Samsung Pushes for Less Costly Award in Fight With Apple

SAN JOSE, Calif. (CN) – It was Samsung’s turn to call witnesses at day three of the heavyweight patent fight between Apple and Samsung on Thursday.

Samsung’s gambit has been clear from the start — making its case to the eight-person jury that the three design patents which Samsung phones infringed only covered components of the phone.

Apple, meanwhile, insists the patents cover the entire phone.

The monetary difference between the two positions is about $750 million.

The case, which is in its third iteration at the U.S. District Court, is entirely about damages. Samsung was already found to have infringed on three design patents when it came out with 18 different smartphones in 2010. It sold about 15.3 million phones that were found to have infringed on Apple’s design patents.

Unlike utility patents, where the holder of the patents are entitled to reasonable royalties for infringement, design patent holders are entitled to the total profits from products found to have infringed.

Apple’s expert witness Julie Davis said Samsung raked in $1.1 billion in total profits over the two-year period in question. Samsung’s expert, Joseph Wagner, told the jury Thursday that number is too high and fails to account for costs like sales teams, marketing, research and development and administrative costs.

The rules around design patent infringement stipulate that costs and expenses must be subtracted from revenues to arrive at total profits.

Wagner said those profits are not as high $1.1 billion. He said that if the jury finds that only the components of the phone, rather than the whole phone, infringe, then the appropriate damages are closer to $370 million.

There’s the rub.

Apple attorney Joseph Mueller crystallized the argument in the early afternoon.

“We say the article of manufacture is the full phone and you and Samsung say it’s the components,” Mueller said. “That’s the clash.”

He said it while Samsung’s industrial design expert Sam Lucente was on the stand.

Lucente summarized the very argument that Samsung had been hinting at since opening remarks were delivered on Tuesday.

“My conclusion was that the articles of manufacture were components of the Samsung phone, not the entire phone,” he said matter-of-factly at the beginning of his testimony.

The three design patents cover the ornamental appearance of the original iPhone, which covers the rectangular darkly colored glass front cover, the stainless steel rim and the famed tile graphical array that appears on the iPhone homepage.

Lucente said that only those specific parts of the phone are the infringing parts and the damages should be calculated accordingly.

But Mueller, during his cross examination, held up the rectangular piece of glass that Samsung is attempting to separate out and noted it wasn’t even black unless it was held up to the phone.

In an another attempt to point out the parts are inextricable from the whole, Mueller noted that the graphical interface at issue isn’t even visible unless plugged in, meaning it’s not removable from the phone.

John Quinn, arguing for Samsung, countered by pointing out how complicated smartphones are, with navigation tools, cameras, speakers and other components and that boiling down such a complex machine to three design features appears to be a stretch.

The trial has been mostly a cordial affair, particularly when compared with earlier iterations of this knock-down, drag-out patent fight that began in 2011.

However, Samsung in particular has intermittently incurred the ire of U.S. District Court Judge Lucy Koh.

She was angered once again on Thursday when Samsung cancelled two of their witnesses at the last minute. Apple complained that their lawyers wasted valuable time preparing cross examinations of witnesses that wouldn’t even appear.

Koh seemed to agree with Apple.

“You can play these games if you think it’s important for your case and I guess you do,” Koh said. “But I want to see the plane ticket.”

Koh said she wanted Samsung to prove that the cancellation was a last-minute occurrence and not a planned gambit, by providing her with plane tickets that showed the two witnesses were scheduled to leave after Thursday’s proceedings.

The public should expect to hear which argument prevails in short order.

The evidentiary part of the trial is expected to wrap up on Friday morning, with closing arguments slated for Friday afternoon.

If all goes according to schedule, the jury will deliberate on Monday, with most observers betting on a verdict early next week.

 

 

 

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