Apple’s $1bn award cut in half

Vicky Kapur

Published Saturday, March 02, 2013

Apple’s legal victory over Samsung got a little less sweet on Friday when, instead of increasing the fine as Apple had been hoping, a US judge slashed off more than $450 million from a $1.05-billion award to be paid by Samsung in a landmark patent lawsuit from Apple, saying a jury had wrongly calculated the damages.

District Judge Lucy Koh in San Jose, California, reduced a jury’s damages award by $450.5 million and said Samsung deserves a new trial on claims over its Galaxy Prevail and other smartphones.

Samsung said in a statement that it was “pleased” with the decision to reduce the damages and added that the company “intends to seek further review as to the remaining award.”

Samsung might be pleased with the revised outcome, but that doesn’t change the fact that, even at a reduced level, these would be among the highest damages in a patent dispute.

The South Korean firm added: “We are also pleased that the court earlier found that Samsung had not acted wilfully, denied Apple’s request for a permanent injunction, and denied Apple’s motion for increased damages.”

The US judge affirmed the remainder of the award, amounting to $598.9 million, in the patent infringement case, while denying Apple’s request for a bigger penalty.

Koh rejected Apple’s request to enhance the jury’s award, saying the amount Samsung owed was heavily disputed and the jury wasn’t bound to accept either side’s damages estimate.

“It is not the proper role of the court to second-guess the jury’s factual determination as to the proper amount of compensation,” Koh said in her ruling.

The judge has, nevertheless, ordered a new trial to recalculate a portion of those damages, leaving open the possibility that some of them could be restored.

Judge Koh said the jury erred in calculating damages for some of the devices in question, including some models of the Galaxy SII smartphone and Galaxy Tab tablet, and struck down as invalid the $450 million awarded to the Silicon Valley giant.

She ruled that a new trial would be needed to award damages for those items, because an “impermissible legal theory” the jury used to calculate the award means that she “cannot reasonably calculate the amount of excess while effectuating the intent of the jury.”

Koh also encouraged both parties to have the case reviewed by an appellate court before any new trial.

“There are eight phones for which the jury awarded 40 per cent of Samsung’s profits for the entire period, but for which, during some of the damages period, infringer’s profits was not an authorised remedy,”
the ruling read.

“The only remaining possibility is to conduct a new trial on damages for these eight products.”

The judge also said Apple could have averted a new trial if it had not pursued an “aggressive” strategy by using an expert report based on a long period of infringement.

“The need for a new trial could have been avoided had Apple chosen a more circumspect strategy or provided more evidence to allow the jury or the court to determine the appropriate award for a shorter notice period,” she wrote.