Apple awarded only $120 million in patent case versus Samsung

The world’s top two smartphone makers have spent hundreds of millions of dollars in legal fees on battles across four continents to dominate a market that was valued at $338.2 billion last year.

Apple won only US$120 million from Samsung in a jury trial over smartphone technology after seeking $2 billion in damages.

The jury also found that Apple infringed one Samsung patent, awarding it $158,000. The verdict sets the stage for each company to seek a judge’s order banning US sales of some older devices found to infringe its patents.

“It is hard to view this outcome as much of a victory for Apple,” Brian Love, an assistant professor at the Santa Clara University School of Law, said. “This amount is less than 10 per cent of the amount Apple requested and probably doesn’t surpass by too much the amount Apple spent litigating this case.”

The jury of four women and four men, who heard almost four weeks of evidence in the companies’ second US trial, found that Samsung infringed two of the four Apple patents they considered. The federal trial in San Jose, California, revolved around whether the maker of Galaxy phones used features in Google’s Android operating system that copied the iPhone maker’s technology.

The world’s top two smartphone makers have spent hundreds of millions of dollars in legal fees on battles across four continents to dominate a market that was valued at $338.2bn last year, according to data compiled by Bloomberg.

Samsung had 31 per cent of industry revenue, compared with 15 per cent for Apple, whose share of the market has shrunk as the touch-screen interface has become more commonplace and Samsung, LG Electronics and Lenovo have introduced lower-cost alternatives.

Even if Apple wins an injunction, most of the 10 devices it sought to ban during the trial are no longer sold by Samsung in the US.

Samsung’s newest smartphones, the Galaxy S4 and S5, weren’t on trial in the case. Samsung is counting on the Galaxy S5, which went on sale March 27 in South Korea, as its marquee device to maintain its global lead competing with Apple for high-end shoppers and with Chinese producers including Xiaomi Corp. that target budget buyers.

“Apple obviously overshot here,” Michael Risch, a professor at Villanova University’s law school, said. “The most important outcome of the case is the message that small, user interface component patents are not justifying gigantic damage awards.”

Apple claimed 10 Samsung devices, including the Galaxy S3, infringe five of its patents. The patents cover a range of user-interface designs for the iOS software that powers iPhones and iPads.

Quick Dialing

One patent Samsung was found to infringe covers the ability for a user to make a call by clicking on a phone number within a web page or email instead of having to dial it separately. The other allows a user to unlock the device through gestures.

The jury rejected Apple's claim on the patent it counted as the most valuable of the group, one that enables updating of applications while other features of the phone are in use. Apple also lost its claim over a patent that allows a user to perform a "universal" search for information with a single click.

A finding that Samsung infringed a fifth Apple patent in the case, one that covers a function for automatic spelling corrections, was issued by US District Judge Lucy Koh before the trial.

Samsung contended that five Apple devices, including the iPhone 5 and versions of the iPod, infringe two of its patents. Samsung sought $6.2m in damages.

The jury agreed with Samsung’s claim that Apple infringed a patent for functions related to retrieving, classifying and organising digital images. Jurors rejected a claim that FaceTime, Apple’s video-chatting service, infringes a Samsung patent for compressing video data so it can be sent over a cellular network.

Apple wanted Samsung to pay as much as $40 for each phone sold that uses infringing technology, for a total of $2.19bn. Samsung argued that the jury should award no more than $38.4m for any infringement damages.

The verdict “doesn’t slow down Samsung at all” because the implied royalty rate is so low that Samsung doesn’t need to worry about paying it, said Kevin Rivette, a 3LP Advisors LLC partner. “It was absurd for Apple to ask for $2 billion. That was a case of ‘Am I going to laugh now or laugh later?’”

Apple might have considered the trial a win if the verdict amounted to more than $10 per phone, Mr Rivette said.