The US financial compensation through Apple vs Samsung

Apple vs Samsung are into legal war and hopefully its coming to an end, once again Apple is the winner at the end.

After 50 hours of testimony, Samsung was found guilty of infringing two patents No. 5,946,647 and No. 6,847,959, while not guilty on the remaining three No. 7,761,414, No. 8,046,721, and No. 8,074,172. As a result, Samsung was ruled to award Apple $119,625,000, although that is down from the $2 billion Apple had requested. Apple, meanwhile, was ordered to pay Samsung $158,400 for one of the two patents Samsung alleged infringement.

The second patent infringement trial follows the August 2012 verdict when a jury awarded Apple over $1 billion in damages against Samsung. U.S. District Court Judge Lucy Koh would later reduce the financial damages to $929.8 million.  

Apple and Samsung are likely to appeal on the jury's verdict.

Why such high monetary compensation reduced to $119,625,000?

US Patent Code §284 allows a trial court, in its discretion, to enhance damages for infringement up to 3X as punishment for willful infringement

In many jurisdictions, the plaintiff in an IP infringement matter (e.g. patent, trade mark, copyright or design) has a choice when pursuing financial compensation. The first option is damages, which is an estimate of the amount lost by the rights-holder as a result of the infringing activity. The second option is an account of profits, which is an estimate of the amount of additional profit the infringer made as a result of their infringement. The plaintiff must select one or other of these options before a court will determine any monetary award. 

The main factors influencing the choice of compensation method are which one the plaintiff thinks will provide the greater award, and/or whether one can be calculated with greater accuracy or certainty than the other. The calculation of an account of profits is typically non-trivial, because not all of the profit made by the infringer is necessarily due to the infringing activity.  Had the infringer chosen to use the best non-infringing alternative, it may have made fewer sales, but its sales would not necessarily have dropped to zero.

In the particular case, Apple would chosen the damages to calculate around $40 monetary compensation  for each infringing mobile bringing onto the market, where the Court decided the monetary compensation around 6% of Apple’s claim.

Orders for monetary compensation are decided by judges, who are generally experienced in such calculations, or are able to obtain additional advice and/or expert evidence to assist in determining the appropriate award. 

Pham & Associates