Samsung in Apple Court: "We're Guilty And Owe A Lot Of Money"
Samsung (OTC: SSNLF) employed an interesting strategy not often seen in big corporate trials.
Lawyers for the South Korean company said, “we’re guilty and we owe a lot of money.”
The remarks came as part of a retrial of the damages portion of an Apple (NASDAQ: AAPL) versus Samsung patent infringement case. Samsung already lost the battle and now an eight-person federal jury is deciding how much Samsung will pay Apple to make it whole.
But it’s not as simple as Samsung admitting guilt. Bill Price, attorney for Samsung, acknowledged that the price would be high but he doesn’t believe that Apple is entitled to as much as it’s asking for.
"This is a case not where we're disputing that the 13 phones contain some elements of Apple's property," Price admitted, adding, "that doesn't mean Apple gets to come in here and ask for a windfall ...for more than it is entitled."
Samsung admits that it was blindsided by the iPhone. In a company memo that it unsuccessfully fought to keep out of the trial, Samsung admitted to a crisis of design.
“All this time we've been paying all our attention to Nokia, and concentrated our efforts on things like Folder, Bar, Slide, yet when our [product] is compared to the unexpected competitor Apple's iPhone, the difference is truly that of Heaven and Earth. It's a crisis of design."
Because of that, the company says that it took some of Apple’s intellectual property but that’s where it’s humble admission of guilt ends.
Apple is asking for $113 million in profit that it lost based on 360,000 iPhones that weren’t sold as a result of the infringement. It also wants $231 million in profits Samsung wasn’t entitled to, and $34 million in patent royalties--$379 million total.
Samsung argues that it earned only $52 million on the infringing devices—not the $3.5 billion that Apple asserts.
Samsung believes that Apple should receive that $52 million plus another $28,000 for patent royalties. $52,028,000 versus $379 million is quite a divide but history isn’t on the side of Samsung.
In a 2012 patent infringement suit against Apple related to its phones, Samsung asked for $290 to $399 million in damages. Using these figures Apple will argue that Samsung put a much higher price tag on an infringement case in the past.
“What are the correct damages under the law? If you do that without bias, you come back with a "huge sum of money," but that sum is $52 million, not $379 million.”
Disclosure: At the time of this writing, Tim Parker was long Apple.
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