John Paczkowski

Recent Posts by John Paczkowski

Apple to Samsung: You Give Us $2.5 Billion and We’ll Give You a Half-Cent-a-Unit Royalty

Apple has put a dollar figure on the damages it believes that it is owed by Samsung for the company’s alleged infringement of its patents, and it’s an awfully big number.

According to a court filing first published by FOSS Patents, Apple is seeking $2.5 billion from its Korean rival, which it argues illegally chose to compete by copying Apple. “Samsung once sold a range of phones and a tablet of its own design,” Apple wrote in its filing. “Now Samsung’s mobile 13 devices not only look like Apple’s iPhone and iPad, they use Apple’s patented software features to interact with the user.”

And that has wrongfully enriched Samsung, while harming Apple.

“Samsung’s infringing sales have enabled Samsung to overtake Apple as the largest manufacturer of smartphones in the world,” Apple wrote in the filing. “Samsung has reaped billions of dollars in profits and caused Apple to lose hundred of millions of dollars through its violation of Apple’s intellectual property. Apple conservatively estimates that as of March 31, 2012, Samsung has been unjustly enriched by about [REDACTED] and has additionally cost Apple about $500 million in lost profits.”

To make good on those violations, Apple is demanding $24 per infringing device. Breaking those damages down by patent, Apple seeks $2.02 per unit for its ’318 “overscroll bounce” patent, $3.10 per unit for its ’915 “scrolling API” patent, $2.02 per unit for its ’163 “tap to zoom and navigate,” and $24 per unit for the use of any of its “design patents or trade dress rights.”

And as for the royalty rate of 2.4 percent that Samsung has been demanding from Apple for use of its standards-essential wireless patents, Cupertino says that’s far too high. Apple asserts that the amount should be just $0.0049 per unit, arguing that the royalty should not be calculated from the market value of the device in which they are used. Rather, “the royalty should be applied to a base equal to the price of the baseband processor, the smallest priceable unit containing the accused functionality.” Baseband chips sell for about $10 apiece, so Samsung is entitled to just a half cent per iPhone.

To Samsung, Apple’s argument that its standards-essential technology is nearly worthless is simply ludicrous. In a filing of its own, the company reminded the court that without that technology there might not be an iPhone, and accused Apple of attempting “to stifle legitimate competition and limit consumer choice to maintain its historically exorbitant profits.”

Samsung has not yet responded to a request for comment.

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