Apple looks to make Samsung pay

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Apple looks to make Samsung pay

Apple is set for a replay of a court fight against Samsung Electronics in which the iPhone maker may seek to recoup more than the $411 million in damages a judge cut from a $1.05 billion jury award in 2012 over patents.

Jury selection began yesterday in San Jose, California, in a retrial over how much Samsung should pay for infringement of Apple’s intellectual property. The original verdict in August 2012, which was the year’s largest in the United States at the time, was found by a judge to be flawed because jurors miscalculated the period the infringement occurred for some of the 28 Samsung devices on trial.

U.S. District Judge Lucy Koh will instruct jurors at the outset of the retrial that the previous nine-member jury found Samsung infringed five valid Apple patents and that their “sole job” is to determine the amount of damages Samsung must pay for the infringement of 13 Samsung products. While Apple hasn’t said how much it will seek, this jury’s revision of the damages to properly account for the infringement may result in more than the $410.6 million subtracted from the previous award, according to Carl Howe, an analyst with Yankee Group.

“The argument at this point is simply about how much Samsung must pay Apple,” Howe said. “In my view, there is no chance that the penalties assessed will be small; the argument is just over whether they will be big or huge.”

In global battles before courts and trade regulators, the world’s two top smartphone manufacturers are spending hundreds of millions of dollars in legal fees on claims of copying each other’s features. Apple, which initiated the legal fight in 2011, is seeking to limit the Galaxy maker’s increasing share of the U.S. smartphone market, where Cupertino, California-based Apple is No. 1 and Samsung No. 2.

Koh concluded in March that the original jury may have overstated damages by basing its calculations on incorrect dates for when Samsung was first on notice that its products infringed Apple’s patents. She also found that the jury mistakenly awarded damages on profits for some Samsung products that infringed only utility patents, which isn’t legally permitted.

The judge has said in court filings that evidence at the retrial should “hew as closely as possible to that presented at the original trial - with the exception of the corrected notice dates.”

While Koh has blocked the companies from presenting exhibits or witnesses that weren’t admitted at the first trial, one difference is that Apple will rely on a different damages expert because Terry Musika, its expert at the first trial, died in December.

Musika, a certified public accountant, presented damages figures to the 2012 jury based on an assertion that Samsung knew as of Aug. 4, 2010, that it was infringing Apple patents, according to Koh’s March 3 ruling.

For two of the patents at issue in the retrial, the evidence supports a notice date 10 months later than what Musika relied on, Koh said in the March ruling. The original award “may have contained some amount of excess compensation” because of the early notice dates, Koh said.

Apple’s new damages expert is Julie L. Davis, a Chicago-based CPA who, according to a court filing, has worked on more than 300 intellectual property disputes. Samsung will rely on the same damages expert, Michael Wagner, who at the original trial rebutted Apple’s damages estimates.

Adam Yates, a spokesman for Samsung, and Kristin Huguet, a spokeswoman for Apple, declined to comment on the retrial.

Apple may call as a witness its marketing chief, Phil Schiller, according to a court filing. The company may also solicit live testimony from Scott Forstall, its former head of mobile-software who left in October 2012 after an executive reorganization by Apple Chief Executive Officer Tim Cook.

Samsung senior executives who may be called to testify are Lee Min-hyouk, vice president of the mobile design group, and Justin Denison and Tim Sheppard, who are vice presidents at the company’s Samsung Telecommunications America unit, according to a court filing.

For the jury picked to hear the retrial, there will be one more big difference from the 2012 trial. The original panel was given 109 pages of instructions, and tasked with answering more than 600 questions following a trial that produced dozens of exhibits and 50 hours of argument and testimony.

The damages retrial is expected to last seven days. Bloomberg
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