Apple win may be cold comfort

On paper, Apple has clearly won the latest battle in its ongoing patent war with Samsung. A California jury awarded Apple $119.6 million, saying Samsung had infringed three of Apple’s key patents. The jury awarded Samsung 0.13% of what it awarded Apple, deciding that the Korean company is owed just $158,000 for the the camera-related patent that Apple was found to have infringed.
But Apple’s courtroom victory will do nothing to change the outcome of the war that has already been fought in the marketplace, nor is it likely to change the outcome of future contests between the two smartphone giants. It has been two years since Apple tried to stop Samsung from launching its Galaxy S III in the U.S. market, based on alleged infringement of Apple’s “quick links” patent. Judge Lucy Koh, the same judge who has presided over both Apple/Samsung patent trials, decided that she did not have time to consider that request. The S III went on the become the world’s best selling smartphone during the summer of 2012. Before the S III launched in the U.S., Samsung was selling 50 million smartphones per quarter. During the first quarter of this year, Samsung sold 85 million smartphones, more than Apple, Huawei, LG and Lenovo combined, according to IDC.
Samsung only needed to sell half a million Galaxy S IIIs to come up with the $119.6 million it has been ordered to pay Apple. Each S III generated a $250 gross profit margin for Samsung, according to the analysts at Bernstein Research. During the second and third quarters of 2012, Samsung sold 23.4 million Galaxy S IIIs, according to Strategy Analytics. That’s a total gross profit of $5.8 billion, or $5.4 billion after subtracting the $400 million Samsung spent on smartphone advertising in the U.S. that year.
Looking at these numbers, it is not hard to see why Apple asked the jury to award $2.2 billion in damages. But the jurors have awarded less than 6% of that amount. This award is also a fraction of that $1.0 billion that the jury awarded in the first Apple vs. Samsung trial, although that amount was later reduced by Judge Koh.
The jury did validate Apple’s claims that its “quick links” patent was infringed, although that may be cold comfort to Apple now. This patent covers the technology that enables a smartphone to capture information that a user selects using one application, and use that information to generate action in another application. The most common example is finding a phone number during a web search and then touching the number to place a call. But there are many more uses and potential uses, making this one of Apple’s most important patents.
The jury also found that some Samsung devices infringed Apple’s “slide-to-unlock” patent. Before the trial started, Judge Koh had ruled that Samsung infringed Apple’s patent covering word recommendation and completion. The jury was able to consider that patent as well when deciding how much to award Apple.
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