Apple Wants $2.5... BILLION From Samsung For Patent Infringement

In an unsurprising move, Apple demanded a substantial sum of money from Samsung according to its latest filings in the case between the companies. But, even for a massive tech company, this is a lot of money.

Today, Apple alleged that the only way Samsung could compete in the smartphone market was by “copying Apple.” Further, the company alleges that “Samsung’s infringing sales have enabled Samsung to overtake Apple as the largest manufacturer of smartphones in the world.” As a result, Apple “conservatively estimates” that it is entitled to: $2 billion for unjust enrichment; $500 million in lost profits; and $25 million in reasonable royalty damages.

This come out to a grand total of $2,525,000,000. Heres the obligatory Austin Powers Dr Evil reference:

dr evil Apple Wants $2.5... BILLION From Samsung For Patent Infringement

The company calculated the royalties based upon the following valuations:

  • $2.02 for the "overscroll bounce" (or "rubber-banding") '318 patent
  • $3.10 for the "scrolling API" '915 patent
  • $2.02 for the "tap to zoom and navigate" '163 patent
  • $24 for use of any of Apple's design patents or trade dress rights

Finally, Apple argues that if Samsung is entitled to any remedy, it must be calculated on FRAND terms. Thus, Apply is willing to pay only $0.0049 per unit for each infringed patent. Alternatively, it is rumored that Samsung is seeking 2.4% of Apple’s sales as a royalty for their patents.

While these numbers may seem worlds apart, it is important to understand this in terms of the underlying patents. Apple’s claims are regarding non-standard essential patents (non-SEP). In essence, these are the patents that make an iPhone an iPhone. On the other hand, the patents that Samsung alleges were infringed are standard-essential patents (SEP). These are what must be included to make a wireless phone a wireless phone. As such, SEPs must be licensed on FRAND terms, whereas non-SEPs can be licensed on other terms.

Is Apple correct in its valuation of their non-SEPs? Maybe, maybe not. But that does not change the fact that Apple’s non-SEPs for iPhone specific features are more valuable than Samsung’s general wireless SEPs.

It is rather ironic, however, that Apple invokes FRAND terms only a few paragraphs after demanding $2.5 billion in damages.

In the end, this just shows how far apart these two companies are from a settlement, and how little these two companies care about the consumer. In the filings, there is a quote from Apple CEO Tim Cook stating, “[I]t is important for Apple not to be the developer for the world. We just want other people to invent their own stuff.”

Mr. Cook is correct – Apple should stop trying to destroy its competition in the courts to become the only developer in the world. Instead, it should give other companies the opportunity “to invent their own stuff” so that the customer can decide. 

Images from: HDblog.it and Gearcrave.com