Experts criticize Apple's move to triple damage payment from Samsung

By Kim Yoo-chul

The patent hearing between Samsung Electronics and Apple in the U.S. on Sept. 21 is expected to be when the world sees the American technology giant turn into a patent monster. The firm is preparing to request record damages from its Korean rival, according to multiple legal sources.

Earlier, nine American jurors ordered Samsung to pay Apple $1.05 billion. Apple plans to ask U.S. Federal Judge Lucy H. Koh to triple the amount, the sources said.

The presiding judge has the option to grant enhanced damages of up to 300 percent for "willful patent infringement."

''The Apple request looks silly. It wants to expand legal battles with rivals rather than putting more resources into product development. Maybe, Apple wants to become another InterDigital ― one of the world's famed patent trolls,'' said one industry executive.

Apple CEO Tim Cook unveiled the iPhone 5 Friday with no big surprises. But its biggest rival, Samsung Electronics, is widening the market gap and Cook's leadership is being put to the test.

The U.S. jurors initially calculated damages at $1,051,855,000 but the amount was corrected to $1,049,454,540 on the orders of Koh. The jurors believed two Samsung models ― the Galaxy Tab 10.1 supporting fourth-generation (4G) long-term evolution (LTE) technology and Intercept ― didn't infringe on Apple patents. But they put the models on the compensation list, said legal officials.

''This was an odd award, given that it's hard to induce someone to do something illegal when it isn't in fact illegal,'' one legal source said.

Then there was the ''rarely confident verdict'' from the controversial jury foreman Velvin Hogan. The retired engineer and patent holder, Hogan has reportedly sold some of his patents for use in Apple devices. Hogan confidently stressed that the jurors answered all 700 questions without needing to read the jury instructions.

''You should keep in mind that the damages you award are meant to compensate the patent holder and not to punish an infringer,'' was the main jury instruction. But Hogan refused to accept the simple and basic instruction.

In an interview with foreign media, Hogan said: ''We wanted to make sure the message we sent was not just a slap on the wrist … We wanted to make sure it was sufficiently high to be painful, but not unreasonable.''

To make matters worse, another juror, Manual Ilagan, admitted that it only took a day to decide that Samsung copied Apple. But the jury couldn't decide about ''prior art'' related issues, which was seemingly a big weapon for Samsung. The jury ruled that these ''prior art'' issues were getting in the way of letting Apple win, according to experts.

That was where Hogan intervened and settled the problem with his own claimed experience of handling patents. Hogan's answer was just to simply ignore prior art and focus on the patent and whether Samsung had broken it.

Patent attorneys based in Seoul said; ''This should smack of an excess of confidence.'' Well-read legal blog Above the Law suggests that it was either that or sheer boredom.

''One factor that likely contributed to the size of the verdict was a feeling among the jury that Samsung should be punished for infringement,'' said Brian J. Love, an assistant professor from the Santa Clara University School of Law, in a recent email interview with The Korea Times.

''Apple's $1.05 billion verdict breaks down to about $48 million for each of 22 million allegedly-infringing Samsung phones sold in the United States. However, it is estimated that any given smartphone is covered by about 250,000 U.S. patents. If all patent owners were able to recover damages at the per patent rate awarded to Apple, a Samsung phone would have to cost a ludicrous $2 million simply for Samsung to break even,'' the professor said.

Based on the analysis of Sections 289 and 284 for patent infringements, it could be difficult to triple the damages, according to Richard T. Redano, a professor from the University of Tennessee College of Law and Thomas F. Cotter from the University of Minnesota College of Law.

The award-winning site Groklaw also pointed to simple facts that suggest anything from boredom to power intoxication. Samsung Electronics' final answer before the San Jose verdict was ''consumers don't make mistakes,'' by insisting Apple is hurting innovation by companies and limiting consumer choice.

''Patent rights only benefit society when they encourage innovation that would not otherwise have taken place. Can Apple credibly claim that it would not have entered the smartphone market, where it is presently enjoying 50 percent profit margins even with competition from Android makers, had it not been able to obtain these broad patents? I think the answer is no,'' said Love.