Apple Bites Back: But Will the Company Come to Regret Its Huge Court Victory?
Los Angeles Times, August 30, 2012 at A15
1 Pages Posted: 25 Sep 2012 Last revised: 6 Jun 2015
Date Written: August 30, 2012
The essay uses a simple thought experiment to argue that the $1.05 billion jury verdict awarded in the first "smartphone wars" trial between Apple and Samsung is unreasonably large. In short, if a $400 smartphone incorporates about 250,000 total patented inventions, the average patent accounts for just $0.0016 of the phone's value. Yet for infringing just a handful of Apple's patents, Samsung now faces $48 in damages per infringing phone, a shocking 30,000 times this average per patent value. If the owners of all 250,000 inventions that might be present in Samsung smartphones were awarded damages at the same level as Apple, Samsung would have to charge a ludicrous $2 million per phone just to break even.
Keywords: Apple v. Samsung, smartphone wars, patent wars, apportionment, reasonable royalty, patent damages
JEL Classification: K41, O34
Suggested Citation: Suggested Citation