In the summer of 2012, technology giants Apple and Samsung engaged in a fierce and highly publicized legal battle in which Apple successfully sued its South Korean competitor for patent violations stemming from designs of Samsung smart phones and tablets. On November 21, 2013, Apple scored another victory when a federal jury, with help from a damages expert witness, awarded the company with a $290 million damage award for lost profits caused by Samsung’s patent infringement.
Apple vs Samsung Legal Battle Continues
After Apple won its patent infringement lawsuit in 2012, the jury awarded the company $1.05 billion from the defeated Samsung. Upon review of the jury award, U.S. District Court Judge Lucy Koh reduced the award to $600 million based on jury error in calculating damages for patent infringement leading to the creation of 13 Samsung products. Over the last several months, the two companies have continued to fight for a correct damage calculation, leading to the November 21st ruling granting Apple an additional $290 million.
The award is less than the $400 million vacated by Judge Koh after the initial trial, but significantly more than the $52 million Samsung had argued for. The primary difference is accounted by the award to Apple for lost profits the company allegedly suffered, which Samsung argued its competitor was not entitled to. The jury also felt that Apple was entitled to a large share of Samsung’s profits generated by sale of products that infringed on Apple patents.
How an Apple Expert Witness Influenced Damages
When Judge Koh reduced Apple’s $1.05 billion award by over $400 million, she did so because the jury had not clearly calculated the effect of Samsung’s patent infringement. When the jury determined that Samsung had infringed on Apple patents to create its smartphones and tablets, the damage calculation had to specifically identify the cost such infringement had on Apple – a difficult task because it is impossible to positively confirm the amount of Apple’s lost profits or attribute what portion of Samsung’s profit came at Apple’s expense . Because Apple’s damage award required a jury to quantify economic projections the calculation required the support of expert knowledge.
In the resulting damages trial, Apple attorneys hired damages expert witness Julie Davis who showed the federal jury that it could attribute $178 million of Samsung’s $230 million in profits to reduced operating costs that were a direct result of using Apple’s patents. Ms. Davis, a certified public accountant, provided the jury with clear evidence of Samsung’s benefit at Apple’s expense, and withstood vigorous cross-examination that questioned her methodology and economic calculations.
Jury forewoman Colleen Allen credited Ms. Davis’ testimony with helping the jury members resolve a dispute about the $178 million in operating costs being included in the damage award, and praised Apple’s witness for her clear explanation of damage calculation and her presence on the witness stand. Juror Barry Goldman-Hall echoed the forewoman’s sentiment by saying that Julie Davis convinced most of the jury to include the full $178 million into its calculations, which helped the jurors generate the $290 final damage figure awarded to Apple.
A Samsung appeal is all but certain given the significantly high damage award, and the two companies will continue the issue in a separate infringement trial scheduled for next March; however, for now it appears Apple’s use of a damages expert witness has paid off. For more information, the case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose). Details, write ups, and the case itself can be found by clicking here.
Apple Award Highlights Value of Damages Expert Witness
Calculating damages in a lawsuit can become complex, particularly when the figure includes lost profit estimations or attributions of one company’s profit to actions that harmed its opposition. Hiring an expert witness who knows how the specific type of damages requested are calculated can be an important asset to getting the full value of a lawsuit. Damages expert witnesses will explain to judges or juries the process of putting a dollar value on losses, and help a party demonstrate that damages without clear cut economic support can be quantified.
Whether the damages alleged are not economic in nature – such as pain and suffering or emotional distress – or the economic value requires projection and conjecture – such as lost profits or missed business opportunity – a damages expert witness can help quantify losses and maximize the value of litigation. As the recent Apple decision highlights, a damages expert witness can have a significant positive impact by helping a jury understand complex award calculations and proving that an injured party is entitled to compensation for losses that are not clearly quantified.
