Samsung expert: Apple exaggerated damages at trial
Comparisons between the Samsung Galaxy Tab and Apple's iPad are seen in this evidence image. — Reuters picSAN JOSE, Aug 17 ― A financial expert said Apple Inc has overstated Samsung Electronics Co Ltd’s profit margins for mobile products, an issue that goes to the heart of damages in the high profile patent trial between the two tech companies.
Michael Wagner, an accountant who testified yesterday for Samsung, said Samsung’s US profits from the smartphones and tablets targeted in the case should be calculated at about 12 per cent, or about US$519 million (RM1.66 billion).
Earlier in the trial, an Apple expert witness testified the US margin was closer to 35.5 per cent.
Additionally, two other Samsung financial experts contended that Apple should owe up to US$421.8 million for violating a clutch of the South Korean company’s patents.
Apple and Samsung are going toe-to-toe in a patents dispute that mirrors a bigger struggle for industry supremacy between the rivals that control more than half of worldwide smartphone sales.
Apple accuses Samsung of copying the design and some features of its iPad and iPhone, and is asking for a sales ban in addition to monetary damages. South Korea’s Samsung, which is trying to expand in the United States, says Apple infringed several patents, including some for its key wireless technology.
Earlier this week, Apple expert Terry Musika said Samsung earned 35.5 per cent margins from mid-2010 through March 2012, on US$8.16 billion in US revenue. Apple is seeking over US$2.5 billion in damages.
However, Wagner testified yesterday that Musika did not take into account many of Samsung’s costs, including marketing. “Not a penny,” Wagner said.
Wagner said his 12 per cent figure assumes a period beginning in April 2011 for most of the mobile products.
The trial, now in its third week, is drawing towards a close.
US District Judge Lucy Koh had given each side 25 hours to present evidence. Samsung began feeling the crunch yesterday: its attorneys decided not to cross examine two of Apple’s technical experts at all, citing time limitations.
More financial details about the famously secretive Apple were revealed yesterday: The company has paid about US$1.4 billion in patent royalties to at least 90 companies, according to testimony from Samsung financial expert Vince O’Brien.
Apple has sold US$12.23 billion worth of iPhones in the US since September 2010, and US sales for the iPad are at US$2.29 billion since the end of April 2011, Samsung financial expert David Teece said.
Other testimony yesterday focused on how much Apple should pay if the jury finds that Apple violated Samsung’s patents. O’Brien said a reasonable royalty for three of Samsung’s feature patents ― including one for seamlessly emailing a photo ― was US$22.8 million.
Asked why the amount was so small, O’Brien said: “They’re one of many features on the phone.”
Yet Teece said Samsung’s wireless patents in the case were worth up to US$399 million. Under questioning from Apple, Teece acknowledged that he had not seen any evidence that Samsung had ever received money for those patents from another company. ― Reuters
