Apple, Inc. v. Samsung Elec. Co., LTD, No. 11-CV-01846-LHK, 2013 WL 772525 (N.D. Cal. March 1, 2013).
The cell phone wars continue to offer a wealth of interesting damages opinions. In Apple v. Samsung, the court undertakes a detailed analysis of issues relating to additur, supplemental damages (for which there is a paucity of case law), prejudgment interest, and notice required for infringement damages.
A jury found that Samsung infringed several of Apple’s design and utility patents, awarding $1+ Billion. Apple requested additur, supplemental damages and pre-judgment interest. Samsung moved for a new trial on damages or remittitur. Id. at *1. The court ruled:
- Additur – Apple sought to increase the award for some Samsung products because the award was less than the amount calculated by Samsung’s own expert at trial. The court denied the motion because (1) the Seventh Amendment prohibits a judicial increase in a jury’s damages award, and (2) the jury was not bound to accept the bottom line provided by either expert and was free to evaluate the evidence as it saw fit. Id.
- Supplemental Damages – Apple sought additional damages for infringing sales not considered by the jury. The court (1) stated its intent to calculate supplemental damages beginning the day after the verdict; (2) stated that supplemental damages for design patent infringement under §289 were recoverable; and (3) determined that the amount of supplemental damages would be calculated based on the jury’s separate award for each infringing product, with a determination of the actual amount of sales to be made after the completion of appeals. Id. at *1 – *4.
- Prejudgment Interest – Exercising its discretion, the court decided to award post-judgment interest at the 52-week Treasury Bill Rate, compounded annually. Further, it determined interest would be calculated at the conclusion of all appeals. Id. at *5.
- New Trial/Remittitur – Samsung moved for a new trial or remittitur, arguing some of the awards rested on impermissible legal theories. Specifically, it was evident from the separate verdicts for each product that the jury had awarded 40% of the amount Apple’s damages expert testified to for some products and 50% for others. Id. at *6.
Given that it was self-evident that the awards were predicated on evidence presented by Apple’s damages expert, the court analyzed whether the awards were based on an impermissible legal theory. Id. at *7.
After a lengthy analysis, the court:
- Concluded there was no apportionment requirement for the infringer’s profits under §289 (Id. at *8);
- Found that Apples damages expert had adequately established its right to lost profits by reconstructing the market based on market share, capacity, and demand (Id. at *9);
- Granted a new trial on damages for a Samsung product that was only alleged to infringe a utility patent when it was apparent the jury had improperly awarded 40% of Samsung’s profits on that product (Id. at *9); and
- In light of §287(a) which precludes damages where a defendant lacked actual or constructive notice of the patent, ordered a new trial for certain products and remitted $9 + Million when it found a disparity between the notice dates and the damages period (Id. at *10 – *16). The court undertook a detailed analysis of four distinct categories of products in undertaking the analysis.
The net effect of the court’s opinion was to strike $450 Million from the award. Id. at *16.