Apple 2.0

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Samsung: We could end up owing Apple more than $1.05B

April 1, 2013: 6:35 AM ET

How could the press get the effect of a judge's high-profile ruling so wrong?

Koh presiding over last August's trial. Court drawing: Vicki Behringer for Reuters

Judge Koh presiding over last August's trial. Credit: Vicki Behringer for Reuters

FORTUNE -- When Judge Lucy Koh last month ordered a new trial to determine the proper damage award for 14 of the 28 Samsung devices found by a jury last summer to have infringed Apple (AAPL) patents, nearly every reporter covering story followed Reuters' lead:

  • "Apple had a major setback in its ongoing mobile patents battle with Samsung Electronics on Friday, as a federal judge slashed a $1.05 billion jury award by more than 40 percent" (Reuters)
  • "The judge overseeing the Apple/Samsung patent case decided to throw out about half of the $1 billion in damages awarded by the jury in a trial last August" (NPR)
  • "A federal judge on Friday weakened the blow from Apple's legal victory" (New York Times)
  • "Judge Lucy Koh has just delivered a serious blow to Cupertino" (The Verge)
  • "The ruling is a setback for Apple" (Wall Street Journal)

Almost lost in the flood of "Apple setback" headlines was the lone voice of FOSS Patent's Florian Mueller, who pointed out that what was being described as a drastic cut in a $1.05 billion award could, in theory, turn out to be an increase.

"The second damages trial over the 14 products," he wrote at the time, "could result in a figure that is lower or higher than (or, theoretically but unlikely, identical to) the one reached by the jury in August."

One month later, his analysis has received a measure of vindication from, of all places, a late-Friday filing by Samsung's lawyers:

"Apple," they wrote, "can seek even more damages on these products in the new trial."

How did the press get it so wrong? Mueller, who writes that he sometimes feels he's swimming against a tide of anti-Apple zealotry, puts it this way:

"There are three kinds of people who are responsible for the widespread misconceptions concerning a 'slashing' or likely reduction of the damages award:

  • A lot of people who comment on these issues simply don't analyze them in sufficient depth. Judge Koh's order said that damages of $450 million were "stricken". It was correct, and I, too, adopted that term in the headline of my post, but I immediately clarified in the first paragraph that "stricken" in this case means "vacated" -- a clarification many others failed to provide.
  • I saw some commentary from undisputed experts in patent law according to whom the final amount would be somewhere between $600 million and the original $1.05 billion ("will get smaller", "less than the original $1 billion"). Samsung's filing now shows that these statements, at least in that definitive form, were wrong. A reduction is neither a given nor can it be reasonably predicted considering that there is still so much upside left for Apple...
  • There may also be a third and small group out there: people who knew that anything including a higher award could happen but who didn't want to say so because they're biased. Or, more likely, who could have researched this in detail if they had wanted but would only have done so if they had expected to identify something that makes Apple look bad or weak."

See: Samsung filing confirms 'Apple can seek even more damages [than $1.05 billion] in the new trial'

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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