Apple's award against Samsung too high?

Law professor Brian J. Love of Santa Clara University, writing in the Los Angeles Times, seems to think so:

The award, the third largest in the history of U.S. patent litigation, will likely cruise into first place next month when U.S. District Court Judge Lucy Koh decides what additional amount Apple should receive from Samsung based on the jury's finding that much of the infringement was "willful."

But even without that enhancement, which could add another $2 billion to Samsung's tab, the jury's $1 billion-plus verdict breaks down to just under $48 for each of the roughly 22 million infringing phones sold by Samsung. To the jury, 50 bucks per phone must have sounded like a reasonable figure, and it may well to you too.

But it's not — it's way too high — and here's why: The average smartphone may arguably infringe as many as 250,000 patents, not to mention myriad copyrights and other design-related intellectual property. (Companies don't sift through every patent coming out of Washington before engineering and releasing a product; they create devices and battle claims as necessary.)

If you were to divide the average retail price of a smartphone — about $400 — by those 250,000 potentially applicable patents, you'd find that each one would account for just $0.0016 of the phone's value. And, in reality, even that's too much, once you factor in the costs of raw materials, labor, transportation and marketing, which also contribute to a phone's value.

Yet for infringing just a handful of Apple's patents, Samsung faces a minimum payment of $48 per phone, a shocking 30,000 times the average per patent value. Put another way, if the owners of all the 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.

But wait, you say, the San Jose jury no doubt included some level of punishment in its award, in order to "send a message." But, by law, patent damages are meant to compensate not punish, as the jury was expressly instructed.

I'm no lawyer (though I've played one on TV) but that seems like sound logic. I don't know if it holds any weight in a courtroom, though.

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You're both wrong!

In addition to sounding the death knell of the "real name system" for on-line users, the ROK judicial establishment has chimed in on the Samsung-Apple frenemy battle, saying that both companies ripped each other off. (They also said that Samsung could not sell its older models of the Galaxy and Apple could no longer sell the older models of the iPhone and iPad.)

From CNET:

A Seoul court has ruled that Apple and Samsung violated each other's patents, has prohibited the companies from selling the infringing devices in South Korea, and has awarded both companies fairly insignificant damages, the Wall Street Journal reported this evening.

The three-judge panel in the Seoul Central District Court also ruled that there was "no possibility" that smartphone buyers could confuse devices from the companies, the Journal reported -- an interesting fact given the headline-grabbing trial currently before a jury in Silicon Valley. In that trial, which is just one part of the international struggle between the two companies over intellectual property, Apple has raised the issue of consumer confusion.

"There are lots of external design similarities between the iPhone and Galaxy S, such as rounded corners and large screens...but these similarities had been documented in previous products," Reuters quoted one of the judges as saying in the Seoul case.

"Given that it's very limited to make big design changes in touch-screen based mobile products in general...and the defendant [Samsung] differentiated its products with three buttons in the front and adopted different designs in [the] camera and [on the] side, the two products have a different look," Reuters quoted the judge as saying.

The judge also said company logos on the devices would make it hard for consumers to mix them up, and that buyers also look at price, brand, applications, operating systems, and services when choosing a product, Reuters reported.

True that. I guess the fact that Samsung's and Apple's logos are so different makes the whole "whose product is this?" confusion sorta moot.

Unlike, say, Honda and Hyundai (car buyers seem to be confusing the Sonata with the Accord).

Anyway, I have been intrigued by the possibility lately that Samsung and Apple have decided (independently or collectively, I'm not sure) to keep this frenemy battle going because it is free publicity.

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