Image: CNET

Image: CNET

With Samsung having argued in its opening statement that the $2B sum being claimed by Apple for five alleged patent violations was “a gross, gross exaggeration,” Apple called two expert witnesses to explain why it believes the sum is reasonable.

Re/code reports that first MIT professor John Hauser carried out a form of trade-off analysis to determine the value of individual features to customers.

Apple used a similar analysis from Hauser in the first Apple-Samsung trial in which he found customers might pay as much as $100 more for a Samsung phone that included patented features …

Hauser’s analysis formed a key part of the evidence that resulted in a total award to Apple last time of almost $1B (comprising a revised award of $450M and a second award of $290M).

Hauser’s evidence was followed by MIT-trained economist Chris Vellturo assessing a mixture of reasonable royalty payments had Samsung chosen to license the patents from Apple, coupled to the lost profits from customers he argued would have bought iPhones had Samsung phones not offered the same features.

Vellturo’s argument hinges on the fairly indisputable fact that once people enter a particular ecosystem, they tend to stick with it for future purchases, so a consumer who chooses a Samsung phone over an iPhone also represents lost revenue when they upgrade their phone or purchase a tablet.

“It’s a particularly significant period for Samsung to have been infringing,” Vellturo said, adding that one’s first smartphone purchase is a key determining factor in future phone and tablet purchases. He added that Samsung was behind in ease of use and took Apple’s know-how to aid its effort to be more competitive.

“That had a dramatic effect on Apple, and the compensation is therefore substantial,” Vellturo said.

It’s believed that Samsung is seeking only $7M in damages for the two patents it claims Apple infringed in order to send a message that software patents are worth significantly less than Apple is suggesting.

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9 Responses to “Apple’s expert witnesses explain why Samsung owes Apple $2B for patent infringements”

  1. shm1ck83 says:

    Do we know what patents Samsung are counter suing Apple for?


    • samsung is a bitter adopted sibling. their attitude of “we want to be the first to do this, let’s throw money at it until it happens” is rotten. buyers appreciate refinement at this point in the game. let’s face it, any state of the art device is now upwards of $600, and i believe in getting what i pay for. It’s such an odd time in technology with the costs, and abilities. My phone cost me more than my 50″ flat panel, and my tablet cost me more than my laptop. All the “S” software of the galaxy S4 is a waste of space to me, and pretty much useless as well, it duplicates the native OS.


      • thejuanald says:

        If you bought a 50″ HD television for less than $600, you bought a bad television. You might want to go with Samsung, they make fantastic televisions. ;)

        You’re right about much of the TouchWiz software, though. It’s very bloated and just mimics what Google’s already mastered in Android OS. The only feature I really like from TouchWiz, though, is the S-Pen features. They’re fantastic.


    • axecop says:

      @shm1ck83, standards-essential patents. That is to say, near worthless in comparison. Even that $7m they’re chasing is excessive when it comes to standards-essential patents…


  2. herb02135go says:

    PS. My friends who work/have worked at Apple aren’t mad. They’re jealous.


  3. I tried following this users link, and the site doesn’t exist. I believe this is a planted post from a Samsung employee. If not, then let me ask what exactly are you doing with your Android phone that you find the iPhone limiting?


  4. rafalb177 says:

    Screw Shamsung! Blatant copycats.