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 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.