SAN JOSE — Squeezing in their last jabs, lawyers for Apple alleged that Samsung executives never appeared in court because they did not dare reveal their real aim for the retrial: a verdict that split the difference.
Since the parties reunited in U.S. District Judge Lucy Koh’s courtroom last week to hash out damages, Samsung has repeatedly asked jurors to award $52 million—nearly $330 million less than what Apple says it is entitled to.
As he delivered his rebuttal Tuesday morning, Apple lawyer Harold McElhinny of Morrison & Foerster seized on the Samsung executives’ absence to offer his own explanation for the divide. Figuring jurors would want to grant an award that fell somewhere in between the parties’ requests, Samsung intentionally low-balled its calculations, McElhinny argued.
“How can they disrespect the process so much that they don’t even come to trial?” McElhinny asked jurors, reprising a theme that played well with a jury last year. “I will tell you plainly what their strategy is. They expect you to compromise their verdict.”
But Samsung lawyer William Price insisted during his closing argument that Apple deserved nothing more because it holds narrow patents that his client could have easily designed around. He stressed that the other side had failed to prove that demand for the 13 Samsung products on trial was driven by the few features that infringe Apple’s patents.
“We’re saying Apple is entitled to profit, but not some rigged calculation of profit based on semantics,” said Price, a partner at Quinn Emanuel Urquhart & Sullivan.
The sole question for the jury is how much Samsung must pay Apple for its infringement of five patents. Koh ordered the damages do-over earlier this year, concluding that some of the original jury’s $1.05 billion award in 2012 had been calculated using an improper notice date.
The intervening year did little to mellow tempers. And lawyers for the mobile titans kept fighting even after jurors filed out of the courtroom to begin deliberations. Price moved for a mistrial, objecting to remarks McElhinny made about the extinction of American manufacturers. Stressing the importance of the patent system, McElhinny told jurors during his rebuttal that many prominent American television makers went out of business because they failed to protect their intellectual property.
Price argued that the remark threatened to prejudice jurors against foreign companies like Samsung, especially since his client is a noted maker of TVs. He also accused McElhinny of injecting racial animus into the jury’s deliberations. Apple lawyer William Lee, a partner at Wilmer Cutler Pickering Hale and Dorr, quickly disagreed, noting he is of Asian descent.
Koh yanked the jury back into the courtroom to remind them that they are not supposed to allow personal preferences to influence their decisionmaking. She allowed Samsung to file a motion for mistrial as part of the flurry of briefing that will follow the jury’s verdict.
Lawyers for Apple hit many patriotic notes in their last words to the jury. During his closing argument for the Cupertino-based company, Lee hailed the American patent system and argued that Apple has always abided by its rules. Samsung has flagrantly disregarded them, he contended.
“If you accept Samsung’s numbers, you have turned our system on its head,” Lee warned jurors. “The system will become one where the infringer profits.”
Damages experts on both sides agree that Samsung sold about 10.7 million products that infringed Apple’s patents, yielding $3.5 billion in revenue. If Apple is awarded the $380 million it seeks, it will still recover only about 10 percent of what Samsung made by stepping on its patents, Lee said. But Samsung wants to hang onto 99 percent of what it gained unlawfully, he argued.
“Is it a lot of money? Yes, it is,” Lee said of Apple’s request. “But wow, it was an awful lot of infringement.”
Samsung’s Price said the line between competition and infringement can be hard to discern. Companies habitually track their competitors’ products and adjust their own offerings accordingly, Price said. Apple even introduced an iPad Mini in response to Samsung’s seven-inch tablet, he argued.
“You might have a hard time figuring out what you can and cannot do,” Price said. “What you do know is you can compete. Apple doesn’t own ‘beautiful’ and ‘sexy.’”
As Price addressed jurors, Samsung projected a slide titled “Things Apple Cannot Own.” The list included love, beauty, magic, whimsy, awe, revolution and elegance, among other virtues.
Faced with a barrage of accusations from Apple, Samsung was forced to go to court to clarify its rights, Price said.
“When Apple comes to you and says, ‘stop,’ why don’t you stop?” Price asked. “Because you don’t agree with them that you need to stop.”
If the parties had not proceeded to trial, Samsung would have agreed to pay only about $28,000 to license Apple’s narrow patents, Price said.
But Lee questioned why Samsung would have continued to roll out infringing phones if it could have settled the dispute for such a small fee.
“It might help to do a real-world reality check on this woulda, coulda, shoulda,” Lee said. “This is a place where your common sense will help us reach the right results.”
Lee stressed that no amount of money can restore the exclusive position that Apple should have enjoyed by virtue of its patents.
But Price urged jurors not to grant Apple’s wish for market dominance.
“Really, what they’re saying,” Price said, “is in the market, justice is just us.”
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