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Apple explains $2.2B damages claim against Samsung from lost profits, royalties

During testimony in the second California Apple v. Samsung patent trial on Tuesday, an Apple damages expert revealed the full damages claim stands at $2.19 billion for lost profits and reasonable royalty fees on five alleged infringed patents.

Samsung Design Europe 2009 iPhone copy doc


According to in-court reports from Re/code, Apple damages expert and Massachusetts Institute of Technology-trained economist Chris Vellturo said the company is seeking $2.19 billion for patents infringed between August 2011 and the end of the 2013 calendar year.

"It's a very large market and Samsung has made a lot of sales into that market," Vellturo said. "It's a particularly significant period for Samsung to have been infringing."

Part of the claim is based on alleged lost profits due to customers buying Samsung products instead of the iPhone, while another portion was calculated on proposed royalties on more than 37 million accused infringing devices.

Earlier in the day, Apple expert witness John Hauser, also a professor from MIT, presented a revised version of a smartphone consumer demand surveys previously used — unsuccessfully — to win an injunction against Samsung products, reports Bloomberg.

Whereas the original surveys included only consumer willingness to pay for Apple's patented technology like "slide-to-unlock," the revised edition takes into account a supposed decrease in demand for Samsung products that do not have the same features.

During direct examination, Hauser testified that he saw a five percent drop in consumer willingness to buy a device that did not offer universal search, a software function that provides a system-wide search mechanism. The surveys covered 966 Samsung device owners, split between 507 phone users and 459 tablet users.

Hauser's methodology uses so-called conjoint surveys, which add in "distraction" questions to the survey's main focus to achieve a more accurate result. For example, the smartphone survey included 21 questions about features not relevant to the trial, like three-way calling and screen size, reports The Verge.

The expert determined that users would spend between $32 to $102 for the features covered by Apple's alleged infringed patents.

For its part, Samsung maintains Apple's estimated damages are a "gross exaggeration" of its patents' worth.

Samsung counsel Bill Price, on cross-examination, argued that consumer demand is driven in large part by branding. Further, Samsung's marketing prowess and overall brand sway were to thank for the uptick in sales, not reliance on Apple-patented features.

Price asked whether Hauser designed a study to measure brand impact, to which the expert responded, "No, I did not."

The Apple v. Samsung patent trial will continue on Friday with Apple wrapping up its case before Samsung goes after the validity of two patents-in-suit.