Ondrej Holzman An Apple-hired damages expert explained to a jury in a California court on Tuesday why the iPhone maker is demanding $2,19 billion from Samsung for copying its patents, which it has been fighting for throughout April and will continue to fight...
Chris Vellturo, an MIT-educated economist, said the compensation includes Apple's lost profits between August 2011 and the end of 2013, as well as the proper royalties Samsung should have paid for using Apple's technology. More than 37 million phones and tablets sold by the South Korean company are accused of copying Apple patents.
"It is a huge market and Samsung has sold a large number of products in it," commented Vellturo, who receives a lot of money from Apple. For working on the current case of Apple vs. Samsung, it comes to $700 an hour. However, according to his words, he spent more than 800 hours on the patents and the entire case, and his entire company Quantitative Economic Solutions spent thousands more.
Velltura explained to the court that Samsung's copying harmed Apple mainly because it allowed Samsung to capture a lot of new customers in a growing market, from which it later profited. "Competition is very important for new buyers, because once they buy from someone, it is very likely that they will make the next purchase with the same company and that they will also buy other products and services from that company," described Velltura, adding that Samsung was at the beginning behind especially in ease of use and therefore used Apple's know-how to be more competitive.
During his testimony, Velltura referred to internal Samsung documents that show the company was worried about inferior controllability compared to iPhones and that competing with Apple was the number one priority. "Samsung recognized that the iPhone had dramatically changed the nature of the competition," Velltura said, noting that Samsung was lacking in user interface, so it had no choice but to take inspiration from the competition.
Even before Velltura, John Hauser, a professor of marketing at the MIT Sloan School of Management, spoke, who conducted several studies in which he offered customers hypothetical products with different prices that differed only in a single function. According to these studies, Hauser then calculated how valuable the given function is for users. His conclusions are quite interesting. For example, users would pay an additional $102 for automatic word correction, a feature that is the subject of a patent lawsuit. Users would also have to pay dozens of dollars extra for other functions that Apple is suing for.
However, Hauser pointed out that these numbers certainly cannot be simply added to device prices, as there are many other factors that need to be taken into account when determining the price. "That would be a different survey, this one was just supposed to be an indicator of demand," said Hauser, who was subsequently questioned for two hours by Bill Price, a lawyer for Samsung, who tried to refute his claims.
Price took issue with specific parts of Hauser's study, in which one of the features says that words are automatically corrected when a space or period is inserted, while the Galaxy S III, one of the subjects of the lawsuit, corrects words immediately. Finally, Price also questioned the overall benefit of the study, which only tracks features and not Samsung as a brand or user affection for Android.
Samsung should continue to argue that Apple should not have obtained its patents at all and that they have almost no value. Therefore, Samsung should not pay more than a few million dollars in compensation.
I think it's good, we could also do that by taking the new iPhone 5s, driving to the store and saying he wants a million copies. Of course, this is not a problem, Android with copied functions can be used there, and we have 90% lower development costs. And we can sell for a few kc with a decent profit. When Samsung did it, it's even better because it has already built a name...