Apple has been slapped with a royalties bill of $422 million (£268 million) by rival Samsung for allegedly using five patents without permission, including copying of the iPhone and iPad.
The news triggered shock waves in the tech industry and sent Apple’s stocks down by 4% yesterday. Samsung claimed in the court that it had last year offered to licence the patents, which cover smartphone wireless signalling and features such as the ability to seamlessly email photos. Samsung has asked Apple for a 2.4% royalty on earnings.
During cross examination, however, David Teece, a University of California business school professor, who gave expert evidence for Samsung, admitted he had “no idea” how the Korean firm arrived at that figure. This trigerred Apple lawyer Joe Mueller to claim that Samsung had no evidence to have charged any other company such a rate.
Samsung sprang to its defence and said that it had offered a “fair and reasonable” royalty rate on its patents to “virtually every major player in the mobile phone industry,” including Apple. As the court trial neared climax after three weeks, the judge told Apple that it had no more chances of calling upon witnesses before jury’s verdict which would be declared next week.
Samsung’s closing arguments also questioned Apple’s maths as one of the company’s expert witnesses said its profit margin on smartphones and tablets in the US was 12% rather than 35.5% as claimed by Apple. The entire technology industry is observing the critical trial as a proxy for the global battle between Samsung and Apple for leadership of the mobile internet revolution.