Hundreds of Millions at Stake in Apple-Samsung Patent Retrial

In what has become a ritual, U.S. District Judge Lucy Koh last week finished off a pretrial hearing in the patent showdown between Apple Inc. and Samsung Electronics Co. by removing her reading glasses, looking down at the armada of lawyers and asking plaintively, “You sure you want to do this?”

Yes, Judge, they do.

On Tuesday, the most powerful players in the smartphone and tablet world will square off again in Koh’s San Jose, Calif., courtroom, this time in a retrial to decide how much Samsung must pay Apple for 13 products deemed to have violated Apple’s patent rights.

The trial is a redo of part of last year’s unprecedented legal battle that resulted in a jury verdict finding that Samsung went too far in imitating Apple iPhone and iPad technology. One Apple lawyer recently called the retrial “groundhog day.”

After last year’s trial, Koh slashed about $450 million from the jury’s $1 billion award, concluding the panel improperly calculated damages on 13 of the more than two dozen Samsung devices found to have violated patent and trademark protections.

As a result, Apple and Samsung will collide again, giving both sides an opportunity to sway a jury with their competing versions of how the two companies have emerged as leaders in the industry.

From a practical standpoint, the six-day trial will be an opportunity for Apple to try to pad the damage award for the sales of Samsung smartphones and tablets, such as the Nexus S 4G phone and original Galaxy tablet, that are so outdated they are a mere blip on the U.S. market. This slimmer version of last year’s trial also gives Apple another shot at its true rival, Google, whose Android operating system runs Samsung’s increasingly popular products.

But legal experts say the retrial is another important stage in a legal conflict that has unfolded in courts around the world. And the outcome will push the case and the jury’s original verdict to a federal appeals court, for key guidance on how patent law should treat smartphone and tablet innovations ingrained in scores of new products sold by many companies.

“I don’t know that I would call it symbolic, but I do think the main effect of the trial will be to set up the whole case for appeal,” said Mark Lemley, a Stanford University law professor.

Added Brian Love, a Santa Clara University law professor: “The retrial sets precedent for the next case … and the next and the next, if the two parties continue to litigate over newer and newer products.”

Apple and Samsung declined to comment on the trial.

But in a hearing last week, Apple attorney Harold McElhinny summed up its focus: The “big question” will be showing how much Apple lost from the sales of the 13 Samsung devices. Apple argues that consumers would have bought iPhones and iPads if Samsung had not been selling devices it considers copies.

“Did we lose a sale because they infringed?” McElhinny told the judge. “That’s what we have to prove.”

After the trial, the jury will have to answer just two brief questions: the dollar amount owed to Apple, and then a breakdown of those damages for each of the 13 Samsung products.

The trial takes place as the two companies continue to battle for global sales as they release newer versions of their signature products, most recently Apple’s iPad Air.

And it will certainly not be the last round. A second patent case pushed by Apple, raising similar claims involving newer products, is scheduled for next spring.

Meanwhile, the U.S. Federal Circuit Court of Appeals is considering whether to permanently block U.S. sales of an older line of Samsung products that the jury found last year had infringed on Apple’s patents. That ruling could come any time.

Companies seldom take their patent squabbles to trial, but Apple and Samsung are proving to be a high-profile exception.

“The trial is important for patent law writ large,” said Santa Clara’s Love. “Decisions made in this trial, and in any appeal that might follow, will set precedent for many patent cases to come.”