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Apple's Damages Expert Makes Case for Why Company Is Due $2.19 Billion From Samsung

That's $438 million for each of the five patents infringed.

3D Pictures/Shutterstock

An Apple-hired damages expert on Tuesday told the jury that the iPhone maker is owed $2.19 billion in damages for infringing five patents between August 2011 and the end of 2013.

MIT-trained economist Chris Vellturo said the damages are a mix of Apple’s lost profits during the time as well as a reasonable royalty for Samsung’s use of Apple’s technology on the remainder of the more than 37 million phones and tablets that are accused of infringing Apple patents.

“It’s a very large market and Samsung has made a lot of sales into that market,” Vellturo said, before getting into the specifics of how he came to his estimate. Samsung’s alleged infringement, he said, came at a time of dramatic growth in the market as many people were buying their first smartphone.

“It’s a particularly significant period for Samsung to have been infringing,” Vellturo said, adding that one’s first smartphone purchase is a key determining factor in future phone and tablet purchases. He added that Samsung was behind in ease of use and took Apple’s know-how to aid its effort to be more competitive.

“That had a dramatic effect on Apple, and the compensation is therefore substantial,” Vellturo said.

Vellturo said he and his firm spent thousands of hours studying the market and the patents at issue in the case and that he has spent more than 800 hours personally.

His testimony followed that of MIT professor John Hauser, who presented results of a survey that he said demonstrates that Apple’s patented features were significant and highly valuable.

The damages estimate comes as Apple is nearing the conclusion of its case against Samsung. Samsung is arguing that it did not infringe Apple’s patents and that the patents never should have been granted in the first place. Furthermore, even if it is found to have infringed, it argues that Vellturo’s estimate is a “gross exaggeration” of what Apple is due.

Update: To buttress his argument, Vellturo is referring to a number of Samsung internal documents that show Samsung was concerned its products were harder to use than the iPhone and that competing with Apple was the company’s No. 1 priority.

“What Samsung recognized is that the iPhone fundamentally changed the nature of competition,” Vellturo said, adding that user interface was seen as key and that Samsung at the time did not have strength in that area. “To help develop that, they turned to the iPhone,” Vellturo said.

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