Apple Inc. To Ask Samsung For $40 Per Device Sold

Apple Inc. To Ask Samsung For $40 Per Device Sold
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Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s patent war seems to be unending, and it gets more interesting after each hearing. Previously, the iPhone maker has made efforts to ban almost a dozen Samsung devices, and now it might ask the Korean firm to compensate it $40 for each device it sells with 5 patented features.

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Apple would present a hypothetical situation

On March 31st, at the hearing in the court of Judge Lucy Koh, Apple Inc. (NASDAQ:AAPL) is expected to come up with a similar suggestion. At the hearing, Apple would make its point by presenting a hypothetical situation on patents that it does not fully own now. Foss Patents have come up with a public transcript of the hearing on January 23.

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A report from Foss Patents says that a damages expert would be presenting Apple’s case that if both Apple and Samsung had “acted reasonably and rationally in a hypothetical negotiation, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) would have agreed to pay $40 — forty dollars! — per phone or tablet sold as a total royalty for the five patents-in-suit.”

More than the previous deal

Apart from the damage amount another interesting fact is that the $40 fee is more than the previous offer made by Apple Inc. (NASDAQ:AAPL) to Samsung. FOSS Patents’ Florian Mueller explains that in October 2010, Apple asked the Korean rival for a licensing deal of $30 per smartphone and a $40 licensing fee per tablet sold. At that time, Apple also hinted that it would offer a 20% off on the royalty rate provided Samsung is willing to cross license its patents to Apple. After the discount, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) would have ended up paying $24 for each smartphone sold and $32 for each Android tablet sold.

The report from Foss Patents further notes that the royalty rates demanded by Apple Inc. (NASDAQ:AAPL) in the initial trial included $3.10 for pinch-to-zoom, and $2.02 for both inertial scrolling and tap to zoom. The total comes to $7.14 for just three software patents.

According to Muller, the settlement between Apple Inc. (NASDAQ:AAPL) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), in 2011, was the “the highest per-unit royalty estimate I heard about.” The settlement was in the range of $10 range, which included all of the standard essential patents (SEP) and non-SEPs of Nokia. Also, Microsoft Corporation (NASDAQ:MSFT) is getting $15 to $20 per unit from each Android manufacturer for its entire patent portfolio.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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