Feature Article

December 09, 2013

Apple Spent $60M in Battle with Samsung, Wants Repayment for Legal Costs

Apple won a nice little victory over Samsung in November when the courts awarded it $290 million in its patent dispute involving its iPhones and iPads. Now the company thinks Samsung should help pay the legal bills it incurred to win the case.

In Apple’s attempt to prove that the case was legally “exceptional,” a definition that allows it to ask Samsung to help pay its legal bills, last week Apple revealed that it has spent more than $60 million in billing by outside legal counsel, with a good portion of the bill coming from the law firm of Morrison & Foerster (a firm that is often known internally as “Mofo,” according to The Register).

"Given Samsung's blatant disregard of Apple's IP rights," the iPhone’s manufacturer claimed, "Apple should not be forced to bear the full expense of prosecuting its claims.”

Apple is seeking $15,736,992 in attorneys’ fees, which is exactly a third of the $47,210,976 that Morrison & Foerster billed Apple through the end of March when the court issued its last order on motions from the first patent-infringement trial.

The company has argued that it is not uncommon for courts to award similar "or even significantly higher" legal fee repayment in such cases, and that the request for the more than $15 million is conservative, eminently reasonable and “flows quite naturally from the jury's finding of willful infringement and the legal standard for 'exceptional cases',” as The Register reported.

This is an impressively high bill for the case given that the dispute was not overly complex, and that supposedly Apple was given “substantial discounts” from its lawyers.

The filing said that the per-hour rate of the top-paid Apple lawyer was “generally less than the rates that Samsung has paid for lawyers at Quinn Emanuel with comparable experience.”

While the legal costs have been high, the dispute continues to be more about a war with Google than an attempt to recoup damages from lost sales. The damages aren’t going to mean more to Samsung than its win with the innovation rip-offs that have led to the wild success of its Galaxy line of smartphones, among others, and it is unlikely that Galaxy phones will be pulled from the market any time soon.

Apple, more than anyone, also knows that the shelf-life of innovation is short and copying is inevitable; that, some argue, is why it has led a rapid innovation cycle since the iPod debuted more than a decade ago. If companies such as Microsoft are going to steal its innovation, Apple just has to move fast enough that the competition can never keep up.

That Samsung is succeeding so wildly with its smartphones has less to do with its copying of Apple’s innovation, in essence, and more to do with Apple’s slowdown in innovation.

While it still might make sense for Apple to sue Samsung, the case itself highlights the fact that Apple is not as innovative with its products as it once was with earlier iterations.

Edited by Stefania Viscusi

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