Apple Can’t Hide How Profitable The iPhone Is Anymore

US District Judge Lucy Koh is telling Apple it must disclose exactly how much money it makes on each iPhone and that Apple must comply. That is, if Apple still wants the over $1 billion in damages awarded to them by a jury in August.

Apple has actually filed for more damages stemming from the verdict. Apple wants about $3 billion from Samsung because it was judged by the jury to have “willfully” infringed on patents Apple owns. That’s all the more reason why Apple needs to disclose the information asked by the court which includes device-specific profit margins.

Apple, Samsung, iPhone, profitability, profit margin, legal, lawsuit, Judge Lucy Koh,

Here’s the juicy part of Judge Koh’s filing on October 17:

C. Confidential Financial Information

Finally, Apple seeks to redact product-specific unit sales, revenue, profit, profit margin, and cost data from its Damages Motion, as well as from the Robinson Declaration and Exhibit 8 to the Robinson Declaration. As this Court explained in the August 9 Order, Apple has not established that public availability of its product-specific unit sales, revenue, profit, profit margin, and cost data would actually provide its competitors with an advantage, as would be required to find the information sealable under the “compelling reasons” standard. August 9 Order at 5-6.

In seeking the very large damages award it sought at trial, Apple stipulated to the introduction of JX1500, a partial summary of its damages calculations, which contains some product-specific unit sales and revenue information. See ECF No. 1597. As Apple appears to have realized in introducing that exhibit, it cannot both use its financial data to seek multi-billion dollar damages and insist on keeping it secret.

Further, this Court previously found that the financial information was essential to Apple’s damages calculations, thus increasing the public’s interest in access. August 9 Order at 6. Apple’s present Damages Motion also requires detailed financial analysis, and the public’s interest in accessing Apple’s financial information is now perhaps even greater than it was at trial. Apple’s motion seeks to permanently enjoin the sale of 26 Samsung products that have already been on the market for varying lengths of time, and seeks an enhancement of $535 million on top of the $1.05 billion in damages awarded by the jury. Such remedies would have a profound effect on the smartphone industry, consumers, and the public. As the extensive media coverage indicates, this is a truly extraordinary case of exceptional interest to the public. Apple’s reasons would have to be very compelling indeed to overcome the unusually robust public interest in access.

Beyond continuing to assert that its financial data are ‘trade secrets,’ Apple has not provided any new arguments for why this information should be protected. Accordingly, consistent with the August 9 Order, this Court finds that Apple’s unit sales, revenue, profit, profit margin, and cost data do not meet the ‘compelling reasons’ standard. Apple’s motion to seal is DENIED as to the proposed redactions on page 27 of the Damages Motion, page 9 of the Robinson Declaration, and Exhibit 8 to the Robinson Declaration. For the reasons explained below, this denial is without prejudice.”

Apple, Samsung, iPhone, profitability, profit margin, legal, lawsuit, Judge Lucy Koh,

Just to repeat, the judge is asking “product-specific unit sales, revenue, profit, profit margin, and cost data” not to be redacted from Apple’s Damages Motion.

Apple’s argument that those are confidential “trade secrets” data has been rejected by the judge. Judge Koh also says that since this case directly affects the tech industry and that there’s a huge amount of public interest in it, the data should be revealed to the public, which makes sense if you ask us.

You need to show how much damage an infringing product has caused to your business. In order to do so, the court must have the profit margin in order to compute this. Furthermore, since consumers will likely be affected by a damages award of this scale and not to mention the changes in consumer electronics devices that will spring about because of this decision, the public needs to know the data Apple so wants to keep secret.

What are your thoughts about this? Share it with us in the comments section below.

Source: Filing via ZDNET

Images from Twyford & samsungtomorrow on Flickr (CC)

[cb]Apple[/cb]

[cb]Samsung Electronics[/cb]

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