Apple today remains embroiled in patent disputes with Samsung and Motorola across the globe. With top law firms charging as much as US$1,000 per hour for complex patent disputes, there's no doubt that Apple's legal bills are rather significant.
In his recent book Dogfight: How Apple and Google Went To War And Started a Revolution, Wired columnist Fred Vogelstein, citing an attorney who previously worked on patent cases for Apple, relayed that Apple is spending approximately $200 million per year in legal expenses on Android related patent litigation alone.
Last week, a court filing from Apple shed more light on the magnitude of its legal fees with respect to Samsung. If you recall, Apple last week filed a motion seeking $15 million in attorneys fees from Samsung.
In laying out its position, Apple revealed that its attorneys' fees during the first Samsung trial checked in at around $60 million. The $60 million figure covers work done from April 2011 (when Apple first filed suit against Samsung) through March 2013. Note that this excludes expenses incurred during the subsequent retrial on damages.
Notably, the $60 million figure only includes legal work by attorneys who billed more than $100,000 on the case.
Apple and its counsel from Morrison & Foerster LLP ("M&F"), who prosecuted its claims against Samsung, have taken numerous steps to ensure that the fees addressed in this motion are reasonable...
For purposes of this motion, Apple included only the fees it incurred for timekeepers who billed more than $100,000 in this case , thereby eliminating fees from timekeepers who provided meaningful work but did not play a substantial ongoing role in the case. Apple made further reductions in the amounts of fees in connection with this motion to be conservative. As a result of all of these efforts and reductions, the hours underlying the fees at issue are reasonable.
The billing rates for the fees at issue also are reasonable, and reflect substantial discounts. No M&F attorney billing to this matter charged over per hour, and the rest were well below that number. The rates are within the ranges of the American Intellectual Property Law Association Economic Survey and are generally less than the rates that Samsung has paid for lawyers at Quinn Emanuel with comparable experience.
Applying these parameters, Apple has paid or expects to pay M&F approximately $60 million for its work on this case through the damages retrial. Apple also has paid or expects to pay approximately $2 million to Wilmer Hale for its fees in the damages retrial, again counting only timekeepers who billed more than $100,000 to the case. In total, using these parameters, Apple has incurred over $60 million in fees for prosecuting its claims against Samsung.
In a separate brief, Apple makes a point of noting that its legal costs were higher than they would have ordinarily been thanks to Samsung's conduct during the discovery process:
Samsung forced Apple to file multiple motions to compel, including motions seeking production of copying documents, source code, and financial information. In several instances, Apple needed multiple orders before Samsung finally complied.
Samsung also pursued extensive discovery on hopeless defenses that it later abandoned, including many arguments regarding the alleged "functionality" of the design patents and asserted trade dresses. For example, Samsung demanded depositions of individuals that worked in Apple's model shop or as paint mixers... These depositions required Apple to review tens of thousands of documents. Samsung insisted that Apple run special searches regarding white iPhone issues, which resulted in Apple reviewing additional thousands of documents totaling many tens of thousands of pages. White iPhone issues were not raised at trial.
In the grand scheme of things, the $60 million Apple paid out in legal fees is merely a drop in the bucket given Apple's financial position. For starters, Apple was awarded close to $1 billion in damages from Samsung. Second, during its most recent quarter, Apple posted $37.5 billion in revenue. That being the case, Apple last quarter earned more than $60 million every four hours.