Having previously looked at the infringement contentions, (the true) Million dollar question is now what is all this worth? How much can Neonode get? How much is Apple and Samsung willing to pay?

To answer this, I believe you need to start looking from the bottom; how much value per device can Neonode get from this? I.e how much award per Samsung or Apple phone will the jury attribute to this lawsuit. Then you can multiply with whatever volume is relevant.

Value from Samsung-case
One obvious starting point for talking value when it comes to Samsung would the the famous “Samsung agreement” signed and effective July 2005. In this agreement Neonode gave Samsung exclusive right to use two patents, together with Neonode software for use in a new Samsung model (not named, called “New Device“). For that Samsung was willing to pay 2 Euro.

? One question is if Samsung ever reported any sales of this (unnamed) device and paid any running royalties ? (besides the upfront payment)

The exclusivity was to run for between 12 and 24 months, depending on launch date for the “New Device” and certain milestones set out in the agreement. Exclusive rights also normally follows with a higher royalty (compared to non-exclusive agreements)

Taking a detailed look at the agreement; it covers two patent applications by that time; called zForce and Neon;
zForce WO03/038595 = WO03038592 (typo in the agreement) – Now granted US 7880732
Neon US 10/315,250 – now patent US 8095879 = 879-patent

Royalties to be paid by Samsung was €1.5 million upfront at signing and then a running royalty of €2 for each sold Samsung “New Device“.
(the agreement also included consultant fees related to the software development and integration)

Considering the 879 is one of these two patents, it would be logical to split the €2 in half, attributing €1 to 879. Then you need to consider how much the software was worth in the deal. Was it half? was it 10% or 90%? This consideration can be an important discussion during trial, since the range is large and whoever wins this argument effects the damage amount immensely.

(Note: the agreement is not a pure patent license agreement, it is a “Research & Development and License Agreement”)

Looking from the other end; the infringement of the alleged infringing functions “Lock Screen” and “Incoming Call” (assuming they stick) may not be the most important features in a 1000 dollar smartphone. For this kind of analysis experts are often called in to explain different economical theories (that fits respective party’s agenda). Brand value is something that often is brought up; i.e how much of the 1000 dollar is attributed to the (Samsung) brand? 50% of the price? more? less? Then the price of the device is disassembled in detail, piece by piece, to finally land on how much the discussed function(s) adds value to the phone. (eg. first removing cost/value of hardware, radio chipsets, screen, battery, etc)

In this context it is highly relevant to compare what a patent license for the whole smartphone cost. i.e SEP-licensing [Standard Essential Patent]
Smartphone licensing has been done for many years, and there are de-facto licensing practices in place since the 90’s.
In this particular business space I have heap-load of confidential information I cannot disclose, sometimes not even hint or give general comments around.

However, based on public information, you can look at what some of the big SEP-players are saying/requesting when it comes to SEP-licensing;

[More recommended reading; Royalty Rates and Licensing Strategies for Essential Patents on 5g Telecommunication Standards: What to Expect]

Notably, these numbers are for a world-wide non-exclusive license to a portfolio of patents (100s of them), covering the fundamentals of a smartphone. (i.e the standardized radio technology). It does not cover for example screen, battery and OS.

Considering that, dollar amount for one patent would seem unreasonable.
This is why I tend to lean towards (a number of) cents per device for Neonode to receive if Samsung is found guilty of infringement. Though definitely effected by the agreement, in terms of higher value.

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

Value from Apple-case
For the case against Apple, there is no agreement to lean towards. Instead we have to look at what value can be attributed to the infringing functions.
(besides the above SEP-licensing benchmark that also will be done by the court)

Assuming that the strong (in my opinion) infringement contention sticks, it comes does to Control Bar. How important is the feature of accessing the Control center from a lock screen in an iPhone? Is it worth dollar amount on a $1000 iPhone? (that would be 0.1% of the phone)
I don’t see that, rather single digit cents per device would be reasonable.

Summary: I see cents, rather than dollar, as a value the jury can set per device. This goes for both Apple and Samsung, however Samsung having a worse situation due to the agreement from 2005 and stronger infringement contentions against them.

My guess then (note guess!!) would be something in the ranges of;
Samsung 20-30 cents per device.
Apple 1-3 cents per device

However, in the end, it is the jury that decides any damages. Remember they are ordinary US citizens, so telling them a compelling story is crucial. And they will hear the story about the small Swedish company fighting with the giants Apple and Samsung having billions and billions of dollar.
Patent litigation is not black or white, it’s not about having right, it’s about getting right. The best story teller will come out best from this game.

Also, remember these above estimations are only based on patent 879. Should the 993 patent come into play (which it very well might do), it adds value. [that will be a separate post, if it comes to it]
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Note: I am not having any financial interest in Neonode.

ps. Next post will look at possibility of settlement. Why do companies settle before trial? When do they usually do that?
Also a little more about relevant volumes, considering the 879 patent relates to software, and not physical devices.