Friday, August 31, 2012

Samsung didn't pay Apple $1.05 billion in 5 cent coins

Over the past couple of days, various rumours have indicated that Samsung paid Apple $1.5 billion in 5 cent coins. A California jury had awarded Apple the amount in damages, at the end of a long-standing patent infringement dispute with Samsung. The news of Samsung paying the damages in nickels spread widely via the website MobileEntertainment, though it had originated on a Mexico-based parody website El Deforma, and then made it to 9gag as a cartoon.

MobileEntertainment reported, "Yesterday, more than 30 trucks filled with five cent coins arrived at Apple’s headquarters in California. Apple security were in the process of freaking out before Apple CEO Tim Cook was called by Samsung explaining that they will pay all of the $1.05 billion they owe Apple in coins, and this was the first instalment".

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Hilarious as it might have been, and though Samsung fans might have hoped it was true, it isn't. MobileEntertainment later updated its story revealing that it was a fake. Though the verdict has been reached, the fine that has been awarded to Apple is not yet payable. Besides that, Samsung will almost certainly appeal the verdict, which will delay the actual process of payment indefinitely. A report by the Guardian has listed several points that indicate that this information is nothing but a hoax. The Guardian reports, “Samsung's fine ($1.049bn) isn't yet payable; the judge hasn't ruled. All we have is the jury's verdict. The judge's decision, which could include a tripling of the fine, is due on 20 September (or possibly 6 December now; it's unclear). Until then, Samsung only has to pay its lawyers. That should be less than $1bn”.

If this isn't enough to put the hoax to rest, a resource put up by the US Treasury explains why Samsung cannot pay Apple the amount due in coins. The statement reads, “The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy”.

Hence, if Samsung and its 30 trucks filled with 5 cent coins reach the gates of the Apple headquarters, they would most certainly be asked to take a U-turn post haste, and head right back to where they came from. If this rumour had been true, the scenario where 30 trucks filled with small change adding up to a billion dollars might easily have gone down as the biggest, funniest, and most expensive troll in history.


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