High court sides with Samsung in patent dispute with Apple

Dec 10, 2016, 01:02
High court sides with Samsung in patent dispute with Apple

The US Supreme Court today sided with Samsung in its big-money smartphone patent fight with Apple, throwing out an appeals court ruling that said the South Korean company had to pay a US$399 million (RM1.7 billion) penalty to its American rival for copying key iPhone designs. "Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand".

The legal dispute centred on whether the term "article of manufacture" in USA patent law should be interpreted as a finished product in its entirety, or merely a component in a complex product.

Samsung had been seeking to pare back US$399 million of US$548 million it paid Apple in December following a 2012 jury verdict finding that it infringed Cupertino, California-based Apple's iPhone patents and copied its distinctive appearance.

"In addition to determining the total profits, now a jury must first determine what is the "article of manufacture" covered by the design patent".

"The Court of Appeals for the Federal Circuit, which specializes in patent law, rejected that argument, agreeing with Apple that Samsung had to cough up all of its profits on an infringed 'article of manufacture'".

The companies have been wrangling over how much Samsung is required to compensate Apple under an 1887 law that requires patent infringers to pay "total profit".

While the court failed to determine whether the whole phone or parts of it constituted the "article of manufacture", its ruling did overturn a large swath of patent law.

Florian Mueller, an intellectual property analyst who writes a closely followed patent blog, wrote that "large parts of the (US and global) tech industry will breathe a sigh of relief now" even if the case is not settled.

In court papers, Samsung, Apple and the US government all agreed that the term could mean a component.

With the products that used iPhone designs, Samsung went on to become the world's top smartphone maker.

As a result of the Supreme Court decision, Apple's damage award does not have to be based on sales of the entire phone but could instead be focused on the value of the particular components claimed in the design patent, said Mark P. McKenna, law professor at University of Notre Dame.

The legal dispute centered on whether the term "article of manufacture", on which design patent damages are calculated in US patent law, should be interpreted as a finished product in its entirety, or merely a component in a complex product. The company claimed that the infringed patents, relating to the face and rounded bezel design of the iPhone, and the icon layout on the home screen, are only minor features of the product.

In court papers, Apple said its iPhone's success was tied to innovative designs, which other manufacturers quickly adopted in their own products.

The justices said Samsung is not required to pay all of the profits it earned from 11 phone models because the features it copied from the iPhone were only a part of Samsung's devices.

The lower court's interpretation of design patents, Black said, "would have had a chilling effect on investment and the development of products - especially in the tech sector". "While they are still very valuable, this decision reduces slightly the advantages of a design patent by limiting the amount of damages that can be recovered".

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