Sam­sung pre­vails over Ap­ple in $399m patent ap­peal

Kuwait Times - - TECHNOLOGY -

WASH­ING­TON: The US Supreme Court on Tues­day over­turned a $399 mil­lion patent in­fringe­ment penalty im­posed on Sam­sung for copy­ing Ap­ple’s iPhone de­sign, in a case watched for its im­pli­ca­tions for tech­nol­ogy in­no­va­tion.

The short­handed jus­tices ruled 8-0 that Sam­sung should not be re­quired to for­feit the en­tire prof­its from its smart­phones for in­fringe­ment on de­sign com­po­nents, send­ing the case back to a lower court.

While the rul­ing was short on specifics, an­a­lysts said it was likely to curb lit­i­ga­tion from patent hold­ers ex­pect­ing to reap big prof­its from in­fringe­ment on a com­po­nent.

A ju­bi­lant Sam­sung hailed the “vic­tory for Sam­sung and for all those who pro­mote cre­ativ­ity, in­no­va­tion and fair com­pe­ti­tion in the mar­ket­place.”

The 11-page rul­ing found that the $399 mil­lion penalty-one el­e­ment of a ma­jor patent in­fringe­ment case-was in­ap­pro­pri­ate be­cause it rep­re­sented “Sam­sung’s en­tire profit from the sale of its in­fring­ing smart­phones” for copy­ing the iPhone’s “rec­tan­gu­lar front face with rounded edges and a grid of col­or­ful icons on a black screen.” But the court stopped short of delv­ing into de­tails of how the lower court should de­ter­mine the penalty.

Jus­tice So­nia So­tomayor wrote in the opin­ion that “do­ing so would re­quire us to set out a test for iden­ti­fy­ing the rel­e­vant ar­ti­cle of man­u­fac­ture... and to parse the record to ap­ply that test in this case.”

The court sent the case back to the ap­pel­late court in Wash­ing­ton to re­solve the de­tails. The case is one el­e­ment of the $548 mil­lion penalty-knocked down from an orig­i­nal $1 bil­lion jury award Sam­sung was or­dered to pay for copy­ing iPhone patents.

Ob­servers had been watch­ing to see how the court-which had not taken up a de­sign patent case in more than a cen­tury would tip the bal­ance be­tween tech­no­log­i­cal in­no­va­tion and pro­tect­ing in­tel­lec­tual prop­erty. Den­nis Crouch, a Uni­ver­sity of Mis­souri law pro­fes­sor and co-di­rec­tor of the Cen­ter for In­tel­lec­tual Prop­erty and En­trepreneur­ship, said the rul­ing may leave both sides dis­ap­pointed. “Al­though the case of­fers hope for Sam­sung and oth­ers ad­judged of in­fring­ing de­sign patents, it of­fers no clar­ity as to the rule of law,” Crouch said in a blog post.

Crouch said the court al­lowed for dam­ages at the com­po­nent level but also in­di­cated that the prod­uct as a whole is “an ar­ti­cle of man­u­fac­ture,” leav­ing the mat­ter open to in­ter­pre­ta­tion. “Thus, it will be up to courts to fig­ure out which level (of dam­ages) ap­plies in par­tic­u­lar cases,” he wrote.

Sam­sung won the back­ing of ma­jor Sil­i­con Val­ley and other IT sec­tor giants, in­clud­ing Google, Face­book, Dell and Hewlett-Packard, claim­ing a strict rul­ing on de­sign in­fringe­ment could lead to a surge in lit­i­ga­tion.

Ap­ple was sup­ported by big names in fash­ion and man­u­fac­tur­ing. De­sign pro­fes­sion­als, re­searchers and aca­demics, cit­ing prece­dents like Coca-Cola’s iconic soda bot­tle. Re­act­ing to the ver­dict, an Ap­ple spokesman said in an email, “Our case has al­ways been about Sam­sung’s bla­tant copy­ing of our ideas, and that was never in dis­pute... We re­main op­ti­mistic that the lower courts will again send a pow­er­ful sig­nal that steal­ing isn’t right.” Sam­sung did not im­me­di­ately re­spond to re­quests for com­ment.

‘Sigh of relief’

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.

Ed Black, pres­i­dent of the Com­puter & Com­mu­ni­ca­tions In­dus­try As­so­ci­a­tion, which rep­re­sents ma­jor tech firms, wel­comed the rul­ing. “This was a piv­otal court case for the tech­nol­ogy in­dus­try and it is en­cour­ag­ing to see the law in­ter­preted and ap­plied in a way that makes sense in a modern era and pro­tects both in­ven­tors and in­no­va­tion,” Black said.

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.” Brian Love, a law pro­fes­sor who fol­lows tech­nol­ogy at the Uni­ver­sity of Santa Clara, said it was note­wor­thy that the top court de­clined to pro­vide de­tailed guid­ance on how to re­solve the dam­age award.


SEOUL: This file photo taken on Oc­to­ber 26, 2016 shows peo­ple on an el­e­va­tor as the logo of Sam­sung Elec­tron­ics is seen on a glass door at a flag­ship store.

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