Samsung had a big win in its long-standing fight against Apple this week, with the US Supreme Court throwing out a federal appeals court ruling that Samsung had to pay Apple a US$399m (NZ$560m) penalty for copying key iPhone designs. The unanimous decision, sending the high-profile dispute back to a lower court to reassess the award, extends the legal battle that dates back to 2011.
Samsung had been looking to claw back US$399m of the US$548m it paid Apple following a 2012 jury verdict that it infringed Apple’s iPhone patents in the Galaxy and other competing devices, notably by mimicking the iPhone’s bezel, its rounded rectangular shape and the colourful layout of the icons on the screen.
The legal dispute in the Supreme Court centred on whether the term “article of manufacture” in US patent law should be interpreted as a finished product in its entirety, or merely a component in a complex product. Justice Sonia Sotomayor for the court said the law is clear that “article of manufacture is broad enough to encompass both a product sold to a consumer as well as a component of that product”.
Justice Sotomayor directed a federal appeals court to consider whether Apple should be able to recoup profits attributable to only particular components, as it may not be entitled to Samsung’s entire profit (as the previous judgment allowed), but stopped short of laying out a specific test. While Apple accepted that a patent holder may only be able to collect profit attributable to a particular component, it argued that Samsung failed to show that the patented designs only applied to part of its phones. In defence, Samsung contended that effectively the starting point should be profit based on components, and it was Apple’s burden to show the infringement gave Samsung any increased profits, as its use of those elements contributed only marginally to a complex product.
Other industry giants are closely following the legal battle, with companies siding with each party, as the outcome could have far reaching effects in the technology and creative design sectors.
The Supreme Court unanimously sided with smartphone maker Samsung on Tuesday in its high-profile patent dispute with Apple over design of the iPhone. The justices said Samsung may not be required to pay all the profits it earned from 11 phone models because the features it copied from the iPhone were only a part of Samsung's devices. Cupertino, California-based Apple had won a US$399 million (NZ$560m) judgment against South Korea-based Samsung for infringing parts of the iPhone's patented design, but the case now returns to a lower court to decide what Samsung must pay.