Samsung Prevails in Supreme Court Appeal of Apple Design Patent Damages Amount
The Supreme Court ruled for Samsung Tuesday in its long patent case versus Apple, saying unanimously the U.S. Court of Appeals for the Federal Circuit must further reduce the damages Samsung owes after its 2012 loss of an Apple lawsuit in the U.S. District Court in San Jose, California. Justices considered in October Samsung's appeal of the Federal Circuit's May ruling that whittled down the damages owed in the 2012 patent infringement case to $548 million. Samsung sought a further reduction of $399 million in damages, claiming the Federal Circuit erred in saying Samsung owed damages on the total profit gained from an infringing device instead of the value of the components that were found to infringe on Apple's design patents (see 1610110046).
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“The term 'article of manufacture' is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not,” said Justice Sonia Sotomayor in the unanimous opinion. “Thus, reading 'article of manufacture' in [Patent Act Section 289] to cover only an end product sold to a consumer gives too narrow a meaning to the phrase.” The Federal Circuit's “narrower reading of 'article of manufacture' cannot be squared with the text of” Section 289, Sotomayor said. “The Federal Circuit found that components of the infringing smartphones could not be the relevant article of manufacture because consumers could not purchase those components separately from the smartphones.”
The top court declined to rule conclusively whether the article of manufacture for each of Apple's design patents involved in the dispute “is the smartphone, or a particular smartphone component,” Sotomayor said in the opinion. “Doing so would require us to set out a test for identifying the relevant article of manufacture at the first step of the [Section 289] damages inquiry and to parse the record to apply that test in this case.” DOJ had proposed a four-question test for jurors that would include the scope of the patented design’s influence on an infringing product and the extent to which the patented design can be separated from a device’s other elements (see 1606090073). Justices struggled during oral argument to coalesce around a set of instructions. Setting a specific test “is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand,” Sotomayor said.
“The question before the Supreme Court was how to calculate the amount Samsung should pay for their copying," Apple said in a statement. “Our case has always been about Samsung's blatant copying of our ideas, and that was never in dispute. We will continue to protect the years of hard work that has made iPhone the world's most innovative and beloved product. We remain optimistic that the lower courts will again send a powerful signal that stealing isn't right.” Samsung didn't comment.
The Computer & Communications Industry Association believes the Supreme Court decision “is one that will help bring the design patent statute into the modern electronic age,” said Patent Counsel Matt Levy in a news release. “The Federal Circuit will have to fashion a test to determine the correct article of manufacture.”