The Lowdown on Apple vs. Samsung
The Apple vs. Samsung case originally went to trial back in 2012. Because the case made some of the inner workings of two of the world’s most secretive companies matters of public record, it fascinated the entire Silicon Valley.
The two companies went to court because Apple accused Samsung of stealing segments of its signature phone designs. Namely, Apple was miffed that Samsung was issuing phones with round cornered front faces, faces with a surrounding bezel, and vivid color grids with 16 icons. Apple has these features patented.
The case went to trial at a district court in California in August 2012. The nine-person Jury sided with Apple and awarded the company $1.05 billion in damages for infringement of design patents. Apple had been seeking $2.75 billion in damages. In its countersuit, Samsung wanted $421 million, but got nothing.
The case didn’t end there. Apple and Samsung viciously argued over the amount that should be awarded as damages. The presiding District Court Judge Lucy Koh struck out $450.5 million off the damages and ordered a new trial to ascertain the exact amount of damages that should be lawfully owed. In December 2015, after a prolonged trial, Samsung ended up paying Apple $548 million in damages for infringing design patents.
Why is the Case Going to SCOTUS?
If the original Apple vs. Samsung case was settled in December 2015, so why is it back in the courts, at the highest court in the country, no less?
The problem lies with how much Samsung owes Apple in damages. The district court found that Samsung did violate Apple’s design patents. Samsung is not contesting that decision. However, Samsung wants the SCOTUS to change how much Apple can demand in a case like this.
The amount for damages Samsung was ordered to pay by the court is determined by calculating the total number of profits Samsung made selling the devices in question. Samsung sold 10.7 million of the devices in question, which generated the company $3.5 billion in revenue.
When Samsung paid Apple $548 million in damages, only $399 million out of it was considered “additional remedy” under Section 289 of the Patent Act of 1952 (35 U.S.C. 289). According to Samsung, the company had paid an extra $149 million in damages. Therefore, Samsung wants the SCOTUS to consider this part of the law.
Basically, Samsung is arguing that design patents are overvalued and wants the highest court in the nation to clarify the issue. The Supreme Court will also be looking at a broader and far more irritating issue with this case as well: When a design patent is applied to a product, should the damages be determined by the profits made by the components, or the product as a whole?
In this case, Apple accused Samsung of selling phones with rounded front faces (among other things), an iconic design feature of the iPhone. When Samsung is asked to pay damages for infringing this design, should the damages be calculated based on the phones as a whole? After all, Samsung is not selling knockoff iPhones. Only a component of the design is found to have infringed copyright laws. So, should damages be calculated based on the amount of money Samsung made solely because of the rounded front faces?
That’s the complicated question the Supreme Court will be addressing this week. This will be the first time the Supreme Court is hearing a design patent case since the 1800s.
The Importance of Apple vs. Samsung
The Supreme Court’s decision in this case will surely resonate throughout Silicon Valley. There are interests of many other companies, nonprofits, and consumer groups caught up in this case.
Companies like Dell, Facebook, Google, HP, and eBay are siding with Samsung. Other groups, like pro digital rights nonprofit Electronic Frontier Foundation, are siding with Samsung, along with dozens of eminent intellectual property rights lawyers.
On the side of Apple are professional designers, like Calvin Klein and Alexander Wang, who have also filed amicus briefs (friend of the court letters) on behalf of Apple.
So, the case essentially boils down to how much innovation can be inspired by what others have already done. For companies like Apple, proprietary designs should be bulletproof. That’s the main source of their income. But for companies like Samsung, the law should be more lenient to spur growth in the tech industry.