On Tuesday the 6th of December, the Supreme Court issued a unanimous decision in Samsung Electronics Co. v Apple. The 8-0 vote sided with Samsung and found that damages awarded for an infringement of a design patent do not automatically attribute profits to the entire article; rather, it would attribute the infringement to a specific component of the article.
We previously wrote about the inimical patent battle between Apple and Samsung. In 2012, a US jury ruled that Samsung had infringed on Apple patents, specifically patent nos. D593,087, D618,677, and D604,305. The judgement ordered Samsung to pay Apple $930 million. On Appeal, Samsung was able to get the amount reduced to $548 million due to the reversal of a trademark liability ruling. Samsung agreed to pay Apple $548 million–with one caveat. Samsung reserved “the right to reclaim or obtain reimbursement” of the $548 million depending on the holding of the Supreme Court. Samsung has already paid Apple $399 million.
In the written opinion, Justice Sonia Sotomayor believed the lower court’s interpretation of an “article of manufacture” to be too broad in its application. The lower court had interpreted the phrase “article of manufacture” to encompass the entire phone. Justice Sotomayor noted that “article” could pertain to just one part of the phone and stated that an article is “just a particular thing”. Sotomayor further noted that “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.”
This is the first product design case the Supreme Court has ruled on since 1885. In that case, Dobson v. Hartford Carpet Co., dealt with the infringement of carpet design patents. The Supreme Court reversed the lower court’s ruling and construed the statute to require proof that the profits were “due to” the design rather than other aspects of the carpets. In another product design case, Dobson v. Dornan, the Supreme Court ruled that “[t]he plaintiff must show what profits or damages are attributed to the use of the infringing design”.
Now that the Supreme Court has issued their decision, the reversed and remanded case will be sent back to the United States Court of Appeals for the Federal Circuit (CAFC) to decide the damages owed by Samsung and whether those damages exceed the amount already paid by Samsung to Apple. In the event that the damages are less than the amount Samsung has already paid, Apple may be in a position where it has to refund a portion of the reward to Samsung.
In a statement, Apple said this 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.”