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Smartphone Wars Episode IV: Renewed Hope (for Samsung)

Mar. 22, 2017 - Recently the Supreme Court heard the first design patent case it has heard in over a century (a design patent protects the visual appearance of a device while a utility patent protects its usefulness).  Apple received several design patents covering, among other things, the rectangular, rounded-corner appearance of the iPhone, the home button, and the grid of on-screen icons, and sued Samsung in 2012 for infringement of these design elements (in practice there is sometimes overlap between “appearance” and “usefulness,” which you may gather from the fact that the Apple home button and on-screen icons don’t just look good, they also perform useful functions).  A jury originally awarded Apple $1 billion in damages.  This was later reduced to about $400 million and was a calculation of Samsung’s total profits from the infringing devices.

But the “smartphone wars” are still ongoing, and Samsung’s appeal recently made it to the U.S. Supreme Court along with supporting Amicus Briefs from several parties including Dell, eBay, Facebook, Google, HP, Newegg, Vizio, law professors from Georgetown, NYU, Notre Dame, and Stanford, and various other parties (an “Amicus Brief” is a “friend of the court” brief filed by a third party not involved in the litigation—a party who files such a brief is called an “amicus” and multiple such parties are together called “amici”—the legal world loves its Latin).  The amici in this case argued that giving “total profits” to Apple was incorrect and that damages should instead be based on the percentage of profits that can be attributed to the infringing elements.  This makes sense if you think about it - if Samsung's devices had also infringed another party's patent, who would that third party recoup from if Samsung had already given all its profits to Apple?  Or would Samsung have to pay again, and again, etc.?

At any rate, in a unanimous 8-0 decision the Supreme Court agreed with Samsung and the third parties and held that, when there is design patent infringement, the damages may be limited to profits attributable to a component of a device instead of profits for the entire device.  In my opinion the Supreme Court got this right, though the actual dollar amount of damages has not yet been recalculated as the case was sent back to the Northern District of California court in February 2017.