Analysis Some good news has finally fallen the way of Samsung, as the Supreme Court has ruled in favour of the South Korean giant in its ongoing patent spat with Apple - scrapping a $399m damages bill in the latest episode of the hottest legal battle in tech, though certainly not the last.
At the heart of this is the idea that instead of penalizing all the profit of an entire smartphone, the jury should have awarded on-ly the profit on what was allegedly copied, which involves the rounded corners of the casing (almost nothing) and the home page design, which is hard to put a value on. Instead of $399m, this is might be something far smaller like $50m, and it’s about time Samsung got a dose of good fortune following the dramatic crash and burn debacle of its Galaxy 7.0 smartphone.
In the first hearing of a design patent reaching the Supreme Court in over 120 years, the "battle of the rectangles" has involved Apple citing controversial design patents in a bid to weaken Android rivals, under the 1887 Design Patent Act.
Apple will have to reimburse $399m to Samsung, a sizeable chunk of the $548m it coughed up last year following a 2012 patent infringement verdict – which an appeals court reduced from the initial $2.7bn that Apple asked for.
Faultline has always said Apple and Samsung devices behave entirely differently, due to their operating systems so that they are not copies of one another, and our prediction that Apple would receive far less damages in the long run has proved correct. Sam-sung argued that to penalize the entirety of profits would be wrong, due to the smartphone being found only to have infringed the patents on one or two of the components.
Justice Sonia Sotomayor wrote, "in the case of a multicomponent product, the relevant 'article of manufacture' must always be the end product sold to the consumer or whether it can also be a component of that product." It was concluded that the US Court of Appeals had misinterpreted the term "article of manufacture" and ruled that Apple cannot seek damages for an entire product.
The phones in question are no longer sold, so as well as Samsung only having to shell out a paltry sum (which the original court will now have to set), this has no impact on future potential revenue. Perhaps more significantly, is how the ruling sets an example for smartphone manufacturers around the world – an illustration that Apple and its propensity to sue on the flimsiest of pa-tents is not to be quite so feared.
It is a deep irony that Samsung has genuine technology patents relating to how phones work at the air interface level, and yet Samsung cannot get Apple to pay it any royalties. Apple’s wireless patents, with the exception of these design patents, were either acquired as part of the purchase of Nortel’s patent hoard in 2011 to a consortium including Apple, Microsoft and Research in Motion, or are software patents which are potentially flawed, since the Supreme Court has changed the burden of proof of patents, after most of them were filed.
Now, to add insult to injury in this reversal of patent fortunes, Apple has also become the object of attack in China, threatened with a bar on iPhone 6 sales due to a patent lawsuit brought by a local handset maker, Shenzhen Baili. This is another representation of how the Chinese firms are becoming major intellectual property players.
A separate court case regarding slide-to-unlock was also recently killed off in the appeals court, after Apple’s patents were declared largely invalid, which has freed Samsung of another $120m settlement.
Apple spokesman Josh Rosenstock said in a statement that Apple is "optimistic that the lower courts will again send a powerful signal that stealing isn't right." The case still faces further review by the Federal Circuit, and this notable win for Samsung is likely to fuel Apple’s burning desire to knock its bitter Android rivals down a peg or two.
However, legal experts are apprehensive that this ruling will con-tribute added complexity to the patents landscape – with the courts constantly moving boundaries to accommodate emerging technologies and their patents.
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