A Supreme Court ruling on Tuesday gave Samsung some breathing room in its fight against Apple over patent violations. It marks a small victory for the Korean electronics firm, but the battle is far from over.
In 2011, Apple filed suit against Samsung over several patent and trademark violations. According to Techdirt, the lawsuit contained seven complaints of utility patent violations, three design patent violations, trademark infringements on six different icons, and three “trade dress” infringements. Several of the complaints were identical to those in lawsuits previously filed against Motorola and HTC.
A lower court ruled in Apple’s favor in 2012 and awarded the Cupertino powerhouse almost $1 billion. The amount equated to all of the profits made from the devices in violation. According to USA Today, the penalties were later reduced to $548 million and then further reduced to $399 million.
Naturally, Samsung appealed the decision, and in an 8-0 Supreme Court ruling, Samsung is relieved of the $399 million forfeiture. The case hinged on the technical definition of “article of manufacture.”
Justice Sonia Sotomayor stated in her opinion, “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.”
Cheif Justice John Roberts added, “Samsung did not infringe on ‘all the chips and wires.’”
In essence what the Supreme Court ruling says is that Apple may be entitled to compensation over individual components of the iPhone, but not over the design of the whole device. Judge Sotomayor illustrated it with an analogy in her written opinion.
“In the case of a design for a single-component product, such as a dinner plate, the product is the ‘article of manufacture’ to which the design has been applied. In the case of a design for a multi-component product, such as a kitchen oven, identifying the ‘article of manufacture’ to which the design has been applied is a more difficult task.”
While the Supreme Court ruling does not let Samsung off the hook, it does seem to indicate that the penalty may see another reduction. As for now, the case will go back to the lower courts where a determination will be made as to which components of the iPhone are the “article of manufacture” in the lawsuit and how much profit Samsung made from those parts.
The U.S. Court of Appeals for the Federal Circuit will have to decide how much of its profit Samsung will have to turn over to Apple. Experts in the field of intellectual property law expect the legal wrangling to take several more years.
“It won’t be easy for courts to differentiate between a product’s design and its overall use, not to mention setting dollar figures for components,” stated USA Today.
Both sides are expected to argue over the “proper tests for calculating damages for infringement of a design patent.”
Despite the Supreme Court’s ruling, Apple remains adamant that its intellectual property has been stolen.
“Our case has always been about Samsung’s blatant copying of our ideas, and that was never in dispute,” a spokesperson told TechCrunch. “We remain optimistic that the lower courts will again send a powerful signal that stealing isn’t right.”
Samsung is staying optimistic as well. Problems with products like the Galaxy Note 7 and some of its washing machines have hung over the company like a dark cloud this year. According to a statement issued to TechCrunch, the company is looking at the small legal victory as a ray of light through that cloud.
“The U.S. Supreme Court’s landmark decision today is a victory for Samsung and for all those who promote creativity, innovation and fair competition in the marketplace. We thank our supporters from the world’s leading technology companies, the 50 intellectual property professors, and the many public policy groups who stood with us as we fought for a legal environment that fairly rewards invention and fosters innovation.”
Samsung is already facing $5.4 billion in losses between now and the first two quarters of 2017 from the exploding Galaxy Note 7 fiasco. Even though the Supreme Court ruling does not relieve the company of financial liability in the patent lawsuit, the Court’s decision has at least bought it some time to recover before having to fork over millions more of its profits to Apple.
[Featured Image by Zach Gibson/Getty Images]