Samsung Gets Supreme Court Hearing on Apple Patent Award

Updated on
  • Samsung says it was ordered to pay too much to Apple
  • Court review extends five-year legal battle over smartphones

Product displays inside a Samsung Electronics Co. store

The U.S. Supreme Court will intervene in the five-year legal war over smartphones, agreeing to hear Samsung Electronics Co.’s challenge to a $399 million award won by Apple Inc.

A jury found that Samsung copied Apple’s patented designs for the iPhone and should turn over the profits from its sales. The Supreme Court will consider whether Apple was overpaid.

High court review extends a legal battle that since April 2011 has spanned the globe, engulfed every major maker of smartphones, led to billions of dollars being spent on patents, and spawned hundreds of millions of dollars in legal fees. The justices will hear arguments and rule in the nine-month term that starts in October.

The question of how to calculate damages in such cases is “a potential minefield for tech,” said Matt Levy, patent counsel for the Computer & Communications Industry Association, which backed Samsung’s petition. “We’re thrilled the court is going to address the issue.”

It will be the Supreme Court’s first case involving design patents in 120 years. Design patents cover the ornamental look of an object rather than any functional aspect. The last Supreme Court cases over design patents involved spoon handles in the 1870s and carpets in the 1890s.

Apple’s design patents cover the rounded corners of its phones, the rim that surrounds the front face, and the grid of icons that users view.

Entire Profits

The appeal contends that the award improperly covers Samsung’s entire profits from sales of its phones, rather than just the portion attributable to the infringement.

The ruling gives patent holders "massive windfalls far exceeding the inventive value of their patents," Samsung argued.

“The court’s review of this case can lead to a fair interpretation of patent law that will support creativity and reward innovation,” said Danielle Meister Cohen, a spokeswoman for Samsung.

Apple points to a provision in federal law that makes the infringer of a design patent liable "to the extent of his total profit." The language "could not be clearer," Apple argued. The company had no comment on the court’s decision to take up the case.

‘Slavishly Copied’

The Supreme Court declined to take up a second line of argument focused on whether Samsung infringed Apple’s design patents. Apple has said that Samsung “slavishly copied” the look of the iPhone, a position partially validated by the infringement finding in this case.

Samsung has paid its chief competitor $548 million -- the $399 million plus more for infringing a patent on Apple’s “pinch to zoom” technology. The Supreme Court case gives Samsung a chance to recoup at least some of that money.

Other damages are still in play -- Apple is seeking another $180 million for five devices that were already found to infringe Apple patents, including the design patents.

The two companies have spent hundreds of millions of dollars in legal costs across four continents since Apple first accused Samsung of copying the iPhone. With little to show from the litigation, both sides opted in August 2014 to drop all but two of the cases.

Verdict Overturned

In the second case, an appeals court on Feb. 26 overturned a $119.6 million verdict won by Apple. The appeals court said Apple’s slide-to-unlock and auto-correct patents were invalid.

Samsung has the support of Alphabet Inc.’s Google, Facebook Inc. and EBay Inc. at the Supreme Court. They say the part of the lower court ruling governing damages was “out of step with modern technology,” considering the complexity of multi-component electronics.

“It’s challenging to be sure, but I think it’s what is appropriate,” Levy said. “To apply a rule that’s fundamentally unfair just because it’s easier is crazy.”

The case is Samsung Electronics v. Apple, 15-777.