April 18, 2024

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[THE INVESTOR] The US Supreme Court sided with Samsung Electronics in a patent dispute with Apple, sending back the ruling that the Korean tech giant pay $399 million for infringing on Apple’s iPhone design patent.

The court returned the case to the lower court on Dec. 6, saying the damages should be computed based on the profit Samsung gained from specific infringing parts of the phones, not necessarily based on the entire product.

The $399 million in penalty -- equivalent to the total profit Samsung gained from all Galaxy series -- was initially computed based on the US Patent Act’s Section 289 during the first and second trials. The section states that the penalty for infringement should be computed based on total profit of the “article of manufacture.”
 
Samsung has claimed that the interpretations of the “article of manufacture” should be different for complicated products like smartphones.

“A patented design might be the essential feature of a spoon or rug. But the same is not true of smartphones, which contain countless other features,” Samsung said in its petition to the US Court of Appeals. 

Apart from designs, “A smartphone is a miniature internet browser, digital camera, video recorder, GPS navigator, music player, game station, word processor, movie player and much more,” Samsung argued.

This time, the Supreme Court upended the traditional interpretation of the phrase “article of manufacture,” saying the term is broad enough to encompass both a product sold to a consumer as well as a component of that product.

“The US 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,” Samsung Electronics said in its statement. 

The nearly six-year design patent battle dated to 2011 when Apple sued Samsung for copying its technology and designs.

At the first trial in March 2014, Samsung was ordered to pay $930 million for copying Apple’s technologies and designs. The penalty was later cut to $548 million at the second trial in May 2015.

In December 2015, Samsung paid $548 million in penalties to Apple and at the same time the Korean firm appealed to the US Supreme Court to pare back $399 million – a penalty given solely for copying designs.

Apple claimed Samsung infringed on three design patents, including the front face of the device, the rounded corners of its smartphones and colorful square icons. 

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)