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Samsung to Pay Apple $538.6M for copying Intellectual Property

On May 24, 2018, after four days of deliberation, an eight-member federal jury in the United States District Court for the Northern District of California found that Samsung infringed on eight of Apple Inc.'s ("Apple") patents relating to their smartphone technology. Specifically, the jury awarded $533.3 million for infringement on three design patents for the phones' silver rims, user interface with icons, and glass back front face and $5.3 million for two utility patents for a "bounce back" scroll feature and double-tap zoom feature.

The lawsuit was the first patent case to reach the Supreme Court in over 120 years, before being sent back to U.S. District Judge Lucy Koh's court. Judge Koh used a four-factor test to calculate damages, rejecting Samsung's request for the use of a simplified, two-factor test. Per the test, the court considered the extent of the design covered by the patent, the importance of the patented design to the product as a whole, whether the design represents a conceptually distinct idea from the whole product, and whether the part of the product covered under the patented design can be physically removed from the product as a whole.

The decision depended upon the interpretation of the "article of manufacture" phrase in the design patent statute and whether Samsung owed Apple damages for the entire value of Samsung's infringing smartphones, or solely the infringing aspects. According to the design patent statute, an entity that makes or sells an "article of manufacture" using a patented design is required to pay damages corresponding to the total profit. However, the Supreme Court previously ruled that Samsung's penalties may apply only to components of Apple's smartphones, not the whole product.

Apple claimed it took four years and more than $1 billion to develop its smartphone designs, which Samsung then used to sell millions of its own, infringing smartphones made between 2010 and 2012. Apple alleged Samsung profited in excess of $3.3 billion from 18 models of phones that had been designed to appear similar to Apple's own iPhone. Apple also claimed that it had unsuccessfully asked Samsung to cease using its patented designs.

In response, Samsung declared Apple's figures to be exaggerated, and added that, because smartphones are so complex and really consist of hundreds of inventions, Samsung should only pay damages for specific parts of the phones.

In its judgment, the jury ultimately awarded Apple slightly more than half of its sought-after damages. A representative for Apple commented that the company was "grateful to the jury for their service and pleased they agree that Samsung should pay for copying our products." Samsung also released a statement, claiming the decision conflicts with the Supreme Court's ruling limiting the scope of the damages and that it will "consider all options to obtain an outcome that does not hinder creativity and fair competition for all companies and consumers."

If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP ("SFMS") is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources

Atkins, Dorothy. "Samsung Owes Apple $539M For Infringing IP, Jury Finds." Law 360. Last modified on May 24, 2018.

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