Samsung scores re-do on Apple’s $400m copycat patent payout

Chris Davies - Dec 6, 2016, 10:39 am CST
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Samsung scores re-do on Apple’s $400m copycat patent payout

Samsung’s $400m damages pay-out to Apple for copying the iPhone design has been overturned, with the US Supreme Court sending the ruling back for reassessment. The court agreed to hear Samsung’s complaint earlier this year, with Samsung arguing that Apple’s argument that various models of the South Korean firm’s phones and tablets infringed patented features like a rectangular devices with rounded corners had led to a miscalculation in what damages should be owed. Now, the Federal Circuit will again rule on whether that $400m figure is the most appropriate.

It’s a number that was generated as a percentage of Samsung’s overall profit from the infringing devices, and it’s that equation which the company takes issue with. It had argued to the Federal Circuit that damages should be calculated on only a portion of the overall profit, because the design patents covered only the front aspect of the phone, not the rear. That didn’t convince the court, however, which decided that since Samsung doesn’t sell parts to regular customers separately, they couldn’t be considered distinct articles of manufacture.

However, the Supreme Court points out that the definitions involved haven’t been sufficiently explained. “Because the term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product,” Associate Justice Sonia Sotomayor writes, “whether sold separately or not, the Federal Circuit’s narrower reading cannot be squared with” section 289 of the patent act.

It’s important to note that, while the case is being thrown back to the Federal Circuit, the amount in damages awarded to Apple may not change. The Supreme Court declined to resolve the question, arguing that “the Federal Circuit may address any remaining issues on remand.” It may well mean that Samsung only has to pay a portion of that overall amount, depending on what percentage of the design is considered infringing.

Of course, many would argue that Apple’s case was never really about financial recompense in the first place. The real goal, it’s suggested, was to embed the idea of Samsung being a design copycat into the minds of consumers. Given how many people dismiss the South Korean firm’s phone aesthetics out of hand as copies of whatever Apple is doing with the iPhone at any point, that scheme may well have worked.

Still, with a big hole in Samsung’s revenue sheets this year after the Galaxy Note 7 exploding battery debacle, the company probably won’t turn its nose up at a reduced damages pay-out. Recently Samsung Electronics responded to investor revolt by promising more shareholder rewards and to elect external members to the board. It also agreed to at least consider splitting the behemoth firm into two, though said it would only do so after an independent review expected to last around six months.

SOURCE US Supreme Court [pdf link]


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