By Andrew Chung
3D-printed Samsung and Apple logos are seen in this picture illustration made in Zenica, Bosnia and Herzegovina on January 26, 2016. REUTERS/Dado Ruvic
The U.S. Supreme Court on Tuesday
sided with Samsung in its big-money smartphone patent fight with Apple,
throwing out an appeals court ruling that the South Korean company had to pay a
$399 million penalty to its American rival for copying key iPhone designs.
The 8-0 ruling, written by Justice
Sonia Sotomayor, held that a patent violator does not always have to fork over
its entire profits from the sales of products using stolen designs, if the
designs covered only certain components and not the whole thing.
The justices sent the case back to
the U.S. Court of Appeals for the Federal Circuit in Washington to determine
how much Samsung must pay. But they did not provide a road map to juries and
lower courts on how to navigate similar disputes in the future.
Apple
spokesman Josh Rosenstock said in a statement that the U.S. company remained
"optimistic that the lower courts will again send a powerful signal that
stealing isn't right."
Samsung
told Reuters in a statement the ruling was a "victory for Samsung and for
all those who promote creativity, innovation and fair competition in the
marketplace."
Following
a 2012 jury verdict favoring Apple, Samsung initially was hit with nearly $930
million in penalties, later cut by $382 million, for infringing Apple's iPhone
patents and mimicking its distinctive appearance in making the Galaxy and other
competing devices.
Samsung
in December 2015 paid its Cupertino, California-based rival $548 million. But
Samsung took the matter to the Supreme Court, saying it should not have had to
make $399 million of that payout for copying the patented designs of the
iPhone's rounded-corner front face, bezel and colorful grid of icons that
represent programs and applications.
With
the products that used iPhone designs, Samsung went on to become the world's
top smartphone maker.
Tuesday's
ruling followed a ferocious legal battle between the world's top two smartphone
manufacturers that began in 2011 when Apple sued Samsung for patent and
trademark infringement. It was one of the most closely watched patent cases to
come before the top U.S. court in recent years.
The
legal dispute centered on whether the term "article of manufacture,"
on which design patent damages are calculated in U.S. patent law, should be
interpreted as a finished product in its entirety, or merely a component in a
complex product.
In
court papers, Samsung, Apple and the U.S. government all agreed that the term
could mean a component.
But
Apple urged the Supreme Court to affirm the appeals court's ruling because
Samsung presented no evidence that the article of manufacture in this case was
anything less than its entire smartphone as sold. Samsung, meanwhile, said that
it did not have to present such evidence.
Sotomayor,
writing for the unanimous court, said that the law is clear. The term
"article of manufacture is broad enough to encompass both a product sold
to a consumer as well as a component of that product," she wrote.
PERIOD
OF UNCERTAINTY
The
justices nevertheless refused to devise a test for juries and lower courts to
use to discern what a relevant article of manufacture is in a particular case,
a task that could be fraught with difficulty when considering high-tech
products.
"No doubt whether with Apple-Samsung, or some
other design patent case, we are going to have a period of uncertainty where
courts will be trying to formulate a test and what the boundaries are,"
Richard McKenna, an expert in design rights at the law firm Foley & Lardner
in Milwaukee, said in an interview.
In court papers, Apple said its iPhone's success was
tied to innovative designs, which other manufacturers quickly adopted in their
own products. Samsung, in particular, made a deliberate decision to copy the
iPhone's look and many user interface features, Apple said.
Samsung argued that it should not have had to turn
over all its profits, saying that design elements contributed only marginally
to a complex product with thousands of patented features.
Design patent fights very rarely reach the Supreme
Court. It had not heard such a case in more than 120 years.
The case is Samsung Electronics Co, Ltd v. Apple Inc,
in the Supreme Court of the United States, No. 15-777.
(Reporting by Andrew Chung in New York; additional
reporting by Lawrence Hurley in Washington and Se Young Lee in Seoul; Editing
by Will Dunham and Stephen Coates)
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