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Legal Review: Ongoing Legal Battle Between Apple and Samsung Could Soon End

by Joel Nied October 12, 2016 at 1:00 pm 0

Legal Review PriceBenowitz

Transactional Group attorney Joel Nied focuses his practice on mergers and acquisitions, corporate and securities, as well as intellectual property.

The Supreme Court is set to hear oral arguments this week that could finally end the ongoing legal battle between Apple and Samsung.

In Samsung Electronics Co Ltd v. Apple Inc, Supreme Court of the United States, No. 15-777, the Court will determine whether monetary damages Samsung has already paid to Apple appropriately reflect the harm done by its patent infringement.

Starting back in 2011, Apple successfully sued Samsung for infringing on multiple iPhone patents and copying the iPhone’s signature look.

Over the course of the last five years, the world’s two leading manufacturers have been fighting in court to determine what damages Samsung must actually pay, although a jury initially determined Apple was owed over $1 billion. Samsung has already paid Apple nearly $400 million, but is nonetheless bringing the suit to the Supreme Court to argue that those damages should be reduced.

This is the first case presenting the issue of design patents to be heard by the Supreme Court in over a decade, and the high-tech subject matter presents new wrinkles when applying legal precedent.

The last time the Court was faced with patented design elements they were examining rugs and carpets, as opposed to a handheld personal computer, telephone, and camera. Samsung argues that upholding the current damage award and requiring them to pay Apple all the profits Samsung made off iPhone look-alikes will stifle creativity in the tech market.

Media giants like Facebook and Google both contributed to Samsung’s brief, and have a vested interest in Samsung’s Android operating platform. Meanwhile Apple, which has achieved greatness in large part due to its innovative and recognizable design features, argues that the law must protect innovators, receiving support in this position from major fashion labels like Calvin Klein.

Although Apple successfully brought lawsuits against Samsung for violating its patented pinch-to-zoom and slide-to-open features, the current suit focuses on three integral design features of the iPhone itself.

The iPhone’s signature rounded edge rectangular shape, front screen bezel, and 16-icon grid were present in 11 phones previously produced by Samsung. It is indicative of how slowly the law determines these types of issues that none of the first generation phones at issue in this case have been sold in stores for years.

As technological advances lead to ever more refined design aspects like voice recognition and intuitive computing, the Supreme Court is still struggling to determine the application of patent law for infringement of some of the iPhone’s most basic physical features.

In its brief, Samsung argues that requiring it to pay to Apple all the profits from the phones that were found to have infringed on the iPhone’s trademarked look is unfair. Samsung analogizes the damage award to requiring a car manufacturer to give up all the profits for a vehicle that merely copied a trademarked cup holder design.

Although legal precedent exists for allowing patent holders to collect only those damages related to specific trademarked components, Apple argues that the central design elements at issue in the case are tantamount to copying an entire car’s design.

While Samsung has framed the issue in terms of innovation and consumer choice, at this point the suit seems to be about nothing more than money.

Although the amount Samsung owed Apple was already substantially reduced through multiple appeals, the original jury award was still less than half of the $2.75 billion initially sought by Apple.

Both companies have already invested huge sums in legal fees to date, and if Samsung convinces the Court that the prior award is unfair, the appropriate amount of damages will have to be determined in yet another trial.

Borderstan contributor and law firm sponsor Price Benowitz LLP. The views and opinions expressed in the column are those of the author — our contributor and law firm sponsor Price Benowitz LLP — and do not necessarily reflect the views of Borderstan.

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