The U.S. Supreme Court ruled in favor of Samsung in its high-profile patent dispute with Apple, sending the case back to a lower court to determine damages.
Samsung had been ordered to pay Apple $399 million for infringing on iPhone patents addressing features such as a front face with rounded corners and bezel. The South Korean company appealed that judgment, saying it was unfairly inflated considering the relative unimportance of the patented features at the heart of the case.
The Supreme Court in March agreed to take the case in a move that’s likely to have a significant impact on the patent-litigation landscape.
“Section 289 of the Patent Act provides a damages remedy specific to design patent infringement,” Justice Sonia Sotomayor wrote (PDF) in the 8-0 ruling. “This case involves the infringement of designs for smartphones. The United States Court of Appeals for the Federal Circuit identified the entire smartphone as the only permissible ‘article of manufacture’ for the purpose of calculating Section 289 damages because consumers could not separately purchase components of the smartphones. The question before us is whether that reading is consistent with Section 289. We hold that it is not.”
Apple initially brought the suit in 2011, saying 11 Samsung handsets violated its patents. Samsung was eventually ordered to pay Apple $930 million, but a U.S. Court of Appeals lowered the amount to $548 million in May 2015.
Samsung agreed in December to pay Apple the lowered figure to settle the case, but the South Korean company continued to press its appeal of $399 million of that amount. Google, Facebook, Dell, HP and others took up Samsung's cause, writing in a single amicus brief that the "interpretation of antiquated laws" could diminish innovation, encourage patent trolls and negatively affect consumers and the economy.
That's because if the court had ruled that the "article of manufacture" was the entire smartphone, and not just certain design elements, all profits for those smartphones would be up for grabs. That precedent could then enable patent trolls and litigious companies to create a viable "industry of litigation" at the expense of manufacturers, the amicus brief noted.
The U.S. Department of Justice filed a legal brief (PDF) in June asking the Supreme Court to return the case to a trial court for more litigation.
The decision doesn’t entirely resolve this specific dispute, but returns the case to a lower court to determine how much Samsung should pay.