The Supreme Court of the United States unanimously ruled on Dec. 6 that Samsung does not have to give up $399 million in profits for copying aspects of Apple's iPhone design into its Android phones.
The court maintained that the South Korean IT products giant does not have to return all the profits from its phones that were found to infringe upon Apple's copyrighted design of the iPhone. Thus it is not liable for at least $399 million of the $930 million patent-infringement award Apple wants as restitution.
As a result, Apple may be able to recover damages from Samsung based on the profits the South Korean company made only from the feature or features that were infringed upon--not the entire smartphone. This indicates Samsung may still be liable for the remaining $531 million the plaintiff is asking the court to mandate.
The case will continue in courts at a later date predicated on that premise.
Case Defines Difference Between Design and Utility IP
The case defines into sharp resolution the legal differences in separating the design and utility intellectual property of a device.
The Supreme Court's decision brings damages law for design patents into accord with the damages law for utility patents, intellectual property attorney Case Collard of Dorsey & Whitney told eWEEK in a media advisory.
"No longer can a patent holder get all of the profits from the sales of a product infringing a design patent. Instead, they may recover the profits attributable to the infringing feature," Collard said. "Design patents are an often overlooked tool to protect IP. While they are still very valuable, this decision reduces slightly the advantages of a design patent by limiting the amount of damages that can be recovered."
In 2012, after three years of legal back-and-forth, in a number of countries, a U.S. court ordered Samsung to pay $930 million to Apple for infringing on patents related to smartphone design, including the use and layout of icons on the Home screen. That amount was lowered from an earlier award of $1.05 billion.
Samsung challenged a $399 million portion of the $930 million, arguing that it amounts to the total profits it earned on the 11 smartphones found to infringe on Apple designs.
Three Samsung Phones Found to Have Infringed on iPhone Design
More specifically, design patents protect the way a thing looks, while utility patents protect the way it works; three Samsung phones were found to have infringed on the look of the iPhone. Samsung argued that it's unfair to make it hand over its entire profits on a superficial aspect of its devices, and that such a ruling would ultimately hurt innovation.
Attorneys for Samsung have likened the case to making an automaker turn over the full profits for a car, for infringing on cup holder design, while others have argued that the cup-holder analogy isn't accurate.
In a "friends of the court" filing on behalf of Apple, industrial design professionals note that Article 289 in the U.S. Patent Code "authorizes a patent owner to recover an infringer's total profit from an infringing article of manufacture."
They continued: "In determining the relevant 'article of manufacture,' the jury should consider the scope of the claimed design [and] the extent to which the design determines the appearance of the product as a whole."
They then offered the example of a car company intentionally copying the design patent for a Volkswagen Beetle, and how, were a "reasonable observer" to buy the car believing it to be a Beetle, "Volkswagen would be entitled only to the profits that the counterfeiter earned on the car's outer body shell, not on the car itself."
Reporting by Michelle Maisto was used in the composition of this story.