The first general rule is that whenever the Supreme Court accepts a patent case, it will reverse the lower court decision and change the law. The second general rule is that whenever the Supreme Court decides a patent case the law is left in worse shape than it was before.
This time, the Supremes have inserted themselves into the Apple v Samsung litigation. In 2007, Apple under Steve Jobs took a high-risk leap and launched the first iPhone. No one knew at the time whether anyone would buy the new product or whether Apple would slowly sink beneath the waves. The first iPad followed three years later. Apple had the foresight to protect the appearance of the iPhone and iPad with design patents. A ‘design patent’ protects how a thing looks, not what it does or how it does it.
The iPhone and iPad were, of course, wildly successful, a fact not lost on Samsung. In a later infringement action by Apple, a U.S. jury found that Samsung willfully copied the appearance of the iPad and iPhone in the early Samsung smart phones and tablet computers, and in the process infringed Apple’s design patents. The jury awarded over $1 billion in money damages to Apple. The money damages were subsequently reduced by the trial judge and now total $400 million.
There is no longer any question as to whether the Apple patents are valid or whether Samsung infringed those patents – the patents are valid and Samsung did infringe. The only issue remaining is whether the method used by the lower courts to calculate Apple’s damages is correct.
Design patents have a special remedy that does not apply to utility patents, and design patent law is as clear as the law gets:
The lower courts held that Samsung’s total profit from the sale of the infringing smart phones and tablet computers was the proper measure of damages and the $400 million award is based on Samsung’s profits from the sale of infringing products.
Samsung argues that because the patented design is incorporated in a component of the total product, then the damages should be the profits from the sale of that component, not the entire product, and that is the issue that the Supreme Court has agreed to consider. Of course, the profit from the sale of a $40.00 smart phone case is a lot less than the profit from the sale of a $600.00 smart phone. This issue has far-reaching ramifications and we expect a decision from the Supreme Court later this year. We’ll keep you posted.
— Robert Yarbrough, Esquire