Apple v. Samsung heads to Supreme Court: What you need to know – CNET
The biggest patent case to hit the modern tech world is back again.
Apple and Samsung will appear before the US Supreme Court on Tuesday to argue why their opponent was wrong when it came to a patent case from 2012. This is the first time a design patent case has been examined by the Supreme Court since the 1800s.
A decision by the court could have a ripple effect across the technology industry and ultimately affect the gadgets you buy. What’s at question is how much money one company has to pay for copying the designs of another. Samsung says an Apple victory would stifle innovation. Apple argues that a Samsung win would weaken the protections afforded to new creations.
Notably, none of the devices in question has been on the market for years.
“One of the interesting things about this whole odyssey is it’s a great demonstration of how slowly the law moves relative to technology,” said Mark A. Lemley, a Stanford Law School professor and one of the people who signed a friend-of-the-court brief in support of Samsung. “Here, we’re on the first-generation trial, but…we’re generations behind what the companies are selling.”
You’re forgiven if you don’t remember what this was all about beyond phones and patents. Don’t worry, CNET has you covered. And we’ve done the homework about SCOTUS so you don’t have to scramble to remember your high school civics class.
Samsung said in a comment that it looks “forward to the Supreme Court’s guidance on a very important matter that has the potential to stifle innovation and consumer choice. Samsung is honored to lead the charge in helping pave the way for future innovators and foster an environment where the fear of unreasonable law suits don’t impinge upon their creativity.”
Apple didn’t have a comment ahead of Tuesday’s hearing.
What was this about again?
Yeah, this all seems like it happened a long time ago. The original Apple v. Samsung trial in 2012 captivated Silicon Valley and the tech industry because it exposed the inner workings of two notoriously secretive companies. It was just one of many cases around the world as the rivals sparred both in the marketplace and in the courtroom.
At issue were design patents for a black, rectangular, round-cornered front face; a similar rectangular round-cornered front face plus the surrounding rim, known as the bezel; and a colorful grid of 16 icons. Those three patents are what’s being considered in the Supreme Court case.
What devices were accused of infringing Apple’s patents?
The products in question included the Galaxy Prevail, Gem, Indulge, Infuse 4G, Galaxy SII AT&T, Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Tab, Nexus S 4G, Replenish, and Transform.
What was the decision in the original case?
In August of 2012, a nine-person jury sided with Apple on a majority of its patent infringement claims against Samsung. At that time, the jury awarded Apple $1.05 billion in damages, much less than the $2.75 billion sought by the Cupertino, California, electronics giant. Samsung, which asked for $421 million in its countersuit, didn’t get anything.
How much did Samsung end up paying Apple?
District Court Judge Lucy Koh, in striking $450.5 million off the original judgment against Samsung, ordered a new trial to begin in November 2013 to recalculate some of the damages in the case. South Korea-based Samsung ultimately paid Apple $548 million in damages in December 2015.
The amount was based on the total profits Samsung made from its infringing devices. That’s what Samsung — and other tech companies like Dell and Facebook — want the Supreme Court to change. In this case, Samsung sold 10.7 million infringing devices, generating $3.5 billion in revenue.
Only $399 million of the $548 million paid to Apple — considered the “additional remedy” amount under Section 289 of the Patent Act of 1952 (35 U.S.C. 289) — is being examined in the Supreme Court case. The additional $149 million in damages Samsung paid Apple is not at stake.
So what’s the issue with money?
This is what the entire Supreme Court case is about. Samsung wanted the court to give guidance on what is covered by design patents (which protect the way an item is used and how it works) and also on what damages can be collected. But the Supreme Court is looking only at the second issue: “Where a patented design is applied only to a component of a product, should an award of infringer’s profits be limited to profits attributable to that component?”
Samsung believes design patents are given too much value when it comes to legal damages. The company contends that Apple should get profits only from the parts of a smartphone that infringe Apple’s patents — the front face and a grid of icons on a user interface — not the profits from the entire phone.
Apple, meanwhile, quotes Congress in saying that “it is the design that sells the article” and, because profits attributable to design are often “not apportionable,” it wants the Supreme Court to uphold the lower court ruling.
Weren’t there some other cases between Apple and Samsung?
Yes. The 2012 case wasn’t the only time Apple accused Samsung of patent infringement. The two companies also battled in April 2014 over newer devices, specifically the Galaxy S3 and iPhone 4S. In that case, a jury told Samsung to pay Apple $119.6 million for infringing some of its patents, while Apple owed Samsung $158,400 for infringing one of the Korean company’s patents.
Another damages retrial — which would have been the fourth showdown between the companies — was slated to start in late March in San Jose, California. But Koh put the trial on hold until the Supreme Court reviews the case.
The companies also were battling in overseas courts but agreed in August 2014 to settle all litigation outside the US.
Who sides with Samsung?
Dozens of legal experts, nonprofit organizations and technology companies filed amicus, or friend of the court, briefs in support of Samsung in January when it was trying to get the Supreme Court to hear its case.
Tech companies that support Samsung include Dell, eBay, Facebook, Google and HP. Other groups supporting Samsung included 50 professors of intellectual-property law, from places like Stanford and Georgetown universities, and digital-rights nonprofits like Public Knowledge and the Electronic Frontier Foundation.
Who sides with Apple?
More than 100 design industry professionals, including well-known fashion names like Calvin Klein and Alexander Wang, signed a friend-of-the-court brief in support of Apple. The designers and educators said the iPhone’s distinctive look drove people to buy it, so a similar-looking Samsung phone could hurt Apple’s sales.
How is the government involved in this?
The US Department of Justice’s Office of the Solicitor General (the group tasked with supervising and conducting government litigation in the Supreme Court) in June filed an amicus brief “supporting neither party.”
But it largely sided with Samsung in believing the lower court interpreted the law incorrectly. Still, it kept open the possibility that Samsung didn’t present enough evidence to show it shouldn’t have to pay remedies on the entire profits from its infringing devices.
The DOJ believes patent holders should get full profits from the sale of an “article of manufacture,” (as detailed in the patent law) but it doesn’t believe the definition of an article is clear. Instead of an article being the entire phone, an article may actually be only the physical shell of the phone.
The DOJ said the ruling of the US Court of Appeals should be vacated and the case should be sent back to a lower court for further proceedings.
When is the Supreme Court hearing?
It starts at 10 a.m. ET on Tuesday and lasts for an hour.
Who will be representing the companies at the Supreme Court?
Kathleen Sullivan, a partner at law firm Quinn Emanuel, will be speaking for Samsung. Her firm represented Samsung in the earlier trials. She’s argued nine cases before the US Supreme Court.
Seth Waxman, a partner at law firm WilmerHale, will be speaking for Apple. He’s a former solicitor general of the US and works for the same firm as Bill Lee, one of the lead attorneys in the previous trials. Waxman has delivered 75 oral arguments in the Supreme Court.
Wait, there are only eight justices now. Could there be a tie?
Yes. Because there are eight justices, there’s no tiebreaker. The Supreme Court was split 4-4 in June in a case challenging Obama’s 2014 immigration policies. If there’s a tie, the lower court’s ruling is affirmed.
But over the last three terms of SCOTUS, seven patent cases were decided unanimously. And patent cases typically don’t split along liberal versus conservative lines.
What happens if Apple wins?
More court time. There’s still litigation going on between Apple and Samsung for other patents, and a second damages retrial from the 2012 case was slated to start in mid-March. Along with the $548 million Samsung agreed to pay, Apple argued its rival owed an additional $180 million in supplemental damages and interest. Koh put that trial on hold until after the Supreme Court reaches its decision.
What happens if Samsung wins?
Yep: more trials. If the Supreme Court limits the money that can be collected on infringing patents, a lower court will have to decide how much Apple is owed.
Other current design patent cases and those going through appeal would face the new Supreme Court interpretation, which means damages would be much lower than in the past.
When will there be a decision?
The Supreme Court recesses for the year on June 30, which means a decision should come before then. It’s likely a ruling will come in the first quarter of 2017.