“The Supreme Court handed a huge victory to Samsung on Tuesday, tossing out nearly $400 million in damages it was ordered to pay to Apple in their long-running patent infringement case,” Ina Fried writes for Recode. “The ruling, while sending Apple’s specific case back to a lower court, changes the landscape for how design patent verdicts can be calculated.”
“A federal jury had earlier ordered Samsung to pay Apple $399 million for infringing on design patents used in Apple’s iPhone, one part of a larger patent verdict for Apple,” Fried writes. “That amount was based on Samsung’s entire profits for the Samsung phones that were found to infringe. However, the Supreme Court ruled Tuesday that damages need not be calculated based on the profits for an entire device.”
“In a unanimous opinion, the court ruled Tuesday that juries need not award damages based on the profits for an entire product if the item consists of many parts,” Fried writes. “Apple, though, really lost this battle when it failed to get an injunction halting sales of Samsung phones. Since then, it’s basically been about how much money Samsung does or doesn’t have to pay — and the amounts here are essentially chump change for both.”
Read more in the full article here.
MacDailyNews Take: As usual, design (art) is vastly undervalued by non-designers, in this case those who sit on the U.S. Supreme Court. In short: They don’t get it.
The crux of the issue: The main reason why Samsung et al. were able to sell phones and tablets at all was because they made fake iPhones and fake iPads designed to fool the hoi polloi in much the same way as how Microsoft et al. profited wildly from upside-down and backwards fake Macs at the end of the 20th century. Google, Samsung, HTC, Xiaomi, et al. are the Microsofts, HPs, Dells, and eMachines of the new century.
Apple’s products came first, then Samsung’s:
Here’s what Google’s Android looked like before and after Apple’s iPhone:
SEE ALSO:
U.S. Supreme Court unanimously rules for Samsung in Apple patent damages dispute; case sent back to lower court – December 6, 2016
Why the U.S. Supreme Court asked if Apple’s iPhone design is like a Volkswagen Beetle – October 12, 2016
Seemingly frustrated U.S. Supreme Court hears Apple, Samsung patent case – October 11, 2016
U.S. Supreme Court to hear Samsung, Apple damages dispute today – October 11, 2016
Apple wins appeal reinstating $119.6 million verdict against patent-infringer Samsung – October 7, 2016
Beleaguered Samsung struggles to put out the fires caused by their exploding phones – October 6, 2016
Dieter Rams, Norman Foster, and 100+ of the world’s top designers side with Apple in Samsung patent case – August 4, 2016
Apple to U.S. Supreme Court: Samsung stole our patents, should end its appeals and finally pay up – August 1, 2016
Obama nominates Lucy Koh for Ninth U.S. Circuit Court of Appeals in San Francisco – February 29, 2016
Patently ridiculous and clueless conclusion by the Supremes.
As I was saying at the time of trial, the proper measure of damages in this case is to figure out:
A. How much money did Apple make while competing with Samsung’s infringing devices, and
B. How much money would Apple have made if Samsung had been selling devices that were non-infringing, but identical to the actual Samsung products in every other way, then
C. Subtract A from B and tell Samsung to cut a check for that amount. That is the amount necessary to compensate Apple for its losses.
Assuming a free market, that will also equal the difference between:
A. The amount Samsung made selling the infringing device, and
B. The amount it would have made selling an otherwise identical non-infringing device.
That is just another way of calculating the cash that flowed to Samsung that should have gone to Apple absent the infringement.
That is how damages are calculated in every other sort of lawsuit. I.E. if somebody negligently damages your car, you get the difference between the value of the car immediately before the collision and its value immediately after; you do not get the full value of a brand-new car. Similarly, if you breach a contract, you can collect your economic losses but not the full face value of the contract without a deduction for the benefits you received due to partial performance.
The purpose of compensatory damages is to compensate for losses, not to punish the defendant for being wicked. We have punitive damages and criminal statutes for that.
In this case, it appears (the record isn’t clear) that the court awarded Apple an amount equal to Samsung’s total profit without deducting the amount it would have made if it had avoided any infringement. Since the record isn’t clear, the unanimous Supreme Court (4 conservative Republicans, as well as 4 liberal Democrats) sent it back for clarification. If the damages were calculated wrongly, it will have to be done right.
The Apple legal team can only work with the facts they are given. If the trial court screwed up badly enough to merit an 8-0 reversal, nothing the lawyers could have done would have helped.
Similarly, the justices have to decide cases on the law and facts they are given. They can’t make it up to punish Samsung for being bad guys. Again, their moral character is immaterial to the calculation of compensatory damages, however material it is to punitive damages.
The Supreme Court makes a lot of clueless assumptions about how the world works.
This case doesn’t seem to be one of those. What is important to remember is that the Supreme Court has to look at the RULES used to make a decision and make sure those rules work for all cases, not just the one in front of them. If they approve a rule that produces a good decision in this cases, but unjust in others, they’ve failed. Here, they said the rule used by the lower court is not valid for all situations, and thus not a valid rule.
They didn’t say that Apple should not get the $399 million, just that the rule the lower court used is not a valid rule. What they said was that what constitutes an “article of manufacture” must be decided on a case-by-case basis. So, it goes back to the lower courts, who CAN decide that, here, it makes sense to view the entire phone as the “article of manufacture” whose total profits should be handed over.
Here’s the most important part of the opinion:
“The only question we resolve today is whether, in the case of a multi-component product, the relevant “article of manufacture” must always be the end product sold to the consumer or whether it can also be a component of that product. Under the former interpretation, a patent holder will always be entitled to the infringer’s total profit from the end product. Under the latter interpretation, a patent holder will sometimes be entitled to the infringer’s total profit from a component of the end product.”
In other words, Apple could end of with the same $399 million judgment against Samsung, and I think that is likely. The problem is the way the lower court MADE its decision could lead to bad decisions in other cases. The Supreme Court has to worry about all the other cases and how they would be affected by a court’s logic, not just whether that logic makes a fair outcome for a single case.
Disclaimer: I AM an attorney, but not yours, and this isn’t advice. Just a little explanatory post on what actually happened here.
And let’s not forget, Judge Koh whittled down the lawsuit before it even started. This whole lawsuit has turned into the Monte Python meme of the knight preventing passage over the bridge…
Does that mean they couldn’t just have another court case covering the patents that aren’t covered in the one currently being bounced around? It was my understanding that the list was whittled down because it was deemed too long for a jury to judge on in reasonable time. It’s not Double Jeopardy if you don’t have overlapping patent infringements.
Ahh, thanks for the salient explanation. Appreciated.
Actually not. It was a UNANIMOUS decision and the basis for it is 100% correct. It’s a shame none of you can see past the tip of your noses.
It’s a shame you are not as well informed as Krioni who gave an adult response as opposed to your unnecessary, unhelpful & infantile snarky one.
The statement can be truthfully truncated and will be way way more true when Trump gets to load the courts with idiots.
“U.S. Supreme Court. In short: They don’t get it.” is a complete truthful summary statement. About many many things. fasten your seatbelts for decades of idiocy.
STOP. BUYING. CONSUMER. SAMSUNG. PRODUCTS.
That will fix the problem.
Move on already. That 400 million was chump change anyway.
The money is secondary, it is the principle of protection of intellectual property at stake.
SCOTUS gets all kinds of things wrong and yes, they are political. When 5 Republican Justices appointed George W Bush President the mask came off for most people.
So, according to that court, It s legal to copy a song as long as they are not exactly the same? for instance, having some one else to sing a hit song but the lyrics can remain the same because I have already changed the singer? I can copy a movie because I change the main poster? so what is the point of investing in creativity if any one can copy your work and there is no court to protect it? Even worse, what is the point of having that court?
Since you selected songs as an example, you might want to keep in mind that Snoop Dogg has complained that the majority of current rappers sound the same. They use the same cadence and rhythm possibly sped up or slowed down and only change the lyrics. It’s one thing to have that for a single artist ‘style’ but when it happens to a ‘type’ of music like rap it appears to be ‘ok’ legally.
Further proof the USA has moved completely into banana republic territory.
Karma is infinitely better than the legal system: SameDung lost $6 billion due to the Note 7 fiasco and most of that went to Apple anyway judging by the record sales of iPhone 7/7+ and Apple capturing 104% of the industry’s profits.
It’s now almost 10 years since the iPhone introduction. The groundbreaking design and function compared to the buttoned plastic toys that existed previously has clearly worn off on the people. Quite disappointed in the US Supreme Court. (So what else is new).
OK Apple, it’s time to copy the Surface Studio, then copy the BMW carbon-fibre body panels, make your own Intel-emulation ARM chip, copy Qualcomm’s radio chips and steal everything from LG while you’re BF buddies.
Make them as similar as you want, the complaints won’t hold up in court.
As I said in a earlier post, this was a narrow ruling and the justices did not reverse everything the lower court decided. Considering that SCOTUS spent some time looking up the definition of “article of manufacture” I’d say we have a problem with the way the patent law is written. It’s time to start lobbying congress to address antiquated terminology in the patent law.
Exactly. This was not about whether infringement is illegal, but about how to calculate the damages. Both the statute and the trial court ruling were unclear, so the Supreme Court sent it back for a clarification in light of normal legal principles that apply to the calculation of damages in every case.