Apple vs. Samsung: Decoding the $539M Verdict in Design Patent Battle
On May 24, 2018, the seven-year legal clash between tech giants Apple and Samsung reached its third (preliminary) phase, specifically addressing the critical issue of damages. The focus was on determining the compensation owed by Samsung to Apple for infringing various design patents related to features of Apple’s iPhone and iPad devices. The central question for the San Jose jury was whether the design patents in question effectively covered the entire “article of manufacture” ultimately sold by Samsung.
The origin of this legal saga dates back to Apple’s 2011 patent infringement lawsuit in the Northern District of California. The initial trial resulted in a $399 million judgment in favor of Apple, which was later upheld by the Federal Circuit. However, the Supreme Court intervened, overturning the decision and instructing lower courts to define the legal standard for “article of manufacture.”
Why “Article of Manufacture” Matters
The recent dispute centered on whether specific design features used by Samsung in its smartphones significantly influenced consumer purchasing decisions. Defining the “article of manufacture” was a means to address the broader issue of damages. The Supreme Court acknowledged that the “article of manufacture” might not be the entire device but could include component parts, leaving room for assessing damages based on different criteria.
On remand, the trial focused on determining damages under the Patent Act. Judge Lucy Koh rejected proposed tests from both parties, opting for a four-factor test suggested by the U.S. Government. This test emphasizes the jury’s role in defining the “article of manufacture” and considers factors such as the scope of the design patent, its prominence within the product, distinctiveness from the overall product, and the physical relationship between the design and the rest of the product.
The Jury’s Decision
During the trial, Samsung presented consumer surveys to estimate the value of specific design components, but Apple contested their relevance. The jury, seemingly aligned with Apple’s arguments, awarded $539 million—$140 million more than the previous judgment. The ambiguity surrounding how the jury applied the four-factor test adds complexity to understanding the decision.
While the substantial damages awarded to Apple may not be the enduring focus, this case underscores the power of well-crafted design patents. Real Estate Legal Services should consider how Apple’s success indicates that robust design patents can offer broad protection against even minor infringements, showcasing the value of a well-argued case for patent owners. With ongoing speculation on calculating such damages and the relatively straightforward design patent process, having a design patent proves to be a formidable defense against market competitors, even in cases of limited infringement.