US Supreme Court rules for Samsung in $399m patent dispute with Apple

Apple loses latest patent court battle, but the ongoing war seems far from over.

The US Supreme Court has sided with Samsung in the latest development of their long running dispute with rival manufacturer Apple. Following a 2012 verdict, Apple were awarded $930m in damages – equal to the profit that Samsung had gained because of its infringement of Apple’s iPhone design.  Although this figure was reduced by $382m by the US court of appeals (which upheld the patent infringement but said the iPhone’s appearance could not be protected through trademarks), the figure still stood at $548m.

Samsung appealed to the Supreme Court. They believed $399m of the sum should not have been awarded.  Samsung’s protestations have been vindicated, as the court returned an 8-0 ruling which effectively sends the case back to the lower courts for further proceedings.

The dispute centred on the term ‘article of manufacture’. There was a discussion on whether the term could be interpreted to mean a finished product in its entirety, or if it could simply be a component in a complex product. Both parties agreed the term could mean a component, but Apple argued that the fine should stand. They claimed Samsung had provided no evidence that the ‘article of manufacture’ was anything less than Apple’s entire smartphone as sold.  Samsung said it didn’t need to present such evidence.

The court agreed with Samsung.  Justice Sotomayor stated that the patent law is clear that the term ’article of manufacture’ is broad enough to encompass both a product sold to a consumer, and a component of that product”.

This decision means that Samsung, who admittedly violated Apple’s patent, does not have to relinquish its entire profit for the sales of products using stolen designs. The designs covered only certain components (the rounded corners, the rim of the front face, the grid icons that users view), and not the entire phone.

Samsung went on to become the world’s top smartphone maker with the products that used IPhone designs.

This ruling is just the latest chapter in a ferocious legal battle between the world’s top two smartphone manufacturers. These battles began in 2011 when Apple first sued Samsung for copying iPad designs, and Samsung counter-sued over the use of 3G technology. In February 2016, Samsung overturned a $120m jury verdict on appeal relating to the infringement of slide-to-unlock and auto-correct features.  The whole saga has been characterised by failed settlements, trials, retrials and appeals in multiple jurisdictions.