The U.S. Supreme Court is hearing Samsung’s appeal in its multi-year patent infringement battle with Apple. The Justices won’t be determining if Samsung infringed on Apple’s patents—the company already admitted to that—and instead will rule on how damages in patent design cases should be calculated. Their decision has real implications for other design-related patent cases, and could lead to yet another lower court hearing for Apple and Samsung.
The case going before the Supreme Court today dates back to 2011 where a jury rules Apple wasn’t infringing on Samsung’s mobile device patents, but Samsung was infringing on several of Apple’s. After years of appeals, Samsung agreed to pay Apple US$548 million in damages with the stipulation it gets the money back if the Supreme Court overturns the Appeals Court ruling.
Damages in design patent cases are calculated based on total profits earned by the infringing company. The court set that at over $900 million, but Samsung negotiated with Apple to get that number down to $548 million. Samsung is hoping to convince the Supreme Court it should pay even less.
The Court can rule one of two ways: Yes, the damages should be recalculated; or no, the lower court’s damages ruling stands. Both have an impact that reaches beyond Apple and Samsung.
Yes: Recalculate the damages
Should the Supreme Court rule that Samsung is right and the damages value needs to be recalculated, the case goes back to the lower Federal Court. That means more time in front of judges for Apple and Samsung, and Apple will ultimately have to give back at least some of the $548 million it’s already been paid.
It also sets a precedent for calculating damages in other design-related patent infringement cases. Damages will likely be much lower compared to cases handled before this ruling.
Companies rooting for this outcome say it’ll foster innovation because they won’t face crippling costs from competitors using the patent system to keep them from inventing new ideas. The fear of the patent system being used as a weapon makes them question the value in designing new products if they’ll face oppressively expensive legal action.
No: The current damages calculation stands
Ruling against Samsung means the lower court’s damages ruling stands, bringing an end to this particular legal battle between Apple and Samsung. The damages Samsung has already paid stay in Apple’s hands, and they redirect their focus to their other patent infringement battles.
Shooting down Samsung’s appeal validates the current damages calculation system that led to the $900 million the company was supposed to pay Apple.
Companies rooting for this outcome say it protects their intellectual property, and in turn fosters innovation. If their ideas can easily be stolen, they argue, there isn’t much incentive to design new technologies and products.
The stakes seem pretty high for more than just Apple and Samsung, and regardless of how the Justices rule will have an impact on future design-related patent cases. The Supreme Court’s ruling won’t come until June 2017, so we still have several months before we know how similar cases will be handled in the future.