Samsung’s legal persistence is paying off because the United States Supreme Court unanimously ruled on Tuesday the electronics maker doesn’t have to pay Apple US$400 million for infringing on iPhone-related patents. More specifically, the court ruled Samsung owes Apple damages based on infringing components instead of the entire device.
The case dates back to 2011 and a landslide legal victory where Apple was awarded over a billion dollars for Samsung infringing on several of its mobile device design patents. That amount was later reduced to a little over $900 million thanks to a jury miscalculating the damages, and Samsung negotiated a deal where it ultimately paid Apple $400 million at the end of last year.
Samsung’s deal came with a big string attached: If the Supreme Court overturned the damages ruling, Apple had to pay back the total amount plus interest.
The Justices heard arguments from the two companies on October 11th. Apple argued consumers buy smartphones based on the whole design, not individual components, and that the law says infringers must pay out the products profits as damages.
Samsung argued damages should be calculated based on the components related to the infringement. The Justices sided with Samsung, so the multi-year patent battle continues because now the case goes back to the lower court to recalculate the damages value.
The ruling is a blow for Apple because it greatly lowers the damages companies can expect to pay in patent infringement cases. From Apple’s perspective, it also means technology patents are less defendable.
From Samsung’s perspective—and many other tech companies—the ruling means innovation can carry on and companies don’t need to worry about oppressive repercussions from potential patent infringement cases.
Now Apple and Samsung can start preparing for yet another round of hearings where they’ll try to convince the lower court how to calculate the infringement damages. While the Supreme Court gave its ruling on the damages, it didn’t offer up any guidance on how the calculation should happen.
The tech industry will no doubt watch closely to see how the new damages hearing plays out. The rules for patent infringement damages are in flux, and the final outcome in the ongoing Apple and Samsung fight will have a significant impact on future patent cases.
[Thanks to Law360 for the heads up]