Samsung gets reprieve in war against Apple from Supreme Court but no lasting relief

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Published: December 9, 2016 6:18:40 AM

For Samsung, whether its violation of Apple’s design patents in the smartphone space were serious or not was a 399-million-dollar question.

The justices ruled 8-0 that Samsung should not be required to forfeit the entire profits from its smartphones for infringement on design components, in a case closely watched by the tech industry. (Reuters)The Court of Appeals for the Federal Circuit—basing on the law that a company is liable to pay the entire profit made on an “article of manufacture” if it violates a patent—had earlier upheld the 9-million penalty on Samsung. (Reuters)

For Samsung, whether its violation of Apple’s design patents in the smartphone space were serious or not was a 399-million-dollar question. That the American Supreme Court eventually sided with the South Korean company shouldn’t surprise anyone. The Court of Appeals for the Federal Circuit—basing on the law that a company is liable to pay the entire profit made on an “article of manufacture” if it violates a patent—had earlier upheld the $399-million penalty on Samsung. But the US SC ruled that the “article of manufacture” clause may sometimes apply to the entire product and sometimes to the specific component for which the patent is violated. With the court declining to “resolve whether the relevant article of manufacture for each design patent at issue here is the smartphone or a particular smartphone component”, the penalty quantum stands void. The SC remarked that while in the case of a violation in a single-component product, the entire product may be considered the “article of manufacture”, in the case of a multiple-component product, identifying the article of manufacture may be a more complicated task.

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Even so, given the yoke of a penalty is not fully off Samsung yet, a more preserving end to the controversy can only come from American law-makers. The appellate court had said as much in its judgment; it had contended that “an award of a defendant’s entire profits for design patent infringement makes no sense in the modern world” but maintained it was bound by the statute and the policy arguments need to be directed at the US Congress.

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