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Will Samsung be able to blow up Apple's $399 million patent infringement award against it, or will its legal arguments spontaneously combust in front of the Supreme Court? The company, which is currently struggling to keep its Galaxy Note 7 phones from literally exploding, came before the Court yesterday to challenge the massive infringement award meted out after Samsung was found to have copied design features from the Apple iPhone in its own Galaxy line of smartphones.
The case is the culmination of a fiery legal battle that has lasted five years and which could carry significant implications for the design and technology industries.
When Samsung unveiled its Galaxy line of smartphones, its competitors at Apple noted something more than a passing resemblance. Apple sued, accusing Samsung of infringing on its design patents by including a front-facing design, rounded edges, and square icons similar to the iPhone's. In 2012, a jury agreed with Apple, awarding the company $399 million in damages.
That $399 million represents the entirety of the profits Samsung had made on its 11 infringing Galaxy models.
Now, Samsung is arguing that, when an infringed patent relates only to a component part, an infringement award should be limited to the profits connected to those design elements, rather than the whole product's total profits. More technically, the dispute hinges on what's considered an "article of manufacture" for purposes of infringement: the infringing elements or the entire product?
As Kathleen Sullivan argued for Samsung yesterday, "A smartphone is smart because it contains hundreds of thousands of technologies that make it work." Allowing one design infringement to entitle the patent holder to all of the phone's profits "makes no sense," she said.
Several Supreme Court justices responded favorably to those arguments. Chief Justice Roberts said that "It seems to me that the design is applied to the exterior case of the phone. It's not applied to all the chips and wires." Since the design doesn't apply to the whole phone, it seems that "there shouldn't be profits awarded based on the entire price of the phone."
But the justices also struggled with how such a concept might play out in practice. Justice Kennedy began arguments by noting that "The problem is how to instruct a jury on that point ... If I were a juror, I simply wouldn't know what to do under your test."
"Neither side gives us an instruction to work with," he complained.
"Design is not a component," Seth P. Waxman argued for Apple, "and the patented design is not the article of manufacture. The patented design is something that's applied to an article of manufacture."
Attorneys for Samsung, Apple, and the Solicitor General's office, perhaps in recognition that some of the justices have shown a limited understanding of cell phone technology in the past, repeatedly turned to the Volkswagen Beetle as an example of a product whose design was arguably essential to its success.
The Beetle's body, expressing its distinctive shape, could theoretically be considered its own article of manufacture, given that some might buy the car based exclusively on its design. But Justice Alito was not convinced, saying that "I can't get over the thought that nobody buys a car, even a Beetle, just because they like the way it looks."
The value of the design to the product could help jurors determine how profits are to be awarded, Justice Breyer noted. For infringed wallpaper design, for example, "you get the whole thing." For "a Rolls Royce thing on the hood? No, no, no. You don't get all the profit from the car."
That would be a question of fact for the jury, Waxman argued.
The dispute between Apple and Samsung is the first design patent case the Court has heard in 120 years. A decision is expected by the end of the term.
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