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Industryweek 10621 Apple Samsung

Supreme Court to Hear Samsung-Apple Patent Damage Appeal

March 21, 2016
The court will look at whether the penalty was excessive for copyright infringement of certain components within the electronics.

WASHINGTON—The U.S. Supreme Court on Monday opened the door to reducing the hundreds of millions of dollars in damages owed by Samsung to Apple in the blockbuster patent case between the world's biggest smartphone makers.

The court agreed to hear one element of the South Korean giant's appeal--it will not reconsider Samsung's guilt, but will look at whether the penalty was excessive for copyright infringement of certain components within the electronics.

The high court posted the case on its weekly list of cases it would hear or decline, saying only that the appeal would be "limited to Question 2," or whether patent infringement should result in handing over all profits from a particular component.

Samsung last year agreed to pay Apple some $548 million in the years-long patent battle in federal court in California, pending the outcome of the appeal.

But Samsung argued that $399 million of the penalty was excessive because it was based on the premise that "Apple was 'entitled to' those entire profits no matter how little the patented design features contributed to the value of Samsung's phones," according to the appeal brief.

Attorneys for the South Korean consumer electronics titan argued the massive payout was not warranted because smartphones "contain countless other features that give them remarkable functionality wholly unrelated to their design." 

"Even if the patented features contributed 1% of the value of Samsung's phones, Apple gets 100% of Samsung's profits," the appeal said.

Aiming at 'Patent Trolls'

Intellectual property analyst Florian Mueller, who writes a blog on patents, said the ruling is positive for technology companies hurt by frequent lawsuits from holders of patents, sometimes derided as "patent trolls."

"I'm very happy that the Supreme Court will now take a look at an interpretation of the law that would theoretically threaten even a company like Facebook (or little guys--for example, 'indie' app developers) with the prospect of losing their entire profits over a single design patent infringement," Mueller said on his blog.

"I'm hopeful that something good will come out of this. And it wouldn't even be bad for Apple. Once the shoe is on the other foot, Apple, the most profitable company in the history of this industry, will fight the notion of an unapportioned disgorgement as well."

Apple declined to comment and Samsung did not immediately reply to AFP queries on the case, in which the California company accused Samsung of copying numerous features from its iPhone.

The Computer & Communications Industry Association, which represents a number of tech firms but not Apple, welcomed the decision.

"The technology industry is breathing a sigh of relief that this case will now get the attention it warrants by the nation's highest court," said attorney Matt Levy of CCIA, which filed a brief in support of Samsung.

"The misinterpretation of this law by the Federal Circuit could have disastrous effects on innovation. The lower court could green light a new breed of design patent trolls that use design patents to threaten companies' entire profits."

Copyright Agence France-Presse, 2016

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