SAN FRANCISCO — The U.S. Supreme Court ruled in favor of Samsung on Dec. 6, in what is being heralded as a major victory in the patent controversy with rival tech giant Apple.

According to www.jurist.org, Apple was awarded $119.63 million in damages and royalties by the U.S. District Court for the Northern District of California for infringement of three of the patents. Samsung appealed the decision, claiming that the amount of the damages should have been based solely upon the infringing components, not on sales of the entire device.

The argument here is part of a larger issue at hand for technology patents. The U.S. Court of Appeals for the Federal Circuit first overturned the lower court’s decision, and then later the court reinstated the initial award.

The Supreme Court was then left to decide if “article of manufacture” included the entire end product, or only the infringing elements of that end product’s design. In an opinion delivered by Justice Sonia Sotomayor, the court held that “In the case of a multicomponent product, the relevant “article of manufacture” for arriving at a §289 damages award need not be the end product sold to the consumer but may be only a component of that product…,” adding that “... because the term 'article of manufacture' is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not, the Federal Circuit’s narrower reading cannot be squared with §289’s text.”

Peter Lee, professor of law and chancellor's fellow at UC Davis School of Law, spoke about the seemingly ambiguous nature of the Supreme Court’s ruling and what it means for the two companies moving forward.

“This is part and parcel of the Supreme Court's recent trend in patent law. It strikes down the federal circuit's bright-line rule and articulates a broad standard with little guidance as to how to apply it,” he told the Northern California Record. “This means that lower courts will have to struggle with defining the relevant 'article of manufacture' on a case-by-case basis going forward.”

Apple has claimed in the past that a ruling in favor of Samsung would be detrimental to business and the innovations of new technology. Lee said this doesn’t necessarily hold true.

“It depends on your perspective,” he said. “It is possible that reducing damages will decrease incentives to create, as Apple claims. However, it's an open question as to how much additional incentive design patents provide over and above natural competitive pressures to innovate. Even aside from exclusive rights, companies still have incentives to create new designs, products and technologies.

“Furthermore, reducing damages allows potentially greater follow-on innovation, which increases competition and may lower prices and increase choice for consumers.”

Both Apple and Samsung have adopted different business strategies here. A ruling in favor of Apple would have been a significant gain for its business model, but according to Lee, the opinion and what will eventually be a lowered damages amount makes Samsung’s follow-on innovation business model more viable moving forward.

Overall, the case has brought to the forefront some issues with patent law in today’s world that have long needed to be addressed by the courts.

“The Apple v. Samsung litigation has drawn considerable attention to design patents, which for a long time was a relatively neglected area of intellectual-property law,” Lee said. “Indeed, design-patent filings have been up in the past couple of years as companies in the IT space have looked to them as effective mechanisms for capturing value. The Supreme Court's ruling may put a dent in this trend, as damages for design-patent infringement will not be nearly as high as before for component products.”

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