Apple wins half a billion dollars in damages from Samsung following design patent lawsuit

By Carrie Bradon | Jun 16, 2018

Apple is suing Samsung after the competitor allegedly infringed on multiple patents which were related to Apple product design.

SACRAMENTO – Apple has settled with Samsung after the competitor reportedly infringed on multiple patents which were related to Apple product design.

The settlement, which was reached in May, declared that Samsung is indebted to Apple for $539 million for alleged infringement of five patents with Android phones that were sold from 2010 to 2011, making this a legal dispute that has been in the works for years. 

The settlement was composed of more than $533 million for infringement of three Apple design patent and more than $5.3 million for two utility patents.

William P. Smith, co-chairman of the Intellectual Property Practice Group at Spilman Law Firm, explained the challenges of the case.

"The issue comes down to the difference between design and utility patents," Small told the Northern California Record. "Utility patents usually cover the functionality of a device, like how it works and there may be slight modifications but it would still fall in the functionality of the claim."

Small explained that the design patents which were involved in this case were a bit different in that they protect the ornamental features of a device.

"So that's the rectangular black screen, and one of the caveats of a design patent is that it does not protect functionality," Small said. "The Samsung 'copy' looked substantially like the iPhone, it was a rectangular screen, though the button was different, which was a minor modification. But what was found was infringement on the design."

Small explained that the design patent has historically been very limited protection, meaning that if there are modifications then the protection goes away. 

"This was the argument that Samsung was making, that the screen was not ornamental but rather functional because you need a display window," Small said. 

Small said that the result of this lawsuit is that design patents will be seen as much stronger, especially after such a large award, and that clients will be advised to pay closer attention to the design elements, as they truly stand to be influential in future lawsuits.

Peter Vujin, a Miami-based attorney commented on the legal aspects of the situation as well as the finer details of the conflict. 

"The customary practice in the business is to afford the competitor the use of the patent for a customary, nominal fee. (The Constitution of the United States reserves rights to owners of patents for a limited time, pursuant to the Copyright clause. Please see U.S. Constitution, Article I, Section 8, Clause 8, but the patent can be licensed.), but Samsung and Apple appear not to want to do business this way, they seem to want to fight over rights," Vujin told Northern California Record. 

Vujin believes that the severity of the fight is heavily linked to the valuable marketplace that these two giants are fighting over, which is the tech industry.

"Lawsuits are certainly a way to stress out the competitor, who will then be preoccupied with the law, as opposed to working on extending its reach in the market," Vujin said.

But one of the lesser known aspects of this fight is the fact that Samsung previously proved that Apple had in fact used some of its designs.

"Samsung previously won a declaration by the U.S. International Trade Commission that established that Apple used some of Samsung's patents, and the penalty was restricted trade (importation) of the infringing items," Vujin said. "This is, arguably, a lot more effective than a damages verdict because it forces Apple products out of the market and thereby enables Samsung to snatch the market."

Meanwhile, Vujin explained, Apple simply won the damages, or money, from Samsung.

"Samsung Telecommunications, part of Samsung, made about 95 billion USD in 2017 - they can easily afford to pay the 500 million USD fine.  It appears that Samsung's aggressive strategy paid off, at least in part: they damaged the competitor, and only had to pay a fine," Vujin said.     

Vujin believes that this case shows how far businesses will go to ensure that they have prime real estate in one of the fastest growing industries. 

"Courts have already held that once someone adds a little bit to the patent (which may be slight, such as repackaging an iPhone as 'Samsung Galaxy'), the new patent holder produces a new product, in order to stimulate innovation," Vujiin said. "The jury in this case saw right through that, and basically ruled that once someone brutally copies someone's existing patent, and renames it, the person/corporation that infringes owes damages."

Northern California Record reached out to both Apple's and Samsung's attorneys and received no response.

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