by Oh! Semput
The US Supreme Court heard its first case involving design patents for more than a century on Tuesday, as Samsung Electronics and Apple took their fight over iPhone copying to America’s highest judges.
The case pits some of the world’s top designers against a coalition of Silicon Valley companies in what both sides argue is a high-stakes battle over the value of innovation and creativity.
Facebook and Alphabet are among the tech companies that have lined up on Samsung’s side, while dozens of designers and architects including Lord Norman Foster and Sir Paul Smith have lent their support to Apple in amicus briefs.
Tuesday’s hearing came as Samsung grapples with a crisis over its Note 7 smartphones. The flagship smartphone has been discontinued after some devices from a replacement batch caught fire.
After emerging from court, Samsung’s lawyer, Kathleen Sullivan of Quinn Emanuel, said the company was fighting for a “fair interpretation of a law that will promote creativity and competition in the marketplace”.
“Awarding all of the profits for a single patent devalues the contributions of the hundreds of thousands of other patents in a smartphone,” she said. “We are hopeful that the Supreme Court will give a sensible and fair reading to the design patent statute.”
The buster legal clash between the world’s top two smartphone makers began in 2011 when Apple sued Samsung in California for patent infringement. A jury in San Jose initially awarded Apple more than $1bn in damages for the copying of the iPhone’s rounded corners and grid of colourful app icons. While some of those damages have been reviewed in separate appeals, hundreds of millions of dollars were still at stake in Tuesday’s hearing.
Noreen Krall, Apple’s chief litigation officer, said that Samsung’s copying “poses chilling risks to the future of design innovation”.
“We firmly believe that strong design patent protection spurs creativity and innovation,” she said. “And that’s why we’ve defended ourselves against those who steal our ideas.”
The Supreme Court will not consider whether Samsung copied the iPhone with its Galaxy smartphone, but the scale of the damages it owes Apple.
At issue is a 129-year-old ruling by the US Congress that “it is the design that sells the article”. The California jury in 2012 awarded Apple $400m in damages related to its design patents, based on Samsung’s entire profits from the infringing devices.
In its appeal, Samsung argues that the damages are “disproportionate” and should only be calculated based on the profits from the specific parts of the product that infringed. More broadly, the South Korean electronics group argues that design patent laws are outdated when applied to a product as complex as a smartphone, which can comprise more than 200,000 patents. It also claims the precedent opens the door to patent trolls, who abuse the legal system for financial gain, though no such cases have yet emerged.
In its submission to the Supreme Court, Apple countered that Samsung had not presented enough evidence to support its arguments.
While a decision is not expected for several months, observers in the court were scrutinising the justices’ questions for clues to their thinking.
“Based on what I heard, I think it’s very likely that the court will modify the lower court’s decision,” said Matt Levy, patent counsel at the Computer & Communications Industry Association.
“At oral argument, Samsung, Apple, and the US government all agreed that the Federal Circuit was wrong to say that design patent damages must be based on the entire profits for the product sold to consumers. The justices seemed to be comfortable with this position as well, because they focused on the correct standards to use in applying the statute.”
The CCIA, which filed an amicus brief arguing that the lower courts’ decision should be overturned, is an industry body whose members include Samsung, Google and Facebook but not Apple.
“A smartphone is much more than just the outer casing,” Mr Levy said. “The logic just doesn’t work and neither does the math.”
Lynda Oswald, professor of business and law at the University of Michigan’s Ross School of Business, said the case was “historic” both because of the decades since design patents were last considered by the Supreme Court, and because the products at issue in the original lawsuit are no longer on sale.
For instance, Apple abandoned the iPhone’s “slide to unlock” mechanism described in one of the patents at issue, with its latest iOS 10 operating system.
“Technology moves at lightning speed, while the law plods along slowly behind it,” Ms Oswald said. “This is a great example of that.”