Samsung Electronics has been granted another chance to claw back some of the $548m it was forced to pay smartphone rival Apple in 2012 by the US Federal Court of Appeals in 2015. In a unanimous verdict, the Supreme Court of the United States ruled that profits owed to Apple by Samsung should be keyed to the value of the specific design elements copied from Apple’s own iPhone design, rather than full profits for its Galaxy phones and other competing devices. The case has now been sent back to the appeals court to decide a proper remedy in the case, in which Samsung will look to recover around $399m of the original award.

Case history

The closely-watched case dates back to 2011, when Apple sued rival Samsung for allegedly copying trademarked technology and design elements of its own iPhone products. A jury verdict in 2012 awarded Apple $930m in damages, though a later decision in the US Court of Appeals for the Federal Circuit ruled that the iPhone’s appearance could not be protected through trademarks. The award due to Apple was subsequently watered down to $548m, which was paid by Samsung in December 2015. However, Samsung has since pursued the case in the Supreme Court, arguing that it should not have had to pay $399m of that payout for copying the patented designs of the iPhone’s round-cornered face, bezel and colourful grid icons that represent applications and programs. Apple, on the other hand, believes that the iPhone’s distinctive design had been crucial to the product’s success, and the subsequent success of Samsung’s own rival products.

‘Article of manufacture’

In delivering the 8-0 verdict, Supreme Court Justice Sonia Sotomayor said there was no mistaking that Section 289 of the Patent Act – which stipulates that it is illegal to sell an ‘article of manufacture’ that infringes on a patented design, and says that an infringer shall be held liable ‘to the extent of his total profit’ – defines ‘article of manufacture’ broadly enough to include components of a product sold to a customer as well as the full product. Apple, Samsung and the US Government had all previously agreed that the term could apply equally to components only, though Apple maintained that Samsung had provided no evidence that the ‘article of manufacturer’ in the present case was anything less than entire Samsung products as sold to customers.

Sources: Corporate Counsel; The Guardian; Reuters