The fight between two of the world’s biggest cell phone companies just got more interesting.
Five years ago, Apple sued Samsung claiming that they copied the iPhone’s look (its face) and functionality (the grid used to lay out application icons) – infringing on patents they hold. They sought major damages and won. A jury sided with Apple and slapped Samsung with $1 billion in damages in 2012, but the case was appealed all the way up to the Supreme Court.
In a unanimous decision, the Supreme Court made it clear that patent infringement won’t be upheld in all cases. Justices reversed about $400 million worth of damages that Samsung ponied up late last year.
Justice Sonia Sotomayer penned the Court’s opinion and in essence held that, even though Samsung copied some aspects of the iPhone, it didn’t copy the entire product that consumers bought and thus it shouldn’t be held liable for damages on the entire phone. In legal language the Court said:
“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.”
The Court didn’t resolve whether the specific parts with patents under contention were infringed upon, but kicked that back down to lower courts.
Apple is optimistic but won’t budge on its belief that Samsung stole their ideas:
In a statement late Tuesday, Apple said it remains “optimistic the lower courts will again send a powerful signal that stealing isn’t right”.
"The question before the Supreme Court was how to calculate the amount Samsung should pay for their copying,” the company said. “Our case has always been about Samsung's blatant copying of our ideas, and that was never in dispute. We will continue to protect the years of hard work that has made iPhone the world’s most innovative and beloved product.”
Samsung is pretty elated:
“The US Supreme Court's landmark decision today is a victory for Samsung and for all those who promote creativity, innovation and fair competition in the marketplace," Samsung said in a statement. "We thank our supporters from the world's leading technology companies, the 50 intellectual property professors, and the many public policy groups who stood with us as we fought for a legal environment that fairly rewards invention and fosters innovation."
This case brings to boil an issue that’s been simmering for years: innovation versus inventor protection. Patents grant inventors protection from competition for a certain number of years which gives them an edge over other competitors producing similar products. Often that lead can’t be overcome. Opponents for the status quo feel that companies too often steal their ideas and deliver competing products.
Proponents of patent reform say that’s it's not stealing but that innovation means improving on what’s already in existence and because of the proliferation of patents, it’s hard not to infringe. They just want the chance to compete and deliver a better offering to customers.
In the mix of all of this are the “patent trolls” who make their living by securing patents and looking for deep-pocketed companies who infringe on their patents. They’re making a pretty penny on doing nothing other than using patent law to rip off real inventors.
The decision in the Apple v. Samsung case doesn’t address whether it’s time to reform our patent system, so this issue is far from resolved. It’s an important conversation to have though.