Supreme court set to hear Apple-Samsung iPhone copycat row - after five years of litigation

Supreme Court will hear arguments on Tuesday in the bitter patent dispute
Justices' ruling is due by the end of June
Supreme Court's first case on design patents in more than 120 years

Published: 06:01 EST, 10 October 2016 | Updated: 10:32 EST, 10 October 2016

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After five years of litigation, the U.S. Supreme Court will hear arguments on Tuesday in the bitter patent dispute between the world's two top smartphone manufacturers over the amount Samsung should pay Apple for copying the iPhone's distinctive look.

The justices' ruling, due by the end of June, could have a long-term impact for designers and product manufacturers going forward because the Supreme Court, if it agrees with Samsung, could limit the penalties for swiping a patented design.

Samsung Electronics Co Ltd paid Apple Inc $548.2 million last December, fulfilling part of its liability stemming from a 2012 verdict for infringing Apple's iPhone patents and copying its look.

The justices' ruling, due by the end of June, could have a long-term impact for designers and product manufacturers if it limits the penalties for swiping a patented design.

WHAT'S THE PROBLEM?

The two hi-tech behemoths went to court over the designs that have now become commonplace on most popular smartphones, with a court ruling in 2012 in favor of Apple.

At issue were design features by now familiar to consumers: a black, rectangular, round-cornered phone front, a surrounding rim, known as the 'bezel' and a grid of 16 colorful icon.

Those design elements were protected, prompting the jury to award Apple all the profits from sales of smartphones containing those features, Samsung lawyers said in their filing.

But Samsung will argue before the Supreme Court that it should not have had to make as much as $399 million of that payout for infringement of three patented designs on the iPhone's rounded-corner front face, its bezel and the colorful grid of icons that represent programs and applications.

It will be the Supreme Court's first case involving design patents in more than 120 years, when the products at issue were carpets and rugs.

Cupertino, California-based Apple sued its South Korean rival in 2011, claiming Samsung stole its technology and the iPhone's trademarked appearance.

Samsung has said it should not have had to fork over all of its profits on phones that infringed the patents, which contributed only marginally to a complex product with thousands of patented features.

Apple has said Samsung was properly penalized for ripping off its work.

With the many years of fighting behind these fierce rivals, this case has become mostly about money, said Michael Risch, a professor at Villanova University Charles Widger School of Law.

'The infringement has been affirmed, now it's whether this huge judgment should be affirmed,' he said.

Risch joined a group of 50 university professors who filed a brief supporting Samsung in the case, as did Silicon Valley heavyweights Facebook Inc and Alphabet Inc's Google, which makes the Android operating system used in Samsung's phones.

Apple, meanwhile, has been supported in court papers by those who emphasize the importance of design in consumer buying choices, including famous fashion names like Calvin Klein and Alexander Wang.

Samsung appeales to the US Supreme Court in hopes of overturning a ruling that it pay $548 million to rival

Last May, the U.S. Court of Appeals for the Federal Circuit in Washington upheld the 2012 patent verdict, but overturned Samsung's liability for trademark infringement. Samsung asked the Supreme Court to review the design patent part of the case.

On Tuesday, the companies will argue over a provision in U.S. patent law requiring infringers to pay a design patent owner their total profits on an infringing 'article of manufacture.'

Samsung said in court documents that the article of manufacture here was not its entire phone as sold, as the lower courts had ruled, and so its damages should be pared back.

APPLE VERSUS SAMSUNG - FIVE YEARS OF LEGAL ACTION

In 2010 Apple began by suing Samsung, but the Korean firm counter-sued just days later.

Apple then secured an injunction to restrict sales of Samsung's Galaxy Tab 10.1 in Europe.

In July 2012, Apple was told to publicly state Samsung hadn't copied its designs, but in August 2012 Apple won $1 billion in damages.

These damages were then dropped from $1 billion (£643 million) to around $930 million (£598 million), an amount that was later reduced by $382 million (£245 million).

In June 2013, the International Trade Commission ruled iPads infringed on Samsung patents and should be banned in the U.S. This ruling was vetoed two months later.

A retrial began in November 2013 that Apple won, but Samsung appealed.

Then, in May, Apple was handed a mixed ruling by a US appeals court.

The prior patent infringement verdict was upheld, but a trademark finding that the iPhone's appearance could be protected was thrown out.

That means up to 40 per cent of the verdict which had been won by Apple must be reconsidered.

If the Supreme Court does not rule in its favor, Samsung said, 'an infringer of a patented cupholder design must pay its entire profits on a car.'

In its court papers, Apple agreed that an article of manufacture may be a mere component of a product, but said that in this case the evidence shows that it is the entire phone as sold by Samsung.

The case is Samsung Electronics Co Ltd v. Apple Inc, in the Supreme Court of the United States, No. 15-777