Update on the Two Apple and Samsung Patent Cases

By Nicole Daniel

Introduction

In October and November 2017 significant developments occurred in the two Apple-Samsung patent cases.

The first concerns litigation between Apple and Samsung that started in 2011 and went to trial in 2012. In October 2017, a retrial was ordered.

A second case between Apple and Samsung was filed in 2012 and went to trial in 2014. In November 2017, the Supreme Court declined to hear Samsung’s appeal—thereby effectively ending the case.

Judge Lucy Koh, a District Judge in the Northern District of California, oversaw both cases.

 

The first Apple and Samsung case

In an order issued on 22 October 2017, Judge Koh ordered a new trial. This will be the second retrial. A damages retrial took place in November 2013.

This order for retrial comes more than five years after a federal jury ordered Samsung to pay $1.05 billion to Apple for patent infringement regarding the design and software of the iPhone. This sum was reduced to $929.8 million in the damages retrial. In the new trial, the jury will have to reconsider approximately $399 million in damages for design patents. Accordingly, the new trial has the potential to reduce the original damages by nearly 40%.

The decision for the new trial was triggered by a December 2016 Supreme Court decision in this case which held that an “article of manufacture” need not just be the whole product, but could also refer to the specific patented elements of the final product. The damages however, were set considering the infringement of the product as a whole and not of certain parts only.

Judge Koh also set out a four-factor test for the jury to use to determine what the “article of manufacture” in the present case is:

  1. What is the “scope of design claimed in the plaintiff’s patent”
  2. What is the “relative prominence of the design within the product as a whole”
  3. Whether the patented design elements are “conceptually distinct” from the whole phone
  4. Whether the patented components could be sold separately from the whole iPhone itself

By setting out this test Judge Koh rejected the tests proposed by Apple and Samsung respectively. Judge Koh determined that Samsung’s proposed test was too restrictive whereas Apple’s proposed test was too broad. Judge Koh adopted the test as argued by the Solicitor General in Supreme Court in 2016.

This second retrial will be significant for the development of design patent law as the definition of “article of manufacture” will be central and this is only the second time a federal judge will weigh in on this definition since the 2016 Supreme Court decision.

The second retrial will start on 14 May 2018 and Judge Koh has said that she will adopt an aggressive schedule leading up to the retrial.

Judge Koh further granted Samsung’s request for time for limited new evidence discovery since the law is currently being developed and it would be more prejudicial for Samsung if it was denied discovery.

She also imposed strict time limits on Apple’s and Samsung’s demands and even though the parties proposed a six-day trial she decided that five days would have to suffice. Judge Koh further rejected Samsung’s request to vacate the partial judgment for $548 million she entered in 2015.

 

The second Apple and Samsung case

On 6 November 2017 the Supreme Court decided not to hear Samsung’s appeal against a $120 million decision in favor of Apple. The Court of Appeal for the Federal Circuit had preserved the original verdict by the jury.

The Supreme Court followed the US Solicitor General’s recommendation to deny the petition for certiorari.

Only some smaller items are left before the case is fully resolved; these regard ongoing royalties to be paid by Samsung and will be decided on by the trial court in San Jose, California.

The original decision for the $119.6 million verdict in favor of Apple was handed down in May 2014 by a federal jury. The Court of Appeal for the Federal Circuit in early 2016 overturned the jury’s verdict. However, then the Court of Appeal for the Federal Circuit met en banc and reversed the three-judge panel. The en banc panel affirmed the lower court decision in an 8-3 decision that denied Samsung’s request for a judgment as a matter of law. Samsung had argued that the three Apple patents that the jury found infringed by Samsung were either not infringed or invalid. This was a rather controversial decision.

Samsung then asked the Supreme Court to decide whether the Court of Appeal for the Federal Circuit had erred in interpreting the four-factor test set out by the Supreme Court in the 2006 decision in eBay v. MercExchange, which states the conditions for when a court may issue an injunction against an infringer of a patent. Samsung argued that there had to be proof that the patented features directly drove demand for the product in question. The Solicitor General argued that no such proof was necessary.

Samsung also argued that the decision Court of Appeal for the Federal Circuit harmed competition and innovation, and that it conflicted with other Supreme Court precedent on patent law. Furthermore, the obviousness of patent claims was treated by the Court of Appeal for the Federal Circuit entirely as a factual rather than a legal question.

Finally, according to Samsung, the Court of Appeal for the Federal Circuit erred in stating that it only needed to consider one out of the three elements of a patent claim.

Advertisements