Apple and Samsung face off in court over design patents once again
It's go time for that legal battle that refuses to die: Apple v. Samsung.
The two smartphone giants will meet in a San Jose, California, court for a week starting Monday to determine how much Samsung owes for illegally using three Apple design patents and two utility patents. The lawsuit, initially filed in 2011, made it all the way to the Supreme Court in late 2016 before being sent back to the lower court. This will be the third district court trial for the case.
Samsung has already been found to infringe Apple's patents. The argument centers on how much it owes Apple for copying some of its patented features, like the rectangular shape of the iPhone. Previously, Samsung paid $548 million, and $399 million of that is being reconsidered in this trial.
Watch this: Apple, Samsung to duke it out in court again
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The South Korean company hopes to pay less by using a Supreme Court decision that changed how the parties may calculate the damages. Samsung will argue that the elements it infringed were just a minor part of the phone. Here's an easier way to think about that point of view: If a company owns a patent on just a car's cup holder, it shouldn't be able to collect the profit from the entire car. Some estimates say more than 250,000 patents go into a smartphone. The original penalty was based on the value of the entire Samsung phone.
Apple, meanwhile, will seek to show that because a Samsung device infringed part of the iPhone's design, Samsung should pay damages based on the value of its entire device. That's because, Apple will argue, if one phone's design is similar to an iPhone, Apple could lose the sale to the competing phone. Apple wants to collect all of Samsung's profits on the long-defunct mobile devices that infringed.
Wait, this lawsuit is still going on?
Yeah, we know. It does seem like this has been going on forever.
The original Apple v. Samsung trial in 2012 captivated Silicon Valley and the tech industry because it exposed the inner workings of two notoriously secretive companies. It was just one of many cases around the world as the rivals sparred both in the marketplace and in the courtroom.
What was the decision in the original case?
In August 2012, a nine-person jury sided with Apple on a majority of its patent infringement claims against Samsung. At that time, the jury awarded Apple $1.05 billion in damages, much less than the $2.75 billion sought by the Cupertino, California, electronics giant. Samsung, which asked for $421 million in its countersuit, didn't get anything.
How much did Samsung end up paying Apple?
District Court Judge Lucy Koh, in striking $450.5 million off the original judgment against Samsung, ordered a new trial to begin in November 2013 to recalculate some of the damages in the case. Samsung ultimately paid Apple $548 million in damages in December 2015.
The amount was based on the total profits Samsung made from its infringing devices. In this case, Samsung sold 10.7 million infringing devices, generating $3.5 billion in revenue.
Only $399 million of the $548 million paid to Apple -- considered the "additional remedy" amount under Section 289 of the Patent Act of 1952 (35 U.S.C. 289) -- is being examined in the 2018 retrial. The additional $149 million in damages Samsung paid Apple isn't at stake.
Now that the Supreme Court has said damages can be based on a portion of a product, not necessarily the entire infringing device, Samsung hopes the jury will award a smaller damages amount to Apple.
What patents are involved?
Jurors will look at five patents in total.
The design patents are for a black, rectangular, round-cornered front face (D'677); a similar rectangular round-cornered front face plus the surrounding rim, known as the bezel (D'087); and a colorful grid of icons (D'305).
The utility patents are the '381 patent, which covers Apple's "rubber band" bounce-back effect when users scroll to the bottom of a window; and the '163 patent, which covers "touch-to-zoom" that lets a user enlarge and center portions of a Web page, photo or document.
What devices were accused of infringing Apple's patents?
None that most of you will even remember (kudos to anyone who recalls the time Samsung had a different Galaxy name for each US carrier). The 16 products are the Captivate, Continuum, Droid Charge, Epic 4G, Fascinate, Galaxy S 4G, Galaxy S II AT&T, Galaxy S II T-Mobile, Galaxy S II Epic 4G, Galaxy S II Skyrocket, Galaxy S Showcase, Gem, Indulge, Infuse 4G, Mesmerize and Vibrant.
How was the Supreme Court involved?
In December 2015, Samsung asked the Supreme Court to examine the decisions reached by lower courts. It wanted the nation's highest court to determine whether design patent damages could be based on part of a device, not the entire gadget.
The court accepted the request and held a hearing in October 2016 -- the first time it had examined a design patent case since the 1800s. It ultimately agreed with Samsung and said damages could be determined differently than in the past.
Apple and Samsung faced off at the Supreme Court in October 2016.
Shara Tibken/CNETThat ruling reshaped the value of designs and how much one company may have to pay for copying the look of a competitor's product. Previously, an infringing "article of manufacture" was considered an entire device. Now an article of manufacture can be only a small portion of a device, which would limit the amount of damages that can be awarded.
Instead of making a decision on the damages themselves, the justices sent the case back to the lower court to determine the process for deciding how much money is owed for infringement.
What's an article of manufacture?
That's the crux of this trial. Though the Supreme Court decision said an article of manufacture could be based on which part of a product infringes a patent, instead of the entire product, it didn't say how to decide that.
Judge Koh in October detailed how to define an article of manufacture at question in a case. Previously, Apple had argued that the article of manufacture was an entire phone. Koh said the test for determining what item has been infringed will be based on four factors: the scope of what's actually patented, how prominent the design is in the overall product, whether the design is conceptually different from the overall product, and if the patented item can be physically separated from the overall device.
Koh said the plaintiff (in this case, Apple) "shall bear the burden of persuasion on identifying the relevant article of manufacture and proving the amount of total profit on the sale of that article."
Apple maintains the article of manufacture is the entire Samsung device. It still wants to collect Samsung's total profits from the devices that infringed Apple's design patents, as well as "reasonable" royalties for the devices that infringed Apple's utility patents.
Who'll testify?
Both sides will have executives and experts take the stand, but neither company's CEO will testify. Jony Ive, Apple's chief design officer and the design brain behind its most popular products, appears only on the witness list as a source of testimony Samsung may provide via deposition. Some Apple witnesses who will testify include Richard Howarth, a senior director of the Apple Design Team and one of the co-inventors of the patents in question; and Greg Joswiak, Apple's vice president of product marketing.
Susan Kare, an early designer at Apple who recently was named a recipient of the prestigious American Institute of Graphic Arts medal, also will take the stand. Apple said she may testify about icon and user interface graphics design, as well as one of the patents in question in the case.
Greg Joswiak, an Apple marketing executive, will take the stand during the retrial.
James Martin/CNETSamsung, meanwhile, will call Justin Denison, senior vice president of mobile product strategy and marketing at Samsung Electronics America; Drew Blackard, a senior director of product marketing for Samsung Electronics America; Jinsoo Kim, a vice president in Samsung's Corporate Design Center who was involved in the design of Samsung's infringing phones; and Jee-Yeun Wang, another designer who was involved in Samsung's user interface design.
Other executives Samsung plans to call to testify are Kyuhyun Han, an executive in Samsung's finance group; Dongwook Kim, a principle in Samsung's procurement business; and Tim Sheppard, Samsung Electronics America's current vice president of supply chain logistics and its former vice president of finance and operations.
Witnesses Samsung may call to testify include Tim Benner, its senior director of marketing science and strategic analytics; Peter Bressler, a design expert Apple used at the initial trial; Steven Sinclair, a former iPhone product marketing manager; and Apple executives Howarth and Joswiak.
What's the schedule?
Jury selection will happen Monday, and then opening arguments will take place Tuesday at 9 a.m. PT. The trial is expected to last five days, with each side alloted eight hours for testimony and cross-examination. Closing arguments could take place late Thursday or early Friday. How long the jury will deliberate is anyone's guess.
What does this mean for consumers?
Not much. None of the Samsung devices in this case is still on the market. But there could be some impact down the road, depending on how much money Apple gets for its design patents. Samsung has argued that granting damages based on the full value of the phone, not just the specific infringing parts, would have a chilling effect on innovation. Companies would be afraid to create new products for fear they could be sued for certain design aspects.
Apple disagrees.
How about for Apple and Samsung?
A few hundred million dollars means very little financially for Apple or Samsung, each of which generates billions of dollars a year in profits. Where it could have impact, though, is on potential litigation in the future.
When Samsung was pursuing its case at the Supreme Court, companies such as Dell, eBay, Facebook, Google and HP filed briefs in support of Samsung, saying high damages in patent cases would hurt everyone from large tech companies to farmers and consumers.
Apple has disputed that claim and has said upholding design patents is essential for innovation to continue. More than 100 design industry professionals, including well-known fashion names like Calvin Klein and Alexander Wang, signed a so-called friend-of-the-court brief in support of Apple ahead of the Supreme Court hearing.
The designers and educators said the iPhone's distinctive look drove people to buy it, and if Samsung offered something similar, it could mean a sale's loss for Apple. For consumers, the "look of the product comes to represent the underlying features, functions and total user experience," they said, and a design patent holder should be compensated for the infringer's entire profits.
Weren't there some other cases between Apple and Samsung?
Yes. The 2012 case wasn't the only time Apple accused Samsung of patent infringement. The two companies also battled in April 2014 over newer devices, specifically the Galaxy S3 and iPhone 4S. In that case, a jury told Samsung to pay Apple $119.6 million for infringing some of its patents, while Apple owed Samsung $158,400 for infringing one of the Korean company's patents. That case is still ongoing.
The companies also were battling in overseas courts but agreed in August 2014 to settle all litigation outside the US.
So this isn't over?
Sorry, we could be covering this one for a while.
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