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Justices Raise Doubts About $399M Judgment Against Samsung

The Supreme Court is raising serious doubts about a $399 million judgment against smartphone maker Samsung for illegally copying parts of the patented design of Apple’s iPhone.

Justices hearing arguments Tuesday in the long-running dispute seemed troubled that Samsung was ordered to pay all the profits it earned from 11 phone models even though the features at issue are just a tiny part of the devices.

But some justices struggled over how a jury should be instructed if the case is sent back to a lower court.

“If I were a juror, I wouldn’t know what to do,” said Justice Anthony Kennedy.

Justice Stephen Breyer appeared to embrace a test proposed by Facebook, Google and other internet companies that would outline new limits on such damage awards. Other justices seemed to favor a different test proposed by the Obama administration.

“Why can’t we just ask the lower courts to listen to your arguments and work it out,” Breyer asked at one point.

The outcome could have ripple effects across the high-tech industry as the court balances the need to encourage innovation against a desire to protect lucrative design patents. It marks the first time in more than 120 years that the high court has taken up a patent dispute over a product’s design.

The case is part of series of high-stakes lawsuits between the technology rivals that began in 2011. None of the early generation Samsung phones involved in the lawsuit remains on the market.

Samsung says the hefty award ignores the fact that its phones contain more than 200,000 other patents that Apple does not own. Apple argues that the verdict is fair because the iPhone’s success was directly tied to its distinctive look, hailed as a revolutionary product when it was unveiled in 2007.

Apple sued over Samsung’s duplication of a handful of distinctive iPhone features for which Apple holds patents: the flat screen, the rounded rectangle shape of the phone, and the layout of icons on the screen.

The companies are wrangling over how much Samsung is required to compensate Apple under an 1887 law that requires patent infringers to pay “total profit.” At issue is whether that means all the profits from phone sales, or just the profit related to the specific components that were copied.

The federal appeals court in Washington that hears patent cases sided with Apple.

The argument comes at a rough time for Samsung. The company announced Tuesday that it is discontinuing production of Galaxy Note 7 smartphones permanently after reports that even the replacements were catching fire. That model was not part of the patent litigation.

© 2016 Associated Press under contract with NewsEdge. All rights reserved.


Posted: 2016-10-11 @ 1:33pm PT

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