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Samsung is the world's largest producer of smartphones (AFP Photo/
DON EMMERT) |
Washington
(AFP) - The US Supreme Court on Tuesday overturned a $399 million patent
infringement penalty imposed on Samsung for copying Apple's iPhone design, in a
case watched for its implications for technology innovation.
The
justices ruled 8-0 that Samsung should not be required to forfeit the entire
profits from its smartphones for infringement on design components, sending the
case back to a lower court.
While the
ruling was short on specifics, analysts said it was likely to curb litigation
from patent holders expecting to reap big profits from infringement on a
component.
The 11-page
ruling found that the $399 million penalty -- one element of a major patent
infringement case -- was inappropriate because it represented "Samsung's
entire profit from the sale of its infringing smartphones" for copying the
iPhone's "rectangular front face with rounded edges and a grid of colorful
icons on a black screen."
But the
court stopped short of delving into details of how the lower court should
determine the penalty.
Justice
Sonia Sotomayor wrote in the opinion that "doing so would require us to
set out a test for identifying the relevant article of manufacture... and to
parse the record to apply that test in this case."
The court
sent the case back to the appellate court in Washington to resolve the details.
The case is
one element of the $548 million penalty -- knocked down from an original $1
billion jury award -- Samsung was ordered to pay for copying iPhone patents.
No
clarity
Observers
had been watching to see how the court -- which had not taken up a design
patent case in more than a century -- would tip the balance between
technological innovation and protecting intellectual property.
Dennis
Crouch, a University of Missouri law professor and co-director of the Center
for Intellectual Property and Entrepreneurship, said the ruling may leave both
sides disappointed because it sets no real precedent.
"Although
the case offers hope for Samsung and others adjudged of infringing design
patents, it offers no clarity as to the rule of law," Crouch said in a
blog post.
Crouch said
the court allowed for damages to be applied at the component level but also
indicated that the product as a whole is "an article of manufacture,"
leaving the matter open to interpretation.
"Thus,
it will be up to courts to figure out which level (of damages) applies in
particular cases," he wrote.
Samsung won
the backing of major Silicon Valley and other IT sector giants, including
Google, Facebook, Dell and Hewlett-Packard, claiming a strict ruling on design
infringement could lead to a surge in litigation.
Apple was
supported by big names in fashion and manufacturing. Design professionals,
researchers and academics who said they had no financial interest in the case
filed an amicus brief arguing on the basis of "fundamental principles of
visual design," citing precedents like Coca-Cola's iconic soda bottle.
'Sigh of
relief'
Florian
Mueller, an intellectual property analyst who writes a closely followed patent
blog, wrote that "large parts of the (US and global) tech industry will
breathe a sigh of relief now" even if the case is not settled.
Ed Black,
president of the Computer & Communications Industry Association, which
represents major tech firms, welcomed the ruling.
"This
was a pivotal court case for the technology industry and it is encouraging to
see the law interpreted and applied in a way that makes sense in a modern era
and protects both inventors and innovation," Black said.
The lower
court's interpretation of design patents, Black said, "would have had a
chilling effect on investment and the development of products -- especially in
the tech sector."
Brian Love,
a law professor who follows technology at the University of Santa Clara, said
it was noteworthy that the top court declined to provide detailed guidance on
how to resolve the damage award.
"The
district court may well end up allowing the entire amount to stand, but it
seems more likely that the award will be substantially reduced," Love
said.
Still, Love
said it may dissuade companies from launching new lawsuits on design patents
"Interest
in design patents spiked following Apple's first jury verdict in 2012," he
said.
"Companies
suddenly saw design patent rights as a potential gold mine. Now, it seems
likely that assertion of design patents will return to being a rare
occurrence."
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