WASHINGTON –The Supreme Court Tuesday wrestled with how to apply a 1952 patent law, particularly sections related to design patents, to a tech industry where innovation and aesthetic appeal play key roles in originality – with Apple arguing that Samsung shouldn’t profit from its smartphones because they infringe on the iPhone design.
The legal battle between the smartphone giants hinges on whether Samsung should be fined for patent infringement based on the total profits of the smartphones that copied Apple patented design features or just those profits specifically linked to the patented features.
Apple owned three design patents for the iPhone when it debuted in 2007, protecting such features as the phone’s rounded corners and the iconic, circular home button. When Samsung’s smartphone came out, Apple claimed patent infringement and two lower courts agreed, requiring Samsung to pay Apple $399 million in damages.
Samsung argued that the damages should be reduced and only cover the profits that could be attributable to the design features. It would be “inappropriate to give total profit,” Samsung lawyer Kathleen Sullivan told the justices Tuesday.
Several justices expressed skepticism that juries could correctly identify a design feature and calculate the damages for patent infringement.
“If I were a juror I wouldn’t know what to do,” Justice Anthony Kennedy said more than once.
But Sullivan said that expert witnesses could help jurors estimate the value and importance of the design to the success of a product. Similarly, experts have been used in utility patent cases, but often leading to more expensive and complex cases.
The case could have far-reaching patent consequences in the tech industry. Companies would have to walk on eggshells in order to avoid design patents when they introduce a new product. “You can preclude lots of people from the market,” said Mark McKenna, an expert on intellectual-property law and a law-school professor at the University of Notre Dame.
Part of the problem is that design patent statutes weren’t created with complex devices like smartphones in mind, McKenna said. What they had in mind, he said, were things like silverware designs or table linens – things that consumers might have bought because of the way they looked.
But in a gadget world, where people aren’t necessarily buying iPhones exclusively for their rounded corners, the statute leave the justices in a difficult position. Justice Ruth Bader Ginsburg questioned how to accurately calculate “profit” when design can be the essence of a product’s popularity, such as a Volkswagen Beetle, which was brought up as a hypothetical example. Justice Sonia Sotomayor wondered how to “announce the right test” for a design component.
Tuesday’s hearing was the first design patent case the Supreme Court has heard in more than a century. It also takes place during a difficult time for Samsung, after a fall in stock and a decision to permanently discontinue the Galaxy Note 7 smartphone. A number of customers reported that their devices were overheating or even catching fire, including one aboard a passenger jet.
The high court ruling will likely come at the end of June.
