The jury in the much-hyped Apple vs. Samsung patent infringement lawsuit recently handed down a verdict which basically gave Apple everything it wanted: A billion-dollar payment from Samsung, plus the possibility of an injunction against sales of infringing Samsung smart phones and tablets. 2009) ("Challenges to jury instructions are reviewed under the law of the regional circuit where the district court sits." Exclusive Webinar Series. 1. ECF No. (forthcoming) (manuscript as of Sept. 4, 2017 at 68 & nn.419-20) (https://ssrn.com/abstract=2850604); H.R. 2369. Think about this, the first computer was built in 1822, by a smart human called Charles Babbage. The number of cases reached four dozen by mid-2012, wherein both firms claimed billions of dollars in damages. Samsung's test purports to exclude as a matter of law any part of a product not claimed in the design patent. Similarly, multiple witnesses testified about how smartphones are assembled and how the screen was separate from internal components. Apple concedes that it bears this burden of production. It tops in shipment volume & market share. First, Samsung explained that "Samsung previously cited a number of cases, including [the Piano cases] . at 435. The Court held a hearing on October 12, 2017. 2011) (citation omitted); see also Norwood v. Vance, 591 F.3d 1062, 1067 (9th Cir. The Court's erroneous jury instructions were thus prejudicial error. The two companies have repeatedly accused each other of copying the appearance and functions of their smartphones and tablet devices. Each company won numerous decisions against the other during 2012-2015, quite often in contradictory rulings from German, American, Japanese, South Korean, Italian, French, British, Dutch, and Australian courts. With regard to the first factor, the Court concludes that the factfinder must consider the scope of the claimed design to determine to which article of manufacture the design was applied, but the scope of the claimed design is not alone dispositive. At most, Apple says Samsung would be entitled to 0.0049 for each chip based on FRAND patent licensing terms (with FRAND referring to Fair, Reasonable and Non-Discriminatory). at 9, Samsung Elecs. , all of those cases stand for the proposition that you cannot get infringer's profits on the entire device and you can only do it for the actually infringing feature." Apple also contends that legal errors in the proposed instruction mean that it was not error for the Court to have excluded it. OVERVIEW OF THE APPLE V. SAMSUNG CASE Apple and Samsung are currently involved in the high stakes patents dispute. . Second, it argued that Samsung's sales took sales away from Apple and resulted in Apple's losing market share. The question before us is whether that reading is consistent with 289. Samsung relied on Bush & Lane Piano Co. v. Becker Bros., 222 F. 902 (2d Cir. While Samsung could argue on the physical appearance being similar with iPhone but another thing the lawsuit included was trademark infringement. ECF No. Moreover, Samsung argued that "[t]he record contains no evidence that the entire sales value of Samsung's products was attributable to their outer casings or GUI, as opposed to the numerous noninfringing technological components that enable the devices to function and drive consumer choice." According to Bloomberg's supply chain analysis Apple accounts for 9% of Samsung's revenue which makes Apple . . At the center of the U.S. Supreme Court's decision and the question now before this Court is 35 U.S.C. Id. 227-249. See Hearing Tr. Section 289 reads, in relevant part: Apple and Samsung dispute whether the relevant article of manufacture for the purpose of calculating damages under 289 for the design patent infringement in the instant case is the entire smartphone or a part thereof. Hearing Tr. 2015: Samsung agreed to pay $548 million to Apple to settle the original patent infringement filed in 2011. The Court then analyzes the various approaches. Universe, which many consider an immediate opponent of the apple company iPhone. 2010) ("Perfect or not, the defendants' proposed instruction brought the issue of deference to the district court's attention."). Nike, 138 F.3d at 1441 (citing Dobson v. Dornan, 118 U.S. 10; Dobson v. Hartford Carpet Co., 114 U.S. 439). 2005) (determining whether there was prejudicial error by determining whether "a reasonable jury could have found" for the party proposing the instruction); see also Kinetic Concepts, Inc. v. Blue Sky Med. In response, Samsung sued Apple over 3G patents and stated that iPhone such as iPhone 4, iPhone 4S, and iPad 2 infringed its patents. at 7. See Apple Opening Br. ; Apple Opening Br. 1, pp. For the reasons below, the Court disagrees. In sum, the Court finds that the jury instructions given at trial did not accurately reflect the law and that the instructions prejudiced Samsung by precluding the jury from considering whether the relevant article of manufacture for the purpose of 289 was something other than the entire phone. Is Filing A Provisional Patent Application A Smart Decision? Id. ECF No. The Billion Dollar Samsung Apple Lawsuit Know the reasons why Apple is dominating the wearable industry. See ECF No. The Court excluded Proposed Jury Instruction 42.1. 1157 (citing Nike, 138 F.3d at 1442-43 (noting that Congress removed "the need to apportion the infringer's profits between the patented design and the article bearing the design" when it passed the Act of 1887, which was subsequently codified under 289)). As there can be thousands of ways of designing icons and GUI effects, Samsung chose in most cases icons similar to that of the iPhone. In 2016, the Supreme Court reviewed this case and held that the net profit damages for infringing design patents need not be calculated based on the product sold to the consumer. The android vs apple war. The jury ordered Samsung to pay Apple $1. As explained above, the U.S. Supreme Court and the Federal Circuit declined to specify how courts or juries are to identify the relevant article of manufacture for the purpose of 289. This setting should only be used on your home or work computer. He immediately trimmed most of the product density in Apple and made the company as slim as possible and launched new sleek products. 284. Id. Thus, Apple bears the burden of proving that it is more probable than not that the jury would have awarded profits on the entire phones had it been properly instructed. Your email address will not be published. . Nonetheless, all of the five forces influence the . Second, other courts in design patent cases have assigned the burden on deductible expenses to the defendant. Apple iPhone . The Court addresses these arguments in turn, and then the Court assesses the United States' proposal. 3:17-cv-01781-HZ (S.D. . Success! The iPhone manufacturer accused Samsung of failing to comply with the order set against it as part of the deal and , May 2012: The US Court of Appeals for the Federal Circuit (CAFC) gave Apple the, June 2012: Following the appeals court ruling, US District Judge Lucy Koh had to reconsider the preparatory sales injunction against Samsungs Galaxy Tab 10.1. 2016) Rule: . 2840 at 704-08 (testimony of Apple's damages expert at 2013 trial); PX25A1.16 (Apple's 2012 trial exhibit summarizing its damages contentions); PX25F.16 (same for 2013 trial)). The question for which certiorari was granted was: "Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?" Thus, the Court limited the evidence and witnesses at the 2013 trial to the evidence that was admissible at the 2012 trial. Id. Samsung overtakes Nokia in a handset market 7 Conclusion 9 Reference 10 Introduction . Apple urges the Court to adopt a burden-shifting framework for both identifying the relevant article of manufacture and proving total profit on the sale of that article, whereby the "plaintiff bears the initial burden of proving that the defendant applies the patented design to a product that was sold and further proving revenues from the sale." The test for determining the article of manufacture for the purpose of 289 shall be the following four factors: The plaintiff 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. Required fields are marked *. 3490-2 at 17. In Negotiation, How Much Authority Do They Have? . 2316 at 2. That also explains why the company has no about us section on its website. May 24, 2018. All rights reserved. By Reuters. Id. 1966, 49th Cong. Samsung cites three categories of evidence to show that the jury could have found an article of manufacture that was less than the entirety of each infringing Samsung phone. at *18-19. Will this mega-lawsuit dramatically alter the way our . 1998). The first time Samsung raised its article of manufacture theory was in a trial brief filed on July 24, 2012, 6 days before the 2012 trial, which began on July 30, 2012. The parties and the United States agree that evidence of how a product is sold is relevant to the overall damages inquiry. Accordingly, the Court must now set forth the method for determining the relevant article of manufacture for the purpose of 289. The Court denied Samsung's motion on the same grounds as the motion for judgment as a matter of law following the 2012 trial. 206, 49th Cong., 1st Sess., 1-2 (1886)). Specifically, Samsung contends that excluding Proposed Jury Instruction 42.1 and giving Final Jury Instruction 54 led the jury to believe that the entire phone was the only possible article of manufacture under 289. In the original 2012 case, Apple sued Samsung saying it copied various design patents of the iPhone. Humans are amazing animals, I mean we are smart and can do almost anything. As the U.S. Supreme Court has explained, Congress enacted the predecessor to 289 in 1887 in response to the U.S. Supreme Court's decisions in what are known as the Dobson cases. Specifically, Proposed Jury Instruction 42.1 included Samsung's now-abandoned apportionment theory and also defined the article of manufacture as invariably less than the entire product as sold. Apple Inc. v. Samsung Elecs. Total bill for Samsung: $1.05 billion. Second, Samsung argued that "the profits awarded [for design patent infringement] should have been limited to the infringing 'article of manufacture,' not the entire infringing product." This statement definitely rings true. According to Apple, this test would mean that a complex multicomponent product could never be the relevant article of manufacture, because a design patent may only cover the "ornamental appearance of an article of manufacture," not "internal or functional features." Laborers Pension Tr. Once the plaintiff has satisfied its burden of production on identifying the relevant article of manufacture, the burden of production shifts to the defendant. The first claim came in April and by August 2011, there were 19 continuing cases between Apple and Samsung in nine countries. "), 14:1-14:2 (Samsung's counsel: "We like the Solicitor General's test . at 9. Apple's argument that Samsung's failure to actually identify a smaller article of manufacture at trial would have precluded the jury from finding any article of manufacture other than the entire phone is not persuasive. "Section 289 of the Patent Act provides a damages remedy specific to design patent infringement." The icons on the iPhone were strikingly similar to those in Samsungs phone. 387). 3509 at 15-16. Schaffer v. Weast, 546 U.S. 49, 56 (2005) (quoting J. August 2011: Apple sued Samsung for patent infringement through its products, including the Samsung Galaxy Tab 10.1. Meanwhile, both companies decided to drop all the patent cases outside the US. The Court holds that if the plaintiff has met its initial burden of production on identifying the relevant article of manufacture for the purpose of 289 and the defendant disputes the plaintiff's identification of the relevant article of manufacture, then the burden of production shifts to the defendant to come forward with evidence supporting its asserted article of manufacture. What to Know About Mediation, Arbitration, and Litigation). Id. Better Buy: Apple Inc. vs. Samsung By Joe Tenebruso - Jul 12, 2018 at 8:33PM You're reading a free article with opinions that may differ from The Motley Fool's Premium Investing Services. 287(a) (predicating infringement damages in certain circumstances on proof that "the infringer was notified of the infringement and continued to infringe thereafter"). This disparity in demographics is a good indicator of the product market. 2784 at 39 (same for 2013 trial); Opening Brief for Defendants-Appellants, Apple Inc. v. Samsung Elecs. The Court denied Samsung's motion for judgment as a matter of law under Nike and the Federal Circuit's precedent forbidding the apportionment of design patent damages. at 8 (quoting Schaffer, 546 U.S. at 57). 17:12-17:20 ("[W]hat the sale might be relevant to is - might be relevant to - is step 2, what's the quantum of profit? Your account is fully activated, you now have access to all content. 3017. 3289. The user market is much skewed in different directions. D730,115 (design patent that claims design for rim of a dinner plate). Get the latest insights directly to your inbox! What is Crisis Management in Negotiation? Samsung has been accused by Apple of violating patents and: - 1) Copying their icon arrangement display pattern. After releasing the iPhone in 2007, Apple obtained design patents on a number of phone design features. Taking into consideration that test and the trial proceedings in the instant case, the Court must then decide whether a new damages trial for design patent infringement is warranted. A California jury ruled that Samsung would have to pay Apple more than $1 billion in damages for patent violations of Apple products, particularly its iPhone. Apple continued to dominate the smartphone market for years until Samsung introduced its Galaxy series in 2013 and emerged as a tough competitor. That's the plain language of [ 289]. Co. v. Apple Inc., 136 S. Ct. 1453 (2016) (granting certiorari). The U.S. Supreme Court framed the issue before it as follows: Although Samsung cites questions posed by U.S. Supreme Court Justices during oral argument to support its test, see Samsung Response at 6, it is the text of the written opinion that controls. Moreover, Apple offers no reason why ordinary discovery would not be sufficient to allow a design patent plaintiff to carry its burden of persuasion on identifying the relevant article of manufacture. Hunter, 652 F.3d at 1235 n.11. The history of 289 provides important context for understanding the progression of the litigation in the instant case, as well as the competing policy considerations implicated by the formulation of a test for determining the relevant article of manufacture under 289. Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School. Apple made two arguments in support of its claim of irreparable harm. Microsoft, on the other hand, is well known US based global organization, settled in . Advanced Display, 212 F.3d at 1281 (internal citations omitted). There Was an Adequate Foundation in Evidence. The U.S. Supreme Court interpreted the Federal Circuit's decision in the instant case as adopting a per se rule that "the relevant 'article of manufacture' must always be the end product sold to the consumer." Cir. iPhone vs Samsung Galaxy Design. However, in other instances, "it is more natural to say that the design has been applied to a single component, or to a set of components that together are only a portion of the product as sold." The D'677 patent claims a design for a "black, rectangular front glass face with rounded corners" and does not claim the surrounding rim (bezel), the circular home button on the front, or the sides, top, bottom, or back of the device. If the plaintiff satisfies its burden of production on these issues, the burden of production shifts to the defendant to come forward with evidence of an alternative article of manufacture and any deductible expenses. 1916) ("Piano II") (opinion after appeal following remand) (collectively, "the Piano cases"), in which the Second Circuit held that the patentee had been overcompensated for being awarded the profits from an entire piano when the design patent at issue only applied to the piano case, not the internal components of the piano itself. The Rivalry Inception of Samsung and Apple, How Samsung and Apple Turned From Friends to Foe, Biggest Media Companies in the United States, India on the Rise: Achieving a $5 Trillion Economy, 5 Tips to Supercharge Your Manufacturing Startup, How Cricbuzz Became the Biggest Cricketing News Sensation, 21 Profitable Business Ideas for Couples to Start this Valentine's Day, 2022 - A Remarkable Year for Indian Startups, Rupee vs. Dollar - Journey Since Independence, Spy on your Competitors (Use code ST30 for 30% off). The Court has already determined that "Samsung objected to the exclusion of Proposed Jury Instruction 42.1 in a proper and timely manner that was in compliance with Rule 51." Second, Samsung argued that "Apple further did not present any evidence of causation, that these particular accused features of the design patents or the patented designs drive the sales and did not include that in their calculation analysis." 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