A unanimous Supreme Court on Tuesday threw out the almost $400 million in damages Samsung was ordered to pay Apple in a long-standing dispute over the patents of elements of smartphones.
The justices ruled that Samsung does not have to pay Apple patent damages based on the profits for the entire device, only the components at issue, and reversed and remanded the case back down to a lower court.
In delivering the court's opinion, Justice Sonia Sotomayor said the text of the law resolves the case.
She said the term “article of manufacture,” that's used in patent law encompasses both a product sold to a consumer and a component of that product.
“'Article of manufacture' has a broad meaning,” she said. "An ‘article’ is just ‘a particular thing.'"
The case stems from a 2011 lawsuit Apple brought against Samsung for violating the patents it holds on the look of the iPhone face and the grid used to lay out the application icons.
A jury awarded Apple more than $1 billion in damages in 2012, but that figure has been reduced over the years.
Apple had sought for Samsung to pay back all the profits from phones made with the patents. But Samsung argued before the justices in October that it should only be required to pay damages for the profits made from the components it copied.
In a statement late Tuesday, Apple said it remains “optimistic the lower courts will again send a powerful signal that stealing isn’t right”.
"The question before the Supreme Court was how to calculate the amount Samsung should pay for their copying,” the company said. “Our case has always been about Samsung's blatant copying of our ideas, and that was never in dispute. We will continue to protect the years of hard work that has made iPhone the world’s most innovative and beloved product.”
Court watchers were hesitant to hail Tuesday’s decision as a clear victory for Samsung, noting the case could drag out for years.
Rick McKenna, an intellectual property lawyer and head of the design rights group at Foley & Lardner LLP, said the lower court still has to determine what damages Samsung owes.
“Justice Sotomayor was quite careful in drafting the court’s opinion to state that the ‘only question we resolve today is whether in the case of a multi-component product, the relevant ‘article of manufacture’ must always be the end product sold to the consumer or whether it can also be an component of that product,’” McKenna said.
“In light of this decision, the lower courts must now determine the relevant “article of manufacture” for each of the infringed design patents and then potentially recalculate damages if the relevant article is something other than the entire smartphone.”
Paul Berghoff, founding partner at Chicago-based intellectual property law firm McDonnell Boehnen Hulbert & Berghoff, said there was no final resolution and Samsung and Apple seem unable to settle the dispute themselves.
“This was a case that started on emotion or emotion was a big part it,” he said. “Steve Jobs looked at Samsung’s phones and said this is a complete rip off … that emotion gets very difficult to diffuse enough to allow what to unemotional parties would be a rational way to settle things.”
This story was updated at 4:17 p.m.