Samsung owes Apple $539M for infringing iPhone patents, jury finds

Samsung must pay Apple $539 million for infringing five patents with Android phones it sold in 2010 and 2011, a jury decided Thursday in a legal fight that dates back seven years.

The unanimous decision, in the US District Court in San Jose in the heart of Silicon Valley, is just about halfway between what the two largest mobile phone makers had sought in a high-profile case that reaches back to 2011.

The bulk of the damages payment, $533,316,606, was for infringing three Apple design patents. The remaining $5,325,050 was for infringing two utility patents. Samsung already had been found to infringe the patents, but this trial determined some of the damages.

The figure is a step back for Samsung, which had fought earlier damages findings. This trial had reconsidered $399 million of Samsung’s earlier payments, so $539 million is a significantly larger sum.

The jury’s rationale isn’t clear, but the figure is high enough to help cement the importance of design patents in the tech industry. Even though they only describe cosmetic elements of a product, they clearly can have a lot of value. That’s good news for designers in Silicon Valley, where Apple products like the iPhone and MacBook have helped elevate design’s role in product success. But it could also concentrate power in the hands of the bigger businesses that have the resources to obtain and defend patents.

Samsung: Verdict isn’t supported

“Obviously, we have some issues that will be addressed in post-trial motions,” Samsung attorney John Quinn told US District Court Judge Lucy Koh, but didn’t seek to keep her from dismissing the eight-person jury. “We don’t think it’s supported by the evidence,” he said of the verdict.

And in a statement, Samsung showed its displeasure and indicated the fight isn’t over.

“Today’s decision flies in the face of a unanimous Supreme Court ruling in favor of Samsung on the scope of design patent damages. We will consider all options to obtain an outcome that does not hinder creativity and fair competition for all companies and consumers,” Samsung said.

Apple didn’t specifically address the damages amount but reiterated its focus on design in a statement Thursday.

“We believe deeply in the value of design, and our teams work tirelessly to create innovative products that delight our customers. This case has always been about more than money. Apple ignited the smartphone revolution with iPhone and it is a fact that Samsung blatantly copied our design. It is important that we continue to protect the hard work and innovation of so many people at Apple.”

Jurors: Apple persuasive on one patent, Samsung on another

Jurors found both Apple and Samsung persuasive when it came to determining what exactly a design patent applies to, two jurors said. In the case of one Apple patent, describing the round-cornered, black front face of a phone, they went with Samsung’s argument and found the infringing product was the display assembly — the screen and accompanying electronics. But for another, which describes a grid of colorful icons, they saw things Apple’s way.

“There wasn’t any meaningful way to separate it from the phone,” said jury foreperson Cait Bravo, 35, manager of an area Barnes and Noble bookstore. “The graphical user interface requires more than just the display screen.”

Juror Christine Calderon, 26, a technical writer for network equipment maker Cisco Systems, saw things the same way. And she expressed sympathy for Apple’s design-first ethos.

“I do understand that process — how important design is,” she said. Calderon took copious notes during the trial, and afterward, she offered Quinn advice on how Samsung could have made its witnesses easier to understand.

The jury instructions required the jurors to apply a four-factor test to determine what Samsung product infringed — a component or an entire phone. That test wasn’t a very specific guide, Bravo said. For example, it said nothing about which factor to weight strongest.

The split view on the patents means neither side can claim outright victory, and there’s not a lot more clarity for legal cases regarding the scope and power of design patents. But give the increased damages and Samsung’s dissatisfaction, it’s clear Apple came out ahead even with the payment a little over half of what it wanted.

$28 million or $1 billion?

Samsung had argued a $28 million penalty was an appropriate penalty for infringing three Apple design patents, but Apple sought $1.07 billion. Apple believes Samsung’s stance would mean a carmaker could build something just like a Volkswagen Beetle but then pay damages only based on the outside shell, but Samsung thinks Apple’s stance would mean a company infringing a cupholder design would have to pay patents on an entire car. Samsung didn’t fight Apple’s suggested $5.3 million penalty for infringing two utility patents.

A trial in 2012 determined that in 2010 and 2011, Samsung sold 15.3 million phones that infringed on five Apple iPhone design patents. Three of those are design patents, which describe ornamental features, and two are utility patents, which cover how a product works. This trial determined the thorny issue of calculating exactly what damages Samsung must pay Apple — thorny because of uncertainty about exactly what profits Samsung must cough up.

Apple argued the payment should be the profit from sales of the entire phone. Samsung argued it should only be the components. A 2016 Supreme Court decision bolstered Samsung’s case but didn’t define with any precision exactly how courts should do the math.

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