The two world's leading smartphone manufacturers, Apple and Samsung, clashed again in court today, this time in the nation's highest tribunal. While the Supreme Court's interpretation of an obscure statute enacted in the same year Thomas Edison opened up his lab in New Jersey will determine the outcome of the case, the implications for the tech industry could be significant.
The ongoing legal disputes between the two companies have spread to courtrooms across the globe, the legal equivalent of a world war with many fronts. Like many of those lawsuits, this case before the eight justices (Justice Antonin Scalia's seat has remained vacant since his death in February) centered around design patents.
A California jury awarded Apple $400 million for Samsung's infringement of three designs dealing with the appearance and interface of the iPhone. The Federal Circuit Court of Appeals confirmed the verdict, which did not touch upon the patents covering the inner workings of the phones.
The justices will not review whether Samsung actually infringed on Apple's designs. Instead, they have been asked to determine whether, under the 1887 statute, Samsung must forfeit to Apple all of its profits earned from the sale of its smartphones using Apple's designs or allocate a portion of those profits to the specific patents it violated.
"A smartphone is smart because it contains hundreds of thousands of the technologies that make it work," opened Samsung's attorney, Kathleen Sullivan. "But the Federal Circuit held that... the holder of a single design patent on a portion of the appearance of the phone to total profit on the entire phone. That result makes no sense," she continued, repeating the thrust of Samsung's arguments.
Relying on the plain language of the 1887 statute, Apple countered that all of Samsung's profits should be disgorged to Apple because of the patent violations. It also emphasized the revolutionary innovations the iPhone brought to the mobile phone industry upon its release. The iPhone, Apple's lawyers have contended, set the standards of smartphones through its very designs Samsung copied. The South Korean company, Apple has argued, should not be allowed to profit from Apple's innovations.
Facebook, Google, and other tech titans, on the other hand, have sided with Samsung, warning the Court in an amicus brief that the Federal Circuit's ruling "will further undermine innovation" and "lead to absurd results." These tech companies proposed a formula which takes into account the "reality of modern, multi-component technological products.... which... are not purchased primarily based on the design of one or more isolated components."
For the justices, adjudicating the case won't be as straightforward as picking between the conflicting arguments. "The problem is," Justice Anthony Kennedy declared, "is how to instruct the jury.... If I were the juror, I simply wouldn't know what to do."
Justices Ruth Bader Ginsburg and Sonia Sotomayor echoed Kennedy's words, the latter asking Samsung's lawyer how to determine the "right test" for juries to apply when it is very difficult to decouple a handful of design elements from an integrated product with hundreds of features and characteristics that might appeal to consumers.
The statute in question is only two paragraphs in length. The lack of complexity does not make this an easy case, however. Without many precedents to rely upon, the application of a law born before the current technological revolution presents challenges to the justices, who have been asked to not just determine the law's meaning but concoct a proper balance suited for the modern world between inventors and innovators who build on those inventions.
