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Reports of a partial cease-fire in the patent war between Apple and Samsung over various design features of the iPhone is certainly welcome news.
Ever since late Apple founder Steve Jobs promised operating system, the mobile ecosystem has been engulfed in over a hundred largely pointless lawsuits, with Apple claiming ownership of such basic features as the rectangular shape of a smartphone, its rounded corners, and the colored icons of the home screen.
While Apple has won and lost some of the lawsuits and has itself been found to infringe smartphone patents of some of its competitors, the company has clearly failed in its stated goal of outlawing Android. The lawsuits, meanwhile, have cost millions in legal fees, distracted the company from continued product development, and exposed some embarrassing facts about Apple’s attitude toward competition.
For whatever reason, Apple is now trying to extract itself from the web of litigation it largely spun. In May, for example, the company announced a wide-ranging settlement with Google and Motorola, ending years of courtroom battles between the once-friendly Silicon Valley neighbors.
The company had made no peace with Samsung, however, until Tuesday’s announcement of settlements in all patent litigation outside the US.
Neither company commented on the status of the US lawsuits, however, leaving them very much in play. In particular, Apple won judgments against Samsung in both 2012 and 2014 in Northern California trials covering several different patents and Samsung devices, both of which are now under appeal.
The main event remains the 2012 suit, in which Apple, after a retrial, was awarded $930 million in damages for similarities between Apple’s products and several Samsung products, including the Galaxy S2 and the Galaxy Tab. (The more recent judgment this year over later devices, including the Galaxy S3, awarded Apple only $119 million, also subject to ongoing appeals.)
The bulk of the damages in both cases was awarded for infringement not of any technical component of the devices but for look-and-feel elements of both the device and its interface, which Apple claims violated limited legal protections known as “design patents.”
Last week, however, Apple withdrew a cross-appeal in the 2012 case that challenged several lower court rulings, including the trial judge’s denial of a permanent injunction banning the infringing Samsung devices.
The fight over damages
That leaves the calculation of damages as Apple’s only objection. The company argues that it is entitled to Samsung’s entire profit from the infringing devices, rather than a proportion commensurate with the value of the patents in question. (Samsung, for its part, is vigorously appealing the finding of infringement as well as the damages.)
In a scholarly brief filed in late May by leading US patent expert Mark Lemley of Stanford Law School, 27 law professors argued that the trial judge’s interpretation of the damages provision for design patents made little sense. According to the judge, infringement of any single design patent, even by someone unaware of the existence of the patent, required the jury to calculate damages based on the total profits of the infringing product.
But that provision of patent law, exclusively applied to design patents, was enacted in 1887, at a time when the design of simple products such as a rug could be thought to be the sole basis on which a consumer made a decision of what to buy. When enacted, the provision only applied to intentional copying.
It makes no sense, Lemley argues, to imagine that the buyers of a smartphone make their decision solely on the basis of its rectangular shape, or, worse, that the actual operation of the device plays no part in their purchase.
“People don’t buy iPhones simply because they look cool; they buy them because they function,” Lemley writes.
And, the lawyers’ brief continues, “by one estimate there are 250,000 patents that arguably cover various aspects of a smartphone. To conclude that one design patent drives the purchase of the product, and therefore that all the defendant’s profit is attributable to infringing that patent, is to say that none of those other contributions should be valued at all.”
Rather, the brief argues, read in the context of the rest of the Patent Act, it’s clear that damages should be apportioned to the importance to consumers of the specific design patents claimed to have been infringed, rather than assuming even a single design element should account for the entire value of the device. (Apple did not make any effort to demonstrate how any or all of the design features involved actually impacted sales of the challenged Samsung devices.)
In response, two professors at the University of Indiana’s law school last week filed a separate friend of the court brief, supporting Apple’s position that an “unapportioned” calculation nonetheless applies to design patents. Their brief says little about the complex nature of high-tech products, however, arguing instead for a strict construction of the 1887 law that seems based on the premise that a product’s design — or even one element as simple as the shape of icons — is all that “sells the article.”
They note that even in recent years, courts have applied the “unapportioned” damages rule for “multi-component devices,” but their examples of cases involving such “devices” dealt with lamps, shoes, and an eyeglass display rack.
Lemley and his colleagues argue that the rationale for the unapportioned method not only doesn’t apply to complex devices such as smartphones, but that any other rule would prove dangerous to the health of many high-tech industries, products, and services. On Apple’s reading of the damages provision, “Today a company could act in perfect good faith in adopting a similar design as a small aspect of a much larger product and still be forced to disgorge its entire profits from the product.”
What are they fighting for?
Though signatories to the battling law-professor briefs attest to having no financial interest in the outcome of the case, blogger Florian Mueller of FOSS Patents noted the oddity of two other amicus briefs written in support of Apple that were filed by the same law firms that represent Apple.
These briefs were written on behalf of separate groups of industrial design professionals and “design educators,” but their representation by Apple’s outside counsel greatly diminishes the perceived, if not the actual, independence of these parties.
As Mueller notes, the only companies that support Apple’s extravagant view of damages for design patents are entirely outside of high-tech industries, representing the makers of relatively simple products.
“The fact that only companies that make products like shoes, furniture or (at best) light switches…support Apple on this issue actually strengthens the argument made by Samsung…that unapportioned design patent damages may have been appropriate a couple of centuries ago but would completely devalue the innovative technologies of our times,” Mueller writes.
Regardless of any possible bias, the Stanford brief surely makes the most sense, legally and practically. The patents that the jury in the 2012 case believed Samsung had infringed covered such trivial and obvious design features as the “rectangular shape, rounded corners, translucent screen, and colorful icons” of smartphones and tablets.
It is hard to see how these features alone comprise the only value to consumers for the devices in question, or how taxing the entire profit of an alleged infringer of even one such feature creates a balanced incentive to protect against future infringement.
Instead, the squabbling over damages — the only arrow left in Apple’s quiver, it seems — makes clear just how pointless the litigation was in the first place and, indeed, how far patent law has devolved from its intended purpose of promoting innovation.
Apple’s stated goal in this case and more broadly was to stop the sale of Android devices, a strategy that has clearly failed. Samsung and others have long-since designed around the claimed patents, many of which are so obvious and broad that they never should have been approved in the first place.
Apple needs to compete in the market rather than the courtroom. The latter is now the preferred milieu, increasingly, of so-called “patent trolls” who buy up dubious patents in hopes of extorting settlements from as many true innovators as possible. It is poor company for Apple to be keeping.
Meanwhile, one measure of the failed strategy Apple now seems to be abandoning is that in the six years since Android’s introduction, the operating system now commands well over half of the smartphone and tablet market.
That market, fortunately for Apple, is still growing rapidly.
