Samsung patent decision: beyond fair?

Samsung Galaxy Note 4
Samsung Galaxy Note 4



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5 August 2015 | 0

Billy MacInnesThe decision by the likes of Google, Facebook, Dell, HP and eBay to offer public support to Samsung’s appeal against the award of damages to Apple for alleged patent infringement raises some interesting issues.

In the Amici Curae brief filed in support of Samsung in its appeal to the US Court of Appeals for the Federal Circuit appeal, the companies argue that forcing Samsung to pay all the profits for sales of smart phones that infringed three Apple patents that  “covered only minor features” would lead to “absurd results and have a devastating impact on companies, including amici, who spend billions of dollars annually on research and development for complex technologies and their components”.

The filing argues that the court decision would require a company selling a smart television to pay damages of the total profit of the entire TV even if an infringing feature was insignificant. Similarly, a design patent covering the appearance of a single feature of a graphical user interface, such as the shape of an icon, which might appear only during a particular use of the product, could entitle the patent owner to receive all profits generated by the product or platform.

“The filing argues that the court decision would require a company selling a smart television to pay damages of the total profit of the entire TV even if an infringing feature was insignificant”

This could occur “even if the infringing element was largely insignificant to the user and it was the thousands of other features, implemented across the remainder of the software that drove the demand generating those profits”.

The filing argues that “awarding a design patentee the total profit from an infringer’s product when the design covers only a relatively minor portion of the product is not only out of proportion within the significance of the design, it is out of touch with economic realities” and claims “disproportionate damages awards hinder innovation”.

From a common sense perspective, it’s hard to argue with the case that infringements of minor design patents should not involve the loss of profits for the entire product. For example, you wouldn’t expect a car manufacturer to have to hand over all the profit made from selling a particular model of car just because a tiny component inside it infringed a design patent.

But by the same token, if the effect of the designs being infringed are inconsequential to the overall profit of the product, it does raise the question of why someone would want to take the risk of copying them in the first place?

Surely the only reason for incorporating particular elements into the overall design of a product is to make it more attractive to customers with a view to selling more units and generating more profit. Trying to attribute a portion of profits to a specific design element is bound to be far more complex to define than just applying a blanket award of the entire profits for the product.

Besides, an argument could be made that awarding damages equal to the total profit is a powerful deterrent to any organisation tempted to steal or rip off another company’s ideas and designs.

The one thing you can say with any certainty is that companies finding themselves in Samsung’s position will argue for a change in interpretation and those in Apple’s position will be happy for things to stay the same.

And the lawyers won’t care either way.

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