The high court granted Samsung Electronics Co. Ltd.’s petition for a writ of certiorari, filed in December, which challenged a lower court’s decision that the Korean tech giant must pay Apple Inc. its entire profits from smartphones found to infringe Apple’s design patents on the look of the iPhone.
Samsung told the justices that the Federal Circuit misread the law and argued that requiring companies to pay their entire profits when they are found to infringe design patents results in exorbitant awards and gives design patents too much power.
“The decision below is thus an open invitation to litigation abuse, and has already prompted grave concern across a range of U.S. companies about a new flood of extortionate patent litigation, especially in the field of high technology,” Samsung said.
The high court declined to consider a second question presented by Samsung about whether courts should limit the scope of design patents to ornamental features.
The high court will now wade into one of the most contentious and high-profile patent disputes in recent history. A jury found in 2012 that Samsung infringed Apple’s patents and awarded more than $1 billion in damages, but a damages retrial and a Federal Circuit decision in May reduced the award to $548 million.
Samsung elected not to appeal the portion of that award dealing with utility patents, and focused its Supreme Court petition on the $399 million in damages related to the jury’s finding of design patent infringement, which the Federal Circuit upheld. Samsung agreed to pay the full $548 million judgment in December, but said it would seek a reimbursement if it prevailed at the Supreme Court.
Samsung noted that the justices had not heard a case dealing with design patents in more than 120 years. The rule that companies must pay their "total profit" from expensive products like smartphones found to have infringed design patents makes no sense in the modern world, the company argued.
“With the recent explosion of design patents in complex products like smartphones, the time is ripe for this court to again take up the issue,” it said.
Apple told the court in February that the law "could not be clearer" that infringers must pay their total profits for design patent infringement, so there was no need to hear the case.
"Samsung had its day in court — many days, in fact — and the properly instructed jury was well-justified in finding that Samsung copied Apple's designs and should pay the damages that the statute expressly authorizes," Apple said, adding that "Samsung has shown no reason for this court to prolong” the case.
The high court’s decision to take the case comes soon after the Federal Circuit wiped out a $120 million judgment that Apple won against Samsung in a later trial over different smartphone patents, finding that the patents were either invalid or not infringed.
The battle between the tech giants is slated to continue next week with a retrial on damages in the Northern District of California, since the Federal Circuit’s May decision held that some damages from the 2012 verdict needed to be recalculated. A jury trial on that issue was set to kick off March 28, although the judge asked the parties Monday to file briefs addressing whether it should be stayed in light of the Supreme Court's decision.
Samsung said in a statement Monday that it was pleased the Supreme Court decided to hear the case and noted that the company's argument was supported by several amicus briefs.
"We welcome the court's decision to hear our case. We thank the many large technology companies, 37 intellectual property professors, and several groups representing small business, which have supported our position," Samsung said. "The court's review of this case can lead to a fair interpretation of patent law that will support creativity and reward innovation."
A representative of Apple declined to comment on the decision Monday.
The patents-in-suit are U.S. Patent Numbers D593,087; D604,305; and D618,677.
Samsung is represented by Kathleen Sullivan, William B. Adams, David M. Cooper, Michael T. Zeller, B. Dylan Proctor and Victoria F. Maroulis of Quinn Emanuel Urquhart & Sullivan LLP.
Apple is represented by William F. Lee, Mark C. Fleming, Lauren B. Fletcher, Steven J. Horn, Seth P. Waxman and Thomas G. Sprankling of WilmerHale and Harold McElhinny, Rachel Krevans, Nathan B. Sabri and Christopher L. Robinson of Morrison & Foerster LLP.
The case is Samsung Electronics Co. Ltd. et al. v. Apple Inc., case number 15-777, in the Supreme Court of the United States.
--Editing by Kelly Duncan.