clock menu more-arrow no yes

In its new Apple v. Samsung ruling, the Supreme Court has changed how patent damages are calculated

The amount Samsung has to pay, though, is back in a lower court’s lap.

Ina Fried

The Supreme Court handed a huge victory to Samsung on Tuesday, tossing out nearly $400 million in damages it was ordered to pay to Apple in their long-running patent infringement case.

The ruling, while sending Apple’s specific case back to a lower court, changes the landscape for how design patent verdicts can be calculated.

A federal jury had earlier ordered Samsung to pay Apple $399 million for infringing on design patents used in Apple’s iPhone, one part of a larger patent verdict for Apple.

That amount was based on Samsung’s entire profits for the Samsung phones that were found to infringe. However, the Supreme Court ruled Tuesday that damages need not be calculated based on the profits for an entire device.

The case had been closely watched as it was the first time in more than a century that the Supreme Court had looked at design patents, with plenty of big companies weighing in.

Samsung had backing from tech giants Google, Dell, HP and Lenovo, while Apple’s position was backed by a host of companies including Tiffany & Co., Adidas and plastic shoemaker Crocs.

In a unanimous opinion, the court ruled Tuesday that juries need not award damages based on the profits for an entire product if the item consists of many parts.

“In the case of a multicomponent product, the relevant ‘article of manufacture’ ... need not be the end product sold to the consumer but may be only a component of that product,” justice Sonia Sotomayor wrote in the court’s unanimous opinion.

However, the Supreme Court didn’t actually decide how damages should be calculated in this case. Instead, it decided a lower court could sort that out and sent the case back to the trial court for yet more hearings.

“Unfortunately, the court did not give lower courts any guidance as to how to determine whether the "article of manufacture" in any given case is the product sold to consumers or a component,” said University of Notre Dame law professor Mark McKenna. “Presumably it has something to do with the nature of the design patent claim, but the court did not make that clear."

So, even after a trip to the Supreme Court, the case of Apple v. Samsung continues.

Apple, though, really lost this battle when it failed to get an injunction halting sales of Samsung phones. Since then, it’s basically been about how much money Samsung does or doesn’t have to pay — and the amounts here are essentially chump change for both.

Here is the court’s full ruling.

Update, 1:00 p.m. PT: Apple said it remains optimistic that the lower court will choose to maintain a significant damage award to “again send a powerful signal that stealing isn't right.”

“Our case has always been about Samsung's blatant copying of our ideas, and that was never in dispute,” Apple said in a statement. “We will continue to protect the years of hard work that has made iPhone the world’s most innovative and beloved product.”

This article originally appeared on Recode.net.

Sign up for the newsletter Sign up for The Weeds

Get our essential policy newsletter delivered Fridays.