APPLE VS SAMSUNG – IT’S NOT OVER

RothLawAppeals, News

One would think that a U.S. Supreme Court decision puts finality to a legal battle, even one between two giants of the business world.  But that will not be the case this week.

The Supreme Court opinion in the ongoing battle Apple and Samsung starts, in essence, with a deceptively simple question – nearly a silly one: what is a product?

The question has more merit than may appear at first blush.  When an item sold to the public has several components, is each component a product, or only what is offered for sale to the end user? Is the entire oven a product, or may the on-off switch be the product at issue?

And this question matters.  It matters greatly.  That is because the measure of damages is the totality of profits the infringer made on the copied product.

All of which brings up to titans at war: Apple vs. Samsung.  When Apple produced the first smartphones, one of its patents included the now iconic rectangular face with rounded edges, with or without a raised edge.  (The raised edge came in a second patent.)  When the lower courts found that only the item for sale to the public could be called a product (or, in the statutory language, an “Article of Manufacture”), it ordered Samsung to give back all its profits on smartphones: $400 million.

That is the reasoning the Supreme Court just reversed.  A product could be either the whole item sold to the public or one of its component.  The statute was not as limiting as the lower courts or Apple would have it.

But because the question before the Court was only whether a product could be a component, the Supremes did not go further.  In particular, they did not tell inventors or their attorneys how to figure out what the product is in any given case, or how profits should be calculated on a single component.

So it is not over.  It is now going back to the trial court.  That judge and the companies’ lawyers will haggle over what test to apply to determine what the infringed product actually was, now that we know it could be either the shell or the whole phone.  And if it should only be the shell, they will have to devise a way to calculate the profits derived just from that part.

This particular lawsuit started in 2011; for $400 million, what’s another five years?