The Supreme Court handed a major victory over to Samsung in its legal battle against rival phone manufacturer, Apple on Tuesday. The court ruled that Samsung would not have to cough up hundreds of millions of dollars in penalties for copying a design of the iPhone on its Galaxy phones. However, Samsung may still be on the hook for at least some penalties under the new decision.
The legal dispute centered on whether the term "article of manufacture" should consider the product in its entirety or just a component of the product. The unanimous decision announced by Justice Sonia Sotomayor declared that Samsung only used a component of Apple's smartphone design, rather than a replica of the entire product, USA Today reports. The Supreme Court further reasoned that the design only mimicked the phone's appearance rather than the iPhone's capabilities. "The term 'article of manufacture' is broad enough to embrace both a product sold to a consumer and a component of that product whether sold separately or not," Sotomayor stated.
The legal battle between the two manufacturers has been pending for nearly five years. In 2012, a lower jury ruled that Samsung had to hand over all profits from the phone while its design infringement case was still in question. Samsung was initially hit with nearly $1 billion in penalties for imitating Apple's design, but it was later cut by $382 million. Later in Dec. 2015, Samsung paid Apple $548 million, but took the matter to the Supreme Court, claiming that it should not have to fork over millions in payouts for copying only one part of the iPhone's latest design, according to Reuters.
The Samsung-Apple case was the first tech-based legal battle to make it all the way to the Supreme Court, but it will now return to the U.S. Court of Appeals for the Federal Circuit to determine what what portion of the profits from the Galaxy that Samsung must pay. "We decline to lay out a test for the first step of the damages inquiry in the absence of adequate briefing by the parties," Sotomayor continued. "The Federal Circuit may address any remaining issues on remand."
Case Collard, a partner at the international law firm who focuses on intellectual property, stated that the recent decision has reshaped the law on design patents. "No longer can a patent holder get all of the profits from the sales of a product infringing a design patent," Collard stated. "Instead, they may recover the profits attributable to the infringing feature." While Samsung awaits the legal battle to start up again in lower court, they might want to work on coming up with a Galaxy design that doesn't involved their phones bursting into flames in people's pockets.