Supreme Court ruling has come as a major relief for Samsung in the backdrop of the infamous Note 7 fiasco that has cost the company over $5 billion so far.
In an interesting new twist to the Apple vs. Samsung legal dispute, the Supreme Court has granted the South Korean company some reprieve by ruling it might not have to pay the entire $399 million profit it made from the sale of Galaxy smartphones. The lower courts had earlier ruled that Samsung must pay the profit it made from the sale of those smartphones that stands accused of infringing upon Apple’s iPhone design patents.
Apple (NASDAQ: AAPL) had earlier accused Samsung of copying key design elements of the iPhone, which includes the rectangular front layout with rounded corners and the arrangement of 16 app icons. The case first filed in 2011 has since been a key point of discussion in Silicon Valley ever since. Apple has won the support of several design firms as well as companies such as Nike and Tiffany. Samsung, on its part, has found backing from the likes of Facebook, Google, eBay, and HP.
However, in the latest development, Justice Sonia Sotomayor said that a company accused of violating patent does not stand liable to turn over its entire profit if the design in question pertains to only a few components in the device and not the entire device itself. As per federal law, a company that has been found to violate design patent on an article of manufacture will have to part with the entire profits.
The case has since been send back to the U.S. Court of Appeals for the Federal Circuit in Washington to determine the exact amount that Samsung must pay Apple in damages for copying the contentious design elements. However, while the Supreme Court has been unanimous in its ruling that Samsung may not have to pay all of its profits, to arrive at the right figure might turn out to be even more of a chore.
That since there has been a difference in opinions as to how to interpret the term ‘article of manufacture’; more so for a multi-component device such as the smartphone. The phrase might be applicable to both the component that goes into the making of the smartphones – as Samsung would like the judges to believe – or the entire smartphone, something that toes Apple’s line.
Samsung is celebrating the decision stating it is “a victory for Samsung and for all those who promote creativity, innovation and fair competition in the marketplace.” However, Apple replied coldly stating “Our case has always been about Samsung’s blatant copying of our ideas, and that was never in dispute. We will continue to protect the years of hard work that has made iPhone the world’s most innovative and beloved product. We remain optimistic that the lower courts will again send a powerful signal that stealing isn’t right.”
The Supreme Court ruling also couldn’t have come at a better time for Samsung that is already reeling in the aftermath of its mega Note 7 fiasco. The Note 7 had just been off to a huge start and could have gone down in history as one of the finest handsets ever made. That was when the device started to explode under mysterious circumstances, forcing Samsung to first initiate a recall and then a complete halt in the sale of the Note 7 devices worldwide.
As things stand right now, it is the Galaxy S7 that is left to take forward the company’s fortunes as well as to nullify, to whatever extent possible, the over $5 billion in losses it suffered owing to Note 7 issues.