Samsung has been accused by Apple of violating patents and: - 1) Copying their icon arrangement display pattern. Cir. Id. Id. The icons on the iPhone were strikingly similar to those in Samsungs phone. Therefore, the Court hereby adopts [the plaintiff's] calculations . Second, Samsung argued that "Apple further did not present any evidence of causation, that these particular accused features of the design patents or the patented designs drive the sales and did not include that in their calculation analysis." 1300 at 19-22. See, e.g., ECF No. Id. Although a design patent owner may recuperate the infringers total profits, the utility patent owner may recuperate his/her lost profits or a fair royalty. "In Dobson v. Hartford Carpet Co., the lower courts had awarded the holders of design patents on carpets damages in the amount of 'the entire profit to the [patent holders], per yard, in the manufacture and sale of carpets of the patented designs, and not merely the value which the designs contributed to the carpets.'" Later the company saw the most profits from smartphone sales. 2271 at 12-13 (citing Nike, 138 F.3d at 1441 ("'It is expedient that the infringer's entire profit on the article should be recoverable,' for 'it is not apportionable' . 1978); see Galdamez v. Potter, 415 F.3d 1015, 1023 (9th Cir. at 10-11 (citing, e.g., Concrete Pipe & Prod. . Moreover, at the October 12, 2017 hearing, both parties stated that they found the United States' test acceptable. Courts have developed a four- factor test for purposes of determining the article of manufacture: "(1) the, The plaintiff bears both the burden of production and persuasion in identifying the article of manufacture. 2. Moreover, the article of manufacture inquiry is a factual one: to which article of manufacture was the patented design applied? Moreover, as Samsung points out, "[p]lacing the burden of identifying the correct article of manufacture on the patent plaintiff also corresponds with the analogous law of utility-patent damages for multicomponent products, where the patent plaintiff similarly must prove the correct component to be used as a royalty base . Laborers Pension Tr. The entire spat began when Apple documented suit against Samsung in April 2011, blaming its opponent for duplicating the look and feel of its iPhones and iPads. Full title:APPLE INC., Plaintiff, v. SAMSUNG ELECTRONICS CO. LTD., et al., Defendants. One significant negotiation to observe happened in August 2012. It explained that "[a]rriving at a damages award under 289 . --------. It has been revolutionizing personal tech for decades. Id. Conclusion The Beginning of Patent Lawsuits Although filing lawsuits is a common strategy for Apple, its focus on Samsung is quite intense and recurrent. In 2016, the Supreme Court reviewed this case and held that the net profit damages for infringing design patents need not be calculated based on the product sold to the consumer. 3523 ("Apple Response"); ECF No. 2005) (quoting Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1281 (Fed. For instance, in August 2011, a German court ordered an injunction on the Samsung Galaxy Tab 10.1 across the EU for infringing Apples interface patent. On September 18, 2015, on remand, this Court entered partial final judgment in the amount of $548,176,477 as to the damages for products that were found to infringe only Apple's design and utility patents (and not Apple's trade dress). In 1938, Lee Byung-Chul dropped out of college and founded a small business he named Samsung Trading Co. ECF No. The U.S. Supreme Court then held that "[t]he term 'article of manufacture,' as used in 289, encompasses both a product sold to a consumer and a component of that product." Sept. 9, 2017), ECF No. Samsung also contends that some of Apple's proposed factors contradict the U.S. Supreme Court's decision in the instant case. Second, it argued that Samsung's sales took sales away from Apple and resulted in Apple's losing market share. 2) Accused of imitating the iconic iPhone's shape which in official terms is called as "tradedress" (e.g. We hold that it is not." At the same time, the Court agrees with Samsung that "[t]he statute cannot be administered without first ascertaining the scope of the design claimed by the patent." See, e.g., KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406-07 (2007) (discussing factors for determining obviousness of an invention); Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. Apple was awarded $399 million in damagesSamsung's entire profit from the sale of its infringing smartphones. Negotiation Training: Whats Special About Technology Negotiations? The case began in 2011 and went on to go worldwide. Apple argues that "[i]f the defendant typically sells its asserted article of manufacture as part of a unitary product, the factfinder may reasonably infer that the defendant has applied the patented design to the product as a whole." On August 24, 2012, the first jury reached a verdict that numerous Samsung smartphones infringed and diluted Apple's patents and trade dresses in various combinations and awarded over $1 billion in damages. Id. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The titans are involved in the battle that aims to take off each other's product off the shelve, where billions of dollar are on the line. Your email address will not be published. On March 21, 2016, the U.S. Supreme Court granted certiorari in this case. The companies showed some willingness to compromise in an effort to avoid going to court: at the California courts suggestion, they cut the number of disputed patents in half. The Apple vs. Samsung case not only reminds us of the importance of filing multiple design patents for protecting a new products look but also the significance of conducting a patent search. The Method for Determining the Relevant Article of Manufacture. See Apple Opening Br. 1916) ("Piano II") (opinion after appeal following remand) (collectively, "the Piano cases"), in which the Second Circuit held that the patentee had been overcompensated for being awarded the profits from an entire piano when the design patent at issue only applied to the piano case, not the internal components of the piano itself. As the smartphone market and the hype around this continues to grow, smartphone leaders fight for greater dominance in this segment of the product. However, the Galaxy Tab S2's high-quality AMOLED screen makes this device a favorite for gamers and people who love watching movies on their tablets. 15-777), 2016 WL 3194218, at *9. . While Samsung Galaxy phones have punch-holes, flat or curved screens, and rear camera modules with four or more camera sensors. They began to work on the Macintosh. One of Samsung's expert reports written by Michael Wagner, which Samsung filed as part of its motion for summary judgment, included a damages theory that would have awarded Apple less profit than the entire profit on Samsung's infringing phones. They have not factored out, for example, the technology and what drives those profits." Hunter, 652 F.3d at 1235 n.11. 1612 at 1367 (Apple expert Susan Kare stating that the D'305 patent is limited to "the rectangular area" represented by the phone's screen). Conclusions Apple and Samsung keep on experimenting bringing various competitiveness strategies, such as new product launch, major innovations, mockups of the rival's offer, product line extensions, aggressive advertising campaigns as well as lawsuits. Id. After trial, Samsung moved for judgment as a matter of law. Accordingly, the defendant must bear the burden of production on any deductible costs that it argues should be subtracted from the profits proved by plaintiff. On November 21, 2013, after six days of trial and two days of deliberation, a jury awarded Apple approximately $290 million in damages for design and utility patent infringement. See ECF No. Cir. Apple was one of Samsung's largest buyers, ordering billions of dollars of parts for electronic devices. Apple also contends that legal errors in the proposed instruction mean that it was not error for the Court to have excluded it. Issues between the two companies continue. 2271 at 26; 2316 at 2 (case management order reinstating portion of original jury award). Nokia and Motorola dominated the mobile phone market before Apple and Samsung became the worlds largest smartphone manufacturers. Apple Response at 19. The Samsung we know today has not been constant as we consider its long history. A critical evaluation of the Competition between Samsung and Apple Samsung and Apple are among the largest manufacturers and suppliers of smartphones in the current global market. (emphasis added). "); ROBERT A. MATTHEWS, JR., 4 ANNOTATED PATENT DIGEST 30:9. However, the Court granted judgment as a matter of law as to the 2012 jury verdict on the theory that Apple's utility and design patent infringement damages numbers relied on improper notice dates. Is Filing A Provisional Patent Application A Smart Decision? You've successfully signed in. Apple Product Line Check your inbox and click the link. From that event, Samsung dared from being a supplier of technological equipment to a competitor in market share. Id. Apple's advantages over Samsung: Not excessively higher prices at the top of the range segment. After two jury trials and decisions by both the Federal Circuit and the United States Supreme Court, the instant case has been remanded for a determination of whether the jury's $399 million award in favor of Apple for design patent infringement should stand or whether a new damages trial is required. when Samsung lacked notice of some of the asserted patents. Apple Opening Br. 2607-5 at 16 (Apple's damages expert noting that he relied on "a file that reflects detailed information on [Samsung's] material costs for the Accused Products"). smartphones resemble the iPhone 3g and iPhone 3gs in shape). b. Micro Chem., Inc. v. Lextron, Inc., 318 F.3d 1119, 1122 (Fed. at 6. Id. The two companies have repeatedly accused each other of copying the appearance and functions of their smartphones and tablet devices. iPhones have usually enjoyed more praise than their Samsung counterparts in terms of sheer photo quality, image consistency, and video quality. Be it flying, cooking, innovating, and even revolutionizing the whole world with unbelievable technology. He immediately trimmed most of the product density in Apple and made the company as slim as possible and launched new sleek products. Read Essay On Apple Vs. Samsung Case Considered By Law and other exceptional papers on every subject and topic college can throw at you. The same with Apple, Samsung has its downsides as well. In Negotiation, How Much Do Personality and Other Individual Differences Matter? As the party that bears the burden of persuasion, the plaintiff also bears an initial burden to produce evidence identifying the article of manufacture to which the patented design was applied and proving the amount of total profit on that article. "), 14:14-14:18 (Samsung's counsel: "But the second best proposal is certainly the Solicitor General's test. 2017) (unpublished) ("Federal Circuit Remand Decision"). Id. ; Apple Opening Br. The plaintiff also bears an initial burden of production on both of these issues. Id. This result is, first of all, the law of the case, and Samsung did not appeal it. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION. The Court then analyzes the various approaches. 2005)). . Section 289 reads, in relevant part: Apple and Samsung dispute whether the relevant article of manufacture for the purpose of calculating damages under 289 for the design patent infringement in the instant case is the entire smartphone or a part thereof. However, the U.S. Supreme Court "decline[d] to lay out a test for the first step of the 289 damages inquiry in the absence of adequate briefing by the parties." The most famous Samsung phones are Galaxy, after the first launch in 2009. The Instructions Were Legally Erroneous. The lesson? However, the appeals and counter lawsuit processes continued until 2014 when almost every target model was out of production. 3:17-cv-01781-HZ (S.D. . The reason is that it is already a brand, a valuable brand which has managed to make a place in the hearts of people all around the world. at 10-11. Moreover, Samsung argued that "[t]he record contains no evidence that the entire sales value of Samsung's products was attributable to their outer casings or GUI, as opposed to the numerous noninfringing technological components that enable the devices to function and drive consumer choice." The Federal Circuit affirmed the damages award, rejecting Samsung's argument that damages should be limited because the relevant articles of manufacture were the front face or screen rather than the entire smartphone. 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"Section 289 of the Patent Act provides a damages remedy specific to design patent infringement." Samsung's argument that the face of the statute lacks an explicit burden-shifting scheme does not mandate a different result. 2008) (stating in a design patent case that, "as is always the case, the burden of proof as to infringement remains on the patentee"), cert. The history of 289 provides important context for understanding the progression of the litigation in the instant case, as well as the competing policy considerations implicated by the formulation of a test for determining the relevant article of manufacture under 289. Apple argues that such a shift in burden is consistent with 289's disgorgement-like remedy, because in other disgorgement contexts the defendant bears the burden to prove any deductions. This is in part because "historically, the concept encompassed two distinct burdens: the 'burden of persuasion,' i.e., which party loses if the evidence is closely balanced, and the 'burden of production,' i.e., which party bears the obligation to come forward with the evidence at different points in the proceeding." See Supreme Court Decision, 137 S. Ct. at 432. 2011) (citation omitted); see also Norwood v. Vance, 591 F.3d 1062, 1067 (9th Cir. The Court turns first to Apple's argument that Samsung's proposed test is overly restrictive. "At that point, the plaintiff has made out a prima facie case under 289," and the "burden then shifts to the defendant, if it so chooses, to prove that the damages should be reduced" by proving a lesser article of manufacture or identifying deductible costs. 3521 ("Samsung Opening Br. In its order on July 28, 2017, the Court held that "the jury was not provided an instruction that stated the law as provided by the United States Supreme Court decision in this case that an article of manufacture can be 'a product sold to a consumer [or] a component of that product.' The support with Samsung is not as good as what you get from Apple. Later Apple bought Next which was founded by Steve Jobs bringing him back as an advisor. The following article discusses the design patent litigations and the battle of power between Apple and Samsung. Sometimes companies copy some famous brands product look and hope to generate sales. The parties agree that determining the relevant article of manufacture for the purpose of 289 is a question of fact that a jury decides when there is a material factual dispute. Chen, C & Ann, B 2016, 'Efficiencies vs. importance-performance analysis for the leading Smartphone brands of Apple, Samsung and HTC', Total Quality Management & Business Excellence, vol. Each factor helps the factfinder think through whether the patented design has been applied to the product as a whole or merely a part of the product. Create a new password of your choice. By July 2012, the two companies were still tangled in more than 50 lawsuits around the globe, with billions of dollars in damages claimed between them. The United States advocates a different burden-shifting regime. 289, instead appealing only to procedural and policy arguments for allowing apportionment in this case."). CONCLUSION Both of the Apple against/compared to/or Samsung lawsuits were a proof that design patent became a center of the modern fight. Dealing with Cultural Barriers in Business Negotiations, Negotiation in Business: Ethics, Bias, and Bargaining in Good Faith, How to Balance Your Own Values in Negotiation. Finally, Apple concedes that it bears the ultimate burden of persuasion on the issue of damages. With respect to multicomponent products, the United States argued that in some instances, "the finished product as sold in commerce is most naturally viewed as the article to which the patented design is 'applied.'" ECF Nos. See ECF No. The Federal Circuit rejected this theory because "[t]he innards of Samsung's smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers." The Court holds that if the plaintiff has met its initial burden of production on identifying the relevant article of manufacture for the purpose of 289 and the defendant disputes the plaintiff's identification of the relevant article of manufacture, then the burden of production shifts to the defendant to come forward with evidence supporting its asserted article of manufacture. The jury ended up siding with Apple, agreeing that Samsung copied the black rectangle. Thus, the Court limited the evidence and witnesses at the 2013 trial to the evidence that was admissible at the 2012 trial. Apple's Test Omits the Scope of the Design Patent and Its Fourth Factor Strays From the Text of the Statute. 17:8-17:9. Cir. Advanced Display, 212 F.3d at 1281. 543 F.3d at 678, 681, 683. However, the court case wasnt the first guard of Apple against Samsung. Apple being the biggest tech company earns billions of dollars in revenue but it doesnt pay billions in tax. at 22 (citation omitted). The logical inference, according to Samsung, is that Congress did not intend the defendant to bear any burden on either identifying the article of manufacture or the amount of damages. Back in April 2011, Apple had filed a lawsuit accusing Samsung of copying the look and feel of the iPhone when the Korean company created its Galaxy line of phones. Although Samsung conceded during the October 12, 2017 hearing that in the case of a single-article product that article must be the relevant article of manufacture, ECF No. Thus, it would likely also be over-restrictive when applied to multicomponent products. ECF No. (forthcoming) (manuscript as of Sept. 4, 2017 at 68 & nn.419-20) (https://ssrn.com/abstract=2850604); H.R. The Teaching Negotiation Resource Center Policies, Working Conference on AI, Technology, and Negotiation, Business Negotiation Strategies: How to Negotiate Better Business Deals, What are the Three Basic Types of Dispute Resolution? However, the Federal Circuit held that, as recognized in Nike, 138 F.3d 1437, Congress rejected apportionment for design patent damages under 289. The jury in the partial retrial on damages awarded Apple $290,456,793, which the district court upheld over Samsung's second post-trial motion. 1998). Nothing in the text of 289 suggests that Congress contemplated the defendant bearing any burden. . Id. In my opinion, the continuous patent battle won't benefit both of them in terms of that Apple is the second biggest client to Samsung and Apple relies on Samsung for component supplies such as chips and LCD displays. at 436 (emphasis added). For example, 284 does not mention burden shifting, but the Federal Circuit endorses burden-shifting in the lost profits context under 284, as discussed above. .") Id. Instead, the U.S. Supreme Court held that "the term 'article of manufacture' is broad enough to encompass both a product sold to a consumer as well as a component of that product." 11-CV-01846-LHK (N.D. Cal. 2014). During the third quarter of 2011, Samsung surged past Apple to the number one spot among phone manufacturers, based on shipments. This began the row of court cases by these tech hulks against each other. Conclusion In conclusion the issues or problems has been shown . Co., 575 F.2d 702, 706 (9th Cir. On the first step, the U.S. Supreme Court held that the "article of manufacture" for which total profits are awarded under 289 was not necessarily limited to the product that is sold to consumers, but may be either "a product sold to a consumer [or] a component of that product." Right now, there is a smartphone user base in the billions. It is a visual form of patent, that deals with the visual and overall look of a product. v. Sel-O-Rak Corp., 270 F.2d 635, 643 (5th Cir. How Samsung and Apple Turned From Friends to Foe Apple vs.Samsung Apple and Samsung are the world's two largest high-end mobile providers.Apple and Samsung are major competitors but are also business partners.Apple is one of Samsung's biggest phone component customers and Samsung is one of Apple's biggest suppliers. It was in 1983 when Steve Jobs famously asked Pepsi CEO John Sculley to be Apples next CEO or if he wanted to sell sugared water for the rest of his life or change the world? In 2007 the first iPhone was unveiled to the world. The jury has ruled that Samsung willfully infringed a number of Apple patents (more on that in a minute) in creating a number of devices (more coming up on that, too) and has been ordered to pay Apple $1.05 billion in damages. Required fields are marked *. Jury Instructions at 15, No. at 9. Id. Samsung ofcourse declined the offer, stating that the company hasn't done anything wrong and is not involved in copying Apple or violating any of the trademarks mentioned in the lawsuit. Merrick v. Paul Revere Life Ins. . at *18. A major part of Apple's revenue comes from them. at 33. Conclusion - Apple vs. Samsung Portal Conclusion In closing, our team has presented our findings relating to the Apple vs. Samsung case and how it evidences the flaws within the current U.S. patent system. See Supreme Court Decision, 137 S. Ct. at 434 n.2; Tr. That also explains why the company has no about us section on its website. Samsung cites three categories of evidence to show that the jury could have found an article of manufacture that was less than the entirety of each infringing Samsung phone. The plaintiff bears the burden of persuasion in proving the relevant article of manufacture and in proving the amount of defendant's total profit under 289. With respect to design patent damages, Samsung argued on appeal that "the district court legally erred in allowing the jury to award Samsung's entire profits on its infringing smartphones as damages." 56, no. The android vs apple war. While tech hulks like these two fight for global dominance and the crown of the most innovative technology pioneer, it is sure that smartphones are a hot topic. Test results show that A14 takes the cake in most iPhone vs. Galaxy benchmarks, but the SnapDragon 888 . The strategies used by Apple Inc. and Samsung Pages: 3 (815 words) The conflicts between Apple and Samsung Pages: 6 (1533 words) Apple and Samsung Pages: 4 (957 words) Apple vs Samsung devices Pages: 2 (477 words) Supplying Capability Apple vs Samsung Pages: 5 (1364 words) Samsung vs. Apple - The smartphone wars Pages: 6 (1605 words) The number of cases reached four dozen by mid-2012, wherein both firms claimed billions of dollars in damages. Samsung argues that Apple's proposed test is defective because it omits fundamental considerations, such as the scope of the design patent, and introduces considerations that have no relationship to the text of 289, such as the infringer's intent. In that trial brief, Samsung argued in its trial brief that 289 "require[s] that profits disgorgement be limited to the 'article of manufacture' to which a patented design is applied" and that, as a result, Apple's attempt to seek "all of Samsung's profits from sales of the accused phones and tablets" would result in a windfall. The Court addresses these issues in turn. . Because Apple had not presented sufficient evidence to recalculate the appropriate damages award for some of the infringing sales at issue in light of the proper notice dates, the Court struck approximately $410 million from the 2012 jury award and ordered a limited new trial on utility and design patent damages relating only to the sales of those products (the "2013 trial"). (internal quotation marks omitted)). They released commercials that defame other pioneer brands openly. The jury instructions given were legally erroneous because they did not state the law as provided by the U.S. Supreme Court in this case. 2014-1335, 2014-1368, 2014 WL 2586819 (Fed. The Court acknowledges Apple's concern that the defendant may apply the patented design in a way that differs from the way that the plaintiff claimed the design in its patent, which would leave the scope of the claimed design with little significance. The company saw good growth under the leadership of Sculley until he was removed because of some failed products. However, had the Court not excluded Proposed Jury Instruction 42.1, Samsung could have made such arguments in its closing. at 57-58. After the succession of third heir Kun-hee, the company saw an opportunity in technology and he invested heavily in semiconductor technologies and transformed Samsung from a manufacturer into a global technology powerhouse. Cir. That too started from a garage and managed to become the most recognizable company in the world. Not only this, Samsung reversed the licensing agreement onto Apple stating that they are the ones who are copying. The Court's erroneous jury instructions were thus prejudicial error. The parties [could] not relitigate these issues." In 2011, when Apple was already embroiled with Motorola, it went after Samsung for tablet and smartphone designs. Based on the evidence discussed in the foundation-in-the-evidence section above, the Court finds that a properly instructed jury may have found that the relevant article of manufacture for each of the design patents was something less than the entire phone. At one point in the trial, an Apple witness showed and passed around to the jury the "major logic board" of a disassembled iPhone 4. at 18-19. In the trial, the jury found that Samsung had wilfully infringed Apple's design, patents and trade dresses. . J. L. & TECH. . May 23, 2014). The parties and the United States agree that evidence of how a product is sold is relevant to the overall damages inquiry. In the ongoing war between Apple and Samsung, no matter who emerges as the winner, the consumer will continue to lose unless the companies agree on having a healthy competition and offering their best products. Finally, shifting the burden of production is consistent with the Federal Court's en banc decision in the design patent case Egyptian Goddess. Moreover, the longer they spend fighting each other, the more contentious and uncooperative they are likely to become. This led to the beginning of a hostile competition and endless court battles between the two technology giants. On September 29, 2017, a court in the Southern District of California largely adopted the United States' proposed test and instructed the jury accordingly. Although filing lawsuits is a common strategy for Apple, its focus on Samsung is quite intense and recurrent. Writing as amicus curiae in support of neither party before the U.S. Supreme Court, the United States described the article of manufacture inquiry as "a case-specific analysis of the relationship among the design, the product, and any components." However, the U.S. Supreme Court declined to establish the test for identifying the article of manufacture for the purpose of 289. In 2011, when Apple was already embroiled with Motorola, it went after Samsung for tablet and smartphone designs. Apple's proposed factors are: Samsung contends that the relevant article of manufacture is "the specific part, portion, or component of a product to which the patented design is applied. ECF No. The Court first describes the approach advocated by the United States before the U.S. Supreme Court and then describes the approaches advocated by the parties. Specifically, Proposed Jury Instruction 42.1 included Samsung's now-abandoned apportionment theory and also defined the article of manufacture as invariably less than the entire product as sold. Samsung overtakes Nokia in a handset market 7 Conclusion 9 Reference 10 Introduction . . 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