What’s Your Damage, Apple?

The opinion of the Supreme Court is in, in Samsung v. Apple, and the news is not appetizing for Apple. Justice Sotomayor, writing for a unanimous Court, did just enough to (temporarily?) undo the $399–million verdict Apple had secured in this skirmish of the smartphone wars for infringement of its design patents. But the Court did little more than that, leaving critical questions for the Federal Circuit to resolve on remand—namely, what to do in this particular case.

In brief, a jury found that Samsung had infringed design patents owned by Apple to the look and feel of certain smartphones. Apple secured its nine–figure verdict based on the argument that its damages had to be measured based on the entire value of an infringing smartphone, not, as Samsung countered, the value of just the front face and/or screen of the device. The Federal Circuit affirmed, holding that the damages should be measured against the value of the phones because Samsung sells phones to its customers, not screens or front faces.

The Supreme Court reversed, concluding that, in the case of a multi–component product, such as a smartphone, the calculation of damages for infringement of a design patent need not be based on the end product sold to consumers, but could be based on just the infringing components of those products—here, the front face and/or screen, not the phone. Having answered the legal question, the Court pushed the several hundred million–dollar question of how to award damages to Apple in this case back to the court of appeals. The high court thereby ensured another chapter in this ongoing saga to be written by the Federal Circuit—on the more interesting question of whether the relevant article for purposes of calculating damages for Samsung’s infringement is a smartphone or a component of one.