Apple, Samsung do battle at Supreme Court

The Supreme Court wrestled Tuesday with whether Samsung should have to pay almost $400 million in damages to Apple as part of a long-standing dispute over patents on elements of smartphones.

Samsung has argued that since the patented designs it was accused of copying from Apple were just components of some of its phones, it should not have to pay damages based on the profits for the entire devices.

{mosads}Chief Justice John Roberts seemed sympathetic to that argument Tuesday.

“It seems to me that the design is applied to the exterior of the phone,” he said to Apple’s lawyer, Seth Waxman. “It’s not applied to all the chips and wires.”

But even as some of the justices appeared skeptical of Apple’s argument, they raised questions about the feasibility of asking juries to determine the difference between a component’s design and the device it is included in.

“If I were a juror I simply wouldn’t know what to do under your test,” Justice Anthony Kennedy told Kathleen Sullivan, the attorney arguing for Samsung.

Lawyers raised the idea that consumer surveys, for example, could be used to determine the value of a component or that the courts could look at the profits a contractor makes from the patented elements of the device.

The case traces back to the early days of the smartphone boom.

In 2011, Apple sued Samsung for violating several of its design patents. Two concerned the iPhone’s face and another was for the grid of application icons that form the visual core of the phone’s operating system.

A jury awarded Apple more than $1 billion in damages in 2012. That figure has been reduced in the years since.

In December, Samsung agreed to pay Apple the roughly $548 million in damages. Sullivan, however, came before the justices on Tuesday to ask them to rule that Samsung does not need to pay Apple $399 million of that larger judgment.

At issue is a simple question: Is Samsung responsible for paying based on the profits from all the phones it created using elements patented by Apple, or just on the profits reaped from the elements themselves?

Samsung argued that the text of the law indicates that infringers should only be required to pay up based on the profits reaped from the patented design components.

“The design was not applied to the innards of a phone — the batteries, the processor, the electronic componentry that makes the smartphone smart,” Sullivan told reporters. “And because Apple didn’t assert that on the iPhone, it doesn’t deserve profits on all of Samsung’s phones.”

Samsung has also argued that the laws are outdated and not capable of being applied to a device as complicated as a smartphone.

“We think the justices gave our arguments very serious attention and were well prepared,” said Sullivan, “and we are pleased that they gave our arguments such a serious and careful hearing. And we’re hopeful that a sensible ruling on design patents will emerge and that it will be a win for consumers and businesses alike.”

The company has been supported in its fight by several major technology companies, including Facebook and Google, who say that upholding the ruling based on the total profits reaped from the Samsung phones in question would severely damage investment in the technology sector.

Apple argues, on the other hand, that the law allows for it to collect damages based on Samsung’s profits from the entire phone. They say that this is supported by the history of laws governing patents on designs.