Professors Discuss Apple-Samsung's Impact on Intellectual Property Law and Litigation

Apple Inc. recently requested that the courts kick Samsung Electronics out of the smartphone market.  Apple requested a court-ordered injunction after a California jury ruled that Samsung illegally copied Apple’s patents. 

The two electronics makers are in a ten-country patent war, both of them battling for the top spot in the market; and so far, Apple is winning. 

In August, Apple won in a case where it accused Samsung of stealing design and technology ideas, including the iPhone’s “bounce-back” feature, its rounded edges, and its bevel design.  The jury ruled that Samsung did in fact copy those very specific features, and awarded Apple a hefty damages award.

“The award was about $1.05 billion dollars, which has the potential to be increased by the judge due to the jury finding that Samsung willfully infringed the patents.  There can be an increase of damages by up to three times under those circumstances,” said Jorge Contreras, an intellectual property professor at American University Washington College of Law. 

Contreras and Professors Jonas Anderson and Christine Farley recently held an informal discussion about the ruling at American University Washington College of Law. The speakers discussed the decision and its implications for intellectual property law and litigation as well as for technology markets. WATCH THE EVENT WEBCAST

Just because Apple won, does not mean the fight is over.

Apple is now seeking an injunction that will prevent Samsung from selling any of the products that infringed Apple’s patents in the U.S.

“Those are not uncommon injunctions to get,” said Contreras.  “Samsung and other companies who are selling smartphones have to think about how they will design around Apple’s patents.  That’s the bottom line.”

If the judge grants the injunction, several of Samsung’s current smartphones could be banned from the market.  Contreras said that if Samsung wants to get back into the market, it will have to be more innovative and creative.

“If Samsung wants to get back into the market, assuming that this decision is not reversed on appeal, Samsung has to change its product design and that’s likely going to happen, in fact that process has probably already begun,” said Contreras.

Just because Apple won, does not mean the fight is over.  Samsung will likely appeal the decision, which means it could be several years before we really know how this case ends.  Jonas Anderson, assistant professor at American University Washington College of Law, says Apple was not necessarily the first company to develop the designs, they were just the first to patent.

“Apple’s real argument in this case is that their design was preeminent and that Samsung stole it,” Professor Anderson said in an informal discussion at the law school.  “That’s all they wanted you to know.  What they didn’t want you to know is that they probably weren’t the first one to come up with this design in the first place.”

According to Contreras, interviews with the jurors after the trial indicated that they did not pay attention to the validity of Apple’s patents.  Contreras said that the jury also should have taken a systematic approach when they considered the complexities of the patents.

“Everybody who observed this trial said it happened really fast, the jury only deliberated for three days or so, for an incredibly complicated case.  They probably should have spent more time going step-by-step through the different products, the different claims,” explained Contreras.  “I think they disregarded a lot of the arguments.  The jury foreman was an inventor who had his own patents and swayed a lot of the others in that way.”

"We might see more design fights in the electronics industry, which we haven’t seen before."

Contreras predicts that because of the outcome in this case, there are going to be more design fights in the electronics industry.

“This case was very unusual in that it was really one of the first cases where design patents played any role in a technology lawsuit.  Laptop computers and DVD players all look the same.  Home consumer electronics are just black or silver boxes; no one has ever really cared that much about protecting the designs,” Contreras said.  “Now, Apple has shown that it might be worthwhile to do.  So we might see more design fights in the electronics industry, which we haven’t seen before.” 

According to Professor Anderson, many companies, including Apple, buy, and sell design patent licenses.  Apple, he said, takes affirmative action to prevent infringement suits by engaging in complex, behind the scene discussions with other companies.

“They’ve licensed a lot of their design patents to Microsoft with the caveat that Microsoft can’t get too close to the iPhone designs.  Somewhere the attorneys have engaged in complex contracting around how much is too much copying, saying ‘you can use our patents.  We won’t sue you for infringing.’” 

According to Contreras, it was obviously worth the cost of litigation for Apple to keep as much of that market as it could.  There is hope, however, for the smartphone market.  Contreras believes that these fights will create diversity in the market because there are still thousands of features that Samsung can develop to make its smartphone unique.

“You’ll still be able to buy a Samsung phone that will be a couple hundred dollars cheaper than an iPhone, it’ll just work a little differently,” Contreras explained.  “Maybe it won’t have as many cool features, but maybe that’s what you pay the extra $200.00 for; you’ll still have a phone, and it’ll be cheaper.  If you want more luxury, you'll have to pay a little extra for it.”

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