Samsung preps for final showdown with Apple over iPhone design elements

14 May 2018 6:51pm
iPhone Screen

11 May 2018. By Mike Swift.

Like the tailfins on a ’58 Thunderbird, the curves of a Coke bottle or the stolid geometry of a red British phone box, the grid of software images on an iPhone’s touchscreen has become a design icon. It's recognizable to billions.

Since its inception in 2007, the iPhone, in part because of the phone’s design, has made Apple one of the world’s most valuable companies. And in seven years of patent and antitrust litigation over what Apple described as Samsung’s “slavish” copying of the iPhone, Apple consistently held the stronger hand during two previous US district court trials.

But Samsung is likely to go more on the offensive when a federal jury is empaneled Monday in Silicon Valley for the third and final trial in a case Apple filed in 2011. The South Korean electronics giant will argue that design must be valued as the sum of many parts, not an indivisible whole.

In the wake of a 2016 US Supreme Court decision that found Samsung’s design patent damages could be based on one component within a complex product like a smartphone — not just the full product — Samsung has a significant chance to slash the $399 million in design patent damages Apple won in two previous trials in San Jose, California.

The purpose of this third trial is to determine how much Samsung must pay for infringing three Apple design patents and two Apple software patents, infringement found by the jury in the first trial in 2012 as part of a $1.05 billion award against Samsung.

To decide Apple’s award, this jury must first define the “article of manufacture” upon which design patent damages are based under US law. That decision, applying a new — and controversial — four-factor test adopted by US District Judge Lucy Koh, is the foundational issue that will dictate the size of the check Samsung writes Apple.

The jury of eight due to be picked Monday will have to decide whether the value of that patented iconic design element — the icon grid is called a “Graphical User Interface,” or GUI, pronounced “gooey” in Valley-speak — is divisible from the value of the whole iPhone.

Apple and its witnesses will argue that they are indivisible. The Cupertino, California, tech giant will say it designs phones, not assemblies of audio jacks, casings, touchscreens and microprocessors.

Samsung will counter, as it did before the Supreme Court in 2016, that it would be unfair to award the owner of an infringed design patent on a car’s cupholder the profits for the entire car. It should be the same, Samsung will tell the jury, with other complex products with thousands of parts, such as an iPhone. Two other Apple design patents are also in play, covering the first-generation iPhone’s distinctive rounded rectangular shape, and its front face surrounded by a metal bezel.

Unless Apple can convince the 2018 jury that the whole phone and its GUI and other design elements are indivisible in terms of value, Samsung has a significant chance to eat away at the $399 million in damages for 16 early-generation Galaxy smartphone models that infringed iPhone design patents.

What makes design patents so valuable, compared to functional utility patents on inventions such as software, is that under US law they allow the patent holder to recover the infringer’s entire profit from the product sale — not just the amount of profit due to the infringement.

Aesthetic test

To reach its verdict, the 2018 jury will have to grapple with the four-factor test first proposed by the US Solicitor General in the Supreme Court case. The test requires a jury to consider the scope of the design claimed in the patent, “the relative prominence” of the design element within the whole product, whether the design is “conceptually distinct” from the product, and “the physical relationship” between the patented design element and the rest of the product.

It is, to state the obvious, a somewhat squishy test based on aesthetic perception rather than quantifiable data. It will highlight the lawyering skills of the two sides, who will work to shape the jury’s perception of those questions over the five-day trial.

The San Jose jury won’t be the first to deal with the new four-factor test. A trial in the District of Southern California last year between Columbia Sportswear and Seirus Innovative Accessories led to a $3 million verdict for Columbia over a single design patent for a wavy heat-reflective material. Seirus has appealed to the US Court of Appeals for the Federal Circuit, but it’s not clear yet whether that appeal will hinge on the jury’s take on the four-factor test.

That means the 2018 Apple-Samsung jury’s take on the test could yet drive the development of design patent law, if the inevitable post-trial appeal by either Apple or Samsung to the Federal Circuit directly features the test.

The test has vocal critics among design patent experts, such as Sarah Burstein, a law professor at the University of Oklahoma.

“There are a lot of problems with the government test,” she told MLex. “At a very high level, they really built this whole test out of nothing. The legal premise they base it on is based on cherry picking one line out of Gorham v. White,” a Supreme Court design patent decision from the 1870s, “which didn’t address these issues at all.”

Koh’s order in April denying Samsung’s motion to strike the testimony of a key Apple expert witness, Susan Kare, offered a preview of Apple’s argument over the next week.

Kare is a trained art historian. While at Apple in the early 1980s, she helped develop many of the graphical symbols that have become universal street signs of the online world, such as the trash can icon to delete files for Macintosh computers. She testified in the first trial in 2012.

“The patented GUI design, together with the exterior design also patented by Apple and infringed by Samsung, was a prominent aspect of the overall design of the infringing Samsung phones,” Kare wrote in her expert report for the 2018 trial. “The overall effect of the hardware and graphical user interface makes a distinctive whole — both as patented by Apple and infringed by Samsung.”

In what could be a significant win for Apple, Koh denied Samsung’s motion to block the jury from hearing Kare testify to that opinion in coming days.

“The Court finds that Dr. Kare’s opinion as to the second factor is relevant, reliable, and would be helpful to the jury,” Koh wrote in that order, referring to the factor in which the jury will have to decide “the relative prominence of the design within the product as a whole.”

Trade dress issue

This trial will be the shortest of the four jury trials between Apple and Samsung. Starting Monday, each side will have only eight hours to present evidence, Koh has decided. They will also have 45 minutes for opening statements and one hour for closing arguments, which are expected Friday.

Since the 13-day trial in August 2012 that cleared Samsung of antitrust violations but hit the company with a $1.05 billion patent and trade dress verdict, the 2011 case has taken an odyssey through the federal court system, incorporating about a dozen separate appeals to the Federal Circuit and Supreme Court. (A second lawsuit, filed in 2012, went to trial in 2014 and is over.)

But after Koh found errors in the jury’s damages calculation, she struck about $410 million from the award and ordered a limited damages retrial on software and design patent damages. The effect of that trial was to replace the $410 million award with an award of $290 million, trimming the total to about $930 million.

Samsung appealed and the Federal Circuit upheld the jury verdict as to Apple’s design patent and utility patent claims, but vacated the jury verdict on Apple’s trade dress claims. Koh scheduled another retrial on the trade dress damages for March 2016.

In the meantime, the Supreme Court agreed to hear Samsung’s design patent issue, forcing Koh to delay the trade dress retrial. That will be the second element of the trial in the coming week, and could involve another several hundred million dollars in damages.

“Nothing in this case is ever simple,” Koh remarked in court back in 2015. It was one of the few uncontested statements ever made in the case.

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