In 2011, Apple Inc. (NASDAQ: AAPL) filed a lawsuit against Samsung Electronics, charging the Korean smartphone maker of infringing on Apple design patents. The patents do not include any copyright or trademark held by Apple, nor is there a utility patent at issue.
Apple won the case in 2012, and last year Samsung was ordered to pay Apple $1 billion, of which $548.2 million represented Samsung’s infringement of Apple’s design patents by copying the iPhone’s look. Samsung appealed the amount of the verdict to the U.S. Supreme Court, arguing that the company was made to overpay by as much as $399 million.
According to Scotusblog, a patent law written in the 19th century provides “that any person who applies a patented design ‘to any article of manufacture’ is ‘liable … to the extent of his total profit.'” The $1 billion fine levied against Samsung was based on the profit from the total smartphone device. Samsung is arguing that the fine should be based on the fraction of the profit attributed to the patented design elements.
The dispute is essentially one between the text and history of the statute (Apple’s argument) and the policy argument (Samsung’s).
According to Scotusblog:
[I]t is possible that the court will sidestep that question and remand the case to the Federal Circuit to reconsider (or clarify) whether the record supports a less inclusive definition of an “article of manufacture.”
Apple’s stock traded up nearly 2% in the noon hour Monday, at $116.27 in a 52-week range of $89.47 to $123.82. The 12-month price target on the stock is $125.86.