The lesson? Samsung countersued, and the case went to preliminary in August 2012. Apple Opening Br. Taking into consideration that test and the trial proceedings in the instant case, the Court must then decide whether a new damages trial for design patent infringement is warranted. 3490-2 at 18. A major part of Apple's revenue comes from them. In this case, Proposed Jury Instruction 42.1 raised the issue of whether the proper article of manufacture for Samsung's phones was the "product sold to a consumer [or] a component of that product." Create a new password of your choice. What began as a way of Apple reclaiming royalties for a copycat activity, dragged on to the court and outside court sessions of mediation in the hopes of finding a deal that would . The parties agree that determining the relevant article of manufacture for the purpose of 289 is a question of fact that a jury decides when there is a material factual dispute. Specifically, Samsung contends that excluding Proposed Jury Instruction 42.1 and giving Final Jury Instruction 54 led the jury to believe that the entire phone was the only possible article of manufacture under 289. Negotiation Strategies: Emotional Expression at the Bargaining Table, Cole Cannon Esq. All through 2010 to August 2014, a bloody patent war transpired between two of the biggest companies in IT and the smartphone industry. Later Apple bought Next which was founded by Steve Jobs bringing him back as an advisor. at 113-14. The Court addresses these factors in turn. The U.S. Supreme Court "construed the statute [in effect at the time] to require proof that the profits were 'due to' the design rather than other aspects of the carpets." Decision Leadership: Empowering Others to Make Better Choices, 2022 PON Great Negotiator Award Honoring Christiana Figueres, Managing the Negotiation Within: The Internal Family Systems Model, Mediation: Negotiation by Other Moves with Alain Lempereur. Samsung only raised its article of manufacture theory days before trial. Since then, the number of patents under dispute has skyrocketed, according to the Korea Times, as has the number of courts involved in various countries. First, there is no indication that Congress intended the defendant to bear the burden of persuasion on identifying the relevant article of manufacture or proving the amount of total profit, see Burstein, supra n.4, at 59-61, and so the default rule is presumed to apply, Schaffer, 546 U.S. at 56. Id. See Micro Chem., 318 F.3d at 1122. With regard to the first factor, the Court concludes that the factfinder must consider the scope of the claimed design to determine to which article of manufacture the design was applied, but the scope of the claimed design is not alone dispositive. This default rule applies to proving infringement and damages in patent cases. Hearing Tr. at 678-79. . Id. Moreover, as Samsung points out, "[p]lacing the burden of identifying the correct article of manufacture on the patent plaintiff also corresponds with the analogous law of utility-patent damages for multicomponent products, where the patent plaintiff similarly must prove the correct component to be used as a royalty base . See ECF No. This growth has led to the establishment of smartphone giants. An appeal is expected. See Burstein, supra n.4, at 59-61; Sarah Burstein, The "Article of Manufacture" in 1887, 32 BERKELEY TECH. So we can assume it wasnt a normal lawsuit. 1931. May 23, 2014). Proposed Final Jury Instructions at 151-52. The two companies had friendly relations with each other. Everything to Know about the New WIPO Sequence Listing Standard ST.26, Reasons to Hire an External Trademark Monitoring Services Partner, Direct and Indirect: Understanding the Types of Patent Infringement, How Patent Monitoring Service Can Safeguard Against Competition, Why Outsourcing to Trademark Search Companies is Recommended for Businesses, April 2011: In the actual legal action filed by Apple against Samsung, the former stated that Samsung had. First, Samsung argued that "[t]he damages . smartphones resemble the iPhone 3g and iPhone 3gs in shape). Total bill for Samsung: $1.05 billion. Br., 2016 WL 3194218 at *27. See DX2519 at 5-11. Accordingly, the Court must now set forth the method for determining the relevant article of manufacture for the purpose of 289. The Court also ordered the parties to identify the relevant article of manufacture for each of the patents at issue in the instant case, as well as evidence in the record supporting their assertions of the relevant article of manufacture and their assertions of the total profit for each article of manufacture. If the plaintiff satisfies its burden of production on these issues, the burden of production shifts to the defendant to come forward with evidence of an alternative article of manufacture and any deductible expenses. The jury awarded approximately $1.049 billion to Apple on its infringement and trade dress claims. Hearing Tr. at 1005. Maybe you look to how the product is sold and whether components are sold separately in a parts market or an aftermarket."). Although the burden of proof as to infringement remained on the patentee, an accused infringer who elects to rely on comparison to prior art as a defense to infringement bears the burden of production of that prior art. The defendant then bore "the burden of proving that the article of manufacture [wa]s something less than the entire product." 17:8-17:9. The U.S. Supreme Court also said, "[R]eading 'article of manufacture' in 289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase." . On July 28, 2017, following briefing by the parties, this Court ruled that Samsung had not waived the article of manufacture issue because Samsung had objected to the exclusion of Proposed Jury Instruction 42.1. See Catalina Lighting, Inc. v. Lamps Plus, Inc., 295 F.3d 1277, 1290 (Fed. 1. Apple cites no authority in its briefs to support the inclusion of this factor. Both the companies Apple and Samsung had a long history of cooperation, so Apple first thought of talking the matter out rather than taking the case to court. After trial, Samsung moved for judgment as a matter of law. How Samsung and Apple Turned From Friends to Foe At most, Apple says Samsung would be entitled to 0.0049 for each chip based on FRAND patent licensing terms (with FRAND referring to Fair, Reasonable and Non-Discriminatory). For two days in late May 2012, Apple CEO Tim Cook and Samsung CEO Gee-Sung Choi met with a judge in the U.S. District Court of Northern California in an attempt to reach a settlement in a high-profile U.S. patent case, a sobering example of negotiation in business. Sorry, something went wrong. Cal., 508 U.S. 602, 626 (1993); Campbell v. United States, 365 U.S. 85, 96 (1961)). 2011) (citation omitted); see also Norwood v. Vance, 591 F.3d 1062, 1067 (9th Cir. If the court determines that a new damages trial is necessary, it will have the opportunity to set forth a test for identifying the relevant article of manufacture for purpose of 289, and to apply that test to this case." May 24, 2018. --------. Cir. Id. Cir. How Sagacious IPs Patent Opposition Strategy Helped A Client to Challenge their Competitors Patent, IP Trends in the Automotive Industry Report, Timeline of the Apple vs. Samsung Legal Battle, Solar Water Splitting to Fuels Conversion Patent Landscape Study, Knock-Out Patentability Searches: Flag IP Conflicts Quickly and Expedite Patent Filing. Id. Yet the two-day mediated talks between the CEOs in late May ended in an impasse, with both sides refusing to back down from their arguments. As a result, the scope of the design patent must be a central consideration for the factfinder when determining the relevant article of manufacture for the purpose of 289. More specifically, a judgment may be altered based on an erroneous jury instruction by a party if "(1) [the party] made a proper and timely objection to the jury instructions, (2) those instructions were legally erroneous, (3) the errors had prejudicial effect, and (4) [the party] requested alternative instructions that would have remedied the error." See 35 U.S.C. Id. "), the dinner plate example shows that Samsung's test as written does not produce a logical result, even when applied to a simple unitary product. Overall, the Court's allocation of the burdens of persuasion and production is consistent with how the court in Columbia Sportswear instructed the jury in that case. What's the difference between a utility patent and a design patent? He immediately trimmed most of the product density in Apple and made the company as slim as possible and launched new sleek products. They began to work on the Macintosh. 3528 at 22:9-22:18, 23:2-23:7, 23:19-23:23, 24:8-24:10 ("Hearing Tr. It was in 1983 when Steve Jobs famously asked Pepsi CEO John Sculley to be Apples next CEO or if he wanted to sell sugared water for the rest of his life or change the world? 27, no. That's the plain language of [ 289]. That too started from a garage and managed to become the most recognizable company in the world. The case began in 2011 and went on to go worldwide. Sept. 9, 2017), ECF No. Samsung Opening Br. Legal Case Review Apple vs. Samsung by Michel Andreas Kroeze BIA512 A legal case review submitted in partial fulfillment of the requirements for the degree of BACHELOR OF ARTS IN INTERACTIVE ANIMATION At SAE Institute Amsterdam 29/04/2013 Word count: 4332 Table of contents 1. . The United States' proposed four-factor test is no less administrable than these other tests. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The infringed design patents claim certain design elements embodied in Apple's iPhone. 2014-1335, 2014-1368, 2014 WL 2586819 (Fed. iPhone vs Samsung Galaxy Design. 3509 at 15-16. Such a shift in the burden of production is also consistent with the lost profits remedy under 35 U.S.C. This led to the beginning of a hostile competition and endless court battles between the two technology giants. Co., 575 F.2d 702, 706 (9th Cir. Test results show that A14 takes the cake in most iPhone vs. Galaxy benchmarks, but the SnapDragon 888 . We have grown from that time at a rapid scale and efficiency, we have seen multifold growth in technology. Id. 3509 at 27 n.5. They are actingthey are assuming that the article to which the design is applied is the entire product, which is erroneous as a matter of law. Conclusion Samsung's advantages over Apple: More advanced specifications. Piano I, 222 F. at 904. Exclusive Webinar Series. at 9, Samsung Elecs. For example, Samsung cites to slides that show a breakdown of one of Samsung's infringing phones, the Vibrant, and its various components. In 2011, when Apple was already embroiled with Motorola, it went after Samsung for tablet and smartphone designs. The jury in the partial retrial on damages awarded Apple $290,456,793, which the district court upheld over Samsung's second post-trial motion. Br., 2016 WL 3194218 at *26. A smartphone is a portable computer device that combines mobile telephone functions and computing functions into one unit. at 33. After nearly five days of deliberations, a jury said Thursday that Samsung Electronics should pay $539 million to Apple for copying patented smartphone features . The U.S. Supreme Court's decision, Apple argues, did not go so far. All these were some specific irks for Samsung. Although Samsung conceded during the October 12, 2017 hearing that in the case of a single-article product that article must be the relevant article of manufacture, ECF No. "The factfinder should identify the article in which the design prominently features, and that most fairly may be said to embody the defendant's appropriation of the plaintiff's innovation." at 435. 2004) (unpublished); Bergstrom v. Sears, Roebuck & Co., 496 F. Supp. If the plaintiff satisfies this burden of production, the burden of production then shifts to the defendant to come forward with evidence of an alternative article of manufacture and evidence of a different profit calculation, including any deductible costs. at 23. Teach Your Students to Negotiate the Technology Industry, Planning for Cyber Defense of Critical Urban Infrastructure, Teaching Mediation: Exercises to Help Students Acquire Mediation Skills, Win Win Negotiation: Managing Your Counterparts Satisfaction, Win-Win Negotiation Strategies for Rebuilding a Relationship, How to Use Tradeoffs to Create Value in Your Negotiations. 1901. After remand, the Federal Circuit remanded the case to this Court and held that "the trial court should consider the parties' arguments in light of the trial record and determine what additional proceedings, if any, are needed. Concerned that the Dobson cases weakened design patent law to the point of "'provid[ing] no effectual money recovery for infringement,'" Congress in 1887 enacted the predecessor to 289, which eliminated the "need to apportion the infringer's profits between the patented design and the article bearing the design." See Henry Hanger & Display Fixture Corp. of Am. 1978); see Galdamez v. Potter, 415 F.3d 1015, 1023 (9th Cir. Incorporated in 1977, the company was called " Apple computer". In addition, Samsung's proposed jury instructions included Proposed Jury Instruction 42.1: Apple objected to Proposed Jury Instruction 42.1 on the grounds that (1) the Piano cases were out-of-circuit, century-old precedent; (2) the Federal Circuit's Nike decision "explain[ed] that [article of manufacture] refers to the product that is sold"; and (3) the instant case was distinguishable from the Piano cases because those cases "refer[] to the piano case being sold separately from the piano," whereas the outer case and internals of the phone are not sold separately. The initial corporate logo had three stars and was based on a graphical representation of the Korean Hanja word Samsung. See Apple Opening Br. at 7. Apple is one of Samsung's biggest phone component customers and Samsung is one of Apple's biggest suppliers. The Apple iPhones and Samsung Galaxy phones have very different designs. First, it argued that Samsung's sales eroded Apple's design and brand distinctiveness, resulting in a loss of goodwill. Sometimes companies copy some famous brands product look and hope to generate sales. Shares His Negotiation and Leadership Experience. See ECF No. This turns the eyebrows up for Samsung. Your email address will not be published. MARKETING STRATEGY AND 4Ps ANALYSIS: APPLE VS. SAMSUNG I. Moreover, the U.S. Supreme Court did not hold that how a product is sold is irrelevant to the article of manufacture inquiry. Supreme Court Decision, 137 S. Ct. at 434. The Court must "presume prejudice where civil trial error is concerned." ECF No. Apple vs. Samsung: A Case Study on the Biggest Tech Rivalry Nov 11, 2021 9 min read Humans are amazing animals, I mean we are smart and can do almost anything. Therefore, the Court hereby adopts [the plaintiff's] calculations . Samsung also contends that some of Apple's proposed factors contradict the U.S. Supreme Court's decision in the instant case. 2822. See ECF No. At the same time, the Court agrees with Samsung that "[t]he statute cannot be administered without first ascertaining the scope of the design claimed by the patent." In 2011, when Apple was already embroiled with Motorola, it went after Samsung for tablet and smartphone designs. See ECF No. J. L. & TECH. at 7-9; Samsung Opening Br. ECF No. 2842 at 113. For the purposes of the instant case, the Court finds that the four factors proposed by the United States best embody the relevant inquiry, and so the Court adopts these four factors as the test for determining the relevant article of manufacture for the purpose of 289. Apple's proposed test also has some flaws. The number of cases reached four dozen by mid-2012, wherein both firms claimed billions of dollars in damages. See Apple Opening Br. The defendant also bore the burden of proving deductible expenses. . Apple, which Samsung countersued for $422 million, will not have to pay anything to Samsung. Cir. Nike, 138 F.3d at 1441 (citing Dobson v. Dornan, 118 U.S. 10; Dobson v. Hartford Carpet Co., 114 U.S. 439). 3017. Hearing Tr. In the 80s the company was primarily focused on the semiconductor business. Apple Opening Br. See, e.g., KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406-07 (2007) (discussing factors for determining obviousness of an invention); Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. Id. Id. After the 2013 trial, Samsung repeated verbatim in its Rule 50(b) motion for judgment as a matter of law the arguments Samsung made in its Rule 50(b) motion for judgment as a matter of law after the 2012 trial. (emphasis added). Microsoft, on the other hand, is well known US based global organization, settled in . 2271 at 12-13 (citing Nike, 138 F.3d at 1441 ("'It is expedient that the infringer's entire profit on the article should be recoverable,' for 'it is not apportionable' . He worked secretly on the first iPhone and launched it in 2007. "), 14:14-14:18 (Samsung's counsel: "But the second best proposal is certainly the Solicitor General's test. First, Samsung cites to the design patents themselves, which cover only certain aspects of Samsung's phones. Having established these threshold issues, the Court now turns to whether the jury instructions given at trial constituted prejudicial error. After two jury trials and decisions by both the Federal Circuit and the United States Supreme Court, the instant case has been remanded for a determination of whether the jury's $399 million award in favor of Apple for design patent infringement should stand or whether a new damages trial is required. . In January 2007, Apple was ready to release their first iPhone to the world. For instance, in August 2011, a German court ordered an injunction on the Samsung Galaxy Tab 10.1 across the EU for infringing Apples interface patent. 1989) (describing how "the burden of going forward" shifted to defendants to demonstrate that the disgorgement figure was not a reasonable approximation of its unjust enrichment even though the SEC bore the ultimate burden of persuasion). 227-249. Apple is the brainchild of Steve Jobs. NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1311-12 (Fed. 378. Though Samsung defended itself and the injunction was reduced to German markets, it was still a big win for Apple. See ECF No. The Court now turns to the four-factor test proposed by the United States. Save my name, email, and website in this browser for the next time I comment. A jury awarded Apple ( AAPL) $539 million in May, l eaving Samsung with an outstanding balance of $140 million it owed Apple. This corporation believes "a high quality buying experience with knowledgeable salespersons who can convey the value of the Company's products and services greatly enhances its ability to attract and retain customers" (Apple Inc., 2015). An appeals court ruled Apple could not legally trademark the iPhone's appearance in May of 2015, which meant Samsung was forced to pay only around $548 million. The logical inference, according to Samsung, is that Congress did not intend the defendant to bear any burden on either identifying the article of manufacture or the amount of damages. We all have that friend who is an ardent fan of apple, and we all have got a friend too who is always in love with Samsung. Thus, the U.S. Supreme Court rejected a per se rule that the relevant article of manufacture is always the product sold to the consumer. Dang, 422 F.3d at 811 (quoting Galdamez, 415 F.3d at 1025). The plaintiff also bears an initial burden of production on both of these issues. Indeed, Samsung's test does not produce a logical result when applied to the very product that the U.S. Supreme Court identified as an easy case: a dinner plate. It widely talked against Apple and filed lawsuits claiming infringements of their company policies and patents. 3523 ("Apple Response"); ECF No. Apple's Test Omits the Scope of the Design Patent and Its Fourth Factor Strays From the Text of the Statute. v. Sel-O-Rak Corp., 270 F.2d 635, 643 (5th Cir. The reason is that it is already a brand, a valuable brand which has managed to make a place in the hearts of people all around the world. For which Apple was awarded $120 million, and Samsung with $160,000. 3524 ("Samsung Response"). APPLE INC., Plaintiff, v. SAMSUNG ELECTRONICS CO. LTD., et al., Defendants. 1157 (citing Nike, 138 F.3d at 1442-43 (noting that Congress removed "the need to apportion the infringer's profits between the patented design and the article bearing the design" when it passed the Act of 1887, which was subsequently codified under 289)). "Once the [patent holder] establishes the reasonableness of this inference, the burden shifts to the infringer to show that the inference is unreasonable for some or all of the lost profits." After remand to the Federal Circuit, the Federal Circuit held that "the trial court should consider the parties' arguments in light of the trial record and determine what additional proceedings, if any, are needed. As the United States explained, "the scope of the design claimed in the plaintiff's patent . L. REV. U.S. Of Cal., Inc. v. Constr. Apple was very serious about their smartphone launch and now with this case too. They released commercials that defame other pioneer brands openly. 3289. Id. of Oral Arg. Samsung has been accused by Apple of violating patents and: - 1) Copying their icon arrangement display pattern. As a result, the Court declines to include the infringer's intent as a factor in the article of manufacture test. Federal Circuit Remand Decision, 678 F. App'x at 1014. Instead, the U.S. Supreme Court held that "the term 'article of manufacture' is broad enough to encompass both a product sold to a consumer as well as a component of that product." Lets understand how it avoided taxes. But this is an issue that can be argued to the factfinder in the context of the facts of a given case; it is not a reason to altogether exclude from consideration the scope of the claimed design. For every iPhone, Apple relies on Samsung for approximately 26% of the components (P.K., 2011). Whatever it will be, humans are fascinated and the future is exciting. Oct. 22, 2017). So at this time, it was in good economic condition. 2005)). See 35 U.S.C. Your email address will not be published. Do you side with Apple or Samsung in this dispute resolution case study? iPhones have usually enjoyed more praise than their Samsung counterparts in terms of sheer photo quality, image consistency, and video quality. Grp., Inc., 554 F.3d 1010, 1021 (Fed. . The Court first describes the approach advocated by the United States before the U.S. Supreme Court and then describes the approaches advocated by the parties. APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 7 . In fact, Samsung resisted attempts by Apple to obtain data about the costs of components of Samsung's infringing phones. In the original 2012 case, Apple sued Samsung saying it copied various design patents of the iPhone. 284. . Soon with a good culture and with government assistance it entered domains like sugar refining, media, textiles, and insurance and became a success. Cir. Dobson v. Dornan, 118 U.S. at 18; Dobson v. Hartford Carpet Co., 114 U.S. at 447. 2003) ("[The defendant] has not provided any evidence that the objected-to [operating] expenses were sufficiently related to the production of the [infringing products]. Hearing both sides, the law court ruled in the favour of Apple. "), 5:1-5:2 (Apple's counsel: "And [Apple's test is] very close to the Solicitor General's four factors, so we think we could live with that. 1117(a)). On the other hand Samsung received zero damages for its . See Supreme Court Decision, 137 S. Ct. at 434 n.2; Tr. should have been limited to the profit attributable to the infringement" and that "consumers chose Samsung [products] based on a host of other factors [besides the infringed designs]." 17:12-17:20 ("[W]hat the sale might be relevant to is - might be relevant to - is step 2, what's the quantum of profit? The document stated that Samsung will pay 30$ on selling every smartphone and 40$ on every tablet. 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