Apple v. Samsung and an Actual Decision (Finally)

After over a year of legal maneuvers, a jury decision was finally handed down in the major smartphone/tablet patent case between Apple and Samsung on August 24, 2012.  The decision made by a jury of nine in the Northern California District Court ended what had become a contentious trial in which both parties angered the presiding judge, Lucy Koh, numerous times.  Apple had alleged that Samsung products had violated numerous patents, trademarks and trade dress and Samsung counterclaimed that Apple had violated numerous Samsung patents, but, the final claims were paired down significantly.  The final claims included Apple alleging over twenty Samsung products infringed three utility patents, four design patents and one registered trade dress and three unregistered trade dress.  Samsung’s final counterclaims included allegations that Apple infringed six utility patents.   

The jury verdict ruled overwhelmingly for Apple, awarding Apple over one billion dollars and deciding that the majority of the over twenty allegedly infringing Samsung products actually infringed on the three Apple utility patents.  In regards to Apple’s design patents most of Samsung’s allegedly infringing phones (and a smaller number of products were accused) were found to infringe Apple’s design patents.  In a small victory for Samsung, the Galaxy Tab 10.1 Tablet was not found to infringe Apple’s design patents. 

In terms of trade dress, the jury ruled that Apple’s registered iPhone trade dress is protectable and that only the iPhone 3G had unregistered trade dress that was protectable.  Apple’s biggest loss came from the jury decision that the unregistered trade dress of the iPad and iPad 2 was not protectable and therefore Samsung could not infringe it.  The jury ruled that of six of seventeen of Samsung’s allegedly infringing products infringed on the iPhone’s registered trade dress and five of Samsung’s products infringed the iPhone 3G unregistered trade dress.

The jury then ruled that none of Apple’s products infringed on any of Samsung’s patents, curiously including a 3G Essentials patent, which patents a method required for a phone to connect to a 3G network (as the iPhone does).  Since this was a standards patent, Apple would have had to infringe in order to make their products truly 3G capable, despite the jury ruling that there was no infringement. 

Due to the case being decided by a jury, the implications of this massive lawsuit for businesses are not entirely clear.  What is clear is that Apple’s patents are valid (at least according to this jury) and Apple will be apple to use these patents against other companies who allegedly infringe on them.  In addition to the validity of patents, the jury decision shows two important trade dress related issues.  First, the jury showed that trade dress can be a viable intellectual property area to raise infringement claims against a company whose electronic products, both hardware and software, might have a similar look and feel.  This is the first ruling of its kind.  While there is no specific ruling of how to apply traditional trade dress to a cell phone, the jury decision shows that trade dress can be applied to cell phones.  Secondly, the jury ruled that the iPad (and iPad 2) do not have unregistered trade dress.  What this means is that barring Apple registering trade dress for the iPad, Apple competitors may use the iPad’s look and feel, barring it does not infringe on any other Apple intellectual property, in creating its own tablets. 

This decision will certainly be appealed by both sides and a decision by the appeals court might give better guidance on trade dress issues and precedence for all issues.  In addition, there will be an injunction hearing later this month to determine  which of Samsung’s infringing devices must be banned from being sold in the US, however, most of these products are either no longer being sold or close to the end of their product cycle.  The question of Samsung’s newer products possible patent infringement including, the Galaxy Nexus and the Galaxy S3 will be decided later this year.

In addition, there has been much made of whether the jury decision is valid.  These questions arise at least partially based on comments from the jury foreman, a patent holder himself.  Samsung will certainly appeal the decision and use the comments of the foreman and other jurors as evidence to hopefully invalidate the jury decision. 

(Written by Brett Alazraki, Fall 2012 IBLT Entrepreneurship Assistance Fellow)