Samsung Vs. Apple and how to quantify the damages

The 6th December 2016 the Federal Court of the US issued a new important decision concerning the Apple-Samsung Saga. In 2012, Apple won a lawsuit against Samsung for the violation of a number of utility models patents and of designs in addition to the competitive damage by “dilution” caused by Samsung for the imitation of the shape of iPhone. Samsung was sentenced to pay a compensation based on the “total profit” – more or less 399 million dollars –, the entire profit Samsung made selling the smartphones considered to be counterfeiting Apple’s patents. Samsung appealed contesting the violation of the patents and the wrong estimate of the compensation but the Federal Circuit confirmed the conviction. The appeal was rejected because the so-called “article of manufacture” on which the compensation is evaluated in accordance with the American law, is the entire smartphone – and not only a component of it. Consequently, the quantification of the damage was evaluated on the whole profit made by Samsung.

Thus, Samsung appealed to the Supreme Court which has changed the previous interpretations. Without issuing any decision, which would be provided by the Federal Circuit, the Supreme Court affirmed

<<the relevant ‘article of manufacture’ for arriving at a §289 damages award need not to be the end product sold to the costumer but may be only a component of that product.” An “article of manufacture”, said the Court, was simply something that was made by hand or by machine, which encompassed both products sold to consumers and components of products sold to consumers>>

Briefly, it established that depending on the cases, the term “article of manufacture” may signify both the product or one of its components or only a part of it. It is the judges’ duty to decide how to apply it in this case and which the consequences of such an interpretation are. If the Federal Circuit will decide that the term indicates only a part of the copied smartphone and not the entire smartphone, the compensation could be estimate not on the entire profit but only on a part of it with a considerable reduction of the compensation and important consequences even on the future cases.

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