Apple and Samsung settle seven year patent dispute

Apple and Samsung have settled their long-running design patent dispute, one month after a jury awarded $539 million to Apple in the clash.

District Judge Lucy Koh, of the US District Court for the Northern District of California, San Jose Division, ordered the dismissal (pdf) of the case with prejudice yesterday, June 27.

Rivals Apple and Samsung submitted a joint notice of settlement (pdf) and stipulation of dismissal with prejudice on the same day, to “inform the court that they have agreed to drop and settle their remaining claims and counterclaims in this matter”.

Terms of the agreement have not been made public.

The dispute dates back to 2012, when Apple accused Samsung of infringing its design and utility patents covering the iPhone and graphical user interface designs.

Apple asked for the total profits arising from Samsung’s infringing devices to be awarded. The jury sided with Apple and awarded nearly $1 billion in damages, including approximately $399 million for design patent infringement.

However, on appeal against the decision, Samsung argued that only parts of the smart phone device were infringing articles, rather than the device as a whole so the award of damages should be reduced.

In 2015, the US Court of Appeals for the Federal Circuit disagreed with Samsung. It held that the entire smart phone was the only “article of manufacture” for the purpose of calculating damages, as consumers could not purchase the components separately.

The following year, the US Supreme Court vacated the Federal Circuit’s decision.

It held that an “article of manufacture” can be broad enough to encompass an entire product, however, if the design patent only covered certain portions of a product, an infringer does not have to pay the entire profit.

The matter was sent back to the Federal Circuit with instructions to clarify the award of damages, as per the two steps prescribed by the Supreme Court: (i) identify the “article of manufacture” to which the infringed design was applied; and (ii) calculate the total profit made on that article.

In 2017, the Federal Circuit remanded the matter back to the California district court for reconsideration of the same, with instructions to clarify the award for damages.

At the California district court, Samsung requested that the court vacate the $399 million verdict and order a new damages trial.

Apple argued that the judgment should remain in place and referred to section 289 of the Patent Act, which states that a party is liable for the total profit of a product that infringes a design patent.

Last month, a jury decided that Samsung should pay approximately $533.3 million for infringing Apple’s design patents, and approximately $5.3 million for infringing Apple’s utility patents.

Samsung had said that it would fight the latest jury verdict, as the decision “flies in the face of a unanimous Supreme Court ruling”. Earlier this month, Samsung submitted a post-trial motion asking the court to dismiss the judgment or retry the case.

It also asked the court to order the return of $145 million from Apple, which Samsung paid in a separate patent infringement case. The design patent in question (number D618,677), which covered multi-touch technology in smart phones, was invalidated in 2015, after Samsung had paid the money.

A hearing on Samsung’s motion was scheduled for July 26, but the matter has now been settled.

Apple and Samsung are bearing their own legal costs, the order noted. It is not known how much more, if anything, Samsung will pay Apple under the agreement.