The “design case of the century” ended with a whimper on Tuesday as a unanimous Supreme Court overturned a lower court’s $399 million ruling involving three patents for Apple’s iPhone.
While the decision was a clean win for Samsung, it was also a limited one as the top court avoided any sweeping statements, and sent the case back to the lower court to clear up just how much Apple’s (AAPL) design patents—which cover the shape and look of the iPhone—should be worth.
In a brief 11-page opinion, Justice Sonia Sotomayor ruled that the Federal Circuit Court of Appeals was wrong to award damages to Apple based on the total profits Samsung made from devices like the Galaxy X, which a jury had found wrongfully copied elements of the iPhone.
The case turned on a law that awards total profits based on an “article of manufacturer,” and whether that phrase must be interpreted to mean the entire product—in this case a smartphone—or just a part of it.
The unanimous court had no difficulty finding the lower court was wrong to say the phrase had to mean the entire product. Here’s the key paragraph from the decision:
the term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not. Thus, reading “article of manufacture” in §289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase.
Justice Sotomayor added that the process for finding the value of design patent damages involved a two-step process: First, a court had to identify the “article of manufacture,” and then secondly, “calculate the infringer’s total profit made on that article of manufacture.”
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The Supreme Court, however, declined to explain how to go about identifying the “article” in question. Even though this question occupied most of the Justices’ time at a hearing which took place in September, Tuesday’s ruling kicked the issue back to the lower court to decide on the grounds Apple and Samsung had not properly briefed the issue for the Supreme Court.
What this means is that the lower court will re-evaluate and also certainly find a way to reduce the current $399 million award to Apple. A company spokesperson offered the following comment.
“The question before the Supreme Court was how to calculate the amount Samsung should pay for their copying. Our case has always been about Samsung’s blatant copying of our ideas, and that was never in dispute. We will continue to protect the years of hard work that has made iPhone the world’s most innovative and beloved product. We remain optimistic that the lower courts will again send a powerful signal that stealing isn’t right.”
Samsung, for its part, praised the ruling.
In the bigger picture, the long-running intellectual property feud between Apple and Samsung will trundle on, but will host just a vestige of its former significance. The feud began in earnest when Apple’s late CEO Steve Jobs declared he would wage “thermonuclear war” against Samsung and Google’s Android (GOOG) operating system, which he believed to be a blatant rip-off of the iconic iPhone.
While the fight continues to echo in a variety on ongoing court cases, including the design patent one, the legal aggression between Apple and Samsung has largely subsided.
This story was updated with comments from Apple and Samsung.
