Samsung Electronics is about to find out just how costly its four-year patent fight with Apple has been.
Each side spent hundreds of millions of dollars in legal bills to answer this fundamental issue — what’s the value of a single feature in a smartphone or tablet and is it greater if the inventor has a reputation for being cool?
That’s the crux of arguments to be made Wednesday when the top U.S. patent court in Washington hears an appeal in one of two remaining cases in the “smartphone war” between the companies that at one point spanned four continents.
“Whoever prevails on this is going to have more leverage than the other party,” said David Long, a patent lawyer with Kelley Drye in Washington who has been following the case. “In wars and rumors of war, they ultimately settle and it’s all about leverage.”
The case has broader implications on how patents for individual features are valued in complex devices. The case has split the technology community. Companies often targeted in patent claims such as Google, HTC, LG Electronics, Rackspace, Red Hat and SAP are siding with Samsung. Ericsson and Nokia, companies that rely on patent licensing for revenue, are backing Apple.
The two smartphone giants filed dozens of lawsuits against each other across four continents with little to show for it before deciding last year to drop everything except two cases originally lodged in Northern California.
A $930 million judgment won by Cupertino-based Apple over Samsung’s use of its unique designs was argued before the U.S. Court of Appeals for the Federal Circuit in December. In the second case, a San Jose jury awarded Apple $120 million. The damage award and underlying infringement finding in that case will be argued later.
The arguments Wednesday before three Federal Circuit judges focus on whether a judge should have issued an order, called an injunction, for Samsung to remove some unique Apple features that the second jury said were copied. They are Apple’s slide- to-unlock and autocorrect techniques, and a feature that detects if a phone or address is in an e-mail and gives the user the option of making a call, finding directions or adding it to the contacts list.
Samsung argued — and the trial judge agreed — that the individual features weren’t driving sales of the iPhone, so Apple could be easily compensated with cash. That’s the position the Federal Circuit has taken in past cases when Apple tried to halt sales of Samsung phones.
A ruling for Apple “threatens to unfairly sow fear, uncertainty, and doubt about the product in the marketplace; to hinder competition; and to grant overprotection to patents,” Samsung said in a filing with the court.
Apple said linking the injunction request to consumer demand doesn’t apply because it wasn’t trying to halt all sales of Samsung phones, just the use of specific features. Samsung had previously said the features were minor and would only take a few months to remove, so it’s no hardship on the Suwon, South Korea-based manufacturer to comply with such an order, Apple contends.
Apple maintains that the court should have taken into account the potential damage to its reputation as an innovator, and how important it is to have unique features to differentiate one phone from another.
“Apple’s advertising showcases Apple’s products as the ‘hero’ by emphasizing their unique features — a strategy that is much less effective when other companies offer the same features,” Apple said in a court filing.
A decision in Apple’s favor could create a different standard for patents owned by manufacturers and those owned by patent-licensing firms whose lawsuits have prompted both Apple and Google to push for legislative changes.
Following a 2006 Supreme Court ruling, it’s been almost impossible for patent owners who don’t make products to obtain injunctions; courts have said the owners can be made whole with cash. When it comes to competitors, the record is mixed.
The Federal Circuit has said that in complex devices like a computer, smartphone, factory machines or cars, it’s unfair to block product sales unless the infringed feature is what drives consumer demand.
The group led by Google told the court in a filing that the rules shouldn’t change for companies like Apple. Smartphones have tens of thousands of patented inventions and a victory for Apple “would require manufacturers to expend an inordinate amount of time and effort to design around trivial patented features,” the group said.
Ericsson and Nokia, in separate filings, argued that the court’s earlier standards erode property rights. A patent is a trade-off — the invention is disclosed to the public to learn from and, in return, the patent owner has exclusive rights to the idea for a specified time period.
Proving a feature drives consumer demand shouldn’t be required when the patent owner is claiming losses other than sales, “such as harm caused by the loss of the ability to exercise exclusive use of the patented feature, or harm to a company’s reputation as an innovator,” Nokia said.
The three-judge panel hearing the case isn’t expected to make a decision for several months.
Source: santacruzsentinel.com
