Apple and Samsung finally settle US patent dispute

A seven-year patent dispute over the alleged copying of the iPhone has been settled between Apple and Samsung Electronics.
Written by Chris Duckett, Contributor

Apple and Samsung Electronics have settled a seven-year patent dispute over Apple's allegations that Samsung violated its patents by "slavishly" copying the design of the iPhone.

The terms of the settlement, filed in the US District Court for the Northern District of California, were not available.

In May, a US jury awarded Apple $539 million after Samsung had previously paid Apple $399 million to compensate for patent infringement.

The South Korean electronics giant would need to make an additional payment to the US-based Apple of nearly $140 million if the verdict was upheld.

Apple had argued that it was owed more than $1 billion, while Samsung contended the $399 million should be slashed to $28 million.

"The only way Apple can come up with $1 billion in damages is by saying the article of manufacture applies to the whole phone," Samsung attorney John Quinn said at the time. "None of the patents is the whole phone."

A jury convened for the original 2012 trial had determined that Samsung should pay Apple $1.05 billion.

A jury in a 2014 trial found that Apple had infringed on some of Samsung's patents, and decided Apple should pay approximately $158,400 in damages, while at the same time declaring that Samsung needed to part with $119.6 million.

Eventually, US District Judge Lucy Koh pegged the amount to be paid by Samsung as $548 million.

The issue was escalated to the US Supreme Court, which determined in 2016 that a lower court needed to re-examine $399 million of the $548 million. In that trial, the court sided unanimously with Samsung's argument that a patent violator does not have to hand over the entire profit it made from stolen designs if those designs covered only certain portions of a product but not the entire object.

But when the case went back to lower court for trial this year, the jury sided with Apple's argument that in this specific case, Samsung's profits were attributable to the design elements that violated Apple's patents.

How much, if anything, Samsung must now pay Apple under Wednesday's settlement could not immediately be learned.

An Apple spokesperson declined to comment on the terms of the settlement, but said Apple "cares deeply about design" and that "this case has always been about more than money." A Samsung spokeswoman declined to comment.

Apple and Samsung are rivals for the title of world's largest smartphone maker, and the dollar sums involved in the decision are unlikely to have an impact on either company's bottom line. But the case has had a lasting impact on US patent law.

Michael Risch, a professor of patent law at Villanova University, said that because of the recent verdict, the settlement likely called for Samsung to make an additional payment to Apple.

But he said there was no clear winner in the dispute, which involved hefty legal fees for both companies.

While Apple scored a major public relations victory with an initial $1 billion verdict in 2012, Samsung also obtained rulings in its favour and avoided an injunction that would have blocked it from selling phones in the US market, Risch said.

In its first-quarter earnings posted in April, Samsung Electronics had operating profits of around $14.6 billion, a jump of over 50 percent year-on-year and a record first-quarter result for the company.

Although Samsung's mobile arm made up almost half of the company's 60.5 trillion won in revenue, the division only contributed 3.8 trillion won to the 15.6 trillion won in operating profit. The vast majority of the profit, 11.6 trillion won, was driven by Samsung's semiconductor unit, which recorded 20.8 trillion won in revenue.

For its part, Apple reported $61 billion in revenue for its second quarter in May, selling 52 million iPhones and 9 million iPads, resulting in $38 billion and $4 billion from the products, respectively.

"Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter," said Apple CEO Tim Cook at the time. "We also grew revenue in all of our geographic segments, with over 20 percent growth in Greater China and Japan."

With AAP

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