US jurisdiction report: Apple v Samsung—ending their patent war

31-07-2018

Paul J Sutton

US jurisdiction report: Apple v Samsung—ending their patent war

neilkendall / iStockphoto.com

What would cause the respected management of a major US corporation to authorise litigation that would probably cost the company hundreds of millions of dollars in attorneys’ fees alone? Especially where the litigation involved a fight over something intangible.

The answer to this question can be found in Apple’s 2011 decision to commence a highly complex patent infringement litigation against Samsung. The magnitude of the attorneys’ fees went on to be matched by Samsung, which would decide not only to defend against Apple’s patent claims but also to assert its own claims of patent infringement against Apple.

This war of the titans lasted seven years and became a lawyer’s dream. Quite apart from the hundreds of millions in attorneys’ fees that were incurred by each side, there were out of pocket costs and disbursements, court fees, non-testifying expert fees, testifying expert witness fees, court reporter fees, research costs, printing fees, costs associated with the travel of attorneys and witnesses, and other costs too numerous to name here.

Of course, this case is not the only high-stakes litigation to fill the pockets of attorneys with extraordinary attorneys’ fees. Remember the long-running patent battle between Kodak and Polaroid, where in 1990 Polaroid won more than $900 million from Kodak as well as an ultimate permanent injunction against Kodak’s foray into instant photography. There were months during this litigation when at least one of the companies was billed more than $10 million by counsel.

Well, for the patent litigators who have been riding this phenomenally lucrative wave, all good things came to an end on June 27, 2018. On that date Apple and Samsung filed with the US District Court for the Northern District of California, San Jose Division a joint notice that they had settled their dispute.

This patent litigation saw several fits and starts, with apparent interim victories going to each side. A jury awarded over half a billion dollars to Apple after finding utility and design patents valid and infringed. The case even went up to the US Supreme Court, which in 2016 ruled that damages for design patent infringement can be based only on those portions of a device that infringed the design patent, not the entire device. This gave a shot in the arm to Samsung.

Coming to their senses

So, who won? It can be argued that neither side won. The dispute began when late Apple co-founder Steve Jobs threatened to sue any company that used the Android operating system in a competing smartphone. He went on to accuse Samsung of “slavishly” copying Apple’s first iPhone design that had been released by the company in 2007. Jobs demanded $1 billion in damages. However, Samsung hasn’t sold the smartphones named in the lawsuit for the past five years, thereby limiting the damages sought by Apple. Any effort to obtain an injunction against those models became moot. And Samsung regularly outsells Apple measured by sales volume.

"This litigation could have been avoided entirely, or settled very early on, were it not for the personality of Jobs and its lingering effects."

In the opinion of this author, this litigation could have been avoided entirely, or settled very early on, were it not for the personality of Jobs and its lingering effects. His fantasy of a scorched earth emotional and financial win has hung as a cloud over the parties and the case itself. Even after his death, his aura served to influence Apple’s management until more recently.

The parties have finally come to their senses and have done what could have been done years ago. Congratulations, Apple and Samsung, for returning to competing with ever-better products in the marketplace. Better late than never.

Paul J Sutton is founding partner of IP boutique law firm Sutton Magidoff. He can be contacted at: paul@suttonmagidoff.com

Apple, Samsung, Paul J Sutton, jurisdiction report, patent litigation, design patent, mobile devices, damages

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