Thursday, November 14, 2013, by Catherine Perez
As we may well remember, Samsung lost a monumental lawsuit to Apple in August of 2012. Apple sued Samsung for copyright infringement and was awarded over 1$ billion dollars in damages. Without an indication as to why the jury awarded such an exorbitant amount, Judge Lucy H. Koh found the award to be arbitrary and vacated nearly half of that judgment, reducing Apple’s award to 600$ million. This week the parties will return to court to determine how much, if any, of the vacated $450 million will be reinstated.
Although some may say the initial damages awarded were excessive, policy considerations will encourage an award that will deter infringement and promote future innovation.
The primary revolving the jury’s ability to justify its award is whether Apple lost sales because of the copyright infringement, and if so, how much? The original jury instructions included 109 pages of information and questions. Among them were two seemingly basic issues to resolve: (1) “What is the total dollar amount that Apple is entitled to receive from Samsung on the claims on which you have ruled in favor of Apple?” And (2) “For the total dollar amount in your answer . . . please provide the dollar breakdown by product”. The Jury responded with an itemized total of $66,927,017, but then provided no explanation for the remaining $982,466,017.
The difficulty in such an ambiguous award is the issue of willful infringement. Federal statute permits the enhancement of damages for willful infringement by the court for up to three times the original award, whereas damages for lost profit may not be enhanced. Without a clear indication of what was infringement and what was willful infringement, the court cannot accurately calculate the award.
Critics have suggested that this verdict will shape the battleground for future innovation. An extremely large award will send the message to developers that infringement will face serious consequences, but unless this award actually affects Samsung’s newly-found popularity, the award will be useless in deterring future infringement. Patent laws are intended to bolster innovation and deter “copycat” products, but in its current application, it is merely a roadblock to market share success.
“It’s an entirely constructed system purely about encouraging the maximum amount of innovation and invention that we think we can coax out of the assembled human intelligence.” – Tim Worstall, The Importance Of The Samsung v. Apple Patent Case Is That Imitation Is A Winning Strategy
Samsung has brought in billions in sales, increased its market share, and provided a much-needed stable platform for the Android OS. Although some may say the initial damages awarded were excessive, policy considerations encourage an award that will deter infringement and promote future innovation. The speed at which technology is improving ensures that by the time infringement cases reach the courtroom, the products at issue are no longer on the market. This means that restricting the release of products until litigation is complete is not a plausible solution. Rather, the courts must find another way to promote innovation and discourage infringement. At the root of the problem is a forest of issues more un-navigable than Mirkwood: What elements should be patentable within the rising technology industry?