In 2015, Apple's long-standing claim that Samsung infringed some of its design patents was upheld by an intermediate appeals court. But the feud wasn't over yet: Samsung still appealed the total damages it must pay Apple, and now the design world is eagerly awaiting the final verdict on the damages Samsung really owes for infringing on three design patents—currently being assessed by the Supreme Court.
For Samsung, the most damning of Apple's remaining design claims is comedically simple: that Samsung copied its arrangement of some colorful, rounded icons, four-wide, on the screen. Thanks largely to those rounded-corner icons, 19 Samsung products were found to infringe on Apple patents, and Samsung agreed to hand over $548 million of its total profits on infringing phones and tablets to Apple. Now, it's hoping the Supreme Court will decide that it owes a large portion—$399 million, to be exact—less than that.
How is this possible? How are a few icons potentially worth almost half a billion dollars, when courts threw out Apple’s other patent claims on watershed UX breakthroughs like slide-to-unlock, universal search, and autocomplete? Why isn’t Samung just on the hook for a few million bucks of licensing fees? The chaos is due to a century-long perfect storm of legal precedent that Sarah Burstein, associate professor at Oklahoma College of Law, walked us through. Burstein teaches intellectual property, trademark, copyright, and design law, and she's been following the Apple/Samsung case as closely as anyone.
"It’s a little bit of the Wild Wild West out there," says Burstein. Here’s a brief look at the fascinating patent rulings that brought us here.
For ages, the U.S. has offered what are called "utility patents"—a type of patent you’d seek to protect a novel function of a device. But for the first time, in 1842, the U.S. awards a new type of patent called a "design patent" to protect what it calls "ornamental" designs. Essentially, these design patents protect form rather than function. This year, a man named George Bruce gets the first design patent—for a typeface. A few decades later, French sculptor Auguste Bartholdi would file a design patent on the Statue of Liberty. Design patents are great, right?
In the late 1800s, the Connecticut carpet scene was hot, with many manufacturers and many copycats. John Dobson and James Dobson got caught in the act by three separate competitors, which filed three patent infringement suits against the design plagiarists.
But things got tricky. As Burstein puts it, the court recognized the Dobson carpets were copies, but "it's hard for [them] to tell how much of the value comes from the surface ornamentation versus the carpet itself." Where does ornamentation stop and the actual product begin? Carpet is complicated! The object essentially is the ornamentation of a unique pile. But the courts didn’t see it that way. So the three winning companies were only awarded nominal damages, or "legal speak for pretend," in Burstein’s words, because that ornamentation could be assigned no quantifiable value. The companies walked away with all of six cents for their efforts.
Orville H. Platt was a Connecticut state’s attorney-turned-senator who realized he’d better do something to protect his regional carpet industry. People couldn’t just go around stealing one another’s carpets! So he lobbied Congress and eventually led it to rewrite the Patent Act.
The updates were profoundly in favor of design patents. Now, an infringing design patent cost the infringer $250, or the complete profits of a product it was attached to. That’s right: If you put my patented side-view mirror on your car, I could claim all the profits of every single one of those cars you sold. But ultimately, that profit argument "didn’t get much action, because frankly, $250 was enough in most cases," says Burstein. The profit cut was often much less.
Whoa, where did 100 years go? So here we are, on the cusp of the next tech revolution. You have companies like Xerox, which suddenly have incredible motivation to patent the smallest of innovations in the emerging field of graphic user interface. And the work of one cunning inventor had made it all possible just a few years earlier.
Hajo Zahn was filing an application for a new drill bit. But it wasn’t really for a whole new drill bit, as had been patented in the past. His patent was just the shank of the drill bit. And on the cutting surface, he drew in dotted lines representing the rest of the bit.
Why does it matter if they were solid or dotted lines? By using those dotted lines, Zahn effectively invented a way to file a design patent on just part of an object, giving companies like Nike, Apple, and eventually Google a whole new layer of defensible IP. And as a result, patents become a lot more granular. "As you can imagine, this opened the door for a lot of strategic gaming, especially by a small cadre of sophisticated design patent attorneys," says Burstein.
The iPhone had been out about a year in 2008, and while geeks were nonchalantly drawing crowds in coffee shops with the magical touch-screen interface that will soon take over the world, a four-sided nail buffer was exciting the legal world—and soon, Apple’s own lawyers.
In a case called Egyptian Goddess v. Swisa Inc. (great name for a legal battle), the company Egyptian Goddess complained that its design patent for a block-shaped nail buffer, with buffing surfaces on three of the four sides, had been infringed upon by Swisa’s own nail buffer, which was virtually identical in scale and proportion, but had buffing surfaces on four of the four sides.
Egyptian Goddess would lose its case, but the battle would still leave a mark on the industry, as it would establish new precedents. The patent-holder would no longer need to satisfy a crucial "point of novelty" test—distinguishing the novelty of their patent from prior products. And the similarity of design elements to the average person became the "sole test for determining whether a design patent has been infringed," in the words of the judge.
"Really, until 2008, most patent lawyers I know thought design patents were a joke, not worth the paper they were printed on," says Burstein. Sure, companies like Apple might be filing them, but no one had really tested whether these patents would hold up in front of a court. "It wasn't until 2008, there was [this] decision that got people thinking, 'Oh, maybe this is something I should be looking at for my clients.' So really, there’s been a renaissance [in design patents]."
All of this legal scaffolding brings us to the decision facing the Supreme Court today. Keep in mind, Apple has already won the case against Samsung. The highest court is merely deciding what the damages should be.
Historically speaking, we have carpets that gave design patents the jurisdiction over a product’s entire revenue, drill bits that created an environment where design patents could become piecemeal, and then, finally, a spirited debate about a fancy nail file that put 120 years of legal history to the test. Yet the question in front of the Supreme Court now will determine just how encompassing and expansive the most granular design patents get to be. Samsung clearly didn’t copy the iPhone in full. (Apple has a complete iPhone patent it didn’t even bring to court because, according to Burstein, it would have lost). So should Samsung really have to pay in full?
More specifically, are Apple’s rounded, colorful icons responsible for selling you an iPhone—or, in essence, the whole carpet? Or should the value of those icons be assessed differently? Do icons just sell you on apps? And if so, how do you even begin to assess the value of that?
It will be a fascinating verdict to watch. "I suspect that no matter what happens, there are going to be people lobbying Congress," says Burstein. "They’re going to want to raise the $250 minimum [in damages] that hasn’t changed since 1887!"
[All Images (unless otherwise noted): via U.S. Patent Office]