Jury Awards Over $1 Billion in Apple v. Samsung (11-CV-01846-LHK, N.D. Cal. Aug. 24, 2012)

Jake Harper

On August 24, 2012, a jury seated in the Northern District of California handed out a verdict in favor of Apple, Inc. in its patent infringement suit against Samsung Electronics Co., Ltd., and its subsidiaries.[1] In a ground-breaking case that pitted two global technology corporations against one another, the jury found that a number of Samsung’s products, including the Galaxy S II, Galaxy Tab, Droid Charge, and Nexus S 4G, had infringed patents owned by Apple, maker of the popular iPhone, iPod, and iPad electronic devices.[2] As a result, the jury awarded $1,049,393,540 to Apple.[3]

WCL Professor Jonas Anderson Sits Down with AUBLR’s Jake Harper to Discuss the Case. View Professor Anderson’s Bio Here.

Before the Honorable Lucy H. Koh of the San Jose Division, the jury took just three days to deliberate on a highly complex and technical matter. The case was extraordinary both in its vitriol and courtroom outbursts and in its far-reaching implications for the smart phone and tablet markets. Because this was a District Court case with a seated jury, there will be no substantive decision issued from Judge Koh that sets out the standards by which the jury arrived at this conclusion. Nevertheless, several important issues arose during the litigation, including whether the Samsung technologies did in fact infringe Apple’s patents, and, if so, how damages should be calculated. Additionally, the jury determined that Samsung had “willfully” infringed on the patents at issue, further complicating the damage calculations.[4]

The conflict between Apple and Samsung has spawned litigation in over nine countries and at the International Trade Commission (ITC).[5] While Samsung is the named party in interest to these matters, this case serves as a remarkable subtext to the ongoing battle between Apple and Google, Inc., and their respective mobile operating platforms, iOS and Android, for dominance of that market. The vast majority of smartphones sold worldwide—nearly 85%—run on one of these two platforms.[6] Clearly, the implications of a win for Apple at the expense of Samsung and Google are significant.

The jury in this case ultimately ruled that Samsung had “willfully” infringed upon five of the nine Apple patents under review.[7] When a jury or judge determines that infringement by a party was willful, the court may, at its discretion, increase the damages up to three times the amount assessed.[8] Unlike copyright law, however, which has a statutory provision concerning willful infringement and imposition of penalties,[9] patent law leaves this type of punitive award exclusively up to the trial judge’s determination. Despite the fact that the jury found Samsung had willfully infringed several of Apple’s patents, however, Judge Koh exercised her discretion and did not increase the damage award.

Representatives of Samsung immediately announced that they intended to appeal the case to the United States Court of Appeals for the Federal Circuit.[10] Based on this decision, Apple also filed a new amended complaint on August 31, 2012, alleging that seventeen more Samsung products, including the Galaxy S III and the Galaxy Note, had infringed its patents.[11]

While this is a significant win for Apple, this matter is likely to end up at the Supreme Court, given the tremendous figures involved and the implications for future technology patent grants. Some commentators have speculated that, in light of interviews given by the jury foreman, the jurors did not sufficiently understand the instructions given to them, raising the appellate question of whether the jury instructions were proper and adequate.[12]

Nevertheless, if this decision is any indication for the outcome of similarly situated cases in the United States and abroad, technological manufacturers will have to pay special attention in designing their products to ensure that they are sufficiently different from competitors.

[1] Apple Inc. v. Samsung Electronics Co., Ltd., et al., 11-CV-01846-LHK (N.D. Cal. Aug. 24, 2012) (Amended Verdict Form).

[2] These patents included three utility patents (7,469,381, 7,844,915, and 7,864,163) and four design patents (D504,889, D593,087, D618,677, and D604, 305). Id. at 2-4, 6, 7.

[3] Id. at 16.

[4] Id. at 9.

[5] See Chloe Albanesius, Every Place Samsung And Apple Are Suing Each Other, PC Magazine (Sept. 14, 2011) http://www.pcmag.com/article2/0,2817,2392920,00.asp (listing the current countries in which Apple and Samsung are suing each other).

[6] Associated Press, Worldwide Market Share For Smartphones, A Market Dominated By Apple And Android, Washington Post (Aug. 24, 2012).

[7] Amended Verdict Form at 9.

[8] 35 U.S.C. § 284 (2006).

[9] 17 U.S.C. § 504 (2006).

[10] See Bryan Bishop, Samsung: Today’s Verdict ‘a Loss For The American Consumer’, The Verge (Aug. 24, 2012), http://www.theverge.com/2012/8/24/3266653/samsung-todays-apple-trial-statement-loss-american-consumer (quoting a statement from Samsung which explains that “[t]his [decision] is not the final word in this case or in battles being waged in courts and tribunals around the world . . .”.

[11] Apple Inc. v. Samsung Electronics Co., Ltd., et al., 12-CV-00630-LHK (N.D. Cal. Aug. 31, 2012).

[12] See, e.g., Jury in Apple v. Samsung Goofed, Damages Reduced – Uh Oh. What’s Wrong With This Picture?, Groklaw.com (Aug. 25, 2012, 11:30 AM) http://www.groklaw.net/article.php?story=2012082510525390 (noting that there were a number of discrepancies in the jury’s verdict and arguing that quotes from the jury demonstrate that they did not sufficiently understand the complexity of the proceedings).

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