The Reason Tech Companies Really Don't Want Apple To Win Its Patent Wars With Samsung

Design turns out to be an important legal as well as marketing and operational asset. JL 

Lucy England reports in Business Insider:

The manufacturer of a smart television containing a component that infringed any single design patent could be required to pay in damages its total profit on the entire television, no matter how insignificant the design of the infringing feature was to the manufacturer's profit or to consumer demand.

Some of Silicon Valley's biggest companies are backing Samsung in its patent war with Apple. A coalition of huge firms including Facebook, Google, HP, Dell, and eBay are asking a U.S. appeals court to review a decision forcing Samsung to turn over full profits for Galaxy products found to infringe on Apple patents.

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In a July 1 "friend of the court" filing to the U.S. Federal Circuit Court of Appeals, picked up by Inside Sources, the group pointed out that devices like smartphones or TVs contain thousands of different bits of hardware and software. This means their design is too complicated to lump it into a single patent-infringement case when only certain aspects of the device could have been copied from another firm. Google, Facebook, Dell, and HP, along with other tech firms and trade groups, believe that the ruling against Samsung sets a bad precedent.

Here's the group's argument: 

Under the panel's reasoning, the manufacturer of a smart television containing a component that infringed any single design patent could be required to pay in damages its total profit on the entire television, no matter how insignificant the design of the infringing feature was to the manufacturer's profit or to consumer demand.

Software products and online platforms face similar dangers. A design patent may cover the appearance of a single feature of a graphical user interface, such as the shape of an icon. That feature—a result of a few lines out of millions of code—may appear only during a particular use of the product, on one screen display among hundreds. But the panel's decision could allow the owner of the design patent to receive all profits generated by the product or platform, even if the infringing element was largely insignificant to the user and it was the thousands of other features, implemented across the remainder of the software, that drove the demand generating those profits.

According to the Inside Sources report, Apple hit back by asking for the group's opinion to be dismissed because Google has an interest in the case as the designer of Android, the mobile platform Samsung devices use. 

The patent war between Apple and Samsung has been going on for years, with each company accusing the other of infringement at several different points.

Apple originally accused Samsung of ripping off designs for tap-to-zoom, single-finger scrolling, and two-finger zooming, as well as edge-to-edge glass design, among other iPhone features. Samsung was eventually found to have infringed on six out of seven patents it was accused of stealing and ordered to pay $930 million in damages. This was the "total profit" of the infringing Galaxy products and was supposed to make up for Apple's lost sales.

This May, an appeals court lowered the amount Samsung was ordered to pay by $382 million. Apple had also accused Samsung of violating the "unregistered trade dress," or wider design of the iPhone such as "a rectangular product with four evenly rounded corners." The court established that these were not just design features of an iPhone but necessary to create a smartphone. Samsung asked the court to review the decision again in June.