Samsung vs Apple compensation case

What the case was

In August 2012 a jury in a federal court in San Jose, California (Judge Lucy Koh) ordered Samsung Electronics of South Korea to pay Apple Inc. about US$1.05 billion for copying features of the iPhone and iPad. The case, Apple v. Samsung, started in 2011 when Apple sued Samsung for infringing its intellectual property in Samsung's Galaxy phones and tablets.

Claims and findings

• Utility patents: features such as "pinch-to-zoom", "tap to zoom" and "bounce-back" scrolling.
• Design patents: the rectangular phone with rounded corners and the grid of icons on the screen.
• Trade dress: the overall look and feel of the iPhone.

The jury found that Samsung had infringed most of these and that the infringement was wilful. It rejected Samsung's counterclaims that Apple had infringed Samsung's patents. Samsung appealed. The judge later cut the award by about US$450 million because the jury had calculated some damages wrongly, and a retrial was held on those amounts. The appeal court then removed the trade dress damages, and in 2016 the US Supreme Court ruled on how damages for design patents should be calculated. In May 2018 a new jury fixed the design patent damages at about US$539 million, and in June 2018 the two companies settled out of court on undisclosed terms (Samsung had already paid Apple about US$548 million in 2015).

Legal principle

Patents, design rights and trade dress are intellectual property. The owner has an exclusive right for a limited period, and an infringer must pay damages and may be stopped from selling the product. The case shows that copying a competitor's product can be very costly.

My opinion

I think the verdict is partly justified and partly too strong.

• Justified: Apple invested heavily in design and research, and internal Samsung documents showed that Samsung studied the iPhone closely. Innovators must be protected, otherwise nobody would invest in new products. Respecting intellectual property is also a matter of professional honesty.
• Concerns: some patents were on basic features, such as a rounded rectangle, which many say are obvious and should not give a monopoly. The huge amount could reduce competition and consumer choice. Samsung also made many of the parts for the iPhone. The amount was later reduced on appeal, which suggests the first verdict was excessive.

A fair rule is to protect true innovation but to avoid granting a monopoly on trivial, general features. For Nepali engineers the lesson is to respect patents, copyrights and software licences, and to produce original work.