This article was first published in Vol. 12, Issue 4 of E-Commerce Law Reports and is reprinted with permission.
As the smart phone wars continue to rage across the world, the verdict in the Apple v. Samsung case is the latest battle to end, at least for now, in favor of Apple. Given Apple’s victory, it is likely that Apple will continue to press its offensive throughout the globe, particularly in the United States. Even though Apple has suffered some set backs, most recently in South Korea, the victory over Samsung in the Northern District of California will spur on additional lawsuits, both in the United States and in other countries. Until Google (perhaps through Motorola) or one of the Android handset makers, such as Samsung or HTC, achieves a victory over Apple, the smart phone wars are not likely to slow anytime soon.
The key aspects of the verdict included the numerous products of Samsung (over twenty in all) that infringed several Apple patents, several findings of willful infringement, a damage verdict in excess of $1 billion and a finding by the jury that Apple did not infringe any of the Samsung patents. Each of these items is significant on its own and when combined show just how significant a win this was for Apple–a win in which Apple essentially swept the board in everything but the amount of the damages and the $1 billion in damages was hardly disappointing.
With the verdict in, there are still issues for the trial judge to decide, including whether to enhance the damages, award attorneys’ fees in favor of Apple and to determine whether a permanent injunction should issue. In addition, Samsung will seek to overturn the jury verdict arguing, among other things, that there is insufficient evidence to support the verdict, that the patents are invalid and that there were legal errors that should result in a new trial.
This next stage of the case will also prove difficult for Samsung. The difficulty arises not just from the size of the damage award of the jury verdict, but also from the sheer number of products found to infringe several Apple patents and the finding that Samsung willfully infringed several of these patents. The finding of willfulness permits the trial judge to award Apple its attorneys’ fees and to enhance the damages up to three times the original amount of the verdict. Further, given the willfulness finding and some of the discovery ruling against Samsung before the trial began, it is likely that the trial judge will award at least some of Apple’s attorneys fees. The district court may enhance the damage award as well, but this is less likely given the large size of the verdict that the jury already awarded.
In terms of the permanent injunction, given the preliminary injunction that issued before the trial began, it is likely that a permanent injunction will issue, at least on some of the products. Expect Samsung to ask for a sunset period, i.e., a period of time to design around the patents, before the injunction goes into effect. Samsung likely has already designed around (or attempted to design around) the Apple patents. There will likely be a number of motions filed with the district court on these issues and Apple, if it is successful in obtaining an injunction, will likely assert that many of the re-designed Samsung products still infringe the Apple patents.
Finally, expect Samsung, once the judgment is final, to appeal. It is not easy to overturn a jury verdict on appeal, but the Federal Circuit will review the verdict and the patent issues closely. There may be some room to challenge the damage award. Of course, given the number of products that were found to infringe and the size of the smart phone market, the jury award, at least a first glance, does not shock the conscience.
What will the impact of the jury verdict have on the other smart phone cases around the United States and in the rest of the world? Given Apple’s highly favorable verdict, it is not likely that Apple will stop the all out assault on Android and Android enabled devices. Even before the Samsung verdict, Apple has already had success against HTC in the US, at the International Trade Commission, and will likely continue to press its matters against HTC. With a much bigger verdict against Samsung, Apple will be even more encouraged to proceed with its assault not just against Samsung and HTC, but also against Motorola.
Ultimately, the smart phone war comes down to Apple v. Google. The many battles have so far focused on handset manufacturers, but the Android operating system lurks in the background. With Google’s acquisition of Motorola, there is now a more direct line of litigation between Apple and Motorola. Motorola recently sued Apple in the US District Court for the District of Delaware and the International Trade Commission, which is further evidence that the smart phone wars are more likely close to their beginning than their end.
Ultimately, Apple will continue its all out assault until another company gains some leverage. That likely will not happen until one of these companies obtains a significant victory against Apple in court. As that is likely a long way off, expect the patent wars over smart phones to continue for some time.