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Samsung to pay $539 M to Apple in longstanding patent dispute

Spandan Sharma
25th May 2018
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Over seven years after Apple and Samsung, the world’s two largest smartphone manufacturers, locked horns in a patents battle, the latest chapter in the long-running legal case finally came to a conclusion, with a San Jose, California-based jury awarding the iPhone maker almost $539 million in damages. After five days of deliberation, members of the jury on Thursday announced the verdict, directing Samsung to pay Apple about $533.3 million for infringing on design patents and an additional $5.3 million for utility payment infringements.

Image: Shutterstock

Apple Inc. vs Samsung Electronics Co. began in April 2011, when the former took the latter to court alleging specific Samsung smartphones copied Apple devices, infringing on patents and trademarks. The trial went to the US Supreme Court, which eventually awarded the case in Apple’s favour in August 2012, directing Samsung to pay $1.049 billion in damages. However, disputes over legal questions and damages drove the case back to court and Samsung eventually paid Apple $548 million in damages.

The latest court hearing was merely aimed at determining the number of damages to be settled between the two companies. Both companies have accepted that the South Korean phone company infringed on three design patents – covering the rounded corners of its phones, the rim that surrounds the front face, and the grid of icons that users view – as well as two utility patents regarding how the devices work and are used. However, Apple demanded damages to the tune of $1 billion, while Samsung claimed it only owed about $28 million.

While the $539 million damages are only half of what Apple wanted, it nevertheless marked a big victory for the Cupertino, California-based company. After the jury decision, Apple said in a statement, “We believe deeply in the value of design, and our teams work tirelessly to create innovative products that delight our customers...This case has always been about more than money. Apple ignited the smartphone revolution with iPhone and it is a fact that Samsung blatantly copied our design.” Samsung was, unsurprisingly, less than pleased with the final decision, and said, “Today’s decision flies in the face of a unanimous Supreme Court ruling in favour of Samsung on the scope of design patent damages...We will consider all options to obtain an outcome that does not hinder creativity and fair competition for all companies and consumers.”

According to Bloomberg, Samsung earns $38.9 million in profit each day, or $1.6 million per hour, from sales of its mobile devices, based on its most recent quarterly earnings, with a chunk of that coming from sales of its smartphones. That means the smartphone division of the technology giant alone could pay the damages to Apple in about two weeks. However, the verdict will no doubt be a setback for Samsung as it faces increasing competition from Chinese phone companies like Huawei and Oppo, even as Apple’s market share has remained largely unchanged. According to data from market research firm IDC, in Q1 2018, Apple held 16 percent of the smartphone market, while Samsung accounted for 23 percent, compared to 30 percent for Samsung and 19 percent for Apple in 2012, the year of the original trial.

The seven-year-old patent dispute between the two giants may be coming to a close, but the two companies are increasingly competing with each other in new technology areas as well, such as self-driving cars, Augmented Reality (AR), smart speakers, and Artificial Intelligence (AI) research. This chapter may be closed, but the rivalry between two of the world’s largest consumer tech companies is far from over.

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