Apple v Samsung – Design Patents and ‘Damages’

In writing a few days ago about the $1.05 billion jury verdict in the US Apple v Samsung trial, we observed that there was a significant disparity between amounts awarded by the jury where it found design patent infringement and those awarded where only utility patent infringement was established.  (See Billion-Dollar Jury Verdict a Blow to Samsung – But How Bad Is It?)

We speculated that this may be due to the theory that consumers might be ‘tricked’ into buying Samsung devices which have been ‘slavishly copied’ from Apple products, resulting in greater loss of sales by Apple.

However, we have now learned that there is a very specific reason for the high awards for design patent infringement.  As explained in this article on the intellectualIP blog, written by Professor Thomas F. Cotter of the University of Minnesota Law School, there is a peculiar anomaly in the US law relating to the remedies available in cases of design patent infringement which justifies such high monetary compensation.

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Tags: Account of profits, Apple-v-Samsung, Damages, Designs, Infringement, US

NZ Government Backtracks – to Europe – on Software Patents

In New Zealand, the new Patents Bill is at last back on the parliamentary agenda, and looks to have very real prospects of being debated and passed in the coming months, following some further amendments by the government which will, amongst other things, moderate the proposed exclusion of computer programs from patentability.  If passed in its current form, the new Patents Act will contain a limited exclusion in essentially the same terms as the European Patent Convention, and its implementing national laws (including the UK Patents Act 1977).

This will be seen as a positive development by many stakeholders, who had previously argued that patent-eligibility provisions in New Zealand should be modelled on those of one of its major trading partners, e.g. Australia, the US or Europe/UK.

The last-minute computer program exclusion appeared to have become something of a stumbling block for further progress of the Bill, following widespread criticism, including by the Office of the United States Trade Representative (USTR), which stated in its annual report on ‘foreign trade barriers’ in April that the exclusion ‘departed from patent eligibility standards in other developed economies’.

Now, hopefully, the Bill will be able to move forward, and New Zealand will finally have a modern patent law for a modern world!

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Tags: Computer programs, Law reform, New Zealand, Patentable subject matter, Politics

Talking to WSJ ‘Asia Today’ Program About Apple v Samsung

Yesterday evening we spoke with WSJ Asia Digital Network reporter Deborah Kan, and DJN Managing Editor, Asia Equities, Yun-Hee Kim, about the likely global impact of the verdict in the US litigation between Apple and Samsung (for our initial views on that verdict, see Billion-Dollar Jury Verdict a Blow to Samsung – But How Bad Is It?).

Generally speaking, our view is that the immediate ‘global impact’ of the ruling will be negligible.  The US forms only a relatively small part of Samsung’s market – perhaps 20% at most – and it is the one place in which Apple is clearly dominant.  Figures released during the California trial reveal that Apple has sold about four times as many smartphones as Samsung in the US, and about 25 times as many tablets.  Yet Samsung is still the only remotely respectable competitor to Apple in the US, with all other manufacturers forming barely a blip on the charts.  At the same time, Samsung leads Apple globally in Smartphone sales, implying that non-US markets are far more important to the Korean company.

The US is Apple’s home turf.  It has the advantage there over all of its Asian competitors in terms of both marketing and IP strategy.  A loss in a US Federal Court no doubt stings – and Samsung will fight on – but it is no more than a reflection of Samsung’s overall position relative to Apple in that market. 

In Asia, however, Apple’s relative lack of experience with local cultural and legal norms is sometimes apparent.  For one thing, Asian consumers are clearly less likely to be concerned whether they are buying from a US or Asian company.  And perhaps Apple’s most glaring fumble in dealing with substantive differences in Asian IP laws was its settlement with Proview Technology (Shenzhen) to the tune of $60 million, to acquire the IPAD trade mark in China.  Apple not only failed to ensure that it obtained the Chinese rights (for a much lower cost) in the first instance, it seemingly underestimated the strength of the rights conferred by trade mark registration in China, even when the trade mark owner has no significant ongoing business interests or reputation in the mark.

As the various legal manoeuvrings continue in the US, it will be ‘business as usual’ for Samsung in the rest of the world, even as a number of other international cases continue their slow progress.

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Tags: Apple-v-Samsung, Media

Billion-Dollar Jury Verdict a Blow to Samsung – But How Bad Is It?

We presume that everyone reading this blog is by now aware that the jury considering the patent dispute between Apple and Samsung in California reached its verdict on Friday, finding strongly in favour of Apple on numerous counts, and awarding total damages of just over $1 billion against Samsung.

Right now it is harder to avoid coverage of the decision than to find it.  But for posterity, and since it is de rigueur to provide a link, this article at ZDNet provides the basic facts of the jury’s findings.

Clearly this is – for now at least – a big win for Apple.  Equally clearly, however, the dispute is far from over.  The court (i.e. Judge Lucy Koh) now has to review the jury’s decision, and it is certain that Samsung (at least) will request that she overrule many of its findings.  Apple, for its part, may push for Judge Koh to overrule one of more of the points on which it did not prevail, and will also then be pressing for injunctions preventing the continued sale of infringing Samsung products in the US.  Any such injunctions that may be granted will be preliminary in nature, however, because an appeal to the Court of Appeals for the Federal Circuit – at least by Samsung, and possible also by Apple – is also a certainty.

There is not much we could add to the plentiful general reporting of the verdict, however there are four aspects that we find interesting, and worthy of closer scrutiny:

1. firstly, it seems notable that the jury found that Samsung’s Galaxy Tab 10.1 does not infringe Apple’s US design patent no. D504,889, i.e. the Galaxy Tab is not substantially similar in appearance to Apple’s iPad;
2. secondly, for at least two of the three utility patents asserted by Apple, workarounds are either relatively straightforward, or are already in place in the current versions of Samsung’s software;
3. thirdly, the damages awarded by the jury – while substantially less that the $2.5 billion dollars Apple was seeking – are nonetheless strikingly high in some cases, relative to the apparent significance of the infringed Apple IP; and
4. finally, the jury found that Apple’s 3G devices do not infringe the patents asserted by Samsung, even though these are said to be essential to the 3G telecommunications standards.

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Tags: Apple-v-Samsung, Designs, Infringement, Patent litigation, US

US Fast Track Examination Strategy 101

As many readers will be aware, the America Invents Act was signed into law on 16 September 2011.  While it will not take full effect – most notably replacing the first-to-invent priority rule with a first-inventor-to-file rule – until 16 March 2013, one provision that did come into effect almost immediately was a new prioritised examination procedure.

Prioritised examination – also known as Track One – is available for a fee at the time of filing an original utility or plant patent application, or as a once-only option when filing a Request for Continued Examination (RCE).  Further information about Track One can be found on the US Patent and Trademark Office (USPTO) web site.  The fee payable for entry into Track One is currently US$4800, or US$2400 for a ‘small entity’, which generally covers companies up to 500 employees, subject to some additional considerations (further details can be found in the USPTO Manual of Patent Examining Procedure, § 1.27, though if in doubt the advice of a US patent attorney or agent is strongly advised).

Since the Track One program commenced, we have recommended it to a number of our local Australian clients.  In a country where an annual turnover of A$20 million dollars qualifies a company for the ‘big end of town’, very few of our clients need to worry about large entity fees – and those that do can comfortably afford them.  With the Australian dollar currently trading above parity against the US dollar, we think that a fee of less than A$2400 to obtain a US search and examination within about three months, and possible final disposal of the application within 12 months, is something of a bargain.  The alternative – a two or three year wait for a first Office Action, followed by prosecution which might drag on for a year or more – carries costs of its own which can easily exceed the Track One fee.

We therefore considered ourselves very fortunate this week to exchange notes on Track One filing strategy with Michael Cammarata, who is a partner of the US firm Birch Stewart Kolasch Birch LLP, a.k.a. BSKB.  Avid consumers of IP blogs should recognise BSKB as a site-wide sponsor of Gene Quinn’s IP Watchdog blog (where, incidentally, we recently contributed a guest post on Apple’s strategic use of the Australian patent system).

Michael has kindly agreed to let Patentology share some of his considerable insight and experience with the Track One process – to date BSKB has filed about 50 prioritized examination requests.

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Tags: Accelerated examination, BSKB, Michael Cammarata, Strategy, US