Apple Samsung patent dispute How the U.S. High Court decided far-reaching impact

Nanjing Huaxun News Last Wednesday (October 11, US Eastern Time), the patent dispute between the two smartphone giants was brought to the US Supreme Court, which will have a wide-ranging impact on the technology industry.

It could take months for the High Court to make a decision. The end result, legal experts say, could set a precedent: whether the look and feel of a product protected by a design patent allows the designer to reap all the profits, regardless of the product's insides.

The case began in 2011, when Apple sued Samsung for copying design features of the iPhone, including its colorful grid of app icons. Two district courts ruled in Apple's favor.

The argument is that Samsung was required to pay Apple the entire profit from the phone, a total of $0.4 billion.

The fine is based on a federal law that requires a party to copy and apply a patented design to "any industrial product" to the extent of its "full profits".

"We firmly believe that strong design patent protection will stimulate more creativity and innovation," Noreen Krall, Apple's chief legal counsel, said after the High Court hearing. "Others steal our ideas. This is why we defend ourselves."

Samsung countered that the $0.4 billion fine was too large. In particular, the South Korea giant argues that Apple does not have the right to receive all the profits from the (infringing) phone, only the portion of the phone that is infringed.

"Design patent law was introduced in the 17th century, when products were much simpler than they are today," Samsung said in a statement." "It's applicable to, like a spoon handle, or a carpet pattern, a design that drives the buying decision. By contrast, today there are more than 200000 patents on a smartphone."

More important than the $0.4 billion fine, at the heart of the case is a broader principle that may have implications in the tech world: What is the appropriate measure of damage from design infringement?

Christopher Carani, a professor at Northwestern University School of Law, said how the court decides the case could have far-reaching implications.

Carani told CNBC, "If we see strong support for the protection of design rights, I think we will see more investment in design. In the future, people will have to make their designs look very different from others. But if we don't do that, you may see more similar designs in the market."

He said, "The point is that the High Court is trying to strike a balance that does not stifle competition and encourages innovation." Silicon Valley has joined the debate, but not all companies are on one side.

Examples include Facebook,eBay and Google, which support Samsung. They argue that Samsung's compensation for the full profits would lead to (in their words) "absurd results" that would have a devastating impact on a company that spends billions of dollars on research and development each year.

These companies believe that the purchase of modern technology products "is not all based on the design of one or two isolated parts."

Tim Cook, Apple's chief executive, also has many strong allies in and outside the tech world.

Fashion companies, such as Tiffany, Adidas and Jenny Yoo, say the "all-profit" rule "ensures that designers have the right incentives and rewards to invest in innovative designs." The cost of combating design piracy is rising, which is sad.

At the same time, more than 100 well-known designers, including Bentley's design director, Microsoft's creative director, and Calvin Klein signed the High Court Statement of Opinions (court brief) in support of Apple.

Their reasoning: Apple should be given the right to all of Samsung's profits, because design is the number one driver of consumers buying their products.

These designers believe that "history shows that the visual design of a product drives sales and becomes the product itself in the minds of consumers."