In sum, the Court finds that the jury instructions given at trial did not accurately reflect the law and that the instructions prejudiced Samsung by precluding the jury from considering whether the relevant article of manufacture for the purpose of 289 was something other than the entire phone. See Apple Opening Br. Overall, the Court's allocation of the burdens of persuasion and production is consistent with how the court in Columbia Sportswear instructed the jury in that case. Clem v. Lomeli, 566 F.3d 1177, 1182 (9th Cir. Nike, 138 F.3d at 1441 (citing Dobson v. Dornan, 118 U.S. 10; Dobson v. Hartford Carpet Co., 114 U.S. 439). 504 and 15 U.S.C. After trial, Samsung moved for judgment as a matter of law. As what Samsung did, they intend to charge Apple 2.4 percent of its chip for every patent. 2003). Similarly, multiple witnesses testified about how smartphones are assembled and how the screen was separate from internal components. In this case - the Samsung Galaxy S21 and iPhone 12. ECF No. Please try again. at 8 (quoting Schaffer, 546 U.S. at 57). Id. 1. See Burstein, supra n.4, at 59-61; Sarah Burstein, The "Article of Manufacture" in 1887, 32 BERKELEY TECH. It was not clear Wednesday how much more, if anything, Apple. ECF No. The Galaxy S21 rocks a SnapDragon 888 CPU, while the Apple phone utilizes the A14 Bionic process. Accordingly, the Court must now set forth the method for determining the relevant article of manufacture for the purpose of 289. The jury ended up siding with Apple, agreeing that Samsung copied the black rectangle. "), 14:1-14:2 (Samsung's counsel: "We like the Solicitor General's test . At one point in the trial, an Apple witness showed and passed around to the jury the "major logic board" of a disassembled iPhone 4. Cir. The Court addresses these arguments in turn, and then the Court assesses the United States' proposal. Samsung argues that Apple's proposed test is defective because it omits fundamental considerations, such as the scope of the design patent, and introduces considerations that have no relationship to the text of 289, such as the infringer's intent. He explained that while Apple could be considered an "innovation" company, as its focus was with the design and the user interface, and Samsung could be considered a "manufacture" company. 43:23-44:3. Try Deal Structuring with Conditions, Dear Negotiation Coach: Finding New Ways to Improve Hiring Practices, How Mediation Can Help Resolve Pro Sports Disputes, Negotiation Research on Mediation Techniques: Focus on Interests, Mediation vs Arbitration The Alternative Dispute Resolution Process, Interest-Based Negotiation: In Mediation, Focus on Your Goals, Using E-Mediation and Online Mediation Techniques for Conflict Resolution. At the 2013 trial, Samsung argued in a Rule 50(a) motion for judgment as a matter of law at the close of Apple's case that "Apple presents no evidence of apportionment." A smartphone is a portable computer device that combines mobile telephone functions and computing functions into one unit. In Egyptian Goddess, the Federal Circuit clarified that the test for design patent infringement is whether an ordinary observer familiar with the prior art would be deceived by the similarity between the claimed and accused designs. The article is identified by comparing the claimed attributes of the design patent to the accused product to identify the specific part, portion, or component of the product that corresponds to the patent's claim." Apple's argument in favor of shifting the burden of persuasion is unconvincing. Samsung argued that "Apple [has not] made any effort to limit the profits it's seeking to the article to which the design is applied. Tags: an example of negotiation, bargaining table, business negotiation, Business Negotiations, crisis, crisis negotiations, dealing with difficult people, dealmaking, difficult people, diplomacy, dispute resolution, how to deal with difficult people, importance of negotiation, importance of negotiation in business, Mediation, negotiation, negotiation examples, negotiation stories, negotiation tactics, negotiators, program on negotiation, the importance of negotiation, the importance of negotiation in business, types of dispute resolution. A federal court in Australia, December 2011 April 2012: Apple failed to block Samsung from selling some 4G-enabled products to US consumers. Id. 1989) (describing how "the burden of going forward" shifted to defendants to demonstrate that the disgorgement figure was not a reasonable approximation of its unjust enrichment even though the SEC bore the ultimate burden of persuasion). See 35 U.S.C. Id. To avoid ambiguity, the Court will refer to the "burden of persuasion" and the "burden of production," rather than the "burden of proof." U.S. Apple vs.Samsung Apple and Samsung are the world's two largest high-end mobile providers.Apple and Samsung are major competitors but are also business partners.Apple is one of Samsung's biggest phone component customers and Samsung is one of Apple's biggest suppliers. Create a new password of your choice. The lesson? at 1005. This month in San Jose, Calif., the two biggest smartphone companies in the world, Apple and Samsung Electronics, entered into a head-to-head intellectual property rights lawsuit. The Court excluded Proposed Jury Instruction 42.1. It faced overheating issues. L. REV. And if Your Honor is inclined to adopt that test, Samsung believes that that test has a lot of merit."). ." Had the Court agreed to give some version of Proposed Jury Instruction 42.1, Samsung could have identified a smaller article of manufacture in its closing argument. Id. "At that point, the plaintiff has made out a prima facie case under 289," and the "burden then shifts to the defendant, if it so chooses, to prove that the damages should be reduced" by proving a lesser article of manufacture or identifying deductible costs. 4. See Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843, 849 (2014) ("It is well established that the burden of proving infringement generally rests upon the patentee. The reason is that it is already a brand, a valuable brand which has managed to make a place in the hearts of people all around the world. At oral argument on October 11, 2016, Samsung abandoned its apportionment argument, and thus interpretation of the term "article of manufacture" was the only issue before the U.S. Supreme Court. The Court excluded Michael Wagner's expert report as to those damages because 289 and Federal Circuit case law clearly exclude an apportionment theory of design patent damages. Apple now advocates a test comprising four factors. v. Citrix Sys., Inc., 769 F.3d 1073, 1082 (Fed. This is in part because "historically, the concept encompassed two distinct burdens: the 'burden of persuasion,' i.e., which party loses if the evidence is closely balanced, and the 'burden of production,' i.e., which party bears the obligation to come forward with the evidence at different points in the proceeding." 1057, 1157 ("Samsung's opposition cites no legal basis for Mr. Wagner's apportionment of damages, in clear contravention of 35 U.S.C. It is an American multinational company specializing in consumer products in the tech line. See 35 U.S.C. This makes the rivalry public and leads to polarisation in the market. Dobson v. Dornan, 118 U.S. at 18; Dobson v. Hartford Carpet Co., 114 U.S. at 447. The support with Samsung is not as good as what you get from Apple. 1903 at 72 (jury instruction from 2012 trial assigning Samsung the burden of proving deductible expenses); ECF No. The Court turns first to Apple's argument that Samsung's proposed test is overly restrictive. Id. Humans are amazing animals, I mean we are smart and can do almost anything. All Rights Reserved. Legal Case Review Apple vs. Samsung by Michel Andreas Kroeze BIA512 A legal case review submitted in partial fulfillment of the requirements for the degree of BACHELOR OF ARTS IN INTERACTIVE ANIMATION At SAE Institute Amsterdam 29/04/2013 Word count: 4332 Table of contents 1. . The user market is much skewed in different directions. The U.S. Supreme Court has observed that "[t]he term 'burden of proof is one of the 'slipperiest member[s] of the family of legal terms.'" Apple is the brainchild of Steve Jobs. Success! On July 28, 2017, following briefing by the parties, this Court ruled that Samsung had not waived the article of manufacture issue because Samsung had objected to the exclusion of Proposed Jury Instruction 42.1. Join a Coalition. Merrick v. Paul Revere Life Ins. StartupTalky is top startup media platform for latest startup news, ideas, industry research and reports, inspiring startup stories. Apple Product Line Will this mega-lawsuit dramatically alter the way our . After seeing such failure they started to work on innovating something new. STRONG, 2 MCCORMICK ON EVIDENCE 342, p.433 (5th ed. The Court gave Final Jury Instruction 31 on design patent damages, which was substantially the same as the 2012 trial's Final Jury Instruction 54, edited only to reflect the fact that liability had already been determined. Save my name, email, and website in this browser for the next time I comment. The infringed design patents claim certain design elements embodied in Apple's iPhone. Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1441 (Fed. Throughout the proceedings, Samsung argued for apportionment. However, intellectual property law is already replete with multifactor tests. Id. What began as a way of Apple reclaiming royalties for a copycat activity, dragged on to the court and outside court sessions of mediation in the hopes of finding a deal that would . 3524 ("Samsung Response"). The smartphone industry has grown and has become one of the biggest industries in the world. 543 F.3d at 678, 681, 683. Apple goes on, "For example, where a design patent covers only the 'upper' portion of a shoe, the entire shoe may fairly be considered the article of manufacture if the defendant only sells the infringing shoes as a whole." Moreover, the article of manufacture inquiry is a factual one: to which article of manufacture was the patented design applied? One significant negotiation to observe happened in August 2012. In 2007 the first iPhone was unveiled to the world. As we've mentioned, this involves comparing flagship phones by the two manufacturers. Apple Opening Br. It was Samsungs heavy advertising together with the distinct Android features that enabled Galaxy to overtake iPhone to become the most popular smartphone brand globally. ECF No. In the ongoing war between Apple and Samsung, no matter who emerges as the winner, the consumer will continue to lose unless the companies agree on having a healthy competition and offering their best products. Save my name, email, and website in this browser for the next time I comment. For two days in late May 2012, Apple CEO Tim Cook and Samsung CEO Gee-Sung Choi met with a judge in the U.S. District Court of Northern California in an attempt to reach a settlement in a high-profile U.S. patent case, a sobering example of negotiation in business. 206, at 2 (1886). The defendant also bore the burden of proving deductible expenses. The U.S. Supreme Court then held that "[t]he term 'article of manufacture,' as used in 289, encompasses both a product sold to a consumer and a component of that product." Conclusion - Apple vs. Samsung Portal Conclusion In closing, our team has presented our findings relating to the Apple vs. Samsung case and how it evidences the flaws within the current U.S. patent system. Until something happened. Id. Id. See Apple Opening Br. Galdamez, 415 F.3d at 1025 (quoting Obrey v. Johnson, 400 F.3d 691, 701 (9th Cir. How Apple avoided Billions of Dollars of Taxes? Next, complete checkout for full access to StartupTalky. Instead of Proposed Jury Instruction 42.1, the Court gave Final Jury Instruction No. Cir. As there can be thousands of ways of designing icons and GUI effects, Samsung chose in most cases icons similar to that of the iPhone. PON Staff on November 30th, 2020 / Business Negotiations. applies the patented design . In Samsung's reply brief in support of its motion for judgment as a matter of law, Samsung argued that Apple "fail[ed] to offer any evidence that [the profits awarded in the instant case] are the profits from the 'article of manufacture' at issue, which is the phones' outer casings or GUI." See DX2519 at 5-11. 1966, at 3 (1886); S. REP. NO. "The factfinder should identify the article in which the design prominently features, and that most fairly may be said to embody the defendant's appropriation of the plaintiff's innovation." ECF No. November 2011: In late 2011, Samsung was held victorious against Apple. ECF No. Although a design patent owner may recuperate the infringers total profits, the utility patent owner may recuperate his/her lost profits or a fair royalty. Notably, 99 percent of the jury verdict was based on Samsung's infringement of design patents, with only about 1 percent (around $5 million of the approximately $540 million jury award) based on Samsung's infringement of utility patents. If the plaintiff satisfies this burden of production, the burden of production then shifts to the defendant to come forward with evidence of an alternative article of manufacture and evidence of a different profit calculation, including any deductible costs. Second, Samsung argued that "the profits awarded [for design patent infringement] should have been limited to the infringing 'article of manufacture,' not the entire infringing product." Proposed Final Jury Instructions at 151-52. Copyright 2023 Negotiation Daily. After the 2013 trial, Samsung repeated verbatim in its Rule 50(b) motion for judgment as a matter of law the arguments Samsung made in its Rule 50(b) motion for judgment as a matter of law after the 2012 trial. The question before us is whether that reading is consistent with 289. The plaintiff was also required to prove the defendant's total profit from the sale of the infringing article. 2009) ("Challenges to jury instructions are reviewed under the law of the regional circuit where the district court sits." Moreover, Apple offers no reason why ordinary discovery would not be sufficient to allow a design patent plaintiff to carry its burden of persuasion on identifying the relevant article of manufacture. Cusumano, M 2013, 'The Apple-Samsung lawsuits', Communications of the ACM, vol. Taking into consideration that test and the trial proceedings in the instant case, the Court must then decide whether a new damages trial for design patent infringement is warranted. During the third quarter of 2011, Samsung surged past Apple to the number one spot among phone manufacturers, based on shipments. This turns the eyebrows up for Samsung. POOF. In response, Apple accuses Samsung of misstating the evidence. . However, had the Court not excluded Proposed Jury Instruction 42.1, Samsung could have made such arguments in its closing. Nokia and Motorola dominated the mobile phone market before Apple and Samsung became the worlds largest smartphone manufacturers. The U.S. Supreme Court framed the question before it as follows: "[T]he Federal Circuit identified the entire smartphone as the only permissible 'article of manufacture' for the purpose of calculating 289 damages because consumers could not separately purchase components of the smartphones. Apple iPhones have big notches on the front, flat screens, and rear camera modules with three or fewer rings. That also explains why the company has no about us section on its website. Co., 786 F.3d 983, 1001-02 (Fed. Id. 3509 at 27 n.5. The defendant then bore "the burden of proving that the article of manufacture [wa]s something less than the entire product." Id. On the first step, the U.S. Supreme Court held that the "article of manufacture" for which total profits are awarded under 289 was not necessarily limited to the product that is sold to consumers, but may be either "a product sold to a consumer [or] a component of that product." , the patentee must do more to estimate what portion of the value of that product is attributable to the patented technology."). Each company won numerous decisions against the other during 2012-2015, quite often in contradictory rulings from German, American, Japanese, South Korean, Italian, French, British, Dutch, and Australian courts. Let us discuss it in further detail. Thus, Apple bears the burden of proving that it is more probable than not that the jury would have awarded profits on the entire phones had it been properly instructed. Apple contends that Samsung's proposed test is too restrictive because overreliance on the scope of the design patent would foreclose the possibility that the relevant article of manufacture in a multicomponent product could ever be the entire product as sold to the consumer. It went from being an ally to a fierce enemy. The history of 289 provides important context for understanding the progression of the litigation in the instant case, as well as the competing policy considerations implicated by the formulation of a test for determining the relevant article of manufacture under 289. Samsung contends that this is precisely the reasoning that the Federal Circuit adopted in the instant case, and it is also the reasoning that the U.S. Supreme Court rejected. Specifically, Samsung contends that excluding Proposed Jury Instruction 42.1 and giving Final Jury Instruction 54 led the jury to believe that the entire phone was the only possible article of manufacture under 289. For every iPhone, Apple relies on Samsung for approximately 26% of the components (P.K., 2011). At most, Apple says Samsung would be entitled to 0.0049 for each chip based on FRAND patent licensing terms (with FRAND referring to Fair, Reasonable and Non-Discriminatory). The costly legal lawsuit between Samsung and Apple went on for several years. at 9. 3017. Apple Vs. Samsung Case Considered By Law Essay Example. 3:17-cv-01781-HZ (S.D. It is a visual form of patent, that deals with the visual and overall look of a product. In my opinion, the continuous patent battle won't benefit both of them in terms of that Apple is the second biggest client to Samsung and Apple relies on Samsung for component supplies such as chips and LCD displays. 2009) (quoting Dang v. Cross, 422 F.3d 800, 811 (9th Cir. In fact, Samsung resisted attempts by Apple to obtain data about the costs of components of Samsung's infringing phones. . Oct. 22, 2017). "), vacated in part on other grounds, 90 F. App'x 543 (Fed. Apple asserts that the same burden-shifting scheme applies to the calculation of total profit. Apple vs Samsung Presentation - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. A major part of Apple's revenue comes from them. ECF No. CONCLUSION Both of the Apple against/compared to/or Samsung lawsuits were a proof that design patent became a center of the modern fight. Two years later, in 2009 Samsung came up with a touchscreen device for their market running on Google's android system. . Supreme Court Decision, 137 S. Ct. at 433 (quoting 24 Stat. It has gone through enormous shifts. The jury awarded approximately $1.049 billion to Apple on its infringement and trade dress claims. In this case, Proposed Jury Instruction 42.1 raised the issue of whether the proper article of manufacture for Samsung's phones was the "product sold to a consumer [or] a component of that product." Apple 289, instead appealing only to procedural and policy arguments for allowing apportionment in this case."). Samsung Elecs. All these were some specific irks for Samsung. at 7-9; Samsung Opening Br. It seems like everyone wants the latest phone to set a trend. To summarize, the Court adopts the four-factor test for determining the relevant article of manufacture for the purpose of 289 proposed by the United States in its amicus brief before the U.S. Supreme Court. Hearing Tr. 2316 at 2. A California jury ruled that Samsung would have to pay Apple more than $1 billion in damages for patent violations of Apple products, particularly its iPhone. Samsung paid $1 billion in compensation to the iPhone designer. Id. Am., Inc. v. Seirus Innovative Accessories, Inc., No. "An error in instructing the jury in a civil case requires reversal unless the error is more probably than not harmless." Id. The company is the biggest technology company with its magnanimous revenues and the most valuable company in the world. In 1938, Lee Byung-Chul dropped out of college and founded a small business he named Samsung Trading Co. The judge eventually reduced the payout to $600 million. Id. The precedent is already set, however, and Apple is likely to use it to go after other Android phone makers. None of the cases that Apple cites in support of this argument apply the "superior knowledge" burden-shifting principle to an analogous situation in the intellectual property context, let alone a patent case. It filed a lawsuit against Samsung in serious violations of patents and trademarks of Apples property rights. After two jury trials and decisions by both the Federal Circuit and the United States Supreme Court, the instant case has been remanded for a determination of whether the jury's $399 million award in favor of Apple for design patent infringement should stand or whether a new damages trial is required. See Henry Hanger & Display Fixture Corp. of Am. They released commercials that defame other pioneer brands openly. Indeed, in the closest analogous contextidentification of the smallest salable patent-practicing unit for utility patent damagesthe burden of persuasion rests on the plaintiff, as explained above. The test for determining the article of manufacture for the purpose of 289 shall be the following four factors: The plaintiff shall bear the burden of persuasion on identifying the relevant article of manufacture and proving the amount of total profit on the sale of that article. Hearing both sides, the law court ruled in the favour of Apple. Incorporated in 1977, the company was called " Apple computer". Id. Samsung contends that, as a matter of law, the "relevant article of manufacture does not include any part, portion, or component of a product that is disclaimed by the patent." The Federal Circuit "remand[ed] for immediate entry of final judgment on all damages awards not predicated on Apple's trade dress claims and for any further proceedings necessitated by our decision to vacate the jury's verdicts on the unregistered and registered trade dress claims." What did you learn from this negotiation in business? "Once the [patent holder] establishes the reasonableness of this inference, the burden shifts to the infringer to show that the inference is unreasonable for some or all of the lost profits." Test is overly restrictive Citrix Sys., Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1441 Fed. The precedent is already set, however, intellectual property law is already replete with tests! 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