Samsung Will Pay Apple for Damages—But Wants the Cash Back
If you thought the patent battle between Apple and Samsung would finally end with a cash payment, you’re sorely mistaken.
Apple (AAPL) and Samsung filed a joint statement to the U.S. District Court for the Northern District of California on Thursday, saying that Samsung has agreed to pay Apple $548 million over alleged patent violations. The amount is equal to the final settlement amount determined by the courts, but far below the more than $1 billion in damages Apple was initially awarded back in 2012 and even less than the $2.75 billion the company had hoped to collect on Samsung’s alleged infringement.
While in most cases, a settlement payment would spell the end of a court spat, that is not the case in the interminable battle between Apple and Samsung. In its statement to the court, Samsung wrote that it reserves the right to be reimbursed for part or all of the $548 million it’s giving Apple. The company argues that while Apple may hold the cash for now, if patents are deemed invalid or it were to win a case on appeal, it should be allowed to retrieve at least part of its payment.
Apple said only that it “disputes Samsung’s asserted rights to reimbursement.” The company didn’t say why it believes Samsung should not be reimbursed if a “partial judgment is reversed, modified, vacated or set aside on appeal or otherwise.”
Apple declined to comment on the joint statement. Samsung did not respond to a request for comment.
Apple and Samsung have been battling over patents since 2011. Both companies have claimed that the other violates patents they own. The patent-infringement claims have ranged far and wide, including the way in which users interact with mobile software, design concepts, and more. They have largely centered on mobile devices, including Apple’s iPhone line and Samsung’s Galaxy devices.
The landmark ruling in 2012 was a blow to Samsung, but after a series of appeals, rulings, and trials, the damages were slowly whittled down. Meanwhile, the companies continued to battle in courts around the world until they mutually decided in 2014 to scuttle their international disputes and focus solely on the U.S.
The $548 million in damages was finally decided by the U.S. Federal Circuit Court of Appeals earlier this year. In August, Samsung’s petition to the court for a new trial was struck down. The decision left Samsung with two options: pay up and move on or appeal to the U.S. Supreme Court.
While Samsung has yet to make a final decision, just days after losing its petition, the company filed court papers suggesting it may appeal to the Supreme Court. Samsung again hinted it may appeal on Thursday in its joint statement, saying that the reimbursement clause should be upheld in the event it files a petition known as a “writ of certiorari” with the Supreme Court.
The possibility of a Supreme Court fight is likely one that many technology giants would like to see. In July, a coalition of industry titans, including Google (GOOG), Facebook (FB), eBay (EBAY), and others, filed a brief with the Federal Circuit Court in support of Samsung’s bid for a retrial. The companies argued that if Apple’s victory is allowed to stand, the possibility of subsequent patent lawsuits utilizing the same intellectual property could negatively impact the development of “useful modern technologies” and “have a devastating impact on companies.”
While those companies have not publicly commented on the possibility of a Supreme Court fight, it’s likely, given their recent support of Samsung, that they would ramp up their efforts to see the Supreme Court hear the case. If the Supreme Court were to hear the case—a possibility that the highest court wouldn’t announce until next year—it would effectively create a retrial and could allow Samsung to get its money back, if the reimbursement clause is upheld.
But that wasn’t all Samsung pointed to in hopes of reimbursement.
A key component in Apple’s case against Samsung is the so-called ‘915 patent, which describes how the pinch-to-zoom feature works on touch devices. While Apple has argued that the patent is valid, and indeed, part of its damages come from the intellectual property, it failed to prove that to the U.S. Patent and Trademark Office (USPTO).
After Samsung challenged the patent’s validity at the start of their spat, the USPTO reviewed the ‘915 patent to determine whether the technology was indeed “patentable.” After its first review in 2012, the USPTO, which had previously awarded the patent to Apple, determined that it was invalid and should not have been awarded. Subsequent reviews by the USPTO have yielded the same result. Last December, the USPTO’s Patent Trial and Appeal Board issued its final decision on the matter, deeming it invalid. With no further recourse, Apple recently filed an appeal to the Federal Circuit court over that ruling in hopes of keeping its patent and thus, the damages that go with it.
“Samsung notes that the Patent Trial and Appeal Board has issued a final decision of invalidity on the ’915 Patent, and Apple filed a notice of appeal to the Federal Circuit in the USPTO last week,” Samsung wrote in its statement to further bolster its argument for reimbursement.
So, not much has changed between Apple and Samsung. Apple will now send an invoice on Friday to Samsung and receive the $548 million by December 14. However, the cash isn’t safe and the case far from over.
Looking ahead to 2016, the battle between Apple and Samsung will live on—and the final blow may ultimately be dealt by the U.S. Supreme Court.
Here’s the joint statement:
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