IP Law Daily  Willful infringement found, enhanced damages warranted in Samsung’s infringement of Apple’s smartphone patent
Monday, June 26, 2017

 Willful infringement found, enhanced damages warranted in Samsung’s infringement of Apple’s smartphone patent

By Linda O’Brien, J.D., LL.M.

A jury verdict that Samsung willfully infringed Apple’s patent on the slide-to-lock feature of its iPhone was supported by substantial evidence and a moderate award of enhanced damages was warranted, the federal district court in San Jose has held. There was evidence of direct copying, continued sale of infringing products after Samsung received notice of the patent, motivation to obtain a competitive advantage by using Apple’s designs, and the availability of a less desirable non-infringing alternative that could have been implemented quickly to indicate that Samsung’s actions were sufficiently egregious to warrant enhancement (Apple Inc. v. Samsung Electronics Co., Ltd., June 23, 2017, Koh, L.).

In February 2012, Apple brought suit against Samsung, alleging that Samsung’s smartphones infringed eight Apple patents covering different aspects of mobile device technology. The district court granted summary judgment that Samsung’s accused devices infringed the asserted claim of U.S. Patent No. 8,074,172 ("the ’172 patent"), which covered the iPhone’s "autocorrect" feature.

After a 13-day trial, the jury found that Samsung infringed the asserted claim of U.S. Patent No. 5,946,647 ("the ’647 patent"), which disclosed a computer-based system for recognizing certain structures on a touchscreen, and for linking certain actions to the structure. The jury also found the asserted claim of U.S. Patent No. 8,046,721 ("the ’721 patent")—directed to the "slide to unlock" feature of Apple’s iPhone—infringed and not invalid and the asserted claim of the ’172 patent not invalid. Separately, the jury found that Samsung had not infringed the asserted claims of Apple’s U.S. Patent Nos. 7,761,414 ("the ’414 patent") or 6,847,959 ("the ’959 patent"). Additionally, the jury found that Apple had infringed the asserted claim of one Samsung patent but had not infringed the asserted claim of another Samsung patent and awarded Samsung $158,400 in damages.

The district court denied Samsung’s requested judgments as a matter of law (JMOL) and entered judgment in favor of Apple in the amount of $119,625,000. Samsung appealed the district court’s grant of summary judgment of infringement as to the ’172 patent, denial of JMOL of noninfringement as to the ’647 patent, and denial of JMOL of obviousness as to the ’721 and ’172 patents. A three-judge panel of the U.S. Court of Appeals for the Federal Circuit reversed the denial of JMOL with regard to the jury verdict of infringement as to the ’647 patent and non-obviousness as to the ’721 and ’172 patents.

Apple filed a petition for rehearing en banc. In February 2016, the Federal Circuit vacated the panel opinion, and affirmed the district court’s judgment in favor of Apple with respect to those patents. Before the district court was the issue of willful infringement of the ’721 patent in light of the U.S. Supreme Court’s intervening decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016).

Willfulness finding. The court first determined that Samsung could not have willfully infringed the ’721 patent before the filing of the instant suit. Apple conceded that Samsung had no knowledge of the ’721 patent before the suit was initiated and that Samsung’s actions prior to the filing of the suit alone did not constitute willful infringement. Moreover, Apple’s assertions of "direct evidence of copying" of its slide-to-unlock feature were insufficient to show willful infringement before the suit was filed since Samsung had no knowledge of Apple’s patent at the time of its actions.

However, Samsung’s post-filing conduct constituted willful infringement, the court stated. Under Halo, a patentee seeking enhanced damages must show by a preponderance of the evidence that the infringer acted with subjective willfulness regarding the patent it infringed. Here, the jury heard substantial evidence—such as multiple internal Samsung presentations and executive emails—that Samsung copied the Apple iPhone’s claimed features and Samsung did not dispute that it copied Apple’s slide-to-lock feature. After Samsung was notified of the ’721 patent by the filing of the suit, Samsung continued to sell the same copied designs.

Further, there was evidence that Samsung had a non-infringing alternative, such as a circle lock, that it could have implemented quickly but chose not to do so. There also was evidence that the non-infringing alternatives were not well received by Verizon, or were less effective. Thus, a reasonable jury could conclude that Samsung chose to continue infringing because it did not want to give up market share by switching to a less desirable alternative, the court explained.

Samsung’s invalidity defense did not preclude a finding of willfulness. The jury was presented evidence that the USPTO issued the ’721 patent after considering the prior art references and did not invalidate the patent after a reexamination proceeding. Thus, the court found, the jury’s finding of willfulness was supported by substantial evidence.

Enhanced damages. A moderate award of enhanced damages was warranted in this case, according to the court. There was substantial evidence that Samsung deliberately copied the slide-to-lock feature and other aspects of the iPhone and that there was a non-infringing alternative that could have been adopted quickly. In addition, there was no evidence of any Samsung investigation after learning of the ’721 patent or that Samsung subjectively believe that the patent was not infringed or invalid. Samsung’s size and financial condition showed that it could have implemented the non-infringing alternative to the slide-to-lock feature quickly.

Samsung also continued to sell infringing products for 10 to 12 months after being put on notice of the ’721 patent. Finally, there was evidence that, by not implementing the non-infringing alternative, Samsung was motivated to leverage a competitive advantage against Apple by using Apple’s designs. Accordingly, the court exercised its discretion to increase the compensatory damages award of $2,990,625 for the infringement of the ’721 patent by 30 percent as a punitive sanction for Samsung’s conduct in the case.

The case is No. 5:12-cv-00630-LHK.

Attorneys: Andrew J. Danford (Wilmer Cutler Pickering Hale and Dorr LLP) and Hervey Mark Lyon (Gibson Dunn & Crutcher LLP) for Apple Inc. Daniel C. Posner (Quinn Emanuel Urquhart & Sullivan, LLP) for Samsung Electronics Co., Ltd., Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC.

Companies: Apple Inc.; Samsung Electronics Company, Ltd.; Samsung Electronics America, Inc.; Samsung Telecommunications America, LLC

MainStory: TopStory Patent CaliforniaNews

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