Samsung eventually had the damages reduced to $548 million, and then decided challenge a lower court ruling ordering it to pay $399 million. The Supreme Court heard Samsung’s arguments and in an 8-0 ruling agreed the South Korean company is not liable for the $399 million judgement. With its ruling, the eight current justices sent the case back to the lower courts.
Samsung’s main argument was that the $399 million figure was reached by calculating a percentage of the entire profits made from the sale of the smartphones that were said to infringe on Apple patents. Samsung’s lawyers argued that the percentage should instead be based on only the parts of the smartphone that caused the infringement. It’s an important distinction that would drastically reduce the amount of damages.
Luckily for Samsung, the Supreme Court agreed that calculating damages using this method could be used in this patent infringement case.
“In the case of a design for a single component product, such as a dinner plate, the product is the ‘article of manufacture’ to which the design has been applied,” Justice Sotomayor wrote in the decision [PDF]. “In the case of a design for a multicomponent product, such as a kitchen oven, identifying the ‘article of manufacture’ to which the design has been applied is a more difficult task.”
The ruling by the Supreme Court means that the federal circuit will be tasked with deciding which method to use to calculate damages: the “entire profit” model favored by Apple or the “partial profit” model that Samsung hopes will reduce its financial burden in this case.