Appeals court slashes payout in Apple-Samsung trial

In August, 2012 a jury found Samsung guilty of infringing multiple Apple design patents as well as claims the manufacturer had filed on “trade dress.” Trade dress refers to the specific appearance or visual art of a product that a consumer would find recognizable. The case has been tied up in appeals ever since, and now the Court of Appeals for the Federal Circuit has found that while the awards for design and utility patent infringements were appropriate, the awards for infringement of trade dresses were not. That’s a massive amount of money altogether — the amount of money Samsung owes Apple just fell nearly 40%.

Note that while the Apple-Samsung case was primarily discussed in terms of patents, the case covered issues of trademark infringement and trade dresses as well. Much of the damages awarded to Apple were based on the argument that Samsung had misappropriated distinct elements of Apple design.

At present, Samsung owes Apple an estimated $548 million, down sharply from the $1.049B that Apple was initially awarded back in 2012. The Appeals Court’s findings were based on balancing the protected nature of trade dresses against the protected right to imitate. It might surprise you that this last is legally allowed, but it is. This balancing act is necessary because there’s a risk that a company might seek trademarks on the functional features of an object.

Imagine, for example, that a blade manufacturer could get a trademark on the design of a blade with a sharp cutting edge on one side and a dull edge on the opposite, affixed to a wooden handle with a full tang. That’s the basic description of a well-made knife and the law recognizes that the functional design of a knife cannot be protected by a trademark. This is critically important, because one difference between a patent and a trademark is that a trademark can be held in perpetuity, whereas a patent eventually expires. The usability test is important because it implies that a product ought to be designed in certain ways in order to be useful. Imagine if any single auto company had been allowed to claim that the number of wheels on a vehicle were a form of trade dress.
Down with rounded corners

One of the claims Apple made in its initial court case was that the rounded corners on the iPhone represented such a significant design element that Samsung had infringed upon the Cupertino manufacturer’s trade dress in building a similarly shaped product. The Appeals Court ruled against this claim, specifically because it finds that the much-derided “rounded corners” of the iPhone confers superior practical qualities.


Samsung was able to convince the court that rounded corners weren’t matters of trade dress, in other words, because putting round corners on a device confers a utilitarianadvantage in much the same way as putting a handle on a knife blade. Technically, a knife doesn’t need a wooden handle — but it’s much easier to use a knife if the dull section of the blade meant for gripping is reinforced and made larger to better fit the hand.

Apple then further lost on additional claims because, “Apple, while asserting that there were ‘numerous’ alternative designs, fails to show that any of these alternatives offered exactly the same features as the asserted trade dress… Apple simply catalogs the mere existence of other design possibilities embodied in rejected iPhone prototypes and other manufacturers’ smartphones.”

The court used similar reasoning to dissect Apple’s other claims of protected trade dress and found against the company in all of them. These findings — that most aspects of the Apple iPhone are functional rather than decorative — collectively represent a major win for Samsung. The company still owes Apple hundreds of millions of dollars for infringing on other claims, but slashing the value of the case will still be seen as a major win.