The
Apple
v. Samsung
Jury Verdict Lacks Sufficient Detail To Support Enhancing
More Than
6.4% Of The $1.04B Monetary Award For Willful Infringement
by Richard T. Redano
Copyright:
Richard T. Redano1
2012 High
stakes design patent cases are rare. The recently tried Apple
v. Samsung case2
is arguably the most important design patent case to be tried in a
U.S. court, particularly if one defines importance in terms of
monetary exposure. Now that the smoke has initially cleared on the
field of battle in the district court, commentators can critically
scrutinize the results i.e. “shoot the survivors.” The primary
thesis of this paper is that no more than 6.4% of the $1.04B monetary
award in the jury verdict3
can be enhanced for willful infringement, without being vacated and
remanded on appeal. The reason for this assertion is that slightly
less than 6.4% of the total monetary award is for infringement of
only utility patents. Additionally, due to the lack of detail in the
jury verdict regarding which Samsung products were used to commit
willful infringement, it is quite possible that no enhancement of
damages for willful infringement will survive an appeal.
The
relative paucity of design patent jurisprudence regarding the legal
remedy of damages and the equitable remedy of an accounting for the
infringer’s profits, makes clear that while an award of damages for
patent infringement may be enhanced under 35 U.S.C. §
284 for willful infringement, an award of profits under 35 U.S.C.
§ 289, may not be
enhanced under Section 284.4
While this distinction may appear important to one who wishes to
obtain an enhancement of the damages award for willful infringement,
the jury verdict form in Apple
v. Samsung
leaves one clueless as to whether the monetary award for infringement
of 18 Samsung devices was an award of damages, an award of profits,
or some combination of the two.
Jury
Questions 1-4 pertained to infringement of Apple’s utility
patents.5
Jury Questions 5-7 pertained to infringement of Apple’s design
patents.6
Table A below summarizes the responses to Jury Questions 1-7. As
shown in Table A, the jury found that:
(a)
15 Samsung devices infringed at least one utility patent and at
least one design patent;
(b)
seven Samsung devices infringed only one or more utility patents;
and
(c)
three Samsung devices infringed only one or more design patents.
Either
damages under Section 284 or the infringer’s profits under Section
289 are available for infringement of the 18 devices in categories
(a) and (c).
TABLE
A: Jury Verdicts On Infringement Liability
Accused
Samsung Device
|
Infringes
A Utility Patent
|
Infringes
D’677 Patent
|
Infringes
D’087 Patent
|
Infringes
D’305 Patent
|
Fascinate
|
Jury
Q’s 1-4
|
Jury Q 5
|
|
Jury Q 7
|
Epic
4G
|
Jury
Q’s 1-4
|
|
|
Jury Q 7
|
Galaxy
S i9000
|
Jury
Q 1-3
|
Jury Q 5
|
Jury Q 6
|
Jury Q 7
|
Galaxy
S 4G
|
Jury
Q’s 1- 4
|
Jury Q 5
|
Jury Q 6
|
Jury Q 7
|
Galaxy
S II AT&T
|
Jury
Q’s 1-4
|
Jury Q 5
|
|
|
Galaxy
S II i9100
|
Jury
Q 1-3
|
Jury Q 5
|
|
|
Galaxy
S II T-Mobile
|
Jury
Q’s 1- 4
|
Jury Q 5
|
|
|
1
Infuse
4G
|
Jury
Q’s 1- 4
|
Jury Q 5
|
|
Jury Q 7
|
Mesmerize
|
Jury
Q’s 1- 4
|
Jury Q 5
|
|
Jury Q 7
|
Vibrant
|
Jury
Q’s 1, 2, 4
|
Jury Q 5
|
Jury Q 6
|
Jury Q 7
|
Captivate
|
Jury
Q’s 1, 2, 4
|
|
|
Jury Q 7
|
Continuum
|
Jury
Q’s 1, 2, 4
|
|
|
Jury Q 7
|
Droid
Charge
|
Jury
Q’s 1-4
|
|
|
Jury Q 7
|
Indulge
|
Jury
Q’s 3-4
|
|
|
Jury Q 7
|
Gem
|
Jury
Q’s 3-4
|
|
|
Jury Q 7
|
Exhibit
4G
|
Jury
Q’s 1-4
|
|
|
|
Galaxy
Ace
|
Jury
Q’s 1, 3
|
|
|
|
Galaxy
Prevail
|
Jury
Q’s 1-4
|
|
|
|
Galaxy
Tab
|
Jury
Q’s 1-4
|
|
|
|
Galaxy
Tab 10.1
(WiFi)
|
Jury
Q’s 1-4
|
|
|
|
Nexus
S 4G
|
Jury
Q’s 1, 2, 4
|
|
|
|
Replenish
|
Jury
Q’s 1, 3, 4
|
|
|
|
Galaxy
S II (Skyrocket)
|
|
Jury Q 5
|
|
|
Galaxy
S Showcase
|
|
Jury Q 5
|
|
Jury Q 7
|
Galaxy
S II Epic 4G
|
|
Jury Q 5
|
|
|
Jury
Question 22 asked: “What
is the total dollar amount that Apple is entitled to receive from
Samsung on the claims on which you have ruled in favor of Apple?”7
The way this question is phrased, one cannot discern the degree, if
any, to which the jury’s response comprises an award of profits
under Section 289 for any infringed design patents. In its amended
response to Jury Question 22, the jury responded “$1,049,393,540.”8
Jury
Question 23 asked: “For
the total dollar amount in your answer to Question 22, please provide
the dollar breakdown by product.9
For the seven products listed in Table A that infringed only one or
more utility patents, Table B lists the jury’s responses to Jury
Question 23. As shown in Table B, the total “dollar amount”
awarded for these seven Samsung products was $66,927,523.
This amount is slightly less than 6.4% of the total “dollar
amount” awarded in response to Jury Question 22.
TABLE
B: Jury’s Monetary Awards For Only Utility Patent Infringement
Samsung
Product Found To Infringe ONLY One Or More Utility Patent Claims
|
Monetary
Award [Jury Q 23]
|
Exhibit 4G
|
$1,081,820
|
Galaxy Ace
|
$0
|
Galaxy
Prevail
|
$57,867,383
|
Galaxy Tab
|
$1,966,691
|
Galaxy Tab
10.1 (WiFi)
|
$833,076
|
Nexus S 4G
|
$1,828,297
|
Replenish
|
$3,350,256
|
TOTAL
|
$66,927,523
|
2
The
jury instructions explained that only damages in the form of either
Apple’s lost profits, or a reasonable royalty, were available for
infringement of a utility patent.10
Assuming that the jury followed the jury instructions, there is a
sound basis for concluding that the $66,927,523
monetary award summarized in Table B was an award of damages under
Section 284, which may be enhanced for willful infringement.
What
about the basis for the jury’s remaining monetary award of
$982,466,017
for Samsung products found to infringe at least one design patent?
Your guess is as good as mine! It is impossible to discern from the
jury’s responses to Jury Questions 22 and 23, whether any portions
of this amount was an award of Samsung’s profits under Section 289,
which may not be enhanced for willful infringement under Section 284,
pursuant to the Federal Circuit’s decision in Braun.11
Thus
the maximum amount of enhancement possible under these circumstances,
assuming a trebling for willful infringement is $133,855,046.12
If the district court were to enhance the monetary award for willful
infringement by more than $133,855,046,
I submit that such a decision likely would be vacated by the Federal
Circuit and remanded for a new determination of enhanced damages.
In
Verizon
Services Corp. v. Vonage Holdings Corp.,13
the district court entered a judgment of infringement of three
patents and awarded damages of $58M with no apportionment of the
damage award among the three patents adjudicated to have been
infringed. The Federal Circuit reversed the district court’s
judgment of infringement on one of the three patents-in-suit, vacated
the entire damages award, and remanded the case for a new trial on
damages for the two infringed patents, holding:
In
light of our holding that a new trial is required on the issue of
infringement of the ’880 patent, we also vacate the determination
that Verizon is entitled to a damages award of $58,000,000 and a
royalty rate of 5.5%, since the jury’s verdict gives no
indication what portion of such damages were allocated to the
infringement of the ’880 patent. In a situation—such as this
one—where the jury rendered a single verdict on damages, without
breaking down the damages attributable to each patent, the normal
rule would require a new trial as to damages. See Memphis Cmty.
Sch. Dist. v. Stachura, 477 U.S. 299, 312 (1986) (“When damages
instructions are faulty and the verdict does not reveal the means by
which the jury calculated damages, the error in the charge is
difficult, if not impossible, to correct without retrial, in light of
the jury's general verdict.”).14
In
NTP,
Inc. v. Research In Motion, Ltd.15
(“the Blackberry case”), the district court entered a jury
verdict of $53.7M in damages for infringement of several claims of
several asserted patents. The Federal Circuit vacated the judgment
of infringement as to several claims and vacated the entire damages
award, holding:
because
the jury verdict did not specify the amount of infringing sales
attributed to each individual patent claim, or the specific devices
and services determined by the jury to infringe each separately
asserted claim, the district court will have to determine the effect
of any alteration of the jury verdict on the district court's damage
award.16
3
The
Federal Circuit’s decisions in Verizon
and NTP
illustrate the danger of not breaking down (granulating) the damages
or profits award in a complex patent case, claim by claim, and device
by device (or method by method).
There
are several reasons why seasoned trial counsel might elect not to
granulate the jury verdict form to this extraordinary degree,
including but not limited to, not overtaxing the jury. It is also
not uncommon for a district court to refuse to granulate the jury
verdict form to this degree. However, in the Verizon
and NTP
cases, insufficiently detailed jury findings, resulted in jury awards
of over $100M for patent infringement being vacated. That amount is
mere “chump change” compared to the 93.5% of the total
$1,049,393,540
monetary award of in the Apple
v. Samsung
case, for which it is impossible to determine whether there is any
award of damages for infringement under Section 284.
Readers
who were devotees of the mid-1960’s Batman
television series may recall that near the end of the first of each
week’s episode, when Batman and Robin were caught in an ostensibly
inescapable appointment with death, the announcer would proclaim “The
worst is yet to come!” The same is true for Apple with respect to
its hopes of obtaining an enhancement of damages for willful
infringement that will withstand an appeal.
Specifically
Jury Question 10 asked: “If
you answered “Yes” to any of Questions 1-9, and then found that
any Samsung entity had infringed any Apple patent(s), has Apple
proven by clear and convincing evidence that the Samsung entity’s
infringement was willful?
(Please
answer in each cell with a “Y” for “yes” (for Apple), or with
an “N” for “no” (for Samsung).)17
Apple Utility
and Design Patents
|
Samsung
Electronics Co. Ltd.
|
Samsung
Electronics America Inc.
|
Samsung
Telecommunications America LLC
|
‘381 Patent
(Claim 19)
|
Y
|
Y
|
Y
|
‘915 Patent
(Claim 8)
|
Y
|
Y
|
Y
|
‘163 Patent
(Claim 50)
|
Y
|
Y
|
Y
|
D’677
Patent
|
Y
|
|
Y
|
D’087
Patent
|
N
|
|
N
|
D’305
Patent
|
Y
|
|
Y
|
D’889
Patent
|
N
|
N
|
N
|
The
jury’s responses to the table in Jury Question 10 appear in italics
in the above table.
Pursuant
to the Federal Circuit’s en banc decision in In
re Seagate,
the first element for proving willful infringement is proving that
the accused infringer “acted despite an objectively high likelihood
that its actions constituted infringement of a valid patent.”18
It is possible, if not likely, that the evidence relating to this
element is not identical for each Samsung device found to infringe an
Apple patent. As summarized in Table A, the jury found that multiple
Samsung devices infringed each of the six patents found to be
infringed. However, one cannot discern from Jury Question 10 and its
response, which of the many adjudicated infringing devices for each
patent was the basis for the jury’s willful infringement verdict.
Thus for any patent where the judgment of infringement is vacated for
at least one Samsung device, any judgment of willful infringement for
that patent should also be vacated because there is no way to
determine whether Samsung committed willful infringement with the
remaining infringing devices.19
4
As
we proceed with this analysis, things get worse for Apple. It appears
unlikely that Apple will have the necessary gadgets in its utility
belt to overcome the defects in this jury verdict form. Even if
every liability verdict in this case survives an appeal, the
information provided by the response to Jury Question 10 should be
found by the Federal Circuit to be inadequate to meet Apple’s clear
and convincing burden of proof that the jury’s findings of
willfulness apply to every Samsung device found to infringe any of
the six patents where willful infringement was found.
There
is no “one size fits all” doctrine for proving willful
infringement. The Seagate
test for willful infringement must be applied to each infringing
device, in order to enhance any award of damages for such device.
The first Seagate
element,
quoted above in now a question of law for the district court to
adjudicate,20
Thus, the district court could rule on this element on a device by
device and patent by patent basis in the post-trial hearing on
willfulness. However, the second element of the Seagate willful
infringement test is still a fact question. That element is whether
the objectively defined risk was either known or so obvious that it
should have been known to the accused infringer.21
Unfortunately for Apple, the jury, has already been dismissed
without making any findings on this issue on a device by device
basis.
Despite
the widespread reporting in the mass media that the $1.04B jury award
to Apple may be trebled, one can see that the jury verdict will not
support such an enhancement and Samsung’s additional monetary
exposure for willful infringement is miniscule, in comparison to the
$1.04B award of damages, or profits, or both.
5
1 Richard
T. Redano is the president of Richard T. Redano, P.C. and an adjunct
professor of law at The Univ. Of TN School of Law, where he teaches
patent litigation (rredano@redanoipcounsel.com).
2Apple
Inc. v. Samsung Electronics Co., Ltd., et al.,
Case No. 11-CV-01846-LHK (U.S.D.C. N.D. Calif)
3
Amended Verdict Form, p. 15, Question 22.
4Braun
v. Dynamics Corp. of America,
975 F.2d 815, 824 (Fed. Cir. 1992).
5Amended
Verdict Form, pp. 2-5, Questions 1-4.
6Amended
Verdict Form, pp. 6-7, Questions 5-7.
7Amended
Verdict Form, p. 15, Question 22.
8Id.
9Amended
Verdict Form, p. 16, Question 23.
10Jury
Instructions, pp. 50 and 54, Instruction Nos. 36 and 40.
11975
F.2d at 824
12
Enhancement = (3-1) X $66,927,523 = $133,855,046.
13503
F.3d 1295 (Fed. Cir. 2007).
14(emphasis added);
Id. at. 1310.
15418
F.3d 1282 (Fed. Cir. 2005).
16Id.
at 1326.
17 Amended
Verdict Form, p. 9, Question 10.
18497
F.3d 1360, 1371 (Fed. Cir. 2007) (en banc).
19NTP,
418 F.3d at 1326.
20Bard
Peripheral Vascular, Inc. v. W.L.Gore & Assoc., Inc.,
683 F.3d 1003, 1006-’07 (Fed. Cir. 2012)
21In
re Seagate Tech.,
497 F.3d at 1371.
|