When it comes to smartphones, is the whole greater than the sum of its parts? Apple thinks so. But on Tuesday, in a patent suit with hundreds of millions of dollars at stake, the company's lawyers faced off against a Samsung legal team that thinks different.
In opening arguments for a damages phase of the patent suit -- Samsung already has been found to infringe -- Apple attorney Bill Lee argued that three design patents, while covering merely cosmetic aspects of iPhones, are in fact key to making the phones look good and work well. That's why Apple wants Samsung to pay more than $1 billion for its infringement.
"Design is what ties it all together," Lee said in US District Court, Northern District of California, located in the Silicon Valley city of San Jose. "The end result was revolutionary."
But Samsung's attorney, John Quinn, held up specific phone components -- a screen cover, a bezel that surrounds it, a display that's underneath -- and told a jury that's where the infringement took place. "This is the article of manufacture," Quinn said of the components. "Apple is certainly not entitled to the profits on the whole phone."
The case not only will determine how much Samsung has to pay, but also how much countless other technology companies might have to worry about patents in the future. The more broadly patents apply, the more they're worth, the greater leverage patent holders have and the harder it is for competitors to challenge them.
The lawsuit began in 2011 and made it all the way to the Supreme Court in late 2016 before being sent back to the lower court, where it resumed Monday. Earlier cases already found that several now-obsolete Samsung devices infringed five Apple patents -- two utility patents and three design patents -- but what's still up in the air is exactly how much Samsung must pay in damages.
Samsung has already paid $548 million, but a $399 million portion of that could be changed because of the Supreme Court decision. It centered on an issue of what exactly constitutes an "article of manufacture" that a patent governs. Apple argues that it should be the entire product -- a phone in this instance -- but Samsung is making the case that it could just be a component of a phone. Depending on who the jury finds persuasive, the actual penalty could increase or decrease.
Samsung argues that a company that owns a patent on just a car's cup holder shouldn't be able to collect the profit from the entire car. Some estimates say more than 250,000 patents go into a smartphone, and the original penalty against Samsung was based on the value of the entire phone.
But Apple argues that though Samsung's devices infringed only part of the iPhone's design, Samsung should pay damages based on the value of its entire device. If one phone's design is similar to that of an iPhone, the thinking goes, Apple could lose the sale of an entire phone.
'Design is at the heart of Apple'
Apple has one word the jurors are hearing over and over: design.
"Design is at the heart of Apple and the heart of this case," Lee said. "Apple puts design before everything else. Apple first and foremost wants to make beautiful products that people like you want to purchase and, more importantly, use."
Three of the patents Samsung infringed are for design, a type of patent that covers ornamental attributes. They are US Patent No. D618,677 (D'677 for short), which describes a black, rectangular, round-cornered front face; US Patent No. D593,087 (D'087), which describes a similar rectangular round-cornered front face plus the surrounding rim, known as the bezel; and US Patent No. D604,305 (D'305), which describes a colorful grid of icons. Damages for infringing these designs should be more than $1 billion, Apple argues.
Patent D'677 is "a wonderful example of how a distinctive design can bring together everything into a central design that can be used simply and intuitively," Lee said.
To support his case, Lee showed a memo from J.K. Shin, then leader of Samsung's mobile division, who called the arrival of the iPhone "a crisis of design." Shin didn't call it a crisis of features, a crisis of technology or a crisis of components, Lee said.
Two utility patents, which govern technology and how features work, also are at issue. But Apple seeks a comparative pittance for infringing them -- only $5 million.
Samsung: Apple's patents are narrow
Samsung's Quinn tried to get the jury to focus on elements of Samsung and Apple phones and see the patents as covering only narrow aspects of design, what he called "minor design details."
"This is not a dinner plate. This is a complex device with many different components," Quinn said.
He argued that components such as bezels and screen glass are complete articles of manufacture, something that's made on its own and can be purchased on its own. Apple even has entire teams that tear down rival products to scrutinize each element, he said.
"There are now hundreds of articles of manufacture inside a phone. The only way Apple can come up with $1 billion in damages is by saying the article of manufacture applies to the whole phone," Quinnn said. "None of the patents is the whole phone."
And disputing Apple's assertion that Samsung's phone sales surged only after it started copying the iPhone, he argued that people bought other phones for many reasons.
"The reason sales took off is because Samsung switched to the Google Android operating system," Quinn said. "That and other innovations that Samsung made, like 4G capability, larger screens, faster processors and the ability to use all cellular carriers, not just AT&T -- that is what drove Samsung sales."
First published May 15 at 11:27 a.m. PT.
Updates at 12:43 p.m. PT: Adds further details from Apple's opening argument; and at 12:59 p.m. PT: Includes further details from Samsung's opening argument.
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