Apple wins appeals court ruling that may require Samsung to change its devices

A ruling says a lower court erred when it didn't ban Samsung products related to a patent infringement suit from 2014.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
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Apple and Samsung have been battling over patents for years. CNET

A US appeals court on Thursday ruled Samsung should have been banned from using certain patented Apple features in its devices, giving the California company a victory in the prolonged patent infringement suit between the two mobile giants.

A jury in May 2014 had determined Samsung infringed three Apple patents, one for quick links, one for slide-to-unlock and another for automatic word correction. Apple had asked the court to ban Samsung's products that used those patents, but US District Court Judge Lucy Koh said monetary damages were sufficient in resolving the harm done to Apple.

The US Court of Appeals for the Federal Circuit disagreed.

"The right to exclude competitors from using one's property rights is important," Judge Kimberly A. Moore wrote Thursday in the majority opinion. "And the right to maintain exclusivity -- a hallmark and crucial guarantee of patent rights deriving from the Constitution itself -- is likewise important."

Two out of the three judges said the lower court was wrong when it "required Apple to show that the infringing features were the reason why consumers purchased the accused products."

"Apple loses sales because Samsung products contain Apple's patented features," the court said. "Apple does not need to establish that these features are the reason customers bought Samsung phones instead of Apple phones -- it is enough that Apple has shown that these features were related to infringement and were important to customers when they were examining their phone choices."

The appeals court vacated the district court's decision and sent the case back to the lower court to be reconsidered. Thursday's ruling means Samsung may have to change certain characteristics of its smartphones and tablets. The company in May said only one of its current devices used an Apple patent involved in the case.

Samsung in a statement Thursday said it agreed with the dissenting opinion of the court that "Apple's request for an injunction is unfounded. It said it will pursue its "rights to have the full Court of Appeals review today's decision."

"We want to reassure our millions of loyal customers that all of our flagship smartphones, which are wanted and loved by American consumers, will remain for sale and available for customer service support in the US," Samsung said. "For decades, we have invested heavily in developing revolutionary innovations in the mobile industry. We look forward to continue to provide American consumers with a wide choice of groundbreaking products that they have come to expect from the Samsung brand."

Apple, meanwhile, reiterated its comment from the May 24 ruling, saying it "reinforces what courts around the world have already found: that Samsung willfully stole our ideas and copied our products. We are fighting to defend the hard work that goes into beloved products like the iPhone, which our employees devote their lives to designing and delivering for our customers."

The ruling could have wide-ranging effects on the patent landscape, particularly when it comes to devices like smartphones that have a complex variety of patents and features. It could make it easier for patent holders to receive sales bans on competitors' products, something that gives them more power when it comes to the negotiating table.

Other major technology companies -- including eBay, Facebook, Google and Hewlett-Packard -- have supported Samsung in its battle. In July, they argued in a court filing with the Federal Circuit Court that a ruling in Apple's favor would have "significant detrimental consequences for the continued development of useful modern technologies" and would give a patent holder unfair leverage for its own competitive gain.

Battling in the courts

The whole spat started when Apple filed suit against Samsung in April 2011, accusing its rival of copying the look and feel of its iPhones and iPads. Samsung countersued, and the case went to trial in August 2012. A nine-person jury sided with Apple on a majority of its patent infringement claims against Samsung. It awarded Apple $1.05 billion in damages, much less than the $2.75 billion sought by the Cupertino, Calif., company. Samsung, which asked for $421 million in its countersuit, didn't get anything.

However, Judge Koh in March 2013 ordered a new trial to recalculate some of the damages in the case.

Apple v. Samsung 2014: The infringing devices (pictures)

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For the latest case ruled on Thursday, Apple filed suit against Samsung in February 2012, accusing it of infringing several patents. Samsung then filed counterclaims against Apple. The trial began in March 2014, and the jury reached its verdict in May of that year.

The jury ordered Samsung to pay $119.6 million for infringing three of Apple's five patents, much less than the $2.2 billion the iPhone maker had demanded. At the same time, Apple was ordered to pay Samsung $158,400 for infringing one of the Korean company's two patents. Samsung had asked for $6.2 million in damages, and it had argued that if it had infringed all of Apple's patents, it only owed $38.4 million.

Judge Koh ruled in August 2014 not to place a permanent injunction against Samsung for selling certain older-model smartphones, including the Galaxy S3. Apple immediately appealed that ruling.

One of the reasons that Koh may have decided not to impose the injunction against Samsung is that Apple has reported soaring profits and iPhone sales. "Apple has not demonstrated that it will suffer irreparable harm to its reputation or goodwill as an innovator without an injunction," Koh wrote in her ruling.

Reuters earlier reported the Thursday ruling.

Update at 11:15 a.m. PT with Apple comment.