After years of battling in courts, Samsung has won an important legal decision over Apple Inc. (NASDAQ:AAPL).
The U.S. Supreme Court ruled on Tuesday that design patent infringement damages can only be based on the part of the device that infringed on said patent, rather than a whole device. This was a unanimous decision.
Here’s why it’s important to technology investors. Under the previous rules, a company could sue for the entire profit a competitor made for ripping off their patent.
Say something in the latest Samsung phone infringed on an Apple patent. Apple could then ask for the entire profit Samsung made off that phone as compensation. Under the new rules, Apple can now just ask for part of the profits.
In 2015, Samsung paid Apple $399 million in just such a dispute. Now that the rules have changed, Samsung will now lobby for a lower punishment in a lower court.
The only problem is the Supreme Court didn’t give much detail. It didn’t lay out ground rules outlining how damages should be paid out.
Predictably, Samsung applauded the decision, calling it a victory for creativity, innovation, and fair competition. Apple still maintains Samsung blatantly ripped off its designs, and should therefore have to pay harsh fines for doing so.
Most of the tech industry is on Samsung’s side, arguing that potential damages on an entire device doesn’t bode well for innovation.
Apple’s shares are virtually unchanged on this news, falling just 0.05% in early Wednesday trading.
