By David L. Newman, Arnstein & Lehr LLP
(David L. Newmanis a partner in the Intellectual Property Practice Group atArnstein & Lehr LLP. His experience includes handling litigation involving intellectual property, preparing and prosecuting applications for obtaining various types of intellectual properties, and opinion work involving business methods, computers, consumer goods, electronic commerce, mechanical devices, medical devices and telecommunications.)
As a result of the combination of a sophisticated jury that understood the nuances of intellectual property law and abundant evidence of copying by Samsung, Apple was awarded $1.049 billion in its patent infringement lawsuit on Aug. 24, 2012. The jury was apparently swayed by evidence that Samsung had copied Apple’s iPhone models that led to a jury verdict that six Apple patents were found to be infringed.
Following the trial, the foreman of the jury, Velvin Hogan, astutely recalled the evidence stating:
And there were other internal memos after that in evidence that were comparing the cell phones, Apple to Samsung, and the individual on the Samsung side, a VP at a very high level, said the difference is that of heaven and earth. You need to move closer. [Samsung] did move closer but in moving closer, they crossed the line. That was unnecessary. You can compete in this country, be similar, and at the same time compete fairly.1
Hogan summarized the evidence of copying and Samsung’s willful infringement by stating that Judge Lucy H. Koh “…will find willfulness because that is what swayed us.”2 So although Samsung was asserting its own patents against Apple that the jury found were not invalid; in view of the evidence that Samsung copied the Apple intellectual property, the jury was swayed to find that only the Apple patents were infringed — not the Samsung patents.
In this case, the technology covered by the patents was fairly subtle — covering the look and feel of the Apple iPhone and tablets and features such as bounce back control of images on the display screen. Nevertheless, due to the jurors’ high-tech pedigrees they were able to find overwhelmingly in favor of the well known technology leader Apple — not a “me too” outfit.
As is the case of many people living in the Northern District of California, including the Silicon Valley; this trial held in San Jose attracted technologically savvy people for the jury.
The foreman, Hogan, is a 67-year old retired engineer who had worked with computer hard drive technology for Memorex, Inc., Storage Technology Inc. and Digital Equipment Corp. Hogan is also the inventor of U.S. Patent No. 7,352,953 for “Method and Apparatus for Recording and Storing Video Information.”
On a nationwide basis, it is rare to find a juror who has a rudimentary understanding of a patent. It is yet another matter entirely to find a juror such as Hogan, who has invented an apparatus for a wireless keyboard and software that enables a user to access the web and email services, download new coder/decoder software and order a movie on demand. In view of his background, it is quite clear why Hogan was nominated the foreman of this jury.
Following the trial, Hogan could have been mistaken for one of the Apple or Samsung patent litigators when he said, “For any patent to be valid, whether it be utility or design, all of the claims and the limitations have to be taken in an entirety.”3
Hogan was referring to the unusual process by which patents are analyzed to determine a patent’s validity when being compared to the prior art (e.g. prior technology available before the filing of the patent), to determine whether the claimed invention is depicted or described in a prior device.
Hogan was surprisingly aware that the patented invention must be viewed as a whole and not viewed bit-by-bit to isolate parts that may be found in the prior art. By applying this doctrine, the jury determined that Apple had not proven by clear and convincing evidence that the Samsung utility patents were invalid. Likewise, the jury determined that Samsung had not proven by clear and convincing evidence that Apple’s asserted utility and/or design patent claims were invalid leading to its verdict that Samsung had infringed.4
The jury’s sophistication was also demonstrated in the manner in which they completed an extremely complex jury verdict form. The verdict form consisted of 20 pages and included thirty-three separate questions and each question had many complex subparts.
Many commentators believe that the fact that the jury was able to complete its deliberations and the 20-page verdict form in three days — after such a lengthy trial and mountains of evidence —was near miraculous. Many pages of the verdict form required the jurors to determine whether more than 20 individual Samsung products infringed seven Apple patents.
Upon finding infringement by Samsung, the jurors had to undertake complex damage calculations with respect to each of the twenty or more Samsung products to determine the damages.
Hogan described the process based on the jury’s estimation of Samsung’s operating costs, which they determined:
…should be closer between 13 percent to 15 percent. We zeroed in on 14 percent. That became the magic number. Then we did our own calculations for each of the areas, adding up those with the royalties that were entitled for some of the items. And we cut that value in half. When we added them together and tallied them up, that is the number we came up with [$1,049,343, 540].5
Samsung is likely to take issue with this methodology when it files its post trial motions and on appeal of the entire decision.
Hogan underlined the jury’s understanding of the importance of intellectual property when he stated, “In this country, intellectual property deserves to be protected.”6 Hogan knew that he and his other jurors were a sophisticated bunch and that jurors in other jurisdictions may have had more difficulty handling such a complex patent suit when he stated:
I believe that any jury of our peers could have reached this decision asking more questions of the Judge. It would have taken longer. But at no time were we so confused that we thought we were going in the wrong direction.7
Hogan’s IP acumen was displayed when he unabashedly summarized the bottom line for the trial — and the message that Apple likely desired to send to its competitors:
My real point was that if anyone, the industry at large, if any company decides to ignore the stipulations and the rules and get too close, that they cross the line and infringe and they do it willfully, they need to understand that if they take the risk and they get caught, they should have to pay for it.8
Samsung may be looking for other opportunities to reconsider its jury selection strategy and to prove that it has not “crossed the line.”
1 Apple v. Samsung: Meet the foreman of the jury (updated), Fortune; Philip Emert DeWitt, August 28, 2012 (“Fortune”), available at http://tech.fortune.cnn.com/2012/08/28/apple-v-samsung-meet-the-foreman-of-the-jury/.
2 Fortune at p. 2.
3 Fortune at p. 3.
4 Amended Verdict Form Apple v. Samsung Case No. 11-CV-01846-LHK; Document 1931, August 24, 2012, pg. 4.
5 Fortune at p. 2
6 Fortune at p. 2
7 Fortune at p. 3
8 Fortune at p. 2