On December 6, 2016, the Supreme Court addressed one of the key (i.e., most valuable) unresolved issues remaining from the long-running Apple/Samsung patent war. In particular, a unanimous Court, in an opinion by Justice Sotomayor, reversed the Federal Circuit’s earlier affirmance of a $399 million damages award to Apple, based on Samsung’s infringement of Apple’s design patent rights. While the headline damages number was a big one for a patent case, the real-world value of the case, relative to Samsung’s revenues and profits from its smartphones and tablets, was actually quite minor. Throw in the fact that by now the accused products in the case have long been relegated to the dustbin of “old” technology, and there is a valid argument that this decision is one more valuable to the pride of the litigants than to their respective (ample) bottom lines.
Reports on the decision in the mainstream media tended to focus on two points. First, that determining damages in design patent cases is a bit of an arcane subject, and that this case was a bellwether for how valuable design patents could truly be — even for complex pieces of technology like modern smartphones. Second, that this latest decision in Samsung’s favor may be considered a bit of a pyrrhic victory, considering that Apple had already reached its main objective in its litigation effort against Samsung years ago. You might ask what that objective could be, if not to recover damages or enjoin Samsung’s products. While Apple did achieve those objectives, only to see most of its gains on those fronts reversed on appeal, in my view the main value of the case for Apple was something less tangible.
As I explained in my column Defining A Litigation Victory, “Apple’s goal for this case was actually never about trying to get Samsung off the market, but to rather cement in the public’s collective mind that Apple is THE innovator in the smartphone space; with everyone else, and especially Samsung, just copying Apple’s innovations in an attempt to stay within touching distance of the undisputed market leader. From that perspective, the case has been a resounding success for Apple, and Samsung’s continued attempts to turn the tide are likely futile — even if they end up ‘winning’ in the end.”
The most recent decision is just the latest example of a battle that Samsung may have won, but after having already lost the war in terms of the public consciousness regarding innovation in the smartphone space. In any event, the Apple/Samsung wars continue, which is probably welcome news for the firms tasked with litigating the remaining issues. Considering the hundreds of millions of dollars spent by the parties so far, current spending on the case must feel like a bargain. I have no doubt that there are patent litigation associates, and perhaps partners, on the lateral market as we speak whose main claim for a place at a new firm is the experience they gained litigating on behalf of Apple or Samsung. In that way, these cases are generation-defining, for at least a sliver of Biglaw IP practices.
But what of smaller firms? What lessons can they learn from these cases, even as smaller-firm IP partners dream of having a shot at just one month’s billings on cases of such magnitude? There are a few to take, at least in my view. As a disclaimer, I have a lot of respect for both of the litigants (having presented at Samsung’s HQ in Korea on this case in 2013, as well as having been part of a team that was retained by Apple for patent litigation defense while I was in Biglaw), even as I believe that there are a lot more interesting experiences available to patent litigators than serving as a cog in the wheel of such mega-litigation.
That said, one of the key lessons for small-firm IP litigators from these cases is that nearly all patent cases involving industry titans will likely end in a draw, even as one side or another will achieve incremental victories along the way. Patent cases have so many issues that only the most resource-rich litigants can afford to truly explore them all, which will always give an advantage to players of that magnitude. For smaller firms that find themselves up against an opponent with bottomless pockets, it can be important to make sure their own clients truly understand the challenges involved. I am not trying to be defeatist, or suggest that a small firm or its clients can’t take down an industry behemoth, but only that such results are hard-earned, and perhaps not achievable in the majority of cases. So small-firm IP lawyers may need to exhibit some creativity in getting cases resolved, rather than trying to match their larger opponents in open combat. At the same time, I would put a focused small-firm trial team up against any of their Biglaw counterparts any day, with every expectation that they could achieve whatever results they want to achieve — especially if they have at least a puncher’s chance on the merits. For that reason, it is absolutely critical for small firms to only embark on worthwhile cases, especially when the firm is taking on some measure of risk as a result of their fee arrangement or other circumstances.
Another key lesson for smaller firms is to remember that while it is nice to represent prestigious clients that are household names, doing work for smaller companies, or even on behalf of lone inventors, can be just as rewarding. While the odds of success may be longer when representing smaller entities, part of the joy of practicing IP in a smaller firm is the opportunity to develop deep relationships with the principals of the client, which is not always possible when you are working with in-house counsel. The emotional investment can be greater as well, which can be both a blessing or a curse depending on the results you achieve. When compared to Apple/Samsung, where many well-qualified lawyers were charged with handling very discrete portions of the case, small-firm IP lawyers must embrace the challenge of doing it all on behalf of their clients, whether on their own or more likely as part of a small team. In this way, handling a “small” case can be just as intellectually stimulating as working on Apple/Samsung, particularly because each patent is unique and part of the excitement of patent litigation is becoming immersed in the technology of each case. That is as true for smartphones as it is for garden edging — both technologies I have litigated.
Ultimately, all IP lawyers hope to have a mix of cases that make sense for their firm financially while also providing some form of financial benefit. There is nothing more exciting for an IP lawyer than having a roster of clients that includes a true cross-section of the IP litigant spectrum, preferably where the cases themselves present interesting issues. As with any law practice, each kind of client a firm represents presents the opportunity for different types of satisfaction or challenge. Whether you are representing Apple or Johnny Appleseed, results matter most.
Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.
Earlier: Supreme Court Unanimously Bails Out Samsung
Beyond Biglaw: Defining A Litigation Victory
Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.
