2014 <Special News Flash>｜News Letter

IPHC Grants Samsung only ¥9,950,000 in Damages Suit against AppleAccording to a Japanese reputed leading business newspaper, Nikkei, the Grand Panel* of the Japanese Intellectual Property High Court (Chief Judge, Toshiaki Iimura) decided on May 16 on an appealed damages suit between Korea's Samsung Electronics and Apple Inc.'s Japanese subsidiary, Apple Japan that “damages claimed by Samsung shall not be granted for a sum exceeding an amount equivalent to a license fee.”

Regarding the infringement and the damages, the IPHC decided that Apple's smartphone “iPhone 4” and others infringed Samsung's patent rights relating to smartphones and others, and reversed the decision of the Tokyo district Court, the court of first instance, which had denied all damages claims filed by Samsung Electronics, and granted Samsung Electronics ¥9,950,000, which corresponded to $97,550, in damages as an amount equivalent to a license fee. However, the IPHC denied Samsung's claims exceeding that amount. Specifically, the IPHC calculated the damages in accordance with the following formula:

“The equivalent of license fee (Damages)” = [Sales amount] x [Rate of contribution of communication standard] x [5%] / [Number of essential patents for communication standard]

Regarding the injunction, the IPHC upheld the Tokyo District Court decision which dismissed Samsung Electronics' demand for an injunction to suspend the sales of Apple's products on the grounds that Samsung Electronics' demand constituted an abuse of rights.

As described in our K&P's IPHC Report in December, 2013, the IPHC had decided earlier to seek information and comments from the public, which is similar to an “amicus curiae brief” in the U.S. courts, regarding a so-called FRAND declaration** in this case for the first time in its history. A total of 58 opinions were provided from domestic and foreign individuals and corporations. The IPHC mentioned in its decision that they were “valuable and helpful information”.

* Grand Panel: Grand Panel is convened to hear cases where it is necessary to virtually unify court decisions, or cases involving important issues, which is somewhat similar to en banc in CAFC of the U.S.A. Since the founding of the IPHC in 2005, 9 cases including the above case have been heard.

** FRAND declaration: FRAND stands for fair, reasonable and non-discriminatory terms and conditions. FRAND declaration is a declaration by the owner of a patent to agree to grant a license on “fair, reasonable, and non-discriminatory conditions” to another entity regarding a standard patent widely used in an entire field of a business. When an exorbitant license fee is imposed for a patent, dissemination of the technology per se is likely to be hindered.
Therefore, the declaration is established as an international rule to balance the benefit of the owner of the patent with the convenience of the licensee.