How the Apple v. Samsung Case Impacts Small Business

Several cases before the Supreme Court, which began its new session October 3rd, may not seem entirely relevant to small business owners, but there is one you should pay attention to if you do design work, including online applications, processes, and websites. It is the legal battle that Samsung and Apple have been in over design patent infringement.

Boiled down, the question is simply, when something is produced that incorporates a copied design, how much of the profit from the sale of the product should go to the designer? The design community says all of it, but other interested parties say that a single design element is not solely responsible for the sale, and handing over ALL profits when an idea has been “borrowed” is excessive.

Intellectual Property for Colorado Entrepreneurs

What exactly is intellectual property?

Intellectual property (IP) refers to the ownership of an idea or design by the person who came up with it. It is a term used in property law. … Common types of intellectual property rights include copyrights, trademarks, patents, industrial design rights and trade secrets. ~Wikipedia

If you are a Colorado entrepreneur who holds copyrights, trademarks, or patents (or thinks perhaps you should), this battle over a design patent between two electronics behemoths may seem far away and unrelated to the work you do. But let’s step back and take a look at both possible outcomes and see how each could affect your work.

Protection for Small Business Owners?

Punishment is meant to act a deterrent to would-be thieves. The initial award Apple was set to receive for the design patent infringement by Samsung was sizable, but do such awards offer protection for small business owners? In the United States today, if someone profits from “borrowing” your ideas, the courts will generally interpret the law to say that you deserve all of the profit. This acts as a deterrent to intellectual property theft, as there is no point in making a sale if you cannot profit from it. But this deterrent is less effective for small business owners, who often cannot afford a legal battle to prove that their idea has been “borrowed.” It works better for businesses like Apple that might realizes awards in the hundreds of millions, even if they have to spend millions to prove the infringement. This is not to say that intellectual property law offers no protection for small business owners; without it, you have no legal recourse against the theft of your ideas, but the strength of that deterrent is probably greater for a mega-corporation.

The design side of this particular legal argument (Apple) wants to keep this deterrent in place, and several prominent design based businesses have stepped up in support of Apple’s argument. If you work in design, a win for Apple may be a win for you, but a win for Samsung might not necessarily be a loss. Here’s why:

Intellectual Property License

An August 2016 post by fashion reporter Marc Bain explains the concerns of the design community, should the Supreme Court see things from Samsung’s point of view:

In theory, designers could become something like involuntary licensees, where the copier could still turn a profit off an infringing product and just pay for the portion that it copied.

The question for small business owners with intellectual property that can be licensed, is, would that be a bad thing? It depends on whether or not the cost of obtaining an award for the portion of the profit to be awarded to the patent holder were more or less expensive than obtaining an award for all of the profit. On one hand, getting someone to decide on whether your idea contributed to 10% or 80% of the resulting profit could be time consuming and expensive, but, the company that “borrowed” your idea may not fight as hard if they can still realize a profit, and might settle more quickly if they do not have to give up 100% of their earnings. For some entrepreneurs, having their ideas licensed – involuntarily or not – could be a welcome means of profiting from the idea. Ideally, the copycat would just come to you first, and with the help of your intellectual property attorney, would negotiate a license with you, but when that doesn’t happen, being awarded a percentage of the profits from the use of your idea might not be all bad.

If you work online or in design, you can find out whether any of your ideas, practices, applications, or web sites can or should be protected by contacting me, Elizabeth Lewis, your Denver small business and intellectual property attorney, at the Law Office of E.C. Lewis, P.C. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com. I can provide you with an intellectual property assessment for your business, or help you set up a licensing agreement with someone who wants to use one of your ideas. I can also help you determine if your intellectual property rights have been infringed on.

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

• Commercial real estate purchases
• Legal review of commercial real estate leases
• Protecting your assets