Samsung v Apple - US design patents
03 February 2017
The US Supreme Court rarely considers the law relating to US registered designs (or 'design patents' in US terminology), but it has recently done so, and on 06 December 2016 it issued a decision which restores an element of common sense to how to decide the quantum of damages to be awarded when a US design patent has been infringed.
Under US design law, it is an infringement to manufacture or sell an "article of manufacture" to which the design of a US design patent (or a colourable imitation thereof) has been applied, and the infringer is liable to pay the owner of the design patent damages "to the extent of his total profit".
Apple successfully sued Samsung for infringement of various design patents relating to components of the overall design of a smartphone (specifically designs relating to the front face being rectangular with rounded edges, and relating to a grid of colourful icons on a black screen), and at the initial trial Apple was awarded damages of $399 million.
On appeal to the Federal Circuit, Samsung argued that the damages should be limited because the relevant articles of manufacture were the front face or the screen, rather than the entire smartphone. The Federal Circuit rejected Samsung's appeal after holding that the components of Samsung's smartphone were not sold separately to ordinary consumers and thus the components were not distinct "articles of manufacture".
On further appeal to the Supreme Court, Samsung finally had some success, as the Supreme Court held that, in the case of a multi-component product (like a smartphone), the relevant "article of manufacture" under US design law for the purposes of assessing the amount of damages to be awarded need not be the end product sold to the consumer but may be only a component of that product.
The Supreme Court arrived at this decision after concluding that, where the statutory text refers to an "article of manufacture", it simply means a thing made by hand or machine, which encompasses both a product sold to a consumer and a component of that product. Specifically, Justice Sotomayor (delivering the opinion of the Supreme Court) stated that: "A component of a product, no less than the product itself, is a thing made by hand or machine. That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture."
The Supreme Court noted that this broad interpretation is consistent with the fact that applications for design patents are allowed to be filed by the US Patent and Trademark Office directed to just a component of a product. (This is usually done by showing the claimed component or part in solid lines, and disclaiming the rest of the product by showing it in dashed or broken lines.)
The Supreme Court concluded that, because the term "article of manufacture" can mean the end product sold to a consumer or a component of that product, the Federal Circuit's narrow interpretation had been incorrect, and thus Samsung's appeal should be allowed.
However, the Supreme Court felt that the parties had not adequately addressed the question as to whether the relevant article of manufacture (for each of the US design patents at issue) is or is not the overall smartphone, or is instead just a particular smartphone component.
Specifically, the court said that to resolve this matter:
would require us to set out a test for identifying the relevant article of manufacture at the first step of the [...] damages inquiry and to parse the record to apply that test in this case. The United States as amicus curiae suggested a test [...], but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the [...] damages inquiry in the absence of adequate briefing by the parties. Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand.
The Supreme Court thus remanded the case back down to the Federal Circuit for that court to hear submissions and to decide the matter whilst taking into account the overall principles laid down by the Supreme Court.
Opinion of the Supreme Court of the United States, Samsung Electronics Co., Ltd et al. v. Apple Inc (PDF), decided 06 December 2016: http://dycip.com/samsungvappleoct16