Takeaway: Pay attention to the first design patent lawsuit that the Supreme Court has agreed to review in a century that will address whether damages for a design patent should be applied based on an infringing design component or the whole product.
On March 21, 2016, the Supreme Court agreed to review the highly publicized Federal Circuit design patent decision regarding design patent infringement of Apple’s cell phone design by Samsung. Samsung Electronics Co., Ltd. v. Apple Inc., U.S., No. 15-777, cert. granted 3/21/2016.
The Supreme Court limited the review to the second question in the petition: “Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?”
The Federal Circuit explained that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” as prescribed in 35 U.S.C. § 289, which authorizes the award of total profit from the article of manufacture bearing the patented design.
Therefore, Judge Prost stated that the statutory language prevented them from agreeing with Samsung that there needed to be a showing of causation of profits linked to the infringing component. The Court held that Apple was “entitled to” the entire profits no matter how little the patented design features contributed to the value of Samsung’s phones.
Samsung’s petition for certiorari contended that the Federal Circuit should not allow the profit award to cover Samsung’s entire profits of nearly $400 million from the sale of smartphones that infringed the patented design.
Further, Samsung argued that the Federal Circuit misinterpreted 35 U.S.C. § 289 because the “article of manufacture” was never defined to be applied as the entire product or the portion of the product of the design patent. Samsung hopes that the Supreme Court will hold that the statute, as interpreted by the Federal Circuit, will allow design-patent holders to obtain damages far exceeding the value of the design patent and may be an open invitation to litigation abuse.
