Apple v. Samsung: Design Patents Reap Profits

by Foley & Lardner LLP
Contact

Design patents are an often-overlooked form of intellectual property, lying somewhere at the crossroads of trademark law, utility patent law, and copyright law. After the Federal Circuit's May 18, 2015 decision in Apple v. Samsung, however, something should be very clear: design patents can be an effective competitive tool, and can pay dividends if infringing activity arises.

The appeal concerned Apple's now-famous billion-dollar verdict against Samsung on claims that Samsung infringed Apple's trade dress and patent rights in the iPhone. The Federal Circuit struck down the portion of the verdict that was premised on trade dress rights, finding that Apple's iPhone design was too functional to be deserving of trade dress protection. In essence, the Federal Circuit found that the shape of a rectangular casing with rounded corners was dictated by utilitarian concerns, and it would be inappropriate to allow Apple to have an indefinite monopoly on those features under trade dress law. The court reached a similar conclusion with respect to the iPhone's digital icons.

In sharp contrast, however, the Federal Circuit affirmed the portion of the verdict that was premised on infringement of Apple's design patents, despite the fact that the design patents claimed rights in essentially the same features that Apple had alleged were covered by its trade dress. The Federal Circuit justified the disparate outcomes on the grounds that design patent rights expire after a number of years, reducing the concern of granting their owner an unfair perpetual monopoly on useful utilitarian features.

The Federal Circuit also addressed the proper measure of damages in design patent cases. To provide some context to this, it is helpful to understand the origin of design patent damages law (codified at 35 U.S.C. § 289). In the late 1800s, the U.S. Supreme Court heard a series of cases concerning design patents for ornamental patterns on carpets. Unable to conclude that the sales of the infringing carpets were due to customers preferring the designs (as opposed to simply wanting to purchase a carpet for its utility), the Supreme Court awarded only nominal damages to the plaintiff. Congress reacted to this in the drafting of the 1887 Patent Act by allowing design patent owners to recover all profits from infringing sales. There has been significant debate over the years about whether the statute allows any apportionment of profits to reflect only those profits proven to result from customers buying the item because they preferred its ornamental design (rather than just being concerned with its utility). Samsung brought this issue to a head in its appeal, and the Federal Circuit has now provided an answer: infringers must disgorge all profits on sales of the accused product, regardless of whether the ornamental design caused the sales or not. This is now the law absent a future judicial reversal or a rewriting of the statute by Congress.

In the wake of the Apple v. Samsung decision, design patents will likely garner more attention from companies who make products with ornamental aspects. Given that design patents are typically relatively inexpensive to secure and maintain, it is only prudent for product designers to consider all options for procuring design patent protection. For those launching new products with ornamental designs, it will also be more important than ever to consider third-party design patent rights in product clearance efforts.

 

Written by:

Foley & Lardner LLP
Contact
more
less

Foley & Lardner LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.