Design patents have been a hot topic in the IP field because statutory law says that infringers must pay the total profits on an article of manufacture that infringes a protected design. The profit disgorgement and predictability of damage awards represent several reasons innovators protect their ornamental designs with design patents.

However in December 2016, when the U.S. Supreme Court held that an “article of manufacture” can refer to the finished product OR a component of the final product, it upset damage award certainty. Thus, when an infringing product has multiple parts, obtaining total profits from the products sold is no longer guaranteed. Consequently, many design patent owners now fear that damage awards will at best equal a portion of the available total profits.

In its decision, the Supreme Court did not establish a test to determine what the “article” is in a given scenario, thus further hindering predictability. On remand, the Federal Circuit next tasked the district courts to address and develop the appropriate rules.

Since then, several cases have broached the issue. In some, the judges have adopted a test that matches the solicitor general’s test as proposed by the U.S. Department of Justice in an amicus brief in Samsung v. Apple. That test considers four factors, including scope, design prominence, conceptual distinctness, and severability, e.g., the physical relationship between the patented design and the product.

At first glance, it seems that the solicitor general’s four-factor balancing test is gaining traction for design cases with multicomponent products. However in Nordock, Inc. v. Systems, Inc., the attorneys for Nordock questioned whether the test is appropriate for all products covered by design patents. Here, the U.S. District Court for the Eastern District of Wisconsin denied Nordock’s request to define the article of manufacture as Systems’ entire dock leveler.

The judge also denied Systems’ competing request to define the article as a plate that spans the gap between the building and a trailer. Systems also opposed Nordock’s request to order the Federal Circuit to clarify the appropriate factors for determining the article of manufacture since the court had already declined similar past requests.

In Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories — the first design patent case to decide damages since the Supreme Court decision — the trial judge adopted a test that matches
the solicitor general’s proposed test, resulting in a jury award of over $3 million for Columbia that reflected the total profit Seirus earned from the sale of the infringing products.

Here, we see that when the patented portion is integral to the article sold — liner fabric in a glove — juries will find it appropriate to award total profits. Seirus plans to appeal. Since Columbia, we also learned that Judge Koh of the Northern District of California has decided to apply the DOJ’s same four factors in the Apple v. Samsung case.

At present, thought leaders differ in opinion on the solicitor general’s proposed test. Some believe the test’s four factors detract from being perceived as a predictable measure for design patent damages, while
others see them as a determining factor on when and whether a patent owner is entitled to profits on the whole product or components of the products.

Even others say that the four-factor test is really just a dial that essentially dials down the available damages from previously available total profits. So for now, these and future cases — particularly the arguments offered by both sides — will help educate us on the intricacies surrounding current design patent damage awards, inevitably allowing us to better serve our clients’ design patent needs.

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[Babak Kusha is a partner in the Kilpatrick Townsend's Intellectual Property practice and is the Co-Chair of the firm's Mechanical and Medical Device Patent team.]