Remand to District Court to Attempt to Identify “Article of Manufacture” for Design Patent Damages

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Addressing the design patent battle between Apple and Samsung on remand from the Supreme Court of the United States, the US Court of Appeals for the Federal Circuit declined to apply the new standard or to order specific action by the district court. Instead, in a non-precedential decision, it simply remanded the damages dispute to the district court for analysis. Apple Inc. v. Samsung Elecs. Co., et al., Case Nos. 14-1335, 15-1029 (Fed. Cir., Feb. 7, 2017) (per curiam) (non-precedential).

This case returned to the Federal Circuit after the Supreme Court held in favor of Samsung that the relevant “article of manufacture” for design patent damages can be a component of the product as sold (IP Update, Vol. 19, No. 12). By statute, design patent damages must be the “total profits” of the infringing article of manufacture, and the Federal Circuit had previously rejected Samsung’s argument that design patent damages must be apportioned to those profits causally attributable to the infringement (IP Update, Vol. 18, No. 6). Samsung dropped the later argument at the Supreme Court in favor of attack over what constitutes the article of manufacture. The Supreme Court set forth a two-part inquiry that involves first identifying the article to which the infringing design has been applied, then calculating the profit on that identified article. But the Supreme Court declined to identify the article upon which damages should be predicated in this case.

On remand, Apple attempted to preserve its favorable damages record by arguing that the Federal Circuit should be the court to identify the article of manufacture for a damages calculation. Samsung argued that the Federal Circuit should remand to the district court with express orders to conduct another damages trial based on the Supreme Court’s new standard. The Federal Circuit rejected both options and instead simply remanded the case with instructions that the district court should decide the issues in the first instance, which the Court said could include the opportunity to set forth a test for identifying the relevant article of manufacture for design patent damages or to conduct a new trial on damages with detailed jury instructions based on the Supreme Court ruling.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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