Supreme Court Changes Standard for Determining Damages for Design Patent Infringement

by Burr & Forman
Contact

Burr & Forman

Samsung Electronics Co., Ltd. v. Apple Inc. (No. 15-777)

In the closely-watched Samsung v. Apple case, the Supreme Court today issued a landmark ruling that changed the long-standing rule for calculating damages for infringement of a design patent.  Section 289 of the Patent statute states that an infringer who sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.”  35 U.S.C. § 289.  Apple’s design patents covered smartphones having a black rectangular front face with rounded edges and a raised rim, as well as a grid of 16 colorful icons on a black screen.  (Slip Op. at 3.)  Apple sued Samsung in 2011 alleging that various Samsung phones infringed Apple’s design patents.  Samsung was found to infringe, and the district court awarded Apple Samsung’s total profits from the sales of its infringing smartphones, which amounted to $399 million.  The Court of Appeals for the Federal Circuit affirmed the award, finding that entire smartphone is the only possible “article of manufacture” for purposes of calculating damages under §289 because consumers could not separately purchase the components of the smartphones covered by Apple’s design patents.

In a unanimous decision, the Supreme Court has reversed, finding that the “article of manufacture” recited in §289 can be a component of an end product sold to the consumer, and is not required to be the end product itself.  The Court reasoned that the term “article of manufacture” has a very broad meaning, and is simply “a thing made by hand or machine.”  (Slip Op. at 6.)  This broad definition of an “article of manufacture” encompasses both a product sold to a consumer as well as a component of that product.  (Id.)  The Court noted that the broad definition is consistent with §§ 101 and 171 of the Patent statute, which permit patents to be granted on individual components of a multicomponent product.  (Id. at 6-7.)  The Court therefore reversed the Federal Circuit’s decision that the “article of manufacture” under §289 must be the end product that is sold to the consumer (e.g., the infringing Samsung phones).  However, the Court expressly declined to articulate a standard for determining the relevant “article of manufacture” for purposes of §289, remanding that issue to the Federal Circuit.  (Id. at 8.)

The Court’s decision marks a significant shift from previous design patent damages jurisprudence, which has long awarded damages based on profits from sales of the end product.  The new standard will likely severely limit damages for design patent infringement, though the extent of the limit will likely depend on how lower courts determine what constitutes the relevant “article of manufacture” under §289.  The Court’s ruling also leaves open the question of how to calculate the “total profits” on a component of a multi-component product.  Thus, the Court’s ruling may be just the beginning –not the end– of the design patent damages issue.

[View source.]

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.

© Burr & Forman | Attorney Advertising

Written by:

Burr & Forman
Contact
more
less

Burr & Forman 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.