On December 6, 2016, the Supreme Court ruled unanimously, in an opinion by Justice Sotomayor, that an award of total profits for infringing a design patent need not be calculated based only on the end product sold to an ordinary consumer. More particularly, in the case of a multicomponent product, the damages award may be calculated based on subcomponents of the end product. In Samsung v. Apple, the Supreme Court applied this rule to reverse Apple’s $400 million damages award against Samsung.

Apple sued Samsung in 2011, alleging that Samsung smartphones infringed Apple’s design patents that covered the appearance of the Apple iPhone – generally, the black rectangular case with rounded corners and the arrangement of icons on the screen. The jury found that Samsung infringed the design patents, and awarded $400 million to Apple, which amounted to the entire profit Samsung made from the sales of its infringing smartphones. On appeal to the Federal Circuit, Samsung argued that the damages should have been limited to the infringing screen or case, not the entire smartphone. The Federal Circuit rejected Samsung’s argument, reasoning that the Patent Act did not require limiting the damages award to infringing components of the smartphone, because the “innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.”