The Federal Circuit Validates Strong Design Patent Protection

McNees Wallace & Nurick LLC

On May 18, 2015, a panel of the Federal Circuit Court of Appeals issued a ruling strengthening broad design patent protection in the long-running legal battle between Apple and Samsung over their competing smartphones, resulting in an award of hundreds of millions of dollars for Apple.

The design patents at issue relate to the designs of Apple’s iPhone front face, iPhone bezel, and iPhone graphical user interface. Samsung attacked the jury’s verdict in favor of Apple, arguing that the similarities between Apple’s and Samsung’s products were limited to functional elements of the design patents, that there was no evidence of actual deception of consumers, and that the Samsung products and Apple’s design patents were distinct from one another when considered in light of the prior art. Samsung also argued that the price of the entire phone should not be considered in calculating damages, but rather an apportionment based on the value attributable to the designs in comparison to the remainder of the product.

Design patents only protect ornamental, not functional, aspects of a design. Samsung advocated an invasive analysis that literally cuts apart a design, excising all functional portions. The Federal Circuit rejected this notion unambiguously, stating that there is no need to eliminate elements from the scope of a valid patent in analyzing infringement; rather a jury instruction that non-functional design aspects are the pertinent aspects for determining infringement is sufficient. This result is critical to the strength of many design patents that cover ornamental designs, but also, as a necessity, include some functional features. Such mixed ornamental/functional design patents are strengthened because courts will not now disassemble such designs to the point where the designs themselves might become unrecognizable.

The Federal Circuit also dealt with a long-running debate regarding whether evidence of actual deception of consumers is necessary to find infringement, which stems from an 1872 Supreme Court decision, Gorham Co. v. White. This case established the standard for infringement of a design patent as to whether an ordinary observer would have been deceived (“giving such attention as a purchaser usually gives”). The Federal Circuit has now clarified that this standard is a hypothetical question and that no actual deception of an ordinary observer is required. The Federal Circuit also held that instructing the jury to consider the prior art in making their infringement determination was sufficient to satisfy a requirement the jury consider whether the Samsung products and Apple design patents were distinct in light of that prior art.

Design patents have a unique option for damages over utility patents that awards the patent holder the entire profit from the infringing products. Samsung argued that awarding all of the profits for a phone infringing only the ornamental design is unfair and that the damages should be limited to the portion of the profit attributable to the infringed design. The Federal Circuit flatly rejected this argument, holding that the statute for design patent damages explicitly authorizes the award of total profits from the article of manufacture bearing the patented design and that the article of manufacture is the entire article, not some portion. The Federal Circuit noted that any disagreements with the policy behind the damages provision must be raised with Congress, not the courts.

It was not a complete victory for Apple, as the Federal Circuit overturned a portion of Apple’s victory stemming from separate trade dress dilution claims, as Apple’s trade dress was found to be impermissibly functional.  This part of the decision further emphasizes the importance of maintaining robust design patent protection for the ornamental aspects of a product.

This important decision confirms that design patents need not be dissected until unrecognizable because some functionality is encompassed by the ornamental design, that there is no need for evidence of actual deception of consumers to prove infringement, and that infringement of a design patent can result in a damages award of the total profits for the infringing articles, not merely some portion. Together these clarifications significantly strengthen design patents and give design patent holders more leverage over infringers in settlement negotiations. Given the relative ease and speed with which a design patent may be secured and the low cost to obtain one in comparison to utility patents, along with the decreased strength of trade dress claims where functionality may be present, design patents are a valuable and powerful tool in protecting product design.

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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McNees Wallace & Nurick LLC

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