The “Smart Phone” Wars – Episode VII: Will the Force of the Supreme Court Awaken?

by Dorsey & Whitney LLP
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Design patents protect the ornamental features of utilitarian objects, that is, the uniqueness of aesthetic features, form, or configuration of products.  Design patents can be a significant weapon in the intellectual property protection arsenal, especially for companies that manufacture consumer goods.  Take the case of Apple and Samsung.  A portion of the ongoing, multinational patent litigation between these two technology giants concerns whether certain early models of Samsung’s Galaxy smartphones and tablets infringe Apple design patents acquired by Apple to protect the ornamental design of the first iPhone.  After multiple trials and appeals, Apple has thus far prevailed in its assertion of the design patents, which account for almost $400 million in damages awarded to Apple by U.S. courts.

An interesting aspect to damage awards for infringement of design patents is that all of the profits from the sale of an infringing article are included in the damages remedy.  See 35 U.S.C. § 289.  This is in contrast to the general rule for damages with respect to utility patents, which employs an “apportionment” principle.  Under this principle, damages are only available for the value of the contribution of the feature claimed in the patent with respect to the profit on the entire device.  Thus, depending upon the product, a judgment of infringement on a design patent could result in a much larger reward to the patent holder than a judgment of infringement on a utility patent, making a design patent as valuable as the bounty on Han Solo’s head.

Samsung has recently appealed the lower court rulings related to the design patent infringement on two grounds.  First, Samsung’s Petition to the U.S. Supreme Court argues that the design statute limits protection to only “ornamental” designs.  Therefore, any “non-ornamental” features of the article cannot be within the scope of protection, or so the argument goes.  Samsung interestingly invokes recent Supreme Court pronouncements regarding the scope of patentable subject matter from the utility patent context.  Citing Bilski, Samsung asserts that no patent–utility or design–can claim a “concept” (i.e., an abstract idea), including shapes or colors, or “functional” features.  Samsung argues that any such concept and any element that has functionality should be removed from the analysis of whether there is infringement and only the purely ornamental features should be considered.  This is couched in the context of claim construction and Samsung faults the trial court for not construing the claims to “exclude” such features from consideration as part of the claimed design.

This argument follows a line of more recent Federal Circuit cases in which that court convolutes the design infringement analysis to factor out visual features, elements, or portions of a design that are considered “functional” when determining the scope of the claim.  The new twist presented by Samsung is the invocation of Bilski and the implicit reference to recent related Supreme Court cases regarding subject matter patentability.  But ultimately, such an analysis may create a great disturbance in the force.  All designs are based upon the application of shapes, e.g., patterns, surface features, and contours.  Further, color is regular element of design patent claims (and if the patented design includes a color, the lack of such color in an accused article would be a factor in favor of non-infringement).  Additionally, almost every article of manufacture will be a functional device.  If all of the “functional” features are removed from consideration, then often there would be no article embodying the design left to claim.  Interestingly, the Federal Circuit backed away from such a strict “factoring” analysis in its decision in favor of Apple.  In this respect it may be worthwhile for the Supreme Court to step in to clarify that an analysis that “factors out” elements of the design is improper and that it is the ornamental design in the context of the article as a whole that should be considered.  It appears that Samsung is attempting a Jedi mind trick by repackaging the Supreme Court’s recent patentable subject matter jurisprudence in the context of claim construction for design patents, which is an entirely different legal question.

Apple U.S. Design Patent No. D618,677

Apple U.S. Design Patent No. D618,677

Second, Samsung’s petition also argues that the damage award is improper because the damages remedy under the design section of the patent statue leads to absurd results, i.e., that the damage recovery is potentially much greater for design infringement than for infringement of an aspect of the underlying technology in question.  This follows the logic of Samsung’s first argument, i.e., that the scope of the claim should be limited to only those ornamental elements that are neither “conceptual” nor “functional.”  While this assertion may seem plausible in the case of a high-tech device such as a smartphone, such cannot be said about many other articles of manufacture which may have utility, but the value to the consumer is primarily in the design aspects, for example, a lamp shade.  Samsung’s view may not be a winner, however, as it appears to go against the plain meaning of the statute.  This tack was also previously refuted by the Federal Circuit, which seems to be on firm footing in this instance in view of the statutory history as noted by other authors.  See, Eric B. Bensen, “Apportionment of Lost Profits in Contemporary Patent Damages Cases,” 10 Va. J.L. & Tech. 8 ¶ 55 n.206 (citing Nike Inc. v. Wal-Mart Stores Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998).

In its brief, Samsung notes that the Supreme Court has not taken up a design patent case in over 120 years.  Whether this significant passage of time will be sufficient to awaken the Supreme Court from its carbonite deep-freeze in the area of design patents remains to be seen.

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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