“A Blunted Sword: Supreme Court Reverses $400M Award in Samsung Electronics v. Apple”

December 7, 2016
Marshall Gerstein Alert

One weapon that design patent owners wield against competitors was weakened on December 6, 2016, by the decision in Samsung Electronics v. Apple, in which the Supreme Court reversed a judgment that Samsung Electronics pay Apple nearly $400 million in damages for design patent infringement. Samsung had been ordered to pay that amount as a measure of all its profits on early smartphones that used certain patented ornamental features of the original Apple iPhone. There was no dispute that other features of the products, including software features of those products, contributed to consumers’ purchasing decisions, but U.S. design patent law does not require the same apportionment of damages that is used when assessing damages in a utility patent case. 

The U.S. has offered protection for ornamental designs that appear on only a part of an overall product or article.  Liability for copying such a design feature cannot be avoided by changing other parts of the article, as may be the case in some countries. Consequently, a lamp maker that develops an ornamental design that it uses on the base of its lamps may be able to stop competitors from using that same base on lamps sold in the U.S., even if the competitor changes other parts of the lamp.    

The U.S. statute says that the owner of an infringed design patent can recover, as damages, the defendant’s “total profit” from sale (or exposure) of the infringing “article.” In awarding nearly $400 million in damages, the U.S. Court of Appeals for the Federal Circuit had presumed that the “article” at issue was the entire smartphone and concluded that the statute precluded apportionment of Samsung’s Electronics’ profit on those phones to other factors.   

In the December 6th decision, the Supreme Court held that a different type of apportionment is possible in design cases, ruling that the portions of the smartphone that bear the claimed design can be construed as a separate “article” for damages purposes. The case will now be returned to the Federal Circuit for further consideration. The Court provided no guidance on how the Federal Circuit should decide whether particular elements of an overall article should be considered a separate article for purposes of design patent damages, and, if so, where the boundaries of that article should be drawn.  

For more information, please contact Richard LaBarge or another attorney at Marshall Gerstein.

The information contained in this alert is for informational purposes only and is not legal advice or a substitute for obtaining legal advice. Under applicable rules of professional conduct, this communication may constitute Attorney Advertising. © 2016 MARSHALL, GERSTEIN & BORUN LLP, Chicago, Illinois. All rights reserved.