January Federal Circuit Review
In Samsung v. Apple, the Supreme Court held that with respect to the statute permitting a design patent plaintiff to recover a defendant’s total profits of an infringing article of manufacture, the term “article of manufacture” may refer to a component within a multicomponent product, such as a smartphone.
Apple sued Samsung in 2011 for infringement of three related design patents directed to ornamental aspects of Apple’s iPhone product, including its rounded, rectangular face and grid of icons. The district court found Samsung liable for infringement of Apple’s design patents, calculated the damages to be Samsung’s total profits earned in connection with the infringing smartphone and tablet products. Samsung appealed to first to the Federal Circuit, and then to the Supreme Court.
Before the Supreme Court, Samsung argued that the phrase “article of manufacture” should have the same meaning as the term “article” used elsewhere in the Patent Act. Designs applied to “articles” may be eligible for design patent protection, and courts have long permitted the issuance of design patents covering particular components of a multi component product (such as a smartphone screen). If a design patent is directed to the design of only one component of a product, a plaintiff should only be able to recover the percentage of profits attributable to that infringing component, and not the total profits generated by the entire product.
Apple countered that section 289 of the Patent Act, regarding design patent damages, was enacted by Congress in 1887 to override the common law rule that design patent damages were only available on the portion of the defendant’s profits that the plaintiff could prove were attributable to the use of the infringing design. Thus, the legislative history of the Act taught that damages should not be apportioned to one component of a multi-component product.
The Supreme Court agreed with Samsung and found that the term “article of manufacture” could apply either to a product sold to a consumer, or a component of that product, whether sold separately or not. The Court demurred on appropriate test for determining whether a component may be separately identified as an “article” for the purposes of damages, and remanded consideration of that question to the Federal Circuit.
Key Takeaways:
Where a design patent covers only one component of a multi-component product, an accused infringer may be liable only for the portion its total profits attributable to that component. The Supreme Court has left it to the Federal Circuit to determine the appropriate test for identifying the relevant “article of manufacture” forming the basis for design patent damages.
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