Thoughts On Samsung v. Apple, Part Two

On December 6, 2016, the Supreme Court ruled in favor of Samsung in its ongoing litigation with Apple over infringement of four design patents covering the iPhone.  A jury found in favor of Apple and awarded $ 399 million in damages for the infringement of the patents on the design for the iPhone by the Samsung Galaxy. Samsung appealed this judgment to the Federal Circuit on the grounds that damages should not be calculated on the value of the entire iPhone but should be limited to the features of the iPhone cover that was the subject of the design patents. The Federal Circuit upheld the verdict on the grounds that the cover was not sold separately from the iPhone. Therefore, the entire phone was the relevant article of manufacture for calculating damages.

The Supreme Court reversed the Federal Circuit, holding that for “a multi-component product, the relevant article of manufacture for arriving at … a damage award need not be the end product sold to the consumer, but may be only a component of that product.” The Court remanded the case to the Federal Circuit for review of the damage award under this new standard.

In a brief opinion, the Court rested its conclusion on the statutory language. The Patent Act uses the terms article of manufacture to include both an end product and components of the product. Grants of design patents have been limited to components of an end product. The Federal Circuit erred in limiting the phrase “article of manufacture” to the end product and not recognizing that the design patent may apply only to a component. Upon remand, the Federal Circuit now has to determine what components of the end product are the article of manufacture.

While the Supreme Court resolves the narrow question of whether design patent damages can be limited to a component of an end product, the Court’s ruling leaves open how to determine what components a design patent covers and how to value them. Since the parties did not adequately brief that question, the Court states, that threshold question of identifying the relevant components is left for a future case. In the Samsung litigation, the Federal Circuit, and very likely the district court, will have to confront the question of identifying what components are the article of manufacture for calculating damages.

The Samsung decision is a landmark decision in design patent law, not only because of the prominence of the dispute between two smart phone giants, but also because of the Court’s addressing a basic question of design patent damages. The last time the Court considered a design patent case was in 1886 in Dobson v Dornan, a case involving infringement of a protected pattern on a rug. One hundred thirty years later, with its Samsung decision, the Court brings design patent law into the new age of complex electronic and information technology. We may not have to wait over a century for the Court’s next pronouncement on the state of design patent law.