Posts Tagged: "Apple v. Samsung"

With over 205 billion in cash reserves at last count, Apple certainly doesn’t “need” the full nine-figure damage award. And, unless Congress steps in and amends the damage award statute, Apple will likely find itself defending its “total profits” for devices even where accused of infringing minor design features. Given the current statutory language the Supreme Court could very well agree with the Federal Circuit and find that it is bound by the clear statutory language. Clearly it is time for Congress to step in and amend Section 289, possibly to add apportionment.

Recent decisions from the U.S. Court of Appeals for the Federal Circuit regarding damages available in design patent cases highlight the court’s divergence from its damages jurisprudence in the utility patent context – specifically, the lack of an apportionment requirement between patented and unpatented portions of an infringing product. While this may make design patents increasingly desirable, the Supreme Court’s decision to review the issue now raises the possibility that the discrepancy will be resolved.

On Monday, March 21, 2016, the United States Supreme Court accepted certiorari in Samsung Electronics v. Apple, Inc., which relates to how much Samsung owes for infringing Apple design patents. The question accepted by the Supreme Court is: “Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?”

In late January, however, an inter partes review (IPR) request filed with the Patent Trial and Appeal Board (PTAB) throws the future of one of the Apple patents involved with this case into question. IPR2016-00500, filed by Intellectual Integrity, LLC, of Frisco, TX, challenges multiple claims in Apple’s U.S. Patent No. 7864163, titled Portable Electronic Device, Method, and Graphical User Interface for Displaying Structured Electronic Documents. This is one of only three utility patents owned by Apple brought up in its infringement lawsuits against Samsung. This also marks the first time that an IPR has been requested to review one of Apple’s many patents.

The victory, if it stands, will encourage more design patent infringement claims, and Apple will likely find itself defending against similar suits in the not so distant future. On December 14, Samsung filed a petition asking the Supreme Court to hear an appeal in the case. Given the economics of future litigation, Apple might quietly hope that the Court takes the opportunity to articulate the appropriate standard for awarding total profit damages for infringement.

Apple v. Samsung is not over. Samsung has stated it is going to file a petition for certiorari later this year with the Supreme Court. In its petition, Samsung is likely to challenge, among other things, the Federal Circuit’s analysis of the district court’s claim construction and what these design patents truly cover. Samsung likely will also challenge the award of hundreds of millions of dollars (the total profits Samsung received on the phones found to be infringing). If the Supreme Court takes the case the Court will be presented with novel and important legal questions that may affect the damages award, both the underlying finding of liability and the proper measure of damages. Additionally, the foundation of Apple’s damages award is crumbling at the Patent Office, with one of the key design patents being rejected on multiple grounds.

Earlier this month the Central Reexamination Unit of the United States Patent and Trademark Office (USPTO) issued a non-final rejection of an Apple design patent at the center of their never-ending patent battle with Samsung. The patent in question – U.S. Design Patent D618,677 – covers the appearance of the surface of an electronic device. One new problem Apple now faces with respect to the ‘677 design patent is that the patent examiner has determined that the priority claim made in the patent “must be canceled.”

Two independent errors warrant reversal, but to be fair, the district court did not have the benefit of the Supreme Court’s decision in Teva. Now, the Federal Circuit has the opportunity to address the interplay of Teva with claim construction in design patents. This is a much needed clarification.

First, look at the merits of the infringement claim. They may be stronger than you think, and you can thank a 2008 ruling for that. That year, the United States Court of Appeals for the Federal Circuit unanimously ruled en banc in Egyptian Goddess, Inc. v. Swisa, Inc. that a design patent is infringed if an ordinary observer would think that the accused design is substantially the same as the patented design when the two designs are compared in the context of the prior art. The court removed the “point of novelty” and “non-trivial advance” standards that previously seemed to constitute a second set of criteria to prove design patent infringement. That ruling has made life much easier for plaintiff attorneys and it helped Apple in its lawsuit against Samsung.

If the President disapproves of the ruling for policy reasons he has the authority to nullify the determination. The statute specifically explains that upon disapproval of the President an ITC determination “shall have no force or effect.” The problem that President Obama faces is very real and offers no easy way out. He will no doubt be pushed to used his authority under Section 1337(j) to disapprove of the ITC determination in order to assist Apple and AT&T, both important US companies. The trouble is that Apple is a non-practicing entity and could (and probably should) be properly characterized as a patent troll. So will President Obama use his authority under Section 1337 to help a patent troll?