Posts Tagged: "article of manufacture"

Is the scope of a design patent determined by the figures alone? Two recent Federal Circuit decisions highlight that the words describing the article of manufacture in the title and claims can indeed limit the scope and enforceability of a design patent. In particular, the title and claims of the design patent contain important information that provide a more accurate and predictable notice of what is and is not protected by the design patent. Thus, the title and the claims of a design patent are particularly relevant to the scope of the patent—both for procurement and enforcement.

Ultimately, the jury’s large damage award might not be the lasting storyline of this case. Apple’s “victory” here shows that well-crafted design patents can offer broad protections against even slight infringements by competitors, and that a well-written design patent and a well-argued case can provide tremendous benefits to the patent owners. Given the relatively inexpensive design patent process and what will only be continued speculation as to how these damages should be calculated, a design patent remains a great defense in the face of even limited infringement by market competitors.

On Wednesday, June 27th, a pair of orders of dismissal, one entered in the District of Delaware and the other entered in the Northern District of California, marked the official end of the patent war which played out between consumer tech giants Apple and Samsung for the better part of the past decade. This legal dispute, which was brought to courts in 10 different countries and even went to the U.S. Supreme Court, is notable because it undermines the argument that major patent infringement battles harm tech consumers through added costs and blocking innovation.

On May 14th the next chapter in the Samsung v. Apple smartphone design patent dispute will commence in the United States District Court for the Northern District of California with a retrial to determine a new award in the case. The most notable moment in this long winding history was the unanimous Supreme Court decision where the Supreme Court sided with Samsung in its appeal in late 2016. But while the Supreme Court’s ruling should have modernized our antiquated law governing design patents to fit into the modern 21st century world, that important outcome is still in doubt pending the retrial. A key question remains – namely, how to determine the “article of manufacture” and appropriate remedy for infringement of multifaceted products. And could this open up potential grounds of consideration for utility patent interpretation?

The first design patent case to go to trial since Apple v. Samsung has given design patent owners hope that a ‘total profit’ award is still achievable… Patent owners are keeping a close eye on how juries respond to the new legal framework, and will be carefully attuned to appeals from these cases as the Federal Circuit addresses the standards that apply to design patent damages cases going forward. If patent owners continue to get total profits for design patent infringement, even after Samsung v. Apple, companies are likely to increase their efforts in obtaining design patents, particularly given the current climate facing utility patents.

In the calculation of design patent infringer profits, two key issues are the definition of the article of manufacture and the methodology for calculating total infringer profits… Depending upon the case, infringer profits may be based on the entire accused product or may be limited to a component of the accused product, but there is no test or guidance at this point for how to determine if the entire product is the article of manufacture or if only a component or certain components comprise the article of manufacture. Therefore, it may be prudent, depending upon the case, to calculate infringer profits based on one or more alternative assumptions as to what the article of manufacture is comprised of in the specific situation. In some cases, the design patent will cover most or all of the product in question but in other cases such as in the Apple case, it will cover only a minor portion of the product.

For patent holders in design patent infringement cases, having multiple component design patents for any given product will help maximize the potential damage award. A multiple design patent strategy is now more important than ever. Given the ease with which design patents are obtained and the relative inexpensive cost associated with obtaining a design patent (at least when compared to the cost of obtaining a utility patent) innovators who must rely on design patent protection will almost certainly need to more strategically acquire design patents as part of a truly robust design patent portfolio building strategy.

The relatively short opinion by Supreme Court standards – just over eight pages – puts it simply: “The text resolves this case. The term ‘article of manufacture,’ as used in §289, encompasses both a product sold to a consumer and a component of that product.”

On Tuesday, December 6, 2016, the U.S. Supreme Court issued a decision in Samsung Electronics Co. v. Apple which found by a unanimous 8-0 vote that a damages award for design patent infringement may be limited to revenues attributable to a component of an article of manufacture and not the entire article itself. Tuesday’s SCOTUS decision overturns a judgment reached in May 2015 at the U.S. Court of Appeals for the Federal Circuit, which would have awarded nearly $400 million in damages to Apple Inc. (NASDAQ:AAPL) for the infringement of three design patents by mobile devices marketed by Samsung Electronics (KRX:005930).

The Supreme Court need not wait for Congress to act. This is a case of first impression in interpreting the provision. Guided by its own law on design patent infringement and legislative history, the Court can reach the common sense result provided by the provision’s wording. Design owners should be made whole, but not unjustly enriched. Awarding the infringer’s total profits regardless of the contribution of the design to the end product’s value subverts patent law’s mandate to promote technological progress.