FOUR HUNDRED MILLION DOLLARS…Or maybe the three pictures on this page are worth that much?
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In August of 2012 a jury awarded Apple over $1 billion in patent infringement damages against Samsung in one of the legion lawsuits in the ongoing smart phone war between these two competitors. On May, 18, 2015, the Federal Circuit, the appeals court that reviews determinations of the federal district courts in patent cases, upheld the award of nearly $400,000,000 by a California jury against Samsung for infringement of Apple’s three pictured design patents. A design patent can be awarded by the United States Patent and Trademark Office for “any new, original and ornamental design for an article of manufacture.”
Design Patents at the Supreme
The method of calculating damages for infringement of a design patent is found in Chapter 35 of the United States Code at Section 289:
Whoever during the term of a patent for a design, without license of the owner…applies the patented design…to any article of manufacture…shall be liable to the owner to the extent of his total profit, but not less than $250…. 1
Samsung, in an effort to take the Federal Circuit’s decision up to the Supreme Court, had described the matter in its Petition for a writ of certiorari as follows:
[T]he Federal Circuit allowed the jury to award Samsung’s entire profits from the sale of smart phones found to contain the patented designs–here totaling $399 million. It held that Apple was ‘entitled to’ those entire profits no matter how little the patented design features contributed to the value of Samsung’s phones. In other words even if the patented features contributed 1% of the value of Samsung’s phones, Apple gets 100% of Samsung’s profits.
The Supreme Court has granted certiorari and will hear argument on the question brought by Samsung: “Where a design patent is applied only to the component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?”
Considering that the Supreme Court rarely takes a design patent case; given the importance of the precedent that will be decided going forward for design patent holders; and taking into account the ubiquitous use and interest in smart phones, the outcome of this case is highly anticipated. The results of this case and our analysis will be available here as soon the opinion is issued.
Gregory J. Winsky is of counsel at Archer & Greiner, P.C. He specializes in the practice of corporate law with an emphasis on intellectual property (i.e., patents, copyrights, trademarks and trade secrets) and technology-related matters. As General Counsel and Executive Vice President, Business Development, of Franklin Electronic Publishers Inc., Greg served in many roles for a multinational consumer electronics company based in New Jersey, including heading up business development and directing research and development (R&D) in creating one of the world’s first handheld e-book readers. Greg focuses his practice today in a number of intellectual property areas, mainly the negotiation of patent, trademark and copyright licenses and of business transactions involving intellectual property. Greg’s own inventions have been awarded four United States patents and are covered by a number of pending domestic and foreign patent applications.