Samsung v. Apple: Functional Design Patents and Profit Disgorgement

by Dennis Crouch

Six amici briefs have now been filed in support of Samsung’s petition for writ of certiorari in its design patent defense against Apple.  

Law Professor Brief: [SamsungLemley] In a petition primarily drafted by Professors Mark Lemley and Mark McKenna, and filed by Lemley, a group of 37 law professors strongly support Samsung’s position that design patent rights should be severely limited. The brief first looks at design patent scope and argues that design patent rights should only be permitted to cover non-functional and ornamental aspects of a product.  “Crucially, design patents protect only ornamentation. They may not cover the functional aspects of a product.”  As I and others have written, the functionality limitation in design patents is much weaker than that of trademark and copyright law.  The brief argues, however, that those regimes should be squared so that utility patent remain the sole domain of for the protection of functional design elements.  “Giving a design patent owner control over utilitarian features undermines the policy goals of the [trademark] functionality doctrine.”

Regarding damages, the brief argues that entire-profit-disgorgement for design patent infringement “makes no sense in the modern world”,  leads to “absurd results”, is “draconian”, and is not required by the statute.   Remember, the idea here is that Apple is collecting all of Samsung’s profits on its infringing Galaxy phones even though only some of the components of the devices infringe.

Public Knowledge and the Electronic Frontier Foundation: [SamsungPKEFF] PK and the EFF argue that we are likely to move into a world of design-patent-trolls filled with “abusive [design] patent litigation.”  PK also suggest a constitutional crisis – that these high damage awards for design patent infringement may violate the Fifth and Fourteenth Amendments (due process).   For part of their argument, the groups quote my 2010 design patent article where I wrote that  “design patent prosecution is a relatively quick, inexpensive, and assured process without substantive examination as compared with either utility patent prosecution or trade
dress registration.”  From my analysis, they reached the conclusion that “the low-quality patent concerns common with abusive utility patent litigation are even more so present with design patents.”

CCIA: [SamsungCCIA]  Although less-so than PK and EFF, the CCIA is fairly consistent in arguing for narrower patent rights.  Here, the organization makes the argument that entire-profit-disgorgement raises constitutional questions by going beyond the “exclusive Right to their respective … Discoveries.”

Systems, Inc: [SamsungSystems] Longtime patent litigator Philip Mann filed a brief on behalf of Systems who is litigating design patent damages issues.  The brief outlines several examples of how the profit disgorgement rule is having a “very real and accelerating” negative impact on  the business community. The brief cites its own case of Nordock v. Systems as well as Pacific Coast Marine Windshields v. Malibu Boats and Microsoft v. Corel.

Tech Companies: [SamsungTech] A group of oft-patent-defendants, including eBay, Dell, Facebook, Google, HP, and NewEgg joined together in a brief arguing for a narrowed interpretation of ‘article of manufacture’ from Section 289 rather than focusing on the entire retail product.

Marginalized Americans: [SamsungHLF] A set of groups that self-identify as “communities that are marginalized in American society” have filed a brief arguing that these strong design patent rights threaten to raise retail prices and limit access to affordable new technology, including smartphones and internet access.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

57 thoughts on “Samsung v. Apple: Functional Design Patents and Profit Disgorgement

  1. No comments on this aspect?

    –Regarding damages, the brief argues that entire-profit-disgorgement for design patent infringement “makes no sense in the modern world”, leads to “absurd results”, is “draconian”, and is not required by the statute.

    In particular, the “not required by the statute bit.” Fed. Cir. has consistently held that disgorgement is required alternative to the $250 thing. I didn’t read Lemly’s brief, but having a look at the language of the statute does not make disgorgement so clear. “To the extent” could be a ceiling. Such an interpretation makes some sense because $250 is clearly a floor.

    I’m guessing that $250 has been interpreted to be per article? That’s not even clear from the statute.

    It’s a strange statute – what’s the purpose of this bit: “recoverable in any United States district court having jurisdiction of the parties.” Superfluous?

  2. At 5.1.2 MM writes:

    “When the design “patent” system — a different animal from the utility patent system in both a practical and fundamental sense — starts being used to protect new technology, i.e., the new “non-obvious” utilitarian shapes of features, it’s a good time to stop and ask “Why are we doing this?”

    I quote it because of the “ie” in the middle of it. I don’t like it.

    Of course the public policy reasons for offereing protection for i) inventions ii) designs and iii) trademarks, are distinct, complementary and self-evidently different. But that is not to say that there is no overlap. Take the shape of a new product for end users, like a phone or a vacuum cleaner. Is the shape distinctive? Does it appeal to buyers? If so, why might that be? Because they like nicely ornamented products? I doubt that.

    Perhaps because a thoughtfully sculpted product suggests that the function is well thought through too? Perhaps because they suppose (rightly) that the product shape better lends itself to daily use? At what point then, does a product shape, or its above-average haptic quality, become “functional”? Hard to say.

    Perhaps that is why Europe pays special attention to product shape features that can be termed “must fit” or “must match” features. Or how about the facets on a diamond solitaire. Are they functional or ornamental?

    Why has Samsung no US design patents? Easy. Until very recently, nobody bothered to register designs outside their own home jurisdiction. It was thought that the cost of the right outweighed any potency it might have. Little did they know, what was going to happen next………………..

    1. Ok, guys, once again: a product shape can perform a function AND have a unique appearance. The unique appearance is not monopolizing that function if there are alternate shapes that perform substantially the same function. Prove the existence of alternate designs, and the functionality defense disappears, because the underlying purpose of the functionality doctrine (in all 3 IP regimes) is that you cannot use design patents, trade dress, or copyright to monopolize that which should only be monopolized with utility patents (cite to Chisum). The existence of alternate designs is incontrovertible objective evidence that the associated functional feature ain’t being monopolized.
      And Samsung has and is applying for scads of design patents. I believe they are #1 in that category.
      So, why are they shooting themselves in the foot? Perhaps because they got their hands caught in the cookie jar, and are embarrassed.

      1. I’m not sure why Samsung would want to use the iPhone interface with its single button. Personally, I can’t stand that interface. It makes no sense to me. Put a “back” button on there, for crying out loud!

  3. I love how people presume the validity of utilitarian features in design patents just because the patent has issued. That’s like saying your suspect can’t be a felon because you didn’t find his fingerprints in a book of mugshots.

    1. While I love the Yogi Berraism, you are not stating the issue correctly.

      It is not “validity of utilitarian features in design patents” but rather

      It is that features that are utilitarian have design aspects in addition to the utilitarian aspects.

      Trying to say there is no overlap, or worse, confusing and conflating the aspect at issue is just not helpful. To anyone.

      1. “While I love the Yogi Berraism, you are not stating the issue correctly.”

        Huh? How is that the defining feature of a Yogism?

        The opera AIN’T over till the fat lady sings! There ain’t nuttin’ incorrect about that.

        Furthermore, when you come to a fork in the road, you
        SHOULD take it!

        1. The Yogi here was the fingerprints not being in a mugshot book at all.

          The miss on the statement of the issue was that no one is attempting to claim “validity of utilitarian features

          The two do not intersect.

          You really don’t get the beauty of Yogi, or where it does or does not reach an issue point, do you?

  4. The “D’140 patent” on a toolbar design (mentioned in Phillip Mann’s brief on behalf of Systems) is an exemplary travesty of the continuing joke we call “US design patent law.”

    Wow. Just …. wow.

  5. Perhaps already argued in court and all over this blog, but the argument:

    “Giving a design patent owner control over utilitarian features undermines the policy goals of the [trademark] functionality doctrine.”

    is fairly weak (in my view) considering that TM rights can last indefinitely whereas design patents have a fairly short term.

    1. Additionally, TM rights have a different constitutional source than patent rights. I guess I’m not seeing their side of the argument here.

      1. I guess they are also overlooking that differences between patent (requiring new and non-obvious (whatever that means in design patent law) and TM which merely requires actual use in commerce and the ability to serve as an indication of source of goods or services. Hence, design patent has a fairly high hurdle to acquiring rights as compared to TM.

      2. The policy goals underlying the relatively strong copyright and trademark “functionality doctrines” have little or nothing to do with the “constitutional underpinnings” and everything to do with (surprise) policy.

        In a nutshell, the “policy goal” of design patent law is to promote new ornamentation, not new technology. Likewise, the “policy goal” of copyright law is to promote new expression, not new technology. The “policy goal’ of trademark law is to promote distinctive marks for consumers to rely on, not to promote new technology.

        When the design “patent” system — a different animal from the utility patent system in both a practical and fundamental sense — starts being used to protect new technology, i.e., the new “non-obvious” utilitarian shapes of features, it’s a good time to stop and ask “Why are we doing this?” If the super smart judges that we’ve appointed buy or promulgate some ridiculous self-serving excuse (“some rich stakeholders want it that way”) then the policy goals of the other systems are surely “undermined” because those jurists are going to be deciding cases concerning the application of the similar doctrines in those other systems.

          1. in other words, you are in agreement with me that the policy goals of TM and patent are widely different.

            The discussion was about the shared policy goals of the respective “functionality doctrines” that are part of design, copyright and trademark law.

            Of course the policy goals of TM and patent are “widely different”. That’s why it’s an immediate cause for concern when one of the regimes is co-opted for the purpose of the other.

            1. when one of the regimes is co-opted for the purpose of the other.

              One again, read (and try to understand) what Perry is talking about.

              There is no conspiracy “co-hort” “Co-opting” going on. Put the tinfoil hat aside.

              Thanks.

        1. The policy goals underlying

          See the comment below about understanding the difference between statutory law and common law (it’s kind of important to recognize when the correct branch of the government is active in writing the policy into the law).

        2. starts being used to protect new technology, i.e., the new “non-obvious” utilitarian shapes of features

          It’s not – but nice misdirection.

          You are mistaking the fact that aspects of something can be applied in more than one type of IP law (gee, I know, shockers).

          The linked patently-o page had you commending Perry – and one of the things that Perry was trying to tell you (but those dots you just could not connect), was that design and utility are just not two completely separable things.

          Of course, if you had any real world experience, you might have been able to pick that up too.

          As far as “(“some rich stakeholders want it that way”)” we have (yet again) the offensive blight of your class w@rfare diatribes.

          Haven’t we had enough of that C R P over the last decade?

          1. “anon” design and utility are just not two completely separable things.

            Ornamental designs and utilitarian features are certainly completely separable in most instances. Are there a few cases on the margins? Sure. Are most design patents on the margin? Nope. Does the fact that a case is on that margin suggest that disgorgement of total profits makes more sense? Of course it doesn’t.

            aspects of something can be applied in more than one type of IP law

            That’s nice. A candy bar wrapper can be used to store used chewin gum. So what?

    2. I think what they’re saying (and I haven’t read the article so I don’t know the context) is that if something is functional, that “thing” can’t serve as a trademark. From what I remember of the Apple design patents, the majority of the features involved buttons, a screen, casing edges being rounded, location and shape of interfaces, etc. Basically, most or all of which (one could argue) are functional. Give Apple a design patent for these (allegedly functional) “features”, and that means those features can’t be copied for a set number of years. During that time, Apple is building a phone whose shape (including all those functional and patented design features) becomes synonymous in the public’s eye as being indicative of Apple’s products. In other words, over time, functional design patent features become trade dress/trademarks. And the patent laws allow this to happen by providing time when only Apple can manufacture similar phones. This process therefore undermines the policy goals of the trademark functionality doctrine, which wants to prevent functional features from becoming trade dress/trademarks.

        1. IIT: I still don’t think this has anything to do with undermining TM policy goals.

          Again, the brief is not asserting that “trademark policy goals” are being undermined. The assertion is that the policy goals of the “[trademark] functionality doctrine” — a doctrine which limits trademarks — is being undermined.

        2. I invented that,

          You are barking up the right trees.

          The Lemley brief is a bit disingenuous. In Traffix Devices, cited on page 4, a utility patent was obtained on a metal support for temporary road signs. After expiration, the patentee tried to extend protection based on trade dress. (A trademark based on a products appearance or packaging versus attached words and designs.) The case held (without reference to the Patent Clause) that the Lanham Act did not extend to functional designs. The best evidence that the design was functional was the original utility patent. There was no reference to design patents.

          But note, according to the PTO (see MPEP section 1504.01(c)Lack of Ornamentality): “An ornamental feature or design has been defined as one which was “created for the purpose of ornamenting” and cannot be the result or “’merely a by-product” of functional or mechanical considerations.’”

          Also on page 4: “(A design is functional only if it is ‘the only possible form of the article that could perform its function.’). Needless to say, that almost never happens.”

          If true, then conversely, one can always obtain the same functionality with a different ornamental design. What’s the complaint?

          On page 5, they assert that trade dress and design patent functionality considerations should be consistent [the same?]. But, the term of trade dress is potentially infinite while design patents are limited to 14 (now 15) years.

          On page 13: “Indeed, by one estimate, there are 250,000 patents that arguably cover various aspects of a smartphone.” This Zombie never dies.

          1. First, the posts of I Invented That and Troubled are spot on, especially the design patent term (very limited) vs. trade dress term (potentially infinite). Because of the latter, courts have made it very very difficult to overcome the functionality hurdle in the trade dress realm. One of the reasons the Federal Circuit struck down the trade dress claims in A v. S was that they were applying 9th Circuit law, and the latter has never had a case where the functionality element has been satisfied.
            Second, the SCOTUS definition of functionality (product or feature is essential to use or purpose of the product or affects its cost or quality) came from Qualitex, and the only authority cited in Qualitex was a footnote from Inwood. Moreover, the definition is something even a first year law student can argue. The trade dress functionality definition used by most courts stems from the CCPA’s seminal Morton-Norwich case, which also happens to be the test in the TMEP used by trademark examining attorneys. They all cite Traffix out of politeness, but use Morton Norwich because the latter sets forth criteria that can be objectively determined by this thing called evidence.
            Third, Traffix had nothing to do with design patents, and really it had nothing to do with the fact that the utility patents had expired. If the SCOTUS were actually presented with a case involving assertion of trade dress rights in the same subject matter of an expired design patent, it would likely invoke the public’s right to copy the design and deny trade dress protection, IMHO.

      1. There is – in law and in reality – considerable cross-over of the intermingled presence of different elements.

        The seminal case for functionality and trademarks is the Traffix case: 532 US 23. See also Inwood Labs v Ives Labs 465 US 844 at 850

  6. Isn’t there a major, and undisclosed, conflict of interest with Mark Lemley filing an “amicus” brief in this case? Mr. Lemley is a partner at Durie Tangri (which is not indicated on the amicus brief), and Samsung seems to be a client of Durie Tangri (See Cellular Communications Equipment LLC v. Samsung Electronics Co., Ltd. et al, TXED-6-14-cv-00759). Thus, isn’t Mr. Lemley arguing to to SCOTUS on behalf of a firm client, without disclosing that issue? It’s hard to believe that Mr. Lemley would take a position contrary to his [firm] client’s interests.

    1. It’s hard to believe that Mr. Lemley would take a position contrary to his [firm] client’s interests.

      Partners at law firms take positions contrary to the interests of other clients at their firm every day.

        1. “anon” You missed the part of submitting this (known) conflict to the court…

          No, I didn’t miss that. What conflict do you see?

          If anything, I see an alignment of interests between the amicus brief and one client (current status unknown to me) of a firm which employs one of the 37 professors listed on the brief.

          1. Yes anon I agree this is pretty bad if they are a current client. Lemley I believe is a partner and one of the founders of the law firm. It would be pretty outrageous not to disclose that to the SCOTUS. He statement says they have no conflict, when in fact he could have a huge conflict.

            (anyone that disputes this doesn’t know law firms.)

    2. How is this a conflict of interest? Lemley is filing a brief on behalf of himself and 37 law processors.

      It is not a conflict of interest with his client, because he is taking a position that would favor his client. It is not a conflict of interest with the Court. The authority of the brief is not changed whether or not the his firm’s relationship with the client is noted. Surely, the Justices are reading the briefs for the content of the arguments and not any relationship with the parties.

      There could be a rule that he is violating. If so, kindly point me in the direction of the rule.

      1. He represents another (undisclosed) party that has (potentially) a material interest in the case before the Court.

        The rules indicate that such material interests (while NOT verbotten), do need to be disclosed.

        1. He represents another (undisclosed) party

          Lemley represents Samsung? Show me the evidence.

          The rules indicate that such material interests (while NOT verbotten), do need to be disclosed.

          Show me. Here’s the rules for amicus curiae briefs in case you have difficulty finding them:

          link to law.cornell.edu

        2. Remind me: does Samsung own any design patents?

          Presumably not because why on earth would they devalue them with all these crrrrrrrrrrazy assertions about limiting damages?

          The shareholders must be furious, at least the ones who drink tons of of that delicious design patent k00l-aid.

      2. Which likely means he wrote it and the other 37 law professors merely signed on.

        I think his brief should say “I’m a partner in a law firm whose client is Samsung.”

  7. I get that this is not an ideal result, but much like it used to be with qui tam cases, wouldn’t this be best handled by Congress, instead of asking the Court to legislate from the bench? Any reading of the statute and legislative history clearly indicates that the current application of the statute is how it was originally intended…ridiculous or not. The statute is what needs to be changed, and I would hope that the Court reads the same on its face and indicates that Congress is the proper path to update.

    1. wouldn’t this be best handled by Congress, instead of asking the Court to legislate from the bench?

      Absolutely.

      The courts get enough “wrong,” when they follow the actual law as written by Congress, they should not be “dissed.”

      Hey Ned, did that article that you provided a link to ever appear outside of a paywall? You know the one, the one by Judge O’Malley urging amici not to seek from the courts what should instead be sought from Congress.

      But hey, why start now with following the distinction between statutory law and common law, amiright?

      /off sardonic bemusement

  8. Kudos to the HLF et al. for bringing the ridiculous Nordock decision to the Supreme Court’s attention:

    These untoward effects of the Federal Circuit’s erroneous ruling will be felt in a variety of industries. They may be most pronounced in design-heavy consumer electronics markets. But other industries will experience them too, including those in which design would not be expected to have an impact. This
    was amply illustrated in
    Nordock, Inc. v. Systems, Inc., 803 F.3d 1344 (Fed. Cir. 2015). The product at issue in that case could not have been less design-intensive: a dock leveler that enables a smooth transfer of items from trucks onto loading docks. Id. at 1347. The patented design could not have been for a more utilitarian, less ornamental feature: the “lip and hinge plate” on the leveler. Ibid. And the manufacturer could not have been less cosmopolitan, operating from Malvern, Arkansas and Germantown, Wisconsin.6 But the consequences were nevertheless excessively harmful to the business. The Federal Circuit, relying on the decision below in this case, rejected all attempts
    to limit the patent holder’s recovery to profits actually attributable to the patented design, and held that the manufacturer should have been forced to disgorge all of its gains on the dock leveler. 803 F.3d at 1354-1355. This shows that the Federal Circuit’s decision will not only have a significant anti-competitive impact, but also a dramatic reach, with significant consequences for minority and rural entrepreneurs.

      1. From that link…

        (in between framing the compliments from Malcolm) Perry had this to say:

        Therefore, I posit that there is, and should not be, any design patent that is invalid for functionality (article in progress).

        Any updates Perry?

    1. Even the most utilitarian, so-called functional products (e.g., a nut and bolt) can have unique appearances, i.e., be “ornamental” within the meaning of 35 USC, and thus qualify for design patent protection. In fact, all products MUST be articles of manufacture, i.e., perform functions, in order to qualify for a design patent in the first place, 35 USC 171. The law has long been settled that “ornamental” does not mean pretty, good-looking or pleasing to the eye, subjective qualities that would otherwise be decided at the whim of a fact finder.

      1. Perry, what if the design patent covers a feature that has significant, and perhaps new or improved, utility, perhaps being the reason why people buy the product? Showing that there are alternative ways of achieving the same utility may not solve the problem.

        For example, I patent the “ornamental” design of a golf club where it is shown that users of golf clubs with the design have significantly decreased golf scores. I think that would be sufficient to say that the design patent covers function.

        1. Ned,

          You paint a false dilemma.

          Your hypo merely involves the fact that the design patent holder could have also have obtained a standard utility patent on those items that you focus on.

          It STILL is not proper to conflate as you attempt the different aspects of the different protections.

          1. Spot on, anon. Ned, if a particular shape lowers golf scores (don’t you love unrealistic hypotheticals?), chances are that other shapes, that do not infringe the first shape, will also do so. Your argument has also been made about other products, like golf balls and tire treads, but it doesn’t wash. Just because a particular design performs a function (that is protectable by utility patents) does not ipso facto mean that its shape is not protectable.

  9. Dennis, there is a typo in “the groups quite [sic] my 2010 design patent article ..”

    P.S. More importantly, did they quote your statistics on how very few design patent applications get a prior art or other substantive rejection?

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