Design Patent Damages at the Supreme Court

by Dennis Crouch

Samsung has filed its opening merits briefs in its design patent damages appeal Samsung v. Apple.  The central issue in the case is the proper statutory interpretation of the design patent damages statute 35 U.S.C. 289 that offers an alternative calculation for damages:

Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.

The question for the court is “total profit” from what? Is it the sale of the article-of-manufacture (here, the Galaxy phones) or merely the particular component.  For this case, the particular components would be the front face of the phone and the icon-grid displayed on a user interface screen.  Samsung asks: 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? [Samsung Opening Brief – US Supreme Court]

In a statement to Patently-O, Samsung argued that “If the current ruling is left to stand, it would value a single design patent over the hundreds of thousands of groundbreaking technology patents, leading to vastly overvalued design patents.”  The itself brief cites Professor Rantanen’s 2015 essay for the proposition that the high damage is likely result in an “explosion of design patent assertions and lawsuits.”

The design-patent-damages statute was originally enacted in 1887 as a reaction to the last Supreme Court design patent damages cases that limited lost profit awards. Dobson v. Hartford Carpet Co., 114 U.S. 439 (1885); and Dobson v. Dornan, 118 U.S. 10 (1886).  However, Samsung argues that the 1952 amendments are important here.

Dennis Crouch

About Dennis Crouch

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

12 thoughts on “Design Patent Damages at the Supreme Court

  1. IPO reports today [6/10/16] that the Department of Justice filed an amicus brief with the Supreme Court Wednesday arguing that the Federal Circuit’s decision in Apple v. Samsung should be reversed and the case returned to the D.C. for whether the design patent infringement is for an entire smartphone or tablet or a component.

    1. Tell me Paul, do you have any problem whatsoever with the Executive branch of the US government urging the Judicial branch of the US government to do (or here re-do) something explicitly allocated by our Constitution to be in the domain of the Legislative branch of the US government?

      Your update does NOT indicate how you feel about this underlying point of the rule of law, so I am curious as to how you stand on the matter.

  2. It seems to me that the “component” to have a separated profit calculation must itself be something that, at a minimum, is separable from the article such that it might have a separate market.

    1. Does the choice of the manufacturer to actually sell any such “separable” component have any bearing? Should it?

      If you cannot buy the item singly (and note – the entire repair market should most likely be treated differently) as an original good, what business is it of the court to make such a (n illusory) distinction?

      The Court may not like the “scrivining” of Congress on this matter, but does the power of the Court extend to it re-writing (another) statutory law?

      1. Anon, the problem is, I think, that Apple does not sell casings. So, just how could one award total profits?

        1. Why is it a problem that Apple does not sell casings?

          Clearly then, one cannot award profit on an item that is not meant for profit – and just as clearly, attempting to do so is attempting to avoid the direct words of Congress on the matter.

          Oh wait (holds up sarcasm sign), you mean that you want the judiciary to come to some different desired ends?

          Total profits of a sold item does NOT mean total profits of some (unsold) component.

          If that is the law that Congress wanted to have written, Congress could have written such a law.

          They did not.

          Why exactly, is there a problem understanding what the law as written by Congress is here? Or do you mean by “problem” the notion that the law as written is not the “desired” law?

  3. “The statute is unambiguous.”

    Well so was Obamacare, but as we now know there are five votes to say that underlying “purpose” trumps all (not saying what that underlying purpose is here – just saying that that’s all the court considers important).

    1. Ken – see post 1.1 and note that “trumps all” just does not work when the Constitution explicitly provides authority to a particular branch.

  4. The statute is unambiguous. There is no honest re-interpretation that could soften the blow in this case. Perhaps the Supremes just want to overturn a ludicrous damages award on grounds that it is ludicrous.

    They’ve overturned awards based on statutory standards on substantive due process before in BMW v. Gore. Often the Supremes stand up for the simple power of the judiciary to ignore statutory instructions from Congress on the basis of separation of powers in cases like Booker.

    1. Owen,

      It appears that you want to applaud a separation of powers transgression as a form of upholding a separation of powers position…?

      I am not sure what you think that you see from BMW v Gore or Booker that would overcome the clear separation of powers that exists in the Constitution that sets up the patent and copyright laws to be the domain of (solely – unless chosen to be shared by) the legislative branch.

      Now, with patents, Congress HAS shared a certain subset of its authority (for courts to use equity in damages). I am not as familiar with the copyright side, but would lean towards the view that NO such parallel view exists for the copyright equity reach of authority.

      As you lead in, the words of Congress seem pretty clear all on their own.

      1. Congress has let courts run wild with copyright fair use even though its “codified” at 17 usc 107, just saying.

        Regarding, 2.1 above, if the court is “interpreting” the statute that is their duty under the constitution. Yeah, it gets hairy when it is a reach, but both this case and Obama Care are reasonable* interpretations.

        * Reasonable because it wasn’t merely legislative history in Obama care because it was the stated purpose of congress and would have defeated the very goal of the law.

        1. Just in case you were not aware of it, the reach interpretations a.k.a. the court scrivining its own law (legislating from the bench) has been a source of contention for quite sometime now.

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