by Dennis Crouch
In a one-paragraph order, the Federal Circuit has vacated its prior design patent damages determination in Samsung v. Apple following the Supreme Court’s 2016 reversal. The appeal is reinstated, and new briefs will now be filed. (Federal Circuit Docket No. 14-1335).
Apple’s design patents cover various ornamental designs applied to the iPhone and infringing Samsung Galaxy devices. Samsung was found to infringe because it “sells … [an] article of manufacture to which such design … has been applied.” 35 U.S.C. 289. The statute calls for for the infringer to be “liable to the owner [of the patent] to the extent of his total profits.” In its original decision, the Federal Circuit held that “total profits” referred to Samsung’s total profits on its infringing phones – i.e., total profits associated with the article of manufacture to which the design has been applied.
In its December 2016 decision, the Supreme Court partially rejected the Federal Circuit approach – holding that, depending upon the circumstance, the total-profits might be associated either with the entire product sold to a consumer or to a component of that product.
[T]he term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not. Thus, reading “article of manufacture” in §289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase.
After offering two alternative approaches, the Supreme Court did not provide any further guidance as to how a judge or jury might decide whether the “article of manufacture” in question should be associated with the entire product or else to a particular component. “We decline to lay out a test for the first step of the §289 damages inquiry in the absence of adequate briefing by the parties.” That is the question likely now before the Federal Circuit – although the court may also punt and ask the district court to first decide the issue.