Change bulb idea to money with smartphone

On December 6, 2016, the U.S. Supreme Court, in Samsung Electronics Co. Ltd., v. Apple Inc., 580 U.S. ____ (2016), unanimously ruled that in multicomponent products, the “article of manufacture” subject to an award of damages under 35 U.S.C. §289 is not required to be the end product sold to consumers but may only be a component of the product.

In 2007, when Apple launched the iPhone, it had secured several design patents in connection with the launch. When Samsung released a series of smartphones resembling the iPhone, Apple sued Samsung, alleging that the various Samsung smartphones infringed Apple’s design patents. A jury found that several Samsung smartphones did infringe those patents. Apple was awarded $399 million in damages for Samsung’s design patent infringement, the entire profit Samsung made from its sales of the infringing smartphones. The Federal Circuit affirmed the damages award, rejecting Samsung’s argument that damages should be limited because the relevant articles of manufacture were the front face or screen rather than the entire smartphone.

The Supreme Court reversed and remanded the case back to the Federal Circuit. In its unanimous opinion, the Court reasoned that for purposes of a multicomponent product, the relevant “article of manufacture” for arriving at a damages award (based on 35 U.S.C. §289) need not be the end/finished product sold to the consumer but may be only a component of that product. The Court determined that “The Federal Circuit’s narrower reading of the ‘article of manufacture,'” limiting it to the end product, “cannot be squared with the text of §289.” How to arrive at §289 damages? According to the Supreme Court, “Arriving at a damages award under §289 thus involves two steps. First, identify the ‘article of manufacture’ to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.”

This decision could have potential impact on future design patent infringement cases, especially when calculating infringement damages. It remains to be seen, what kind of guidance the Federal Circuit will provide in addressing the scope of the “article of manufacture” for multicomponent products.

If you have any questions regarding the topics discussed in this bulletin, please contact Robert S. Rigg at +1 (312) 609 7766, Sudip K. Mitra at +1 (312) 609 7617 or your Vedder Price attorney with whom you have worked.

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Photo of Sudip K. Mitra Sudip K. Mitra

Mr. Mitra started his career as an Engineer and a Boeing Program Manager at Safran and Snecma, where he worked on new electro-mechanical connector designs, fuel quantity indicator systems (FQIS) and in-flight entertainment systems for Boeing, Airbus and other commercial aerospace programs. While working at Safran, Mr. Mitra was also involved in the Boeing 787 Electrical Design team in Seattle, Washington, which was instrumental in developing the new electrical system for the Boeing 787 aircraft.

Photo of Robert S. Rigg Robert S. Rigg

Robert S. Rigg is a Shareholder and Chair of Vedder Price’s Intellectual Property practice group and Co-Chair of the Intellectual Property Litigation practice group. He concentrates his practice in all areas of intellectual property, including patent, trademark, copyright and trade secrets law with a primary focus on patent infringement.

He has a special focus in the areas of complex patent infringement litigation of all types of technology, including heavy machinery, pharmaceutical, chemistry and computer technology as well as business method patents. He has appeared as lead counsel in numerous federal district courts, the Court of Appeals for the Federal Circuit and the International Trade Commission and is a member of the Trial Bar for the U.S. District Court for the Northern District of Illinois. In addition to his litigation experience, he has counseled clients on intellectual property asset management, the procurement and enforcement of patents, trademark and copyrights, interference proceedings in the U.S. Patent and Trademark Office, licensing and confidentiality agreements.