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Tuesday, 06 December 2016 21:00

Supreme Court Reverses $400m Verdict in Apple v. Samsung

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Today, in Samsung v. Apple, the Supreme Court reversed the $400 million verdict Apple won against Samsung over certain elements of Apple's iPhone design. In an unanimous decision authored by Justice Sotomayor, the Court threw out the earlier verdict of the Federal Circuit, holding that the lower court erred when it ordered Samsung to pay damages equal to its entire profit from smartphones with infringing design elements. 

This decision revolves around a particular statutory section for providing damages in design patent cases at 35 U.S.C. § 289, which requires courts to order damages equal to the "total profit" earned from the sale of an "article of manufacture" that infringes upon a design patent. The Federal Circuit found an "article of manufacture" to mean the entire product sold to consumers, since a consumer could not buy particular iPhone design features, such as its arrangement of rounded icons on the home screen. The Supreme Court disagreed, and held that the law allows defendants to argue that damages are restricted only to the component(s) of finished products, and they need not be the finished product sold to consumers.

The 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.

Unfortunately, due to "inadequate briefing", the Court did not provide much guidance as to how to determine what a design patent covers, or how much it might contribute to damages (i.e., a test for determining the breadth of an "article of manufacture"). Therefore, it falls back to the Federal Circuit to devise a test as to what (narrower) "article of manfuacture" is covered by a design patent in question, for further proceedings, which, given the stakes, may likely and subsequently be appealed back up to the Supreme Court for further review.

For the full opinion -- https://www.supremecourt.gov/opinions/16pdf/15-777_7lho.pdf

Read 2815 times Last modified on Tuesday, 06 December 2016 21:21
Tony Guo

As a specialized technology counsel, Tony supports his clients in the high tech, creative, and online industries. His primary areas of practice include intellectual property protection, Internet law, and startups. Tony is a USPTO registered patent attorney, as well as a licensed lawyer in California and Florida. He comes from a background involving considerable hardware and software development experience, having worked in both development and IT roles in the tech and finance industries.