In a high-stakes case between two tech-world giants, the Supreme Court in Samsung Electronics Co. v. Apple Inc. (US 2016) dismissed a $399 million dollar jury verdict in favor of Apple for Samsung’s infringement of Apple’s smartphone design patents. At issue in the case were several Apple design patents granted as early as 2009 which cover various aspects of the design of the first-generation iPhone including its black, rectangular front face with rounded corners and the distinctive interface displaying a grid of sixteen colorful icons on a black screen. At trial, the jury found that several Samsung smartphones infringed Apple’s design patents under 35 U.S.C. § 289, which holds the infringer liable for its total profits.
On appeal to the Federal Circuit, Samsung argued that the damages should not be Samsung’s entire profits from selling its smartphones and damages should be limited to the components that are subject to Apple’s patents, in this case, the front face or screen of the smartphone rather than the entire smartphone. The Federal Circuit upheld the jury verdict and rejected Samsung’s argument explaining that the infringed features are not sold separately to consumers and therefore should not be considered separately from the smartphone for the purpose of determining damages.
To Samsung’s relief, the Supreme Court reversed and held that design patent infringement damages can be calculated based on the overall device or alternatively on a component of the device. The Court, however, declined to establish a test to determine whether for each design patent involved in the case, damages should be calculated based on the profits from the entire smartphone or merely a component of the smartphone. The Supreme Court also failed to provide guidance on how to determine what portion of the infringer’s profits are attributable to a specific component or feature of the smartphone. Instead, the Court remanded to the Federal Circuit for further proceeding.
Despite this decision, Samsung has won the battle but not the war, as the damages are likely to be reduced on remand but will still be substantial. While design patents are often overlooked or ignored in favor of utility patents, the Samsung v. Apple litigation underscores the importance of including design patents as part of a patent portfolio. For many products, the design of the product may have a significant impact on consumer opinion that is itself worthy of protection aside from the functional attributes of the product. Here, Apple’s foresight in protecting the preferred designs of their smartphone allowed the company to win a large damages award over a key competitor, reserving to Apple a particular aesthetic that competitors will now be more careful to avoid imitating.
For more information on patents and intellectual property law, contact Tyler Tassone, a member of Flaster Greenberg’s Intellectual Property Department.
Tyler Tassone concentrates his practice on patent and trademark matters. He graduated from Villanova University School of Law, cum laude, and received a Bachelor of Science Degree in Chemical Engineering, magna cum laude, from the University of Virginia. Tyler is licensed to pactice in Pennsylvania and before the USPTO.