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Smartphone Wars – Supreme Court Awakens: Samsung Files Petition for Certiorari in New Hope to Harmonize Design Patent Law

On Monday, in the latest episode of the smartphone wars, Samsung filed a petition for certiorari with the Supreme Court.

Smartphone Wars

Samsung is appealing a Federal Circuit decision that upheld a $399 million judgment against Samsung for infringing three of Apple’s design patents. Samsung argues that the decision, if left unchecked by the Supreme Court, could dramatically increase the value of design patents. While the Supreme Court is the ultimate power in patent jurisprudence, it was a long time ago that it last considered a design patent case; more than 120 years ago according to Samsung. Samsung’s petition presents two fundamental questions concerning design patents:

1. Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope?

2. 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?

With respect to the first question – whether a district court should be required to limit the protection of a design patent to only ornamental features – Samsung argues that the Federal Circuit’s decision conflicts with both Section 171 of the Patent Act and with the Supreme Court’s precedent requiring judicial construction of patent claims.

According to Samsung, the Federal Circuit refusal “to cabin design patents to their protected ornamental scope” conflicts with Section 171 and allows infringement to be “found based on the use of nonornamental attributes.” Thus, argues Samsung, the Federal Circuit broadened the protectable scope of design patents, which are limited to “any new, original and ornamental design for an article of manufacture,” under section 171. Samsung argues the Federal Circuit’s ruling also creates tension with other areas of intellectual property law that routinely enforce limitations to protectable scope, such as copyright doctrine of “filtration” and trademark law’s doctrine of functionality.

Samsung also maintains that the ruling is contrary to Supreme Court precedents in the analogous context of utility patents, which recognize that district courts have a duty to construe patent claims and eliminate unprotected features. In Samsung’s view, similar to a Markman hearing, a district court should instruct a jury to identify non-ornamental features of a design patent and exclude them from the infringement analysis.

Turning to the second question – whether damages should be limited to the profits attributable to the infringing component – Samsung argues that the Federal Circuit’s decision conflicts with Section 289 of the Patent Act and the basic principles of causation and equity.

Samsung urges that “the Federal Circuit’s holding as a matter of law that an infringer of a design patent is liable for all of the profits it made from its entire product, no matter how little the design contributed to the product’s value or sales” be corrected. Samsung argues that the Federal Circuit’s conclusion that the article of manufacture is the entire smartphone, and not specific subcomponents, is wrong based on a natural reading and purpose of Section 289 of the Patent Act, contemporary extrinsic evidence regarding the definition of “articles of manufacture,” and non-controlling case law (see note below).

According to Samsung, the Federal Circuit’s “interpretation of Section 289 also flies in the face of well-settled tort principles of causation” and “ignores that disgorgement of the defendant’s profits is a classic equitable remedy for which the accepted measure of recovery generally is ‘the net profit attributable to the underlying wrong.’” “The cardinal principle of damages in Anglo-American law is that of compensation for the injury caused to plaintiff by defendant’s breach of duty,” This is the backdrop in which Section 289 was adopted. “Where disgorgement is available in patent cases, it has [] been ‘given in accordance with the principles governing equity jurisdiction, not to inflict punishment but to prevent an unjust enrichment by allowing injured complainants to claim ‘that which … is theirs, and nothing beyond this.’”

Samsung claims that certiorari should be granted because the Federal Circuit’s decision dramatically increases the value of design patents relative to other forms of intellectual property. Without correction, design patents will have whatever scope juries choose to give them, and a design-patent holder will be entitled to the infringer’s profits on the entire product even if the patented design applies only to a part of the product, and contributes to only a minor faction of the overall value. The Federal Circuit’s decision allows design patent owners to obtain the infringer’s total profits – a remedy not available under utility-patent law. Samsung contends that such leverage “poses a real danger for companies everywhere,” that it will lead to an “explosion of design patent assertions and lawsuits.”

Will the Supreme Court agree with Samsung that the Federal Circuit has caused a great disturbance in design patent jurisprudence? Difficult to see. Always in motion is the future.

Bush & Lane Piano Co. v. Becker Bros., 222 F. 902, 904 (2d Cir. 1915), (allowed an award of infringer’s profits from the patented design of a piano case but not from the sale of the entire piano, holding that “recovery should be confined to the subject of the patent.”); Young v. Grand Rapids Refrigerator Co., 268 F. 966 (6th Cir. 1920), (Affirmed the denial of all profits from the sale of refrigerators where the infringed patent related only to the design of the refrigerator’s door latch, explaining that it was not even “seriously contended” that the patentee could recover all profits from sales of refrigerators containing that latch.)

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume V, Number 351
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Patrick T. Driscoll, IP Attorney, Mintz Levin, Patent Procurement Lawyer,
Associate

Pat brings practical experience to the firm’s intellectual property practice, having been an electrical engineer for nearly a decade before beginning his legal career. He practices in all areas of intellectual property law with a focus on patent prosecution and litigation. His experience includes a broad range of electrical and computer technologies such as RF, microwave, antenna, phased array, wireless communications, optical networking, telecommunications, signal processing, GPS, consumer electronics, electronic storage, software-based, aviation control, medical devices, lighting, clean...

617-348-3055
James Wodarski IP Litigation Attorney Mintz Levin
Member

Jim is a seasoned trial lawyer who concentrates his practice on intellectual property litigation. He skillfully represents clients in federal district and appellate courts, including the US Court of Appeals for the Federal Circuit, as well as the International Trade Commission. He handles disputes involving smartphones, core processor circuits, digital imaging software, telecommunications devices, and LED lighting systems, and many other technologies. And he has more than two decades of experience with complex civil litigation, including insurance, securities, and First...

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Michael Renaud IP Litgation Attorney Mintz Levin
Member / Chair, Intellectual Property Division

Michael is a highly regarded intellectual property litigator and patent strategist who helps clients protect and generate revenue from their patent holdings. Intellectual Asset Magazine has repeatedly recognized him in its select IAM Patent 1000 and IAM Patent Strategy 300 publications. Clients rely on his counsel regarding sensitive licensing agreement negotiations, acquisitions, and other technology transactions. He leads a team known for its ability to translate complex technology and its value to non-technical professionals — in court and business negotiations.

Michael is...

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Michael C. Newman, Intellectual Property Attorney, Mintz Levin,Patent Litigation Federal Circuit Appeals International Trade Commission Federal District Court Strategic IP Monetization & Licensing
Member

Michael represents companies in complex intellectual property disputes, with a particular focus on Section 337 investigations before the US International Trade Commission (ITC). His experience spans from pre-litigation investigation and litigation, to appeals before the Court of Appeals for the Federal Circuit. In addition, Michael has had extraordinary success representing patent owners in inter partes review proceedings before the Patent Trial and Appeals Board (PTAB).

Michael represents a broad range of clients in cases involving such diverse technologies as integrated...

617-348-1626
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