Samsung recently won a patent battle that began in 2012 against Apple, which saved them from the $399 million settlement they were originally ordered to pay for stealing iPhone designs. The U.S. Supreme Court ruled that a patent violator should not be forced to pay the full amount of profits made from the device in question when only parts were copied rather than the entire complex piece of technology. Lower courts and jurors, however, are now faced with the daunting task of determining how to rule on design patent cases in the future, without any sort of test or precedent.
Article of Manufacture
When the case first came to light, it was agreed that Samsung had duplicated several of Apple’s patented designs including the round-cornered front face, the bezel, and the colorful icon grid. The core issue became whether these violations are a relevant article of manufacture, an article of manufacture being what design patent damages are calculated on in U.S. patent law. According to the United States Patent and Trademark Office, “a design patent protects only the appearance of the article and not structural or utilitarian features.” In a unanimous court ruling, it was decided that the term “article of manufacture” is broad enough to apply to both a component of a product and the complete product.
Team Apple
Apple argued that their designs are responsible for the success of their device which led to a line of questioning throughout the hearing concerning the value of design to the overall product. The Volkswagen Beetle was referenced, as justices suggested that its sales are due to its unique appearance. Justice Samuel Alito contested this argument, saying that “Nobody buys a car, even a Beetle, just because they like the way it looks.”
Apple expressed further concern that this interpretation of the law would leave new products and designs vulnerable to future violations. Without requiring companies to pay total profits, violators may risk the reduced fines for a chance to pull ahead of the competition. Apple’s chief litigation officer, Noreen Krall, asserted that “strong design patent protection spurs creativity and innovation.”
Apple has quite a few proponents in their corner, including the executive creative director at Microsoft, Raymond Riley, former senior industrial designer at HP, Sohrab Vossoughi, and even Calvin Klein. More than a hundred designers have come behind Apple in support. The Supreme Court’s decision could certainly have a ripple effect through countless industries.
Team Samsung
Samsung certainly did not come to battle out-manned. It was revealed during the trial that Google is helping to pay for Samsung’s defense. In fact, quite a few notable companies are supporting Samsung, including Facebook, eBay, Dell, and HP. Intellectual property professors from across the country have also rallied behind Samsung.
Kathleen Sullivan, Samsung’s attorney, countered Apple’s argument that awarding less than the full amount of the offending products devalues the designs in question by stating that to do otherwise devalues all of the other patents that comprise a smartphone. Samsung equated it to paying the full profits of a car due to an infringing cupholder. They counted the ruling as a victory for competition in the marketplace. Now that the court has ruled in Samsung’s favor, the reduced amount they will have to pay Apple has yet to be determined.
Design Patent Cases Moving Forward
This case has truly plunged design patent law into uncharted waters. A design patent case had not appeared before the Supreme Court in more than 120 years, so the justices had very little precedent to guide them. Now that they’ve established a new legal standard, many questions have been raised over how jurors and lowers courts should determine the value of design in future patent cases. Justice Anthony Kennedy suggested several solutions including market studies to determine design value and de minimis exception (in reference to the cupholder argument) but repeated that as a juror, he “simply wouldn’t know what to do.”
While the outcome of this case does acknowledge the complexity of technological creation and design patent law, it potentially opens the door for leniency toward future violations. Will this ruling hamper creativity and innovation as Apple suggests or will it encourage competition in the marketplace?
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