Supreme Court will hear Samsung, Apple damages dispute on Tuesday

Large sections of the tech industry are backing Samsung

The U.S. Supreme Court is to hear arguments Tuesday in a closely-watched dispute between Samsung Electronics and Apple on the procedure for calculation of damages for the infringement of design patents.

In general terms, a design patent protects the way an article looks, while utility patents address the way an article is used and works, according to the U.S. Patent and Trademark Office. Some older Samsung smartphones were found by a jury in 2012 to have infringed three design patents related to the look of the iPhone, including its face and rounded bezel design, and the icon layout on the home screen.

Samsung is questioning an appeals court’s interpretation that it has to pay as damages all the profits from the sale of infringing products, claiming that the patented designs are only minor features of the product. A number of tech companies, trade groups and legal experts are supporting Samsung on this issue, as they hold that an adverse outcome could have implications on innovation.

The interpretation of the relevant statute by the U.S. Court of Appeals for the Federal Circuit “effectively grants exclusive rights over a device covered by tens of thousands of utility patents, even though the ‘discovery’ covered by the patent-in-suit is an ornamental feature,” technology industry group Computer & Communications Industry Association (CCIA) wrote in a ‘friend-of-the-court’ brief in January.

The relevant provision in this regard is a design patent damages statute, which states that any person, who without license from the owner of the design patent, "applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale," or "sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties."

Products were far simpler when design patent law was created in the 17th century, Samsung said in a commentary on the upcoming hearing. “It pertained to things like the handle of a spoon or a carpet pattern, which may have driven a purchase decision. By comparison, today, there are more than 200,000 patents in a single smartphone,” it added.

CCIA wants the “article of manufacture” addressed in the statute, 35 U.S. Code § 289, to refer to the smallest article to which the patented design is applied, and not a larger device that includes the article as one of its components.

“Were it not, a design patent covering a windshield for a boat could be liable for profits on the entire boat,” according to the CCIA filing.

Apple has submitted to the court that Congress enacted the rule as it recognized that ‘it is the design that sells the article.’ As the profits that can be attributable to design are difficult to arrive at, it is expedient that the infringer’s entire profit on the article should be recoverable, as else none would be recovered, according to the filing.

Allowing that the article of manufacture could be less than the total product as sold, Apple argues that Samsung failed to provide evidence supporting any outcome other than the jury’s conclusion that Samsung’s entire smartphones are the infringing articles of manufacture to which the patented designs were applied.

The South Korean company is questioning US$399 million in damages out of a total award of $930 million for infringement of both utility and design patents. The Supreme Court partially granted Samsung’s petition, limiting itself to the question: 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?

The CCIA has said that the issue is of great concern to its member companies because if the interpretation of the Federal Circuit is affirmed, these companies could be faced with attacks using design patents by patent companies, pejoratively referred to as "patent trolls" because they make their money from licensing and suing companies over patent infringement, usually using purchased patents.

The Federal Circuit's interpretation will likely raise prices and discourage new goods and services from coming to market, thus affecting consumers’ access to new technologies, wrote the Electronic Frontier Foundation and other groups in their "friends-of-the-court" brief.  "It also opens the door to the economic inefficiencies of patent holdup and royalty stacking, which work to disincentivize future invention and productivity," according to a June 7 filing.

Samsung is also considering an appeal to the Supreme Court of an order that reinstated damages of $119.6 million that would be payable to Apple for patent infringement in another lawsuit. The company said Saturday that it is reviewing the decision of the U.S. Court of Appeals for the Federal Circuit, and is “looking carefully at the possibility of Supreme Court review.” The opinion won in an 8-3 vote.

Join the PC World newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?