With numerous intellectual property cases pending before the United States Supreme Court this term, the earliest decision to issue in 2016 is Samsung Electronics Co., Lt. et al. v. Apple Inc., 580 U.S. ___ (2016) [hereinafter ‘the Court’] [ hereinafter Samsung and Apple]. The decision resolved whether a component of a product is an article of manufacture when calculating damages for infringement of a U.S. design patent. If a person manufactures or sells a manufactured article displaying a patented design or similar design without the patent owner’s consent, then that person is liable to the patent holder for the infringer’s total profit. 35 U.S.C. section 289. Samsung’s position was that damages for its infringement of Apple’s product should only include the component that was actually copied, and thereby reduce the trial court’s award to Apple. The Supreme Court agreed and held that for a multicomponent product the relevant article of manufacture maybe only a component of that product.
Prior to this litigation Apple obtained several U.S. design patents for iPhones that were initially released in 2007. Subsequently Samsung sold a series of smartphones that resembled Apple’s iPhone. Apple then sued Samsung for infringement of its design patents and the trial court awarded Apple damages of $399 million for infringement. The Federal Circuit Court of Appeals affirmed this award for the entire profit Samsung acquired from its sales of infringing smartphones. In reaching its conclusion the Federal Circuit reasoned that the interior components of Samsung’s smartphones were not sold separately from the phone exterior surface that displayed an infringing design.
The Court resolved the threshold legal question of whether an article manufacture (i) must also be the entire end product sold to consumer, or (ii) may comprise only a single component of that product. The Court looked to section 289 and concluded that its term ‘article of manufacture‘ is sufficiently broad to include a product component, in part because the component is created by hand or machine. The Court also observed that section 289 does not explicitly limit design infringement damages exclusively to complete articles or to articles as sold. The Court further relied upon 35 U.S.C. section 101 that defines a new and useful manufacture as patent eligible and which is interpreted to include parts of a machine separate from the totally assembled machine. The Court concluded that there was no legislative history or statutory text to support the Federal Circuit’s conclusion that section 289 solely addresses damages for sales of a complete end product.
The Court declined to identify the relevant component of Samsung’s infringing smartphones or provide a test for designating the relevant article of manufacture. Instead, it reversed the Federal Circuit’s holding and remanded the case to the Federal Circuit to address this test along with any remaining issues. On February 7, 2017 the Federal Circuit remanded the case to the federal district court to determine whether additional proceedings are necessary. If such proceedings are warranted the trial cour0000000000l may present a test for identifying the relevant article of manufacture under section 289.
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Intellectual Property for Businesspeople 