After a jury in the U.S. District Court for the Northern District of California found that Samsung infringed Apple’s design and utility patents and awarded Apple $$290,456,793 in damages, Samsung appealed to the United States Court of Appeals for the Federal Circuit. The original damages award had been $639,403,248, but a retrial at the district court level reduced the award.
A design patent is infringed if an ordinary observer would have been deceived: “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” An infringement analysis must include a comparison of the asserted design against the prior art: “[i]f the accused design has copied a particular feature of the claimed design that departs conspicuously from the prior art, the accused design is naturally more likely to be regarded as deceptively similar to the claimed design, and thus infringing.” However, for design patent infringement actual deception is not required.
The design patents on appeal at the Federal Circuit claim certain design elements embodied in the iPhone. The D′677 patent focuses on design elements on the front face of the iPhone. The D′087 patent claims another set of design features that extend to the bezel of the iPhone. The D′305 patent claims “the ornamental design for a graphical user interface for a display screen or portion thereof”. In its appeal Samsung argued that the district court legally erred in allowing the jury to award as damages Samsung’s entire profits on its infringing smartphones
With regard to the design patents, Samsung argued that the design patent damages should have been limited to the profit attributable to the infringement because of “basic causation principles contending that “Apple failed to establish that infringement of its limited design patents … caused any Samsung sales or profits.” Samsung further contended that consumers chose Samsung based on a host of other factors.
Section 289 of the Patent Law provides:
“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) 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.”
The Court of Appeals for the Federal Circuit ruled :”The clear statutory language prevents us from adopting a “causation” rule as Samsung urges….The innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers. We thus do not agree with Samsung that these Second Circuit cases required the district court to limit the damages for design patent infringement in this case.… We therefore affirm the damages awarded for design patent infringements.”
This case teaches that having a new and non-obvious ornamental design for a product whose main value lies in its functional aspects can be extremely important. The functional aspects of the I-phone may have been protected by utility patents, but, because the exterior of the Samsung products were deemed to infringe on the Apple design patents, Apple was entitled to Samsung’s entire profit on these cell phone sales.
A late follow up on this case shows that after the Federal Circuit’s decision the US Patent Office invalidated one of Apple’s design patents that the judgment was based on. This further muddies the water about the ultimate outcome of the case.