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Apple v. Samsung – The Smartphone Patent Litigation War Continues

Gavin Doherty | December 16th, 2016

In recent mdp newsletters, we have considered US patent litigation matters and the implications of these for many of our clients that have secured, or are considering, Australian and international patent and design registrations.

The most recent battles in the ongoing Apple v. Samsung smartphone wars are a prime example of how the hierarchy works in the US legal system and how patent damage claims are not always easy to apply.

Background

In 2011, Apple sued Samsung for infringement of some of Apple’s design patents. Design patents are analogous to registered designs in Australia, in that the protection offered by a US design patent relates to the pattern/ornamentation of a 2D design or the shape/configuration of a 3D design.  In this regard, Apple’s US design patents covered visual aspects of the screen and casing of the Apple smartphone.

An example of the coverage of Apple’s US design patent D593087 is shown below, with those features (shown as dashed lines) not to be considered as part of the monopoly.

 phone

Initial decision

A federal court found that Samsung infringed Apple’s design patents and ordered Samsung to pay Apple $399 million in damages.  This amount was based on Samsung’s entire profits for those Samsung phones that were found to infringe Apple’s design patents.

Damages for infringement of US design patents are determined under Statute §289, whereby damages are calculated to be the total profit from an ‘article of manufacture’ to which the patented design has been applied.

Samsung appealed this initial decision to the Federal Circuit on the basis that damages should have been based on profits of only the infringing components of the phone, not the entire phone.  The Federal Circuit upheld the decision and rejected Samsung’s argument on the basis that the components could not be purchased separately from the phones and, as such, could not be considered articles of manufacture in accordance with the Statute requirements.

Further appeal

Samsung then further appealed this decision to the Supreme Court, which rejected the awarded damages in a unanimous decision. The Supreme Court ruled that an ‘article of manufacture’ encompasses both a product sold to a consumer and ‘a component of that product’. As such, juries need not award damages based on the profits of an entire product if the item consists of many parts.

That being said, the Supreme Court didn’t decide how damages should be calculated for this case, but merely sent the matter back to the Federal Circuit for further trial.

Impact of the decision

Whilst $399 million in damages may seem like a drop in the ocean to such a large company as Samsung (let’s face it, an injunction preventing Samsung from selling their phones would have been a bigger hit to their bottom line), this case is worth noting merely from the fact that it shows the strength a design patent (or design registration) can have.

For clients who have a product with unique visual features, consideration should always be given to protecting those features by registering the design, as often it is the visual aspect of a design rather than its functional purpose that give the product its appeal.

Gavin Doherty

Gavin Doherty

Director, B.E (mech & manuf), CGTL&P at mdp
Gavin is regarded as one of Australia’s foremost Patent Attorneys, having developed and managed world-renowned intellectual property (IP) portfolios for some of Australia’s most innovative international companies and has almost twenty years’ experience in international patent applications from both a regulatory and commercial perspective.
Gavin Doherty

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