Supreme Court Decision May Take Bite Out of Apple's Design Patent Damages Award

Monday, December 12, 2016

In Samsung Elecs. Co. v. Apple Inc., __ U.S. __ (No. 15-777) (2016), U.S. Supreme Court reviewed a jury's award to Apple of Samsung's total profits -- amounting to almost $400 million -- from Samsung's sale of smartphones found to have infringed Apple's design patents.  Apple’s design patents covered a black rectangular front face with rounded corners, and a grid of colorful icons on a black screen.  The district court and the Federal Circuit had held that the relevant "article of manufacture" for arriving at a damages award under 35 U.S.C. § 289 was the entire smartphone, not just its screen or shell, because the “innards” of Samsung’s smartphones were not sold separately from their screens or shells as distinct articles.  The Supreme Court reversed, holding that in the case of a multi-component product, here Samsung’s smartphone, the “article of manufacture” need not be the entire end product sold to consumers, but may be only a component of that product. In remanding the case, the Supreme Court declined to provide a test for identifying whether the relevant "article of manufacture" for Apple's design patents was the smartphone or a particular smartphone component, because that issue had not been adequately briefed by the parties.