For the first time in over 120 years, the United States Supreme Court was called to decide on a design patent infringement suit. This time, the suit is between the two biggest smartphone producers—Samsung Electronics Co. and Apple Inc. This appeal was filed by Samsung requesting the US Supreme Court to set aside the judgment of the United States Court of Appeals for the Federal Circuit. In its decision, the US Court of Appeal upheld a jury’s award of the entirety of Samsung’s profits on smartphones that were found to have infringed two of Apple’s design patents. Though, the design patents were directed only to part of the iPhone’s outer shell and a single graphical-user-interface screen.

The court rejected Samsung’s argument that damages must be limited to the profits made from those infringing features. Relying on 35 U.S.C. 289, which explicitly authorizes the award of total profit from the article of manufacture bearing the patented design”, the Court took the view that the entire smartphone was the relevant “article of manufacture” basing this conclusion on the fact that the “innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.”

Section 289 of the Patent Act 1952, provides in part that:

“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 . . . .”.

Arriving at a damages award under this provision involved two steps.  First, identify the “article of manufacture” to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.

The court held that damages is awarded to the extent of the total profit on the accused article of manufacture. Recognizing that the relevant article of manufacture could be a product in itself, or a component of a product. Although it did not set out a test for identifying the relevant article of manufacture, it however came to the conclusion that where the article of manufacture is a component of a product, it is only the profit on that particular component, as against the whole product, that the plaintiff can claim.

Determining whether the article of manufacture relates to the entire product or a component of the product could pose a challenge during litigation. But the United States in its amicus curiae brief suggested some tests that could be applied in determining whether an article of manufacture is the product or a component of the product. It argued that the following should be taken into consideration the following:

  1. The scope of the claimed design, including the drawing and written description.
  2. The relative prominence of the design within the product as a whole.
  3. The existence of unrelated, conceptually distinct elements in the product.
  4. The physical relationship between the patented design and the rest of the product.
  5. The manner in which the components were manufactured.

In applying these tests, some of the facts needed to reach a reasonable conclusion are within the peculiar knowledge of the defendant. Therefore, the defendant should bear the burden of producing evidence that the relevant “article of manufacture” in a particular case is a portion of an entire product as sold, while the plaintiff bears the ultimate burden of establishing the amount of the defendant’s total profit.

I submit that applying these tests to the product in question will lead to a reasonable and equitable finding. This is necessary to ensure that the plaintiff does not somehow get over compensated.

This judgment though not binding on other jurisdictions establishes good guidance as regards accessing damages in cases of infringement of industrial designs. Countries not having similar provisions as 35 U.S.C. 289 may still rely on these principles where a defendant has to render account, and for the purpose of accessing damages.

There is still a lot to expect from the Samsung v. Apple case as the Supreme Court remanded the case to the trial court for further proceedings. It is expected that the retrial will provide opportunity for a standard test to be laid down in determining whether or not the article of manufacture relates to the entire product or a component of the product.

 

Mordecai Adejo is a Lagos-based legal practitioner, and Corporate & Intellectual Property consultant.

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