PublishedOctober 30, 2017

New Trial On Design Patent Damages, But A Flawed Test

In the long-running Apple v. Samsung dispute, which has now gone from the trial court to the Federal Circuit to an en banc opinion to the Supreme Court and then back to the Federal Circuit and finally back to the trial court, Judge Koh has granted a new trial on the issue of damages for design patent infringement.  During that journey, the Supreme Court and Federal Circuit declined to decide what the appropriate test to determine an “article of manufacture” is, leaving it to Judge Koh to create a test.

Unfortunately, the test Judge Koh selected is likely to create new burdens on litigants and chilling effects on those who want to try to create products.

Writing The Test

Judge Koh essentially adopted a test proposed by the Solicitor General.  This is a four-factor test, which looks at:

  1. The scope of the design claimed in the plaintiff’s patent;
  2. The relative prominence of the design within the product as a whole;
  3. Whether the design is conceptually distinct from the product; and
  4. The physical relationship between the patented design and the rest of the product, including whether the design pertains to a component that a user or seller can physically separate from the product as a whole, and whether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.

While this kind of multi-factor test may be easy for a judge to apply, they can be a nightmare for anyone trying to determine whether they can launch a product without getting sued.  

For example, the “relative prominence of the design” is a purely subjective factor, one which you simply can’t predict an outcome for ahead of time.  And the fourth factor is either irrelevant, or else it allows the same exact patent, applied to the same exact device, to have two different penalties depending on whether a defendant chooses to sell a given piece separately or not—something totally outside of the scope of the patent!  If the test is that the component “can be sold separately,” whether or not the defendant actually does so, the test is essentially meaningless, as any component in a multi-component device can be sold separately.  If the test is whether the defendant actually does so, two defendants, making the same exact product, could have different judgments depending on whether or not they sell a replacement part separately or not.  

This incentivizes manufacturers to make non-design choices (like whether or not to sell a part separately) purely to avoid potential legal liability from design patents, and ties design patent scope and damages to factors completely unrelated to the design of the product.

The Test Fails

Let’s take the siding on a house.  You certainly care about the visual appearance of siding, but I don’t think anyone would expect that a design patent on siding should cover the entire house.

Factor 1: Scope of Design

Let’s assume that our patent owner was forward thinking and claimed their siding, but illustrated it in the context of a house shown in broken lines.  In a design patent, broken lines represent subject matter that is illustrative but not claimed.  So, the scope of the design implies the house is included.  Although, of course, the actual design, represented in solid lines, doesn’t include the house, so maybe the scope doesn’t include the house.  Prior to a judicial ruling, you simply won’t be able to tell.

Factor 2: Relative Prominence

The relative prominence of the design within the product?  The siding is immediately visually apparent whenever you look at the house, but when you’re actually using the house you may not be able to see the siding at all.  Again, it’s hard to say how prominent it is until a judge rules on it, but certainly the siding is a prominent aspect of the house’s design when you’re looking at the outside.

Factor 3: Conceptual Distinctness

Is siding conceptually distinct from a house?  I guess so, in that siding is a distinct piece of a house, but then again, the design of the house includes siding and the designer of the house presumably chose the siding to provide visual appeal.  We’re still stuck being unable to determine the proper article to look at.

Factor 4: Relationship Between Design And Product

Finally, the physical relationship between the design and the product.  As I said earlier, this could be meaningless.  Siding is physically separable from the house and is manufactured separately, so if it that’s enough, then it’s a separate article.  At the same time, you usually buy your house with siding already on it.  It’s a lot like a smartphone screen in that way—even though you usually buy the smartphone with the screen attached, it’s a physically separate component, manufactured separately, which can be sold separately.

Putting The Factors Together

The end result of the Solicitor General’s test?  I don’t know if the siding or the house is the correct article of manufacture, because the test doesn’t actually distinguish effectively between the two components.  And if I apply it to a smartphone and the screen for the phone, I end up with the same problem.

The Test’s Grade? D.

The test proposed by the Solicitor General, as adapted by Judge Koh, just isn’t workable in practice.  While it’s better than Apple’s test, which would have included the intent of the defendant as a factor (potentially resulting in different articles of manufacture for the same exact product depending on the defendant’s state of mind, an even worse problem than the defendant’s business practices), the Solicitor General’s test doesn’t provide sufficient ability to ascertain the correct article of manufacture from the face of the patent, relying instead on the defendant’s product and business practices.

The best solution would be to simply eliminate § 289, the statute that provides a special “total profits” remedy for infringement of design patents.  The special rule § 289 represents was created when the most common remedy for infringement was a share of the infringer’s profits.  These days, when the typical damages remedy for patent infringement is a reasonable royalty, there’s simply no need for § 289.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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