PublishedMay 14, 2018

Apple v. Samsung, Round Six

A district court trial.  A retrial, after part of the verdict was vacated.  An appeal to the Federal Circuit.  A Supreme Court opinion with a remand to the Federal Circuit.  A remand from the Federal Circuit back to the district court.  Seven years after Apple originally filed suit against Samsung, we’re right back in Judge Koh’s courtroom for the sixth part of this dispute, a third jury trial on damages.[1. I’ve omitted the other, totally parallel and separate, Apple v. Samsung jury trial and appeal that’s sometimes included as part of this case.]

By the time you finished reading the last paragraph, jury selection already began.

What’s At Stake For Apple And Samsung?

Quite simply, money—about $400 million of it.  This trial is exclusively on damages. The jury will be required to assume that certain Samsung products infringe certain Apple design patents.  The jury will be asked only to determine what the appropriate amount of damages is.

Apple has requested damages under 35 U.S.C. § 289, which allows them to recover “the extent of [the infringer’s] total profit.”  That seems simple, but there’s one big question left open. Design patents are issued for ornamental designs applied to articles of manufacture, and it’s the total profit on the article of manufacture that the patentee is entitled to.

So, when you have a design patent—as Apple does—on a particular design for a phone bezel, or on a black, highly reflective front surface of a phone, what’s the article of manufacture?

The $400 Million Question

That’s what the jury will have to decide.  Do Apple’s design patents cover an article of manufacture that’s the entire phone—including the LCD display, cellular radio, WiFi/Bluetooth chip, processor, memory, storage, and all the other components that make up the vast majority of the cost of a modern smartphone?  Or do they just cover the casing of the phone?

As Patent Progress has previously covered, Judge Koh has provided a set of four factors that will guide the jury:

  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.

And, as previously covered, that test is flawed in ways that make it hard for juries to apply and hard for manufacturers to understand before a lawsuit is actually filed.  It’s anyone’s guess what the jurors will do when faced with these four factors, the Apple patents, and the accused Samsung products.

Apple would like them to think of the phone’s exterior as inseparable from the entire device and award Samsung’s profits on the entire device.  That’s a bad idea for a number of reasons, including several that we described in detail in our Supreme Court brief filed in this exact case.

It isn’t just an issue in the Apple v. Samsung case, though.

What’s At Stake For Everyone?

If design patents on a small piece of a product can regularly be applied to the profits on the entire product, it will have a huge impact on whole swaths of industry—many of them far from the high-tech sector.  Those industries will be placed at risk of in terrorem threats of litigation and chilling effects on product design and development.  Disgorgement of total profits on the whole product for a design patent covering only a small component will reduce willingness to work with smaller suppliers who can’t indemnify the manufacturer.  It will make manufacturers seriously reconsider providing open access to their systems. It might even drive a wave of design patent troll lawsuits.

The auto industry, the app ecosystem, consumer goods manufacturers—even diapers—all of them face potential concerns if Apple’s theory of the case prevails.  Over the course of this week, as the Apple v. Samsung trial unfolds, I’ll explain exactly how these other industries face threats from this interpretation of § 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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