Cellphone Wars: Apple & Samsung Battle Over Design Patent Law
The cellphone wars continue with the next installment of Apple v. Samsung. Today is just another example of Samsung and Apple wielding their intellectual property portfolios against one another. However, unlike the utility patent infringement cases the two technology giants have brought this case regarding design patents, and the case is ascending to the Supreme Court. As a result, the Supreme Court will review a design patent case for the first time in over 120 years. The parties have submitted their briefs and oral arguments are set for October 10th, 2016.
Let’s take a step back and see where this case originated.
In July 2012, a jury held that Samsung infringed Apple’s design and utility patents and awarded Apple $1.05 billion in damages. On appeal, the Federal Circuit reduced the damages to $548 million, $399 million of which resulted from damages for design patent infringement. The damages were calculated using the total profit from Samsung’s infringing cellphones. The design patent pertained to Apple’s rectangular front face with rounded corners, bezel and colorful grid. The District Court decision and Federal Circuit affirmation grounded their decisions on the Patent Act’s Additional Remedy for Infringement of Design Patent provisions codified in 35 U.S.C. § 289. It provides that a design patent infringer is liable for the total profit from the infringing product.
The Patent Act created § 289 in 1887 and the Supreme Court last heard cases on design patents in the late nineteenth century. Those cases all pertained to products consisting of a single or a few components such as a spoon handle,[1] a carpet,[2] a saddle,[3] and a rug.[4] In contrast, today’s cellphones contain far more components and are orders of magnitude more complex.
Samsung appealed the Federal Circuit decision and the Supreme Court granted certiorari. The fight is over what constitutes the infringing product for determining damages – the individual infringing components, or the entire product. As with most questions, there are two sides of the coin. Samsung argues that the Federal Circuit misinterpreted § 289 to define the product as the completely assembled part instead of only the infringing part and that, therefore, the liability should only be for the damage caused by the infringing part.
On the other hand, Apple stands by what they argue is the statute’s plain meaning: the infringer is liable to the design patent owner for the total profit from the infringing product. Moreover, Apple argues that even if this is not what Congress intended, Congress has passed up opportunities to correct it, and the judiciary should leave it to Congress to correct.
Policy concerns are inherent in decisions regarding intellectual property. Intellectual property law must strike the balance between incentivizing innovators, in this case designers, to innovate by giving them a monopoly on their intellectual property while simultaneously allowing those ideas to seep into society and spur more innovation. Here, Apple can argue that large damage awards will deter infringers and therefore incentivize innovators to create. However, Samsung can counter that large damages will cause new innovators to fear litigation and therefore shy away from building on existing innovations.
Now, the question is: how will the Supreme Court decide on this question?
I can see the Supreme Court coming out one of a few ways but I think there is one most likely outcome. I think the Supreme Court will decide to exercise judicial restraint and uphold the Federal Circuit’s decision. Theoretically, it is the legislature’s responsibility to write the law and the judiciary’s responsibility to interpret it. Here, I think the Supreme Court will find Apple’s plain meaning argument persuasive and tell Samsung that if it does not like the law, to bring it up with the legislature.
On another note, the eight-justice Supreme Court also weighs in favor of this outcome. The justices may be granting cert. for easily decided cases in an effort to avoid stale-mating. Here, Apple’s plain meaning seems to be clean-cut and might be an easy decision.
Whether you agree, disagree, or have a completely different opinion, let me hear it in the comments.
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