On Tuesday, September 29, 2015, the Federal Circuit remanded a case for a new damages trial in a design patent infringement case because the damages awarded by the jury did not account for all of the defendant’s profits, as required by the design patent statute, 35 U.S.C. § 289.
The plaintiff, Nordock, Inc. sued Systems, Inc. in the United States district court for the Eastern district of Wisconsin alleging Systems’ hydraulic dock levelers infringed U.S. Design Patent No. D579,754 (D’754 patent), which claims the ornamental design of a lip and hinge plate for a dock leveler. A jury found that Systems’ hydraulic dock levelers infringe the D’754 patent, and that the patent is not invalid. The district court entered judgment awarding Nordock $46,825 in damages as a reasonable royalty. Nordock filed a post-judgment motion to amend the judgment, and alternatively, for a new trial on damages. The district court denied the motion and Nordock appealed to the Federal Circuit. Systems filed a cross-appeal arguing the patent was invalid.
The Federal Circuit affirmed the verdict for infringement, but found that the damages award improperly failed to account for all of Systems’ profits. The Federal Circuit explained that “the plain language of [35 U.S.C. § 289] permits design patentees to claim either $250 or the infringer’s ‘total profit’ on sales of ‘any article of manufacture’ to which the patented design was applied.” Citing its recent decision in Apple Inc. v. Samsung Elecs. Co., 786 F.3d 983, 1001-02 (Fed. Cir. 2015), the Federal Circuit held that “apportioning profits in the context of design patent infringement is not appropriate, and that ‘Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design.’”
The court instructed that on remand Nordock is entitled to a proper determination of Systems’ profits based on the appropriate gross revenue methodology, not the so-called “cost savings” approach that guided the jury’s damages award.
The case is Nordock, Inc. v. Systems, Inc., et al., Case Number 2014-1762, in the U.S. Court of Appeals for the Federal Circuit.