On May 24, 2018, after a week-long trial and four days of deliberation, a federal jury determined that Samsung owes Apple $533,316,606 in damages for infringement of three design patents asserted by Apple. The jury also found that Samsung should pay more than $5 million for infringement of two utility patents. The case caption is Apple Inc. v. Samsung Electronics Co. et al., No. 11-CV-01846-LHK, in the U.S. District Court for the Northern District of California. The design patents at issue—D604,305, D593,087, and D618,677—cover ornamental features of smart phone devices, including their shape and graphical user interface.
This case has been pending for more than seven years. Apple initially sued Samsung in 2011, asserting a number of utility patents and the above-mentioned three design patents, as well as trade dress and trademarks relating to aspects of Apple’s iPhone and iPad devices. After jury trials in 2012 and 2014, Apple was awarded $399 million in damages for infringement of the design patents—Samsung’s total profits for its infringing smartphones. Samsung appealed to the U.S. Court of Appeals for the Federal Circuit, which in 2015 upheld the damages based on design patent infringement. Samsung then appealed the design patent damages issue to the U.S. Supreme Court, which in 2016 reversed. Following remands by the Supreme Court and the Federal Circuit back to the district court, a new trial on damages was held on May 14-18, 2018.
The Four-Factor Test For Design Patent Damages
The design patent damages statute provides that an infringer who applies the patented design to any “article of manufacture” shall be liable to the extent of its total profit. 35 U.S.C. § 289. This calculation of damages—disgorgement of the infringer’s total profits—differs from damages for utility patents, which may be based on the lost profits of the patentee. Prior to the Supreme Court’s 2016 decision in this case, Federal Circuit law had held that the relevant “article of manufacture” under 35 U.S.C. § 289 is the entire product sold to a consumer to which the design is applied—even if the design covers only one component of the product. In an effort to reduce the basis upon which its profits were calculated, Samsung argued to the Supreme Court that the article of manufacture should be limited to the component embodying the patented design. The Supreme Court agreed in part: it held the article of manufacture could be either the component or the entire product, depending on the particular facts of the case.
The Supreme Court, however, did not explain which choice applied to the case, or how to calculate damages based on a component of the product. After considering competing proposals by Apple and Samsung, the district court ended up adopting a test formulated by the U.S. Solicitor General during the Supreme Court proceedings. Specifically, the district court instructed the jury to consider four factors: (1) the scope of the claimed design, including the drawings and written description provided by the design patent; (2) the relative prominence of the design within the infringing product as a whole; (3) whether the design is conceptually distinct from the product as a whole; and (4) the physical relationship between the patented design and the rest of the product, including whether the design pertains to a physically separable, separately sold, or separately manufactured component.
In the May 2018 trial, the jury awarded Apple $533 million in design patent damages. Although the jury’s verdict form breaks down this award among 16 infringing Samsung smartphones, it does not shed light on what, exactly, the jury determined to be the article of manufacture. On the one hand, the May 2018 award is comparable to the prior $399 million award, when the law required calculating total profits based upon the value of the entire product. On the other hand, the jury’s award essentially splits the difference between the $1 billion in total profits that Apple sought and the $28 million that Samsung argued to the jury was the appropriate figure.
When the Federal Circuit remanded to the district court after the Supreme Court’s decision, it did not provide any guidance on how to determine the article of manufacture. However, at least two other district courts have taken the same tack as the district court in this case, applying the Solicitor General’s four-factor test. At least at this time, there appears to be a growing consensus on how district courts will instruct juries regarding design patent damages.