Digest of Apple Inc. v. Samsung Electronics Co., et al., No. 2014-1335, 2015-1029 (Fed. Cir. May 18, 2015) (precedential). On appeal from N.D. Cal. Before Prost, O’Malley, and Chen.

Procedural Posture: Defendant Samsung appealed from the District Court’s decision upholding a jury verdict finding dilution of Apple’s registered and unregistered trade dress, validity and infringement of Apple’s design patents, and validity and infringement of Apple’s utility patents. CAFC reversed the jury verdict relating to trade dress and vacated the damages. CAFC affirmed the jury verdict relating to design patent and utility patent claims.

  • Trade Dress – Functionality: c the cost or quality of the article. In the Ninth Circuit, there is a high bar for non-functionality.
  • Trade Dress – Functionality: Substantial evidence did not support a jury finding that Apple’s unregistered trade dress was non-functional. When asserting an unregistered trade dress, Apple has the burden of proving that the claimed trade dress is not functional. Apple asserted that Samsung infringed its unregistered trade dress related to the product design and user interface of its iPhone 3G and 3GS products. The CAFC found that Apple designed the iPhone with utilitarian concerns in mind, such as ease of use, pocketability, and durability. While alternative designs exist, Apple failed to show that those alternatives offered exactly the same features as the asserted trade dress. Apple’s advertisements arguably touted the utilitarian advantages of its phones, but Apple failed to counter that evidence. Finally, Apple did not show that the design elements of its trade dress were not relatively simple or inexpensive to manufacture. Thus, the CAFC found Apple’s unregistered trade dress not protectable.
  • Trade Dress – Functionality: Substantial evidence did not support a jury finding that Apple’s registered trade dress was non-functional. Apple asserted that Samsung infringed its registered trade dress, which claims design details of the icons on the iPhone home screen. When accused of infringing a registered trade dress, Samsung has the burden of providing evidence of functionality. Samsung provided expert testimony on how the icon designs promote usability, such as by serving as visual shorthand for other things or by efficiently using screen real estate. The CAFC found that Samsung satisfied its burden, and that Apple’s registered trade dress was “nothing other than the assemblage of functional parts.” The burden shifted back to Apple to show evidence of non-functionality of its registered trade dress, but because Apple failed to provide substantial evidence of such non-functionality, the CAFC found the registered trade dress not protectable.
  • Design Patent – Infringement: Jury instructions in this case regarding infringement of design patents fairly and correctly covered the applicable law, and any alleged error was not prejudicial. The CAFC found that the jury instructions properly limited the scope of the design patents to the “ornamental” elements, properly clarified that actual deception or confusion was not required, and properly required each juror to consider the prior art. The CAFC held that Samsung failed to show that the applicable law was not fairly and correctly covered by the jury instructions, and found that substantial evidence supported the jury’s verdict of infringement.
  • Design Patent – Damages: The District Court did not err in its instruction to the jury on design patent damages. Samsung argued that the damages award should be limited to the damages attributable to infringement of the design patents, and that the District Court erred in allowing the jury to award Samsung’s entire profits on infringing phones as damages. However, Section 289 of Title 35 explicitly authorizes the award of total profit from an infringing article of manufacture. Thus, the CAFC held that the District Court did not err, and affirmed the damages award for design patent damages.
  • Preclusion of Evidence: The District Court properly precluded Samsung from proffering a witness’s testimony regarding the development of one of its earlier phones. The witness did not design any of the accused devices and thus the testimony would have limited probative value on the issue of copying.
  • Utility Patent – Indefiniteness: The District Court correctly determined that Samsung failed to carry its burden of showing indefiniteness. One of the asserted claims of Apple’s utility patents includes a feature in which a user double taps a portion of a page to cause that portion to be “substantially centered” on the display. Samsung failed to show that skilled artisans would find the element to be lacking reasonable certainty in scope. The CAFC explained that skilled artisans in the art would understand the term to mean “essentially centered except for marginal spacing.”
  • Utility Patent – Anticipation: Substantial evidence supported the jury’s finding that an asserted claim was not anticipated. Samsung challenged a claim as being anticipated and argued that a prior art reference discloses an “event object” claim element. Samsung’s expert argued that the “event object” was inherently disclosed in the prior art, and Apple’s expert provided evidence rebutting that argument. Given such evidence, the CAFC found that a reasonable jury could have credited Apple’s expert over Samsung’s expert.
  • Utility Patent – Lost Profits: Substantial evidence supported the jury’s award of lost profits. Samsung argued that lost profits should not have been awarded because non-infringing alternatives existed. However, of the two Samsung phones asserted by Samsung as non-infringing substitutes, one phone was never sold by a U.S. carrier and the other phone had significantly different features. The CAFC concluded that a reasonable jury could have found that the phones were not acceptable alternatives.
  • Utility Patent – Reasonable Royalty: Substantial evidence supported the jury’s reasonable royalty award. Samsung argued that Apple’s damages experts did not apply the Georgia-Pacific factors with enough detail when calculating a reasonable royalty. Apple’s expert had testified that certain factors relevant to lost profits were also relevant to reasonable royalty, but did not repeat that analysis when discussing the reasonable royalty. The CAFC found that it was sufficient for an expert to refer to earlier testimony, and that a reasonable jury could refer to an expert’s earlier testimony when weighing the evidence. The CAFC affirmed the damages award for infringement of Apple’s utility patents.