Samsung v. Apple: The Cert. Petition Is GRANTED But Limited To Question 2 (damages)

Apple’s success story is well-known: “Before 2007, mobile phones were bulky, inelegantly designed boxes with multiple buttons and protruding antennas”. The context hasn’t changed either: Samsung, faced with a crisis of design, “made a deliberate decision to copy the iPhone’s innovative look and many of its other features, and its mobile devices became iPhone clones”. And now we know the result: the petition for writ of certiorari (request for U.S. Supreme Court review) is granted, at least, to question 2 (see below).

The tone in Apple’s brief opposition petition for writ of certiorari ("cert. petition"; a brief asking the U.S. Supreme Court (SCOTUS) to hear a case) seemed strong, but wasn’t good enough to convince the SCOTUS not to review the Federal Circuit's decision (786 F.3d 983). After a 120-year hiatus, the highest judicial body in the United States will, again, examine the valuation of design patents. Apple did however “win” regarding the scope of the design patents as the petition is only granted to question 2.

This almost five-year-old high-profile litigation with Apple should have been settled a long time ago. Samsung and Apple spent too many days in Court. Recently, in December 2015, Samsung has filed a cert. petition, asking the SCOTUS to hear this design patents case based on two legal issues (see below). Disregarding the contrary view of 9 high-technology companies (including eBay, Dell, Facebook, Google, HP), 37 intellectual property professors, 2 public interest organizations, and others advocacy groups that have filed amicus briefs (“friends of court”) in support of Samsung’s petition, Apple told the SCOTUS that it should not hear the case because it was "legally unexceptional”.

To make this case seem certworthy, the South Korean multinational electronics company emphasized on its long standing industry leader in the field of mobile phones, and its position as first mobile-phone manufacturer to introduce devices that incorporated 3-D cameras, MP3 music players, etc. Apple, by contrast, was a latecomer to the mobile-phone industry, announcing a “new, original, and beautiful object, something that would really wow the world” (a.k.a. the iPhone) in 2007.

This case involves three design patents covering various aspects of the iPhone: U.S. Design Patent No. 618,677 (the “D’677 patent”) protects the iPhone’s distinctive front face; U.S. Design Patent No. 593,087 (the “D’087 patent”) protects the iPhone’s distinctive overall appearance, including its particular shape, the flat contour of the front face, and the raised edge separating the glass display from the rest of the device; and U.S. Design Patent No. 604,305 (the “D’305 patent”) protects the iPhone’s colorful graphical user interface (a particular colorful grid of sixteen icons).

Samsung raised two legal issues in its petition, one about claim construction (the scope of a design patent) and one about the determination of damages:
1.      Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope?
2.      Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

As you know, while utility patents protect functional inventions and copyrights protect works of art, design patents protect only ornamentation and not the functional aspect of a product (35 U.S.C. § 171(a) (providing protection for “any new, original and ornamental design for an article of manufacture”[the statute does not define what constitutes a protected “ornamental” design, but it cannot protect “abstract ideas” or “physical phenomena” like basic shapes or concepts: Bilski v. Kappos, 561 U.S. 593, 601]). To qualify for protection, a design must present an aesthetically pleasing appearance that is not dictated by function alone, and must satisfy the other criteria of patentability (489 U.S. 141, 148 (1989)).

It’s easier to understand that a patented design might be the essential feature of a spoon or rug said Samsung; but what about smartphones, which contain countless other features that give them remarkable functionality wholly unrelated to their design? In sum, Samsung thinks design patent rights should be limited and only be permitted to cover non-functional and ornamental aspects of a product. It is indeed not undisputed that the three design patents at issue here cover very specific, limited portions of a smartphone’s design (for instance, a particular black rectangular round-cornered front face).

Samsung raised the question as whether one may own rectangles, round corners, the color black or the concept of a grid of icons and whether those elements should not be seen as functional? Samsung argued that: “Rectangular shapes and flat screens allow a user to view documents and media. Round corners make phones easier to slip into a pocket or purse. A bezel prevents the glass screen from shattering if a phone is dropped. Icons on a screen inform a user how to touch the screen to initiate  various functions”.

Concerning the damages, the question was whether the entire-profit-disgorgement for design patent infringement makes sense? According to us, the system needs to be revised. Indeed, the Federal Circuit allowed the jury to award Samsung’s entire profits from the sale of Galaxy phones found to contain the patented designs (totaling $399 million) even though only some of the components of the devices infringe. The Court held that Apple was “entitled to” those entire profits no matter how little the patented design features contributed to the value of Samsung’s phones. The situation is almost ridiculous. It means that no matter how much the patented features contributed of the value of a so-called infringing smartphone, 35 U.S.C. §289 awards 100% of the profits from the infringing phone.

The Samsung v. Apple disputes (#appsung) always attract a large amount of media attention, and it’s not a surprise as Apple and Samsung are the top two manufacturers of smartphones. They both need to protect their intellectual property and stop rivals from copying what they believed to be theirs. Whether it is about patents, money, or values, this long-running fight between the two tech-industry giants is now before the U.S. Supreme Court and it’s gonna be exciting! We can only regret that the SCOTUS is limiting the case to question 2. Whether Samsung is a “fast follower” rather than an innovator, future will (eventually) tell…


Popular posts from this blog

Ethical Coffee Company Sues Nestlé Nespresso For €150m

92% Of NPE Litigation In 2015 Were Brought By Patent Assertion Entities