I M A G E B Y A N D R I J B O R Y S A S S O C I A T E S / S H U T T E R S T O C K

of manufacture” to which the patented designs had been applied.

Samsung persuaded the Supreme Court to review the CAFC ruling.

 

Solicitor General Weighs In

The U.S. government rarely files briefs
with Supreme Court cases or joins in
oral argument when disputes are be-
tween private litigants such as Apple
and Samsung. The Solicitor General
(SG) filed a brief in Samsung to chal-
lenge the CAFC’s ruling, saying it
would result in “grossly excessive and
essentially arbitrary awards” for design
patent infringement in cases in which
the patented design was applied to
one component of a multicomponent
product (such as a latch for a refrigera-
similar that an ordinary observer would
be deceived into buying the infringer’s
product thinking it was buying the pat-
entee’s product. (Embodying the design
in a different type of product generally
does not infringe because consumers
will not be deceived in this manner.)

When design patents have been infringed, courts may order defendants to pay the patentee a reasonable royalty for use of the patented design in infringing products. Alternatively, design patentees can ask for a disgorgement of the defendant’s profits as to the article of manufacture to which that design has been applied. (Courts have ruled that design patentees cannot get both disgorgement of profits and reasonable royalties, as that would produce double recovery.)

 

Origins of the “Total Profits” Rule In the late 19th century, in two cases involving design patents for carpets, the U.S. Supreme Court gave a narrow interpretation to the disgorgement of profits rule. The Court denied the patentee an award of the infringers’ profits because he had not proven how much of the infringers’ profits were due to the patented design and how much was other factors (such as the quality of the wool).

In response to criticism of these decisions, the U.S. Congress in 1887 amended the design patent statute so that patentees could get the “total profits” that defendants derived from selling articles of manufacture embodying the patented designs. Congress was aware that this new “total profits” rule might overcompensate some patentees, but regarded this outcome as better than a rule that undercompen-sated them. There is, however, no comparable “total profits” rule in any other intellectual property law.

 

Apple’s Design Patents and Total Profits Award

Three design patents on the external configuration of smartphones were at issue in Samsung. One was for a black rectangular round-cornered front face for the device. A second was for a rectangular round-cornered front face with a surrounding rim or bezel. A third was for a colorful grid of 16 icons to be displayed on a screen.

In the trial Apple brought against
Samsung for infringing these pat-
ents, the judge instructed the jury
that it could not assess how much of
Samsung’s profits from selling smart-
phones were attributable to the pat-
ented designs. If the jury found in-
fringement, it was obliged to award
Samsung’s total profits from sales of
infringing phones. The jury agreed
with Apple on the infringement claims
and awarded $399 million in total prof-
its. Samsung appealed to the CAFC.

The appellate court acknowledged it was difficult to justify this award for infringement of the three Apple design patents as a matter of equity.

However, the CAFC decided the statute
required it to affirm the total profits
award because it regarded Samsung’s
smartphones as the relevant “article
viewpoints