Design patent infringement damages can be for the final product or just a component of the final product
Samsung Electronics Co., Ltd. V. Apple Inc.
In 2011 Apple sued Samsung for infringing upon its design for smartphones to which Samsung then counter sued. Apple was awarded damages of $399 million, which was the sale of all smartphones by Samsung that used their patented design. Samsung then appealed the damages saying that it should be limited to the amount that is attributable to the components that the patent applied to alone, the Supreme Court agreed with Samsung regarding the damages.
§289 of the Patent Act provides:
“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.”
Thus, §289 effectively holds liable a defendant who infringed upon a patent for both their product in its entirety or for even a portion of the product. What was unclear until this case was whether damages would be awarded for the products sold in their total or whether they would be limited to only the value of the components that infringed upon the plaintiff’s patents. In this case, the Supreme Court found that when applicable, the damages would be limited to only the components.
The Supreme Court found that a two-step process should be applied when determining the damages that should be applied under §289: 1) “Identify the article of manufacture to which the infringed design has been applied”; and 2) “calculate the infringer’s total profit made on that article of manufacture.”
In developing the two-step test the Supreme Court also defined what the scope of “articles of manufacture” entailed stating that by reading the “articles of manufacture” to relate only to the end product would be too narrow of a reading and thus found that the scope includes both the end product and a component of the end product. Thus, it is up to the court hearing the case as to whether the damages awarded should be from profits of the final product or only from the component upon which the patent was infringed upon.
This article is provided for informational purpose only and is not intended as a form of legal advice. If you have any questions on the subject matter of this article, call Roland Tong, at 949-298-6867 or email Mr. Tong at [email protected]. Mr. Tong has been obtaining patent, trademark, copyright, and trade secret protections for his clients since 2001. He has represented a wide range of clients from start-up companies to Fortune 500 companies in a wide range of industries.