Damages for Design Patent Infringement: What Is an "Article of Manufacture?"

On December 6, 2016, the U.S. Supreme Court issued its long awaited decision in Samsung Electronics Co. v. Apple Inc.  The issue in Samsung v. Apple was whether 35 U.S.C. § 289 requires that design patent damages of a multi-component product must always lie in the end product sold to the consumer.  The Court, in a unanimous decision, held that the term “article of manufacture” as used in § 289 does not mean only the end product sold to the consumer, but can mean a smaller component part – even where the component part is not available for separate purchase.  In so doing the U.S. Supreme Court reversed Apple’s $399 million award for design patent infringement.

The design patents in the Samsung v. Apple litigation related to the appearance of the exterior of a smart phone.  The jury found that Samsung infringed those design patents and awarded Apple the total profits made by Samsung, $399 million.  The controlling statute for design patent infringement is 35 U.S.C. § 289, which states:

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 . . . .

(Emphasis added.)  The Federal Circuit affirmed the award and rejected the argument that damages should be less because the articles of manufacture were the front face or screen rather than the entire smartphone.  The unanimous decision authored by Justice Sotomayor is only nine pages long and turns on the Court’s view that the plain meaning of the term “article of manufacture” is simply a thing made by hand or machine and can be a subcomponent of the accused multi-component product being sold.

Lessons for Practice

The U.S. Supreme Court declined to provide specific guidance as to how to identify the relevant article of manufacture when looking to a multicomponent product being sold.   In this author's opinion, courts applying Samsung v. Apple will take partial guidance from the utility patent concept of smallest saleable unit aligning as many articles of manufacture as possible to the claimed design features.

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