On December 6, 2016, the Supreme Court decided Samsung Electronics Co. v. Apple. In April 2011, Apple sued Samsung Electronics, alleging that Samsung’s smartphones infringed on Apple’s trade dress as well as various design patents for the iPhone. A jury awarded Apple nearly $1 billion in damages under Section 289 of the Patent Act, and the trial court upheld most of the award against Samsung’s post-trial challenges. On appeal, the U.S. Court of Appeals for the Federal Circuit rejected Samsung’s argument that the district court erred by allowing the jury to award damages based on Samsung’s profits off of its phones in their entirety, rather than just the portion of profits attributable to the smartphone components covered under the design patents.
The question before the Supreme Court was whether, where a design patent is applied to only a component of a product, an award of infringer’s profits should be limited to those profits attributable to the component.
By a vote of 8-0, the Supreme Court reversed the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Sotomayor, the Court unanimously held that in the case of a multicomponent product, the relevant article of manufacture for arriving at a damages award under Section 289 need not be the end product sold to the consumer but may be only a component of that product. Whether the relevant article of manufacture in this particular case should be the entire smartphone or merely a component thereof is an issue the Court left open for resolution on remand.
To discuss the case, we have Trevor Copeland, a Shareholder at Brinks Gilson & Lione, and Art Gollwitzer, a Partner at Michael Best & Friedrich LLP.