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By Maegen Sincleair

On October 11, 2016 the Supreme Court heard oral arguments for the Apple Inc. v. Samsung Elecs. Co.[1] case. The case began in 2011, when Apple Incorporated (“Apple”) filed suit against Samsung Electronics Co. (“Samsung”) alleging that numerous Samsung smart phones infringed and diluted Apple’s patents by copying the front screen display and graphical user interface.[2] A jury agreed with Apple and found that Samsung infringed upon Apple’s designs patents.[3] The District Court for the Northern District of California upheld the jury’s verdict,[4] the verdict was affirmed again by the Federal Circuit,[5] and then the Supreme Court granted cert on March 21, 2016.[6]

Although the Supreme Court hears cases involving copyrights, trademarks, and utility patents multiple times a year, this case provided the Court with a unique opportunity to consider a statute that “has not [been] directly considered in more than a half century.[7] The case involves 35 U.S.C. § 289[8], which provides that any person who applies a patented design “to any article of manufacture” is “liable. . . to the extent of his total profit.”[9] The ultimate issue before the Court was “whether an award of infringer’s profits should be limited to profits attributable to a specific component in cases where a design patent is only applied to a specific component of a product.[10]

Samsung argued that modern cellphones are made from hundreds of individual elements and components, which makes it illogical to release all of its profits to Apple when only a limited number of components infringe upon Apple’s design patents.[11] Essentially Samsung believed that the Apple infringed elements are not the sole source of their profits and that consumers choose to purchase Samsung phones for many additional reasons. Although this might be an argument based largely in policy, Samsung furthered its reasoning by arguing that the screen design and user interface are separate “article[s] of manufacture”[12] and are therefore different from the phone and should result in damages being awarded accordingly.

Comparatively, Apple supported its position through statutory interpretation. Apple claimed that the language, “to any article of manufacture,”[13] assumes that “any article” contains a patented design as an element and still directs that a “total profit”[14] be awarded. Apple also relied on the legislative history of 35 U.S.C. § 289 by looking to the Supreme Court’s interpretation of the predecessor to Section 289.[15] In Dobson v. Dornan[16], the Supreme Court interpreted the predecessor to Section 289 to mean that damages should only be awarded to the profit attributable to patented design elements[17], which Congress quickly rejected with its rewriting of Section 289 to force the award to be the “total profit.”[18]

Despite the outcome of the case, any decision the Supreme Court makes will have a lasting effect on the technology world and its consumers. If Apple is victorious, it could create a significant barrier to technological innovation. All phones consist of common components that make it functional and familiar to consumers, so if companies where forced to abandon or redesign these components in order to create products that are different enough to protect themselves from patent litigation it may result in more time, effort, and resources being used for innovation.  Alternatively, it could force technology companies to create different new designs, which would ultimately give consumers more options. Additionally, an Apple victory might allow and even encourage patent owners to sue over minor details of successful products and thus lead to an increase in patent litigation and congestion in our courts. Conversely, if the Court decides in favor of Samsung, it could deteriorate the numerous protections afforded to new creations and could also suppress creative innovation.

[1] Apple Inc. v. Samsung Elecs. Co., 786 F.3d 983 (Fed. Cir. 2015), cert. granted, 84 USLW 3350 (U.S. Dec. 16, 2016) (No. 15-777).

[2] See id. At 989.

[3] See id.

[4] See id. (upholding over Samsung’s post trial motion and upheld $639,403,248 in damages while also ordering a partial retrial on the remainder of the damages).

[5] See id. at 1005.

[6] See Samsung Electronics Co. v. Apple, SCOTUSblog, https://www.scotusblog.com/case-files/cases/samsung-electronics-co-v-apple/?wpmp_switcher=desktop.

[7] See Ronald Mann, Argument preview: Justices to consider $400 million verdict for Samsung’s infringement of the design of Apple’s iPhone, SCOTUSblog (Oct. 4, 2016, 4:22 PM), https://www.scotusblog.com/2016/10/argument-preview-justices-to-consider-billion-dollar-verdict-for-samsungs-infringement-of-the-design-of-apples-iphone/.

[8] 35 U.S.C. § 289 (1952).

[9] Id.

[10] SCOTUSblog, supra note 6; see also Mann, supra note 7 (reframing the issue as “whether the relevant ‘total profit’ is the profit form the entire device or some fraction of that profit attributable to the patented design elements).

[11] See supra note 7.

[12] 35 U.S.C. § 289.

[13] Id.

[14] Id.

[15] Id.

[16] Dobson v. Dornan, 118 U.S. 10 (1886).

[17] Dobson, 118 at 17.

[18] 35 U.S.C. § 289.

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