US Supreme Court Sides With Samsung In Latest Legal Battle Against Apple
Thursday 8 December 2016 @ 12.16 p.m. | IP & Media
The Supreme Court of the United States has sided with Samsung in the latest round of the company’s ongoing legal battle with Apple over the design of its smartphones. The Supreme Court reversed a decision from the Court of Appeals from the Federal Circuit which had held that Apple was entitled to the full profits from the sales of Samsung mobile phones that had been found to infringe Apple’s design patents. The case will be returned to the Federal Circuit for further consideration.
The case revolved around the interpretation of s 289 of the US Patent Act, which provides for damages remedies for design patent infringement. The section provides that a person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.”
The Previous Decision
The Court of Appeals for the Federal Circuit had interpreted the “article of manufacture” as the entire smartphone, awarding Apple the entire profit that Samsung made from a number of smartphones that were held to infringe on Apple’s design patents. Samsung had argued “that the profits awarded should have been limited to the infringing ‘article of manufacture’”— for example, the screen or case of the smartphone—“not the entire infringing product”—the smartphone.” However, the Court rejected this approach on the basis that ““limit[ing] the damages” award was not required because the “innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.”
The Supreme Court Decision
The Supreme Court unanimously overturned this decision, rejecting this approach. Justice Sonia Sotomayor, who wrote the joint judgment, said:
“the term “article of manufacture” is broad enough to encompass both a product sold to a consumer as well as a component of that product. A component of a product, no less than the product itself, is a thing made by hand or machine. That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture….
The Federal Circuit’s narrower reading of “article of manufacture” cannot be squared with the text of §289.”
However, the Supreme Court refused to resolve precisely what the article of manufacture should be in these circumstances:
“The parties ask us to go further and resolve whether, for each of the design patents at issue here, the relevant article of manufacture is the smartphone, or a particular smartphone component. Doing so would require us to set out a test for identifying the relevant article of manufacture at the first step of the §289 damages inquiry and to parse the record to apply that test in this case. The United States as amicus curiae suggested a test, see Brief for United States as Amicus Curiae 27–29, but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the §289 damages inquiry in the absence of adequate briefing by the parties. Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand.”
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