Samsung Electronics Co. v. Apple Inc.: Redefining Design Patents’ “Article of Manufacture” Standard

December 9, 2016

Samsung Electronics Co. v. Apple Inc.: Redefining Design Patents’ “Article of Manufacture” Standard

The Supreme Court addressed the scope of design patents for which a patentee may recover an infringer’s “total profits” under 35 U.S.C. § 289. In Samsung Elecs. Co. v. Apple Inc., 580 U.S. __ (2016), the Supreme Court unanimously reversed the Federal Circuit’s affirmance of the $399 million damages award and held that the term “article of manufacture” is broad enough to embrace both an entire product sold to a consumer and a component of that product. The Court remanded the case to the Federal Circuit to determine, for each of the design patents at issue, whether “the relevant article of manufacture is the smartphone or a particular smartphone component.”

The design patent statute makes an infringer “liable to the [patent] owner to the extent of his total profit, but not less than $250” where the infringer, “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.” 35 U.S.C. § 289. Thus, determining a damages award under § 289 requires: (1) identifying the “article of manufacture”; and (2) calculating the infringer’s total profits.

The patents-in-suit relate to the appearance of Apple’s first generation iPhones. Before the Federal Circuit, Samsung argued that damages should have been limited to the profits for the respective patented features (e.g. the screen or the case). In rejecting the argument, the Federal Circuit reasoned that limiting the damages was not required because the “innards” of the phone “were not sold separately from their shells as distinct articles of manufacture.”  In reaching its decision, the Court considered only the first prong of the design patent damages analysis in addressing “whether, in the case of a multi-component product, the relevant ‘article of manufacture’ must always be the end product sold to the consumer or whether it can also be a component of that product.”

The Court interpreted the phrase “article of manufacture” to be sufficiently broad enough to potentially encompass a component of a product. The Court referenced design patent precedent related to 35 U.S.C. § 171, where design patents may be granted to only a component of a multicomponent product. The Court also referenced eligible subject matter precedent under 35 U.S.C. § 101, where parts of a machine have been considered separately from the machine itself. Thus, the Federal Circuit’s unitary, narrow interpretation of “article of manufacture” does not meet the text of the statute. Therefore, future courts should make findings as to whether the “article of manufacture” of the design patent relates to the entire product or only to a component.

The Court declined to lay out an express test for determining what is the “article of manufacture” for a given design patent. As such, parties—including design patent applicants and owners, patent prosecutors, and litigators—must be cognizant of how to demonstrate the value of the claimed ornamental design feature, and its impact upon a potential damages award.  Future cases will provide additional guidance as to what specifically delineates a component from the end product in the ultimate “article of manufacture” analysis. 

Authored by Joseph Dubis, Ph.D.