Patent Damages

Tianxiang (Max) Zhou, MJLST Staffer

In Dec. 2015, almost five years after Apple sued Samsung for infringing a smartphone design patent, Samsung agrees to pay Apple $548 million. Apple is now demanding Samsung pay an additional $180 million for the patent dispute. Besides the huge amounts of damages, the case is not over and it continues raising fundamental issues of how to evaluate values of design patent infringements.

In the petition for writ of certiorari challenging the $400 million that it has paid for infringing Apple’s design patent, Samsung writes, “The questions presented are: . . . Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

The second issue stated in the writ is noteworthy. Under the current rule, the awards in a design patent infringement case to the patent owner are the whole profits from the sale of the infringing products. This rule has created and will create massive jury verdicts in design patent infringement cases, and the Supreme Court has not reviewed the rule. As Samsung writes in the petition, “the Supreme Court has not reviewed a design-patent case in more than 120 years.” With the new development of the industries and various design patents, it is doubted whether the awards of whole profits are reasonable.

Although statistically the Supreme Court will not take the case, the issue of design patent awards raised heated discussions. In 2014, a group of 27 law professors submitted an amicus brief in support of Samsung urging the Federal Circuit to interpret the relevant statutory provision to limit the award of profits in design patent infringement cases. The amicus brief stated: “the Court should require proof of some connection between the patented design and the defendant’s profits, the order the district court to remit the award of profits to the extent it exceeds those profits attributable to the patented designs.” The professors argued the origin and context of the controlling statute Section 289, and that awarding a defendant’s entire profits makes no sense in the modern world, and to prevent disgorgement of profits.

As stated above, the Supreme Court has not reviewed the issue for over one hundred years. With the unsettled dispute between Samsung and Apple continuing, we could look forward to whether the Supreme Court would take the case and redefine Section 289. However, a question posed to the judges is, if the awards to the design patent infringement are not the whole profits of the sale, then what proportion of the profits should be awarded? Judges should figure out a reasonable standard to evaluate the amount attribute to the infringed design.

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