Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

SCOTUS Makes Big Decision Regarding Design Patent Damages

Author: Scarinci Hollenbeck, LLC

Date: December 21, 2016

Key Contacts

Back

U.S. Supreme Court Clarifies Design Patent Damages

design patent damages

The U.S. Supreme Court recently issued its much-anticipated decision in , which revolved around how to calculate damages in design patent infringement cases. In a unanimous decision, the Court held that Samsung could be liable for only those profits associated with the infringing components of the phone rather than the whole device.

Determining Design Patent Damages

Section 289 of the Patent Act makes it unlawful to manufacture or sell an “article of manufacture” to which a patented design or a colorable imitation thereof has been applied. It further provides that one who “applies the patented design … to any article of manufacture … shall be liable to the owner to the extent of his total profit, … but [the owner] shall not twice recover the profit made from the infringement.”

Samsung and Apple’s intellectual property dispute centers on a series of design patents that protect various aspects of the iPhone’s iconic design, including its rectangular front face with rounded edges and a grid of colorful icons on a black screen. After Samsung introduced smartphones with similar features, Apple filed a design patent infringement lawsuit.

The jury found Samsung liable for infringement of Apple’s design patents and awarded Apple $399 million in damages, which represented Samsung’s entire profits from the sale of smartphones found to contain the patented designs. On appeal, the Federal Circuit Court of Appeals rejected Samsung’s argument that damages should be limited because the relevant “articles of manufacture” were the front face or screen rather than the entire smartphone. According to the Federal Circuit Court of Appeals, a design-patent holder is entitled to an infringer’s entire profits from sales of any product found to contain a patented design, without any regard to the design’s contribution to that product’s value or sales, because the components of Samsung’s smartphones were not sold separately to ordinary consumers and thus were not distinct articles of manufacture.

Supreme Court’s Narrow Patent Ruling

The Supreme Court held that the relevant “article of manufacture” for determining a damages award is not limited to the end product sold to the consumer, but may also be only a component of that product. The decision rested exclusively on the Court’s interpretation of the statute and avoided the larger issues raised on appeal.

As interpreted by the Court, “an article of manufacture … is simply a thing made by hand or machine.” Accordingly, the justices held that term is “broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not.” Moreover, the justices concluded that “reading ‘article of manufacture’ in §289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase.”

While the Supreme Court decision brings some clarity to design patent damages, it did not establish a clear test for determining whether the profits should apply to a product as a whole or its individual components. “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,” Justice Sotomayor wrote.

Going forward, it will be up to the Federal Circuit to establish a standard. Given the ongoing litigation between Samsung and Apple, it would not be at all surprising if the Federal Circuit’s test ends up back before the Supreme Court.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Shane Birnbaum, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
What Every Real Estate Investor Should Know Before Buying a Rental Property post image

What Every Real Estate Investor Should Know Before Buying a Rental Property

Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]

Author: Donald M. Pepe

Link to post with title - "What Every Real Estate Investor Should Know Before Buying a Rental Property"
Can You Change an Irrevocable Trust in New Jersey? post image

Can You Change an Irrevocable Trust in New Jersey?

In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]

Author: Marc J. Comer

Link to post with title - "Can You Change an Irrevocable Trust in New Jersey?"
How Intellectual Property Valuation Will Impact Business Transactions post image

How Intellectual Property Valuation Will Impact Business Transactions

Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]

Author: Jay McDaniel

Link to post with title - "How Intellectual Property Valuation Will Impact Business Transactions"
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls post image

Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls

For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]

Author: George McGowan

Link to post with title - "Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls"
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate post image

Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate

The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]

Author: Donald M. Pepe

Link to post with title - "Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate"
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand post image

Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand

Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]

Author: Donald M. Pepe

Link to post with title - "Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!