Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: December 21, 2016
The Firm
201-896-4100 info@sh-law.com
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.
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.
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.

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

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

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

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

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

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
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!