Design Patent Damages: Impact of Samsung v. Apple on Patent Prosecution, Litigation and Valuation

Description

On Dec. 6, 2016, the Supreme Court rejected Apple’s nearly $400 million damages awarded against Samsung stemming from smartphone design patents. The Court unanimously held the damages award under 289 need not always be calculated using the total profits from the commercialized end product to which the design was applied. Instead, the Court held that the relevant article of manufacture for determining total profits could be, in some circumstances, a component of the commercialized end product. The Court addressed the scope of the term “article of manufacture” and concluded “article of manufacture” is broad enough to encompass both the end product sold to a consumer and its components.

The impact of the Court’s decision is unclear. The Court left it to the Federal Circuit to determine the test and apply the test in this case. Depending on the test that is adopted, the Court’s decision could result in a lower value for certain kinds of design patents, particularly those directed to only part or parts of an end product as opposed to those directed to an entire end product. In view of this decision and the state of uncertainty in the law, prosecution counsel to design patent applicants must develop best practices to increase the likelihood that the relevant article of manufacture would be considered the entire end product as opposed to just a portion thereof. How “article of manufacture” is interpreted will be a critical factor in determining valuation of a design patent.

Listen as our authoritative panel of patent attorneys examines the Supreme Court’s decision in Samsung v. Apple and the implications for damages calculations and assigning valuation to a design patent. The panel will also discuss what the decision means for patent applicants and the impact on how they draft applications to protect a commercial product.