Tuesday, December 6, 2016

Design Patents Totalled

The United States ("U.S.") Patent Act has long included a special damages provision that applies only to design patents.  Under the relevant part of 35 U.S.C. §289 (tellingly-entitled "Additional remedy for infringement of design patent"),
Whoever during the term of a patent for a design, without license of the owner, (1) 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 shall be liable to the owner to the extent of his total profit...[emphasis added]

The U.S. Supreme Court disagreed in its decision published on December 6, 2017.  Writing for the unanimous Supreme Court, Justice Sotomayor parsed the meaning of "article of manufacture" to encompass either an entire device or a mere fraction of it, explaining
the term “article of manufacture” is broad enough to encompass both a product sold to a consumer as well as a component of that product.  A component of a product, no less than the product itself, is a thing made by hand or machine.  That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture.
Applying this logic, she reasoned that "total profit" should be assessed from only that portion of an article of manufacture claimed in an infringed design patent.  Since most modern electronic devices are composed of dozens or hundreds of distinct parts, many of which could be individually-claimed in distinct design patents, the practical implication of this decision will most likely be a substantial decrease in the "total profit" Samsung will owe Apple for design patent infringement.

A broader implication may be a reevaluation of the value of design patents, whose numbers have been climbing rapidly (applications increased by almost 800% from 1963 to 2015).  Now that "total profits" has a totally-new denominator, applying for, acquiring, and maintaining design patents may have become markedly less desirable. 


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