Case(s): Apple Inc. v. Samsung Elecs. Co., 15-777 (U.S.)
Apple Inc. sued Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC in April 2011, alleging that certain design elements of Samsung’s smartphones infringed specific Apple-owned patents for design elements in the iPhone.
After jury trials in 2012 and 2014, Apple was awarded $399 million in damages for infringement of the design patents – Samsung’s total profits for its infringing smartphones. Samsung appealed to the U.S. Court of Appeals for the Federal Circuit, which upheld the damages award based on design patent infringement in 2015. Samsung then appealed the design patent damages issue to the U.S. Supreme Court.
Supreme Court Decision
Taking on the case, the Supreme Court held that in the case of a multicomponent product, the relevant “article of manufacture” for arriving at a s. 289 damages award need not be the end product sold to the consumer but may be only a component of that product. Writing for the court, Justice Sotomayor stated in the December 6, 2016 decision that …
(a) The statutory text resolves the issue here. An “article of manufacture,” which is simply a thing made by hand or machine, encompasses both a product sold to a consumer and a component of that product. This reading is consistent with s. 171(a) of the Patent Act, which makes certain “design[s] for an article of manufacture” eligible for design patent protection, and which has been understood by the Patent Office and the courts to permit a design patent that extends to only a component of a multicomponent product. This reading is also consistent with the Court’s reading of the term “manufacture” in s. 101, which makes “any new and useful . . . manufacture” eligible for utility patent protection.
(b) Because the term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not, the Federal Circuit’s narrower reading cannot be squared with s. 289’s text. Absent adequate briefing by the parties, this Court declines to resolve whether the relevant article of manufacture for each design patent at issue here is the smartphone or a particular smartphone component. Doing so is not necessary to resolve the question presented, and the Federal Circuit may address any remaining issues on remand.
Remands and Settlement
Following remands by the Supreme Court and the Federal Circuit back to the district court, a new trial on damages was held in May 2018, and the jury awarded Apple $533 million in design patent damages.
The parties settled the case in June 2018. Terms of the settlement, filed in the U.S. District Court for the Northern District of California, are confidential.