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Samsung Electronics v. Apple

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Supreme Court of the United States
Samsung Electronics Co. v. Apple
Reference: 15-777
Issue: Patent law
Term: 2016
Important Dates
Argued: October 11, 2016
Decided: December 6, 2016
Outcome
Federal Circuit Court of Appeals reversed and remanded
Vote
8-0 to reverse and remand
Majority
Chief Justice John G. Roberts • Anthony Kennedy • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan
Concurring
None
Dissenting
None


Samsung Electronics Co. v. Apple is a case argued during the October 2016 term of the U.S. Supreme Court. Argument in the case was held on October 11, 2016. The case came on a writ of certiorari to the United States Court of Appeals for the Federal Circuit. On December 6, 2016, in an opinion by Justice Sonia Sotomayor, the court unanimously reversed and remanded the judgment of the Federal Circuit.

HIGHLIGHTS
  • The case: Samsung Electronics Co. challenged a ruling that they owed the entirety of profits made on a product which was designed, in part, on components protected under a design patent held by Apple.
  • The issue: When a design patent is applied only to a component of a product, should profits be forfeited on the entire product or just on those components protected under patent?
  • The outcome: The judgment of the Federal Circuit was reversed and remanded.


    • In brief: Samsung Electronics Co. challenged the Federal Circuit's interpretation of a federal law, 35 U.S.C. § 289, which says that the entirety of profits on a product must be forfeited to the patent holder if a design patent is violated in any way. Samsung argued that profits on those components which are patented are the only profits that are required to be given to the patent holder and not those profits made on the entire product. Oral argument before the U.S. Supreme Court was held on October 11, 2016. On December 6, 2016, the court unanimously reversed and remanded the judgment of the Federal Circuit.

    You can review the Federal Circuit's opinion here.[1]

    Click on the tabs below to learn more about this Supreme Court case.

    Case

    Background

    This case was about the extent to which damages should be awarded when a component of a design patent is violated. In April 2011, Apple sued Samsung in federal court alleging multiple violations of Apple's design patents, utility patents, and trade dress protections related to Apple's smartphones. In August 2012, a jury found Samsung violated Apple's patents and trade dress protections and awarded Apple over one billion dollars in damages. Following the trial, the district court upheld most of jury findings against a post-trial motion filed by Samsung, sustaining an award of nearly 640 million dollars in damages. The district court, however, ordered a partial retrial on the remainder of the damages as Samsung did not have adequate notice of some of the patents which Apple held. A jury in the partial retrial on damages awarded nearly 300 million dollars to Apple, which the district court sustained against a post-trial motion by Samsung. Final judgment against Samsung was entered on March 6, 2014. Samsung appealed to the United States Court of Appeals for the Federal Circuit.[1]

    On appeal, Samsung challenged the district court's judgments related to Apple's trade dresses, Apple's utility patents, and Apple's design patents. The Federal Circuit sided with Samsung on the challenges to Apple's trade dresses and reversed the district court's findings accordingly. The Federal Circuit sided with Apple, however, on its utility patent claims and affirmed the district court's findings on those issues. The Federal Circuit also denied Samsung's claims both that the district court exhibited prejudice in its jury instructions related to the design patent infringement claim and that the district court abused its discretion in excluding evidence that Samsung wished to enter related to development of its own smartphone design.

    The issue being brought before the U.S. Supreme Court is a question of the degree to which damages should be awarded based on a violation of a component of a design patent. According to Samsung, the district court erred in allowing a jury to award as damages the entirety of profits Samsung made on its smartphones that infringed on Apple's design patents. Samsung argues that damages should be limited under federal law to those profits attributable only to the components that were found to have infringed on Apple's design patent, and not to the entirety of profits on the smartphones themselves.

    The federal law in question is 35 U.S.C. §289, which reads,[2]

    “

    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, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

    Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement. [3]

    		”

    The particular language in question that Samsung challenges is that portion where an infringer of a patent "shall be liable to the owner to the extent of his total profit." In Samsung's view, profits should be limited to "the portion of the product as sold that incorporates or embodies the subject matter of the patent" and not the entire infringing product. The Federal Circuit disagreed in holding that, because the patented items could not be separated as distinct articles of manufacture but rather were sold together, awarding damages to Apple based on the profits on the entire product was appropriate. Samsung argues that awarding the entire profits from the sales of any product which contains an infringed design, irrespective of the design's monetized value to the product itself, is an incorrect interpretation of 35 U.S.C. §289.[1]

    Petitioner's challenge

    Samsung challenged the Federal Circuit's interpretation of 35 U.S.C. §289 that when a design patent is infringed in any way, the entirety of profits made on the product itself - not simply the infringed component(s) - should be awarded to the patent holder.

    Certiorari granted

    On December 14, 2015, petitioner Samsung Electronics Co. initiated proceedings in the Supreme Court of the United States in filing a petition for a writ of certiorari to the United States Court of Appeals for the Federal Circuit. The U.S. Supreme Court granted Samsung's certiorari request on March 21, 2016, limiting argument to question 2 of the petition. Oral argument before the Supreme Court was held on October 11, 2016.

    Arguments


    Question presented

    Question presented:

    Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?[4]


    Audio

    • Audio of oral argument:[5]


    Transcript

    Transcript of oral argument:[6]

    Outcome

    Decision

    In a unanimous decision, the Supreme Court reversed and remanded the judgment of the United States Court of Appeals for the Federal Circuit. Justice Sonia Sotomayor delivered the opinion of the court.[7]

    Opinion

    In her opinion for the court, Justice Sotomayor noted that, in order to award damages under § 289 of the Patent Act, two steps are required, "First, identify the 'article of manufacture' to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture." She then proceeded to address what the court felt was the threshold inquiry of the case,[7]

    “

    This case requires us to address a threshold matter: the scope of the term 'article of manufacture.' The only question we resolve today is whether, in the case of a multi-component product, the relevant 'article of manufacture' must always be the end product sold to the consumer or whether it can also be a component of that product. Under the former interpretation, a patent holder will always be entitled to the infringer’s total profit from the end product. Under the latter interpretation, a patent holder will sometimes be entitled to the infringer’s total profit from a component of the end product ... The text resolves this case. The term 'article of manufacture,' as used in § 289, encompasses both a product sold to a consumer and a component of that product ... An article of manufacture, then, is simply a thing made by hand or machine. So understood, 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. [3]

    		”

    In construing § 289 in this way, the court rejected the Federal Circuit's interpretation of § 289, holding that an "article of manufacture" could not be mere components of a product -- in this case, design components of smartphones -- because consumers were unable to purchase those components separately from purchase of the smartphone itself. As Justice Sotomayor noted, "article of manufacture" was a term "broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not. Thus, reading 'article of manufacture' in § 289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase."[7]

    The justices declined to address an issue briefed by the United States, but neither by Samsung nor Apple, as to whether or not a test was necessary to determine the relevant "article of manufacture" for purposes of an initial § 289 inquiry. The justices felt that issue was unnecessary to dispose of this case and noted that the Federal Circuit could address any outstanding issues on remand.[7]

    Concurring opinions

    There were no concurring opinions filed.

    Dissenting opinions

    There were no dissenting opinions filed.

    The opinion


    Filings

    The court granted Samsung's certiorari request on March 21, 2016, limiting argument to question 2 of the petition.

    Merits filings

    Parties' filings

    • Samsung Electronics Co., the petitioner, filed a merits brief on June 1, 2016.
    • Apple Inc., the respondent, filed its merits brief on July 29, 2016.
    • Samsung Electronics Co. filed a reply brief on August 29, 2016.

    Amicus curiae filings

    The following groups filed amicus curiae briefs in support of the petitioner, Samsung Electronics Co.

    • Brief of the Computer and Communications Industry Association
    • Brief of Engine Advocacy and Shapeways, Inc.
    • Brief of the Hispanic Leadership Fund et al.
    • Brief of the Internet Association et al.
    • Brief of the Hispanic Leadership Fund et al.
    • Brief of Public Knowledge et al.
    • Brief of the Software Freedom Law Center
    • Brief of various intellectual property law professors, David Abrams, et al.


    The following groups filed amicus curiae briefs in support of the respondent, Apple, Inc.

    • Brief of ACT | The App Association
    • Brief of the American Intellectual Property Law Association
    • Brief of Bison Designs, LLC, et al.
    • Brief of the Boston Patent Law Association
    • Brief of Roger Cleveland Golf Company, Inc.
    • Brief of Tiffany and Company et al.
    • Brief of various industrial design professionals and educators
    • Brief of various intellectual property law professors


    The following groups filed amicus curiae briefs in support neither party.

    • Brief of the Bar Association of the City of New York
    • Brief of BSA I The Software Alliance
    • Brief of the Industrial Designers Society of America
    • Brief of the United States of America


    Certiorari filings

    Parties' filings

    • Samsung Electronics Co., the petitioner, filed a petition for certiorari on December 14, 2015.
    • Apple, Inc., the respondent, filed a brief in opposition to certiorari on February 3, 2016, after the court granted an order extending time to file.


    Amicus curiae

    The following groups filed amicus curiae briefs in support of granting certiorari

    • Brief of the Computer and Communications Industry Association
    • Brief of Dell, Inc., et al.
    • Brief of the Hispanic Leadership Fund et al.
    • Brief of Public Knowledge et al.
    • Brief of various intellectual property law professors

    See also

    Footnotes

    1. ↑ 1.0 1.1 1.2 U.S. Court of Appeals for the Federal Circuit, "Apple Inc. v. Samsung Electronics Co., Ltd., et al.," decided May 18, 2015
    2. ↑ Cornell University Law School - Legal Information Institute, "35 U.S. Code §289 - Additional remedy for infringement of design patent," accessed September 16, 2016
    3. ↑ 3.0 3.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    4. ↑ Supreme Court of the United States, Samsung Electronics Co. v. Apple, March 21, 2016
    5. ↑ Supreme Court of the United States, Samsung Electronics Co., v. Apple Inc., argued October 11, 2016
    6. ↑ Supreme Court of the United States, Samsung Electronics v. Apple, argued October 11, 2016
    7. ↑ 7.0 7.1 7.2 7.3 Supreme Court of the United States, Samsung Electronics Co., Ltd., et al. v. Apple Inc., decided December 6, 2016
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