After sparring in federal courtrooms at the circuit and district levels for years the Supreme Court has finally set the stage for war between tech giants Samsung and Apple. Both companies have been sparring over a series of design and utility patents. After the Court of Appeals for the Federal Circuit (“Federal Circuit”) ruled against Samsung in May of 2015 Samsung’s attorneys filed a petition for a writ of certiorari, asking the U.S. Supreme Court (“Supreme Court”) to take up its appeal of the Federal Circuit decision. The Supreme Court agreed, limiting the inquiry to “whether, where a design patent is applied to only a component of a product, an award of infringer’s profits should be limited to those profits attributable to the component.”
At issue are a trio of Apple’s design patents, a trio of Apple’s utility patents, and a registered trade dress. As a matter of background Apple first sued Samsung in April 2011. Sixteen months later a jury issued a verdict finding Samsung guilty of infringing and diluting Apple’s patents and trade dresses, awarding Apple over $1 billion in damages. Samsung appealed the case to the Federal Circuit.
First, the Federal Circuit found that Apple failed to show non-functionality for its unregistered trade dress, therefore finding that Apple’s unregistered trade dress could not be protectable. The unregistered trade dress included “a rectangular product with four evenly rounded corners; a flat, clear surface covering the front of the product; a display screen under the clear surface; substantial black borders above and below the display screen and narrower black borders on either side of the screen; and when the device is on, a row of small dots on the display screen, a matrix of colorful square icons with evenly rounded corners within the display screen, and an unchanging bottom dock of colorful square icons with evenly rounded corners set off from the display’s other icons.”
Analyzing the unregistered trade dress as per the Disc Golf factors the Federal Circuit found that Apple had failed to disprove functionality. Apple admitted that the unregistered trade dress improved the quality of its iPhone in some respects, thereby providing a utilitarian advantage. Apple failed to demonstrate the existence of alternative designs that offered the exact same features present in the unregistered trade dress. Apple failed to win the argument that its advertisements refrained from touting utilitarian advantages. In addition Apple failed to produce evidence demonstrating that the design elements of its unregistered trade dress were inexpensive to manufacture.
Next the Federal Circuit tackled the registered trade dress issue, once more finding functionality as a result of the “easy to use” design theme of the sixteen icons present on the screen. The Federal Circuit ruled that Apple had failed to disprove functionality on behalf of its registered trade dress.
Samsung raised three points of contention in arguing that it was not guilty of infringement of Apple’s three design patents. The points of contention included the presence of functionality, the absence of actual deception, and the need for comparison to prior art. But the Federal Circuit found that the design patent claims pertained to “the ornamental design,” not any functional elements. In addition, noting that “a design patent is infringed if an ordinary observer would have been deceived,” the Federal Circuit ruled that actual deception was not a requirement for infringement and that the jury instruction was proper on that matter. Moreover, the Federal Circuit concluded that the jury instruction properly included a requirement that the jury had to consider the prior art admitted at trial.
In a similar light the Federal Circuit rejected Samsung’s contention that substantial evidence failed to support the infringement verdict. Nor did the district court abuse its discretion in precluding Samsung’s witness testimony with regard to an allegation of copying.
With regard to damages the Federal Circuit ruled that the district court jury was correct in awarding lost profits to Apple after finding that Samsung did not provide non-infringing substitutes. In addition the Federal Circuit held that Apple’s experts sufficiently provided evidence to support the jury’s reasonable royalty awards for Apple.
Samsung filed a petition for a writ of certiorari. On March 21 the Supreme Court granted the petition. Apple’s brief to the Supreme Court included analysis regarding reasons for denying the petition. Apple contended that the district court’s jury charge properly explained the issue of design patent protection. Apple also argued that Samsung’s claim of Apple’s design patents claiming “conceptual or functional attributes like rounded corners and rectangular form” was wrong. Apple also argued against the incorporation of the filtration doctrine of copyright law. In addition Apple contended that the Federal Circuit’s ruling on design patent damages did not warrant review, and that the question of the case was not important enough for Supreme Court review.
Samsung posed three key contentions. First, Samsung contended that the district court neglected to explain the meaning of “ornamental” in the term “ornamental design.” Second, Samsung contended that Apple failed to mention the infringement instruction in its brief. Third, in suggesting that the invalidity contention rescued the infringement instruction, Apple only highlighted the need for review, as Apple offered no reason why its features should be functional for trade dress purposes but not for design patent purposes. In addition Samsung contended that Apple’s features were not merely ornamental but indeed functional for trade dress purposes. Samsung also contended that courts, not juries, must construe patent claims. Samsung’s second main point of contention argued that certiorari was warranted on whether a design patent holder was entitled to an infringer’s entire profits. Moreover Samsung supported review of the case as it presented a question of “enormous national importance.”
While the word “enormous” may be a bit out of place there is no denying the importance of this case. A ruling from the Supreme Court would indeed speak volumes as to the methods of analysis used in design patent cases. Apparently the Supreme Court agreed in granting the petition. And so this long-ranging war between Samsung and Apple will reach a new high (or low) in the coming months as the Supreme Court puts its stamp down on issues of infringement and damages.