The Federal Circuit recently handed down an important design patent decision in Samsung’s appeal from the district court’s $930 Million judgment in favor of Apple in the Apple v. Samsung case. While the amount of damages awarded, alone, makes the Apple v. Samsung case remarkable, this decision is also noteworthy because it demonstrates significant shifts in design patent law. The last seven years have seen radical changes for design patents and, in many ways, the Apple v. Samsung decision represents the culmination of these developments. Once regarded as a minor form of intellectual property, design patents have steadily gained value and prominence over the last several years. Today, design patents are regarded as one of the most cost-effective forms of intellectual property available, with unique remedies that allowed for the staggering judgment awarded to Apple. If you have not closely considered this form of intellectual property protection in the past – now is the time.
One of the most common misconceptions about design patents is that they have extremely narrow scope. This impression is a relic of earlier case law, in which federal courts took a very narrow view of design patent scope. See, e.g., Brooks Furniture Mfg. v. Dutailier Intern., Inc., 393 F. 3d 1378, 1383 (Fed. Cir. 2005) (“design patents are entitled to almost no scope beyond the precise content of the patent drawings.”). Many inexperienced attorneys still maintain a narrow view of design patents as a result of this precedent and it is reflected in their practice. But, as the design patents at issue in the Apple v. Samsung case prove, design patent scope is not nearly as narrow as was once believed and has evolved to meet the needs of various industries.
This revolution in design patent scope was largely the result of a 2008 Federal Circuit decision in the case of Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (2008), in which the Federal Circuit eliminated the so-called “point of novelty” test long used by courts and which unfairly limited design patent scope. Under the old point of novelty test, courts focused the design patent infringement analysis only on the “novel” elements within the design. Courts asked “whether the accused design has appropriated a single specified feature of the claimed design, rather than . . . the claimed design as a whole.” Under the guise of this test, design patent infringers would highlight seemingly minor differences between their products and the asserted design patents in order to avoid liability.
In Egyptian Goddess, the Federal Circuit held that the “ordinary observer” test is the sole test for design patent infringement. Under that test, an accused design infringes a design patent if an “ordinary observer” would consider the overall appearance of the two designs to be “substantially the same.” In so doing, the Egyptian Goddess court gave design patents significantly more breadth. Had it not been for that decision, Apple’s design patent case against Samsung may not have been successful, given the observable differences between Apple’s design patent and the design for the home screen of Samsung’s Galaxy line of phones.
The Apple v. Samsung decision is also unique because it represents the first design patent case asserting a computer generated icon (CGI) design patent, rather than a traditional design that is fixed in a tangible article of manufacture. Prior to 1996, the Patent Office had consistently rejected CGI design patents as being merely portrayed as part of a graphical user interface or computer display screen. According to the Commissioner of Patents “[a]n image projected on a screen is no more embodied on the screen than is a photograph placed temporarily on a coffee table… .” In several notable appeals, the Board of Patent Appeals and Interferences also affirmed the rejection of CGI design patents, holding that CGI designs were ineligible for design patent protection. See, e.g., Ex Parte Strijland, 26 U.S.P.Q. 2d 1259 (B.P.A.I. 1993) (“Where the article of manufacture functions as a mere display for a design of an icon and the article of manufacture is not ornamented by the displayed design, the claim is merely directed to the design per se and is not a design that is encompassed by 35 U.S.C. § 171.”).
However, by 1996, the Patent Office’s stance on CGI design patents began to soften, as software-related intellectual property began to be a focal point for American innovation. That year, the Patent Office reversed its position regarding CGI design and promulgated regulations finally allowing for CGI design patents, so long as the design was claimed with reference to a display screen. Since 1996, the software industry has slowly adopted CGI design patents, and as of 2012, CGI design patents were the fastest growing segment of design patent filings. However, prior to the Apple v. Samsung case, the validity of CGI design patents had not been tested in a court of law. With the Federal Circuit’s affirmance in Apple v. Samsung, CGI design patents should have even more strength than ever before.
While the Apple v. Samsung case demonstrates how much design patents have changed in the last several years, it also shows how some aspects of design patent law have remained the same. The primary issue that Samsung appealed to the Federal Circuit was whether Apple was entitled to all of Samsung’s profits from the accused Galaxy line of smart phones and devices, which made up the vast majority of the $930 Million awarded to Apple. The monetary award to Apple was based on a special remedy for design patent infringement under the Patent Act, which makes a design patent infringer “liable to the owner to the extent of his total profit…” 35 U.S.C. § 289 (emphasis added). This special remedy for awarding the “infringer’s profits,” is unique to design patent law and can support extremely large monetary awards, as in the Apple v. Samsung case. For example, utility patent owners are only entitled to a reasonable royalty or their own lost profits due to infringement, which is very difficult to prove.
On appeal, Samsung and several commentators asked the Federal Circuit to limit the damages award to only Samsung’s profits that were attributable to the infringing design of the accused Galaxy devices. According to Samsung, it was unfair to award Apple all of Samsung’s profits when Samsung’s phone was profitable for several reasons having nothing to do with its aesthetic design, such as the functionality of the software and cellular phone capabilities. However, the Federal Circuit rejected Samsung’s argument, applying a strict interpretation of 35 U.S.C. § 289:
“In reciting that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design. … The clear statutory language prevents us from adopting a “causation” rule as Samsung urges.”
Thus, the Federal Circuit strongly affirmed the unique disgorgement remedy for design patent infringement – even where this remedy results in a harsh punishment for infringement. As a result, the Apple v. Samsung decision has confirmed the extent of damages available for design patent infringement and stands as a warning to would-be design patent infringers.
Apple v. Samsung was a watershed case in design patent law that shows how far design patents have come in the last two decades. Design patents are now an essential component of a robust intellectual property portfolio with the ability to protect a significant range of product configurations and/or computer-generated imagery. Furthermore, with unique and harsh remedies available for design patent infringement, design patents also have the ability to make potential infringers think twice before adopting a colorable imitation of a competitor’s design. We would be happy to hear from you with any questions regarding design patents, or if you would be interested in receiving a brief presentation on design patent law.