Washington DC
06 December 2016
Reporter: Mark Dugdale

Supreme Court reverses Samsung v Apple

The US Supreme Court has reversed the Court of Appeals for the Federal Circuit’s decision in Samsung v Apple, finding its reading of “article of manufacture” to be too narrow.

In the unanimous decision, which was delivered today (6 December), Justice Sonia Sotomayor wrote: “The Federal Circuit’s narrower reading of ‘article of manufacture’ cannot be squared with the text Section 289 of the Patent Act.”

The cornerstone smartphone case saw Samsung accused of copying key design elements of Apple’s flagship iPhone.

Apple, asserting three design patents covering the iPhone’s screen shape, round corners, and bezel and icons, won the Federal Circuit’s backing in May 2015, with the appeals court upholding the original jury’s decision to award $399 million in damages based on Samsung’s entire profits from the sale of smartphones found to contain the three patented designs.

Supreme Court Justice Sotomayor explained that “article of manufacture” is broad enough to encompass both a product sold to a consumer and 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.”

Turning to the specifics of Samsung v Apple, Justice Sotomayor said: “The Federal Circuit found that components of the infringing smartphones could not be the relevant article of manufacture because consumers could not purchase those components separately from the smartphones.”

“But, for the reasons given above, 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 Supreme Court also declined to go further and resolve whether, for each of the design patents at issue, the relevant article of manufacture is the smartphone, or a particular smartphone component.

“Doing so would require us to set out a test for identifying the relevant article of manufacture at the first step of the Section 289 damages inquiry and to parse the record to apply that test in this case,” Justice Sotomayor explained.

“The US as amicus curiae suggested a test, but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the Section 289 damages inquiry in the absence of adequate briefing by the parties. Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand.”

Rick McKenna, partner at Foley & Lardner, said the decision is important because its definition of ‘article of manufacture’ will become “the basis for the calculation of damages for infringement of design patents which cover the ‘article’”.

“This decision is arguably a partial victory for Samsung because it delays a final decision on the damages award. Apple obviously would have preferred a blanket affirmation of the Federal Circuit decision and the multimillion dollar damages award.”

McKenna added: “It is unfortunate that the Supreme Court was not in a position to provide some guidance on this important topic so it is possible that we will enter into years of turmoil over the proper tests for calculating damages for infringement of a design patent.”

“Let us hope that the courts provide us with some clarity on this important issue and that we don’t have to wait another 100 years for the Supreme Court to provide guidance.”

The Federal Circuit’s decision was reversed and remanded for further consideration.

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