January 22, 2016
Previously published on December 21, 2015
Three Apple design patents were first asserted against Samsung in 2011. These patents have since been discussed, argued, appealed, and commented on with a regularity and frequency that would have been nearly unheard of before the Smartphone Wars first began to elevate many intellectual property issues to general public awareness. For those who have been following the fate of these patents for any length of time, the designs may already be familiar. But for those who may have only recently become aware of these patents, the three designs are shown to the side.2
Apple ultimately obtained a judgment for hundreds of millions of dollars based on these designs: a shiny black screen, a rectangle with rounded corners, and a screen with square icons arranged in a grid. That judgment was affirmed by the Federal Circuit. In upholding that judgment, the Federal Circuit rejected Samsungs argument that the district court had not properly construed the designs to exclude functional elements. As discussed in more detail below, design patents only cover the ornamental design of an article. They do not cover functional aspects, and can in fact be invalidated if they are deemed functional. However, in rejecting Samsungs argument, the Federal Circuit deviated from this clear demarcation and blurred the line between functional and ornamental. The result is a dysfunctional functional standard for design patents that has the potential to distort infringement and damages analyses, embolden patent trolls, and cause substantial confusion for district courts and juries.
But there is hope for a course correction. Samsung recently filed a petition for writ of certiorari with the Supreme Court challenging the Federal Circuits functionality standard and damages analysis. In view of that petition, this article provides an overview of design patents and analysis of the Apple v. Samsung dispute as it relates to functionality, infringement and damages.
I. Function and Design
A brief background of design patents is useful for framing the discussion. But before discussing specifically what a design patent is, it might first be illustrative to discuss what a design patent is not. Section 101 of Title 35 states that [w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor …. This is the basis for what is covered by a utility patent, the type of patent which makes up the largest portion of patents in the United States. These patents protect subject matter that as a necessity must be useful, that is, it must perform some function or in itself have some utility.
Design patents are different. For design patents, 35 U.S.C. 171 states that [w]hoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor . . . . Design patents are thus used to protect ornamental designs. Unlike utility patents, it is not necessary for those designs to be useful. In fact, functionality can actually be a barrier: a design that is dictated by function is ineligible for design patent protection. To demarcate between utility and design patents, the courts have limited design patent protection to only the ornamental portion of the design and not any structural or functional features.3
For simple articles, this distinction is fairly straightforward. What the article looks like and what the article is are to a large part coextensive. The design is ornamental or not, functional or not. And if the design is dictated by function, then it is not eligible for design patent protection. More complicated articles, however, can have a mixture of functional and ornamental features. This is not a per se barrier to design patent protection. In these cases the design can still receive protection for its ornamental aspects. But in such a case, [w]here a design contains both functional and non-functional elements, the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent.4 In other words, the design patent protection does not extend to the functional elements of the design.
II. Infringement and Recovering Damages: Why the Distinction Matters
After covering what a design patent is intending to protect, we must next turn to how the designs are protected. When design patents are issued, just like other patents, they create a certain scope of activities from which others are excluded. If a new, original, and ornamental design is patented, then during the life of the patent (15 years from grant for design patents) no one else may use that design or any design determined to be substantially similar to the patented design without the permission of the patent owner. Determining the proper scope of a design patent claim is thus very important in that it both defines the scope of protection for the patent owner, and it defines the scope of activities from which others are excluded else they be found liable for infringement.
As such, care must be taken in ensuring that the proper scope is determined for two reasons. First, the claim is what defines infringement. Defined too narrowly and the patent owner will not receive the full protection to which they are entitled; too broadly and others might be wrongly found liable for using designs beyond the scope of the inventors actual contribution. Second, as discussed below, substantial damages are tied to infringement, thus the scope of the claims also defines the recovery the patentee can obtain. Failure to properly construe a claim can therefore both overprotect and overcompensate a design patent owner.
As to the first point, while design patents may rightfully prevent a party from using a protected design, protection should only apply to the ornamental aspects. For example, if an inventor receives a design patent where the ornamental feature is an ornate pen cap, that ornate cap is what is being protected, and as such it is what should be compared to a potentially infringing product. Whether the design patent claims the pen cap alone or the pen cap in combination with a pen, only the ornamental features should be considered for infringement. Both products may have relatively cylindrical pen bodies with a writing end and a non-writing end, where the ends are both sized so that the ornate cap can attach to either end, and the writing end tapers to a point. These features would be considered to be functional-dictated by the requirements of being able to perform as a pen. In other words, these features alone do not receive design patent protection. The focus of the infringement should be comparing the ornamental pen caps, and whether the functional pen bodies are similar should have no bearing on whether the allegedly infringing ornamental features are substantially similar to the protected ornamental features. Additionally, as will be discussed below, should infringement be found, recovery should be limited to profits attributable to the infringing article, i.e. the pen cap.
But if a court does not explicitly tell a jury to ignore the functional features it runs the risk of the jurys finding of infringement being influenced by unprotected features, such as the pen body in the hypothetical above. If the ornamental features were either themselves substantially similar, or clearly not so, to the extent that considering the functional features would not change a jurys opinion, this would not present a problem. But the possibility of a scenario where the threshold for infringement is not met by the ornamental features alone, but the functional features push the jury over that line to a finding of infringement, presents a very troubling situation. The functional pen body is not new, original, or ornamental, and should not have protection, yet its inclusion with the ornamental feature can potentially result in infringement of a design patent intended to protect the ornamental feature alone. This can doubly expose a party to damages liability, both in that a party might now be liable for damages based on an incorrect finding of infringement, and that it can also result in damages based on the value of unprotected functional components in multicomponent articles, such as unprotected aspects of the pen discussed above.
This worrisome situation may have played out in the Apple v. Samsung case. There, the District Court performed its construction duties of the design patents by instructing the jury that the design patents claimed the ornamental designs shown in the respective figures. Essentially, the District Court concluded it was sufficient to append the word ornamental to the figures. In turn, the jury-given no instructions on the unprotected, functional elements of the design which should have been filtered out in their analysis -returned a finding of infringement.
The Federal Circuit endorsed this approach. In its opinion, the Federal Circuit acknowledged that its precedent requires that the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent.6 But it sought to distinguish that clear mandate by stating that the functional elements need not be excluded in their entirety.7 As supposed support, the Federal Circuit cited to its earlier Richardson opinion where the District Court had highlighted the ornamental aspects of the disputed design as part of its claim construction, which included the ornamental aspects of the otherwise functional elements.8 But Richardson does not support the Federal Circuits blurring of functional and ornamental. Unlike the District Court in the Apple v Samsung case, the Richardson District Court provided a detailed explanation as to what aspects were functional and unprotected, and what aspects were ornamental and within the scope of the claim.9 Worst still, the Federal Circuit reversed the trade dress dilution claims, finding Apples trade dresses-which are substantially the same as the design patents-invalid as functional. While the trade-dress claims were analyzed under Ninth Circuit law, the finding of functionality and invalidity suggests that there are at least some elements of the claimed designs that should have been excluded in claim construction.
On the second point, in addition to finding infringement based on unprotected functional features, this blurring of the line between ornamental and functional has a perverse effect on damages in design patent cases. It allows for the recovery of damages based on unprotected, functional components in multicomponent articles. To be clear, a design patent protects the article that is claimed in the patent. For example, each of the three Apple design patents covers different aspects of the iPhone, e.g., the front face, bezel and graphical user interface. None cover the entire device, particularly when functional aspects of the design are excluded. Yet both the District Court and the Federal Circuit held that Apple was entitled to Samsungs entire profits from the sale of the accused devices. Had the District Court or Federal Circuit properly construed the claims, it would have been apparent that any infringing articles would be limited to components of Samsungs phones, rather than the phone itself. As the Second Circuit articulated in Bush & Lane Piano Co. v. Becker Brothers:
A patent for a book binding cannot, either justly or logically, be so identified with the entire book as to give all the profits on a work of literary genius to the patentee of a binding, although the binding was manufactured with and for that one book, and has no separate commercial existence. The binding and the printed record of thought respond to different concepts; they are different articles.”10
This is also consistent with 35 U.S.C. 289, which provides an additional remedy for design patent infringement. While 289 initially refers to a party being liable to the owner to the extent of his total profit, it later clarifies that the profit is the profit made from the infringement. Thus, as the statute makes clear, it is the profit from infringement that may be recovered. For that reason, it is critical that the courts properly define the claims of design patent that in turn define the scope of infringement, and in turn determine to what extent profit may be recovered.
Decisions from other Circuits prior to the formation of the Federal Circuit were careful to draw a distinction between infringing components in larger multi-component articles. One such case is Young v. Grand Rapids Refrigerator Co.11 In that case, a patent owner was asserting design patents related to the latch casings for refrigerator doors. The Sixth Circuit noted that:
The ornamental design of the shell added something to the attractiveness of the unitary article sold; but it is not seriously contended that all the profits from the refrigerator belonged to Young. It would be less fanciful to treat the latch and casing together as a unit; but defendant did not sell them in this form . . . .12
Because the latch casings were not sold as a unit, the Sixth Circuit ultimately awarded the statutory minimum of $250 as opposed to any portion (much less all) of the defendants profits from the refrigerators. But the opinion makes clear that the Sixth Circuit did not view the claimed design as being directed to the refrigerator in its entirety.
To hold that a patented design on a device that at its core is functional, such as a pen or phone, entitles the patent owner to the full profits of an accused device, is not only logically disproportionate, it is a clear invitation for trouble. Patent trolls who currently seek money by asserting utility patents face all the difficulties standard to patent litigation in proving infringement and preserving validity, and on the chance they are successful their reward is often limited only to a reasonable royalty or portion of profits in some way attributable to the patents invention. This same group might now turn its eyes to design patents, where a finding of infringement might be helped by similar functional (and unprotected) elements, and where success is rewarded with the total profits.
Samsungs petition for a writ of certiorari presents the opportunity for the first design patent case to be heard by the Supreme Court in 122 years.13 Such a hearing would be a welcome, and arguably overdue, opportunity for the Court to correct what has become a clear opportunity for abuse. Not only do the current rulings allow for someone to potentially obtain a ruling of infringement on a design patent where the functional attributes have not been excluded, that infringement then allows the patent owner to collect the full profits on an article for which the design makes up only a miniscule portion of its value. This both overprotects and overcompensates design patent owners. Failure to reign in this area of the law will, put frankly, incentivize trolls who will see the hundreds of millions of dollars that can be obtained on otherwise insignificant inventions.
2The first, U.S. Patent No. D618,677, covers the black, polished front face of the phone. The second, U.S. Patent No. D593,087, covers the rectangular front face of a phone, enclosed by a bezel. The third, U.S. Patent No. D604,305, covers a graphical user interface for a display screen.
3OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997); Lee v. Dayton-Hudson Corp., 838 F.2d 1186, 1188 (Fed. Cir. 1988).
4OddzOn Prods., 122 F.3d at 1405.
5Apple Inc. v. Samsung Elecs. Co., Ltd., 786 F.3d 983, 999 (Fed. Cir. 2015) (internal quotations omitted).
6Id. at 998.
10234 F. 79, 81-82 (2nd Cir. 1916).
11268 F. 966, 973-74 (6th Cir. 1920).
12Id. at 974.
13Florian Mueller, Apple v. Samsung: petition for Supreme Court to take first look at design patent case in 122 years FOSS Patents (Dec. 14, 2015) http://www.fosspatents.com/2015/12/apple-v-samsung-petition-for-supreme.html