United States: Patent Cases Pending Before The Supreme Court (October Term)

Samsung Elecs. Co. v. Apple, Inc., No. 15-777

On March 21, 2016, the Supreme Court granted Samsung's petition for a writ of certiorari as to the following question:

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?

The Supreme Court's first design patent case in 120 years arises out of the now well-known "rounded rectangle" design-patent litigation between Apple and Samsung. Below, a jury in the Northern District of California had found that Samsung infringed three of Apple's design patents and awarded Apple $399 million in damages.1 The Federal Circuit affirmed the jury's damages award as to infringement of the design patents.2

By contrast to utility patents, which protect "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof,"3 design patents protect "any new, original and ornamental design for an article of manufacture."4

Samsung takes issue with the lower decisions that require Samsung to pay its entire profits on eleven smartphones for infringing three features of Apple's design patents.5 Samsung argues that its smartphones embody hundreds of thousands of patented features—not owned by Apple—and thus an entire profits damages model is inappropriate.6

The damages statute at issue is 35 U.S.C. § 289, which states:

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.

Apple argued, in its brief in opposition to Samsung's petition, that the text of Section 289 is clear, and that the Federal Circuit's application of the total-profits rule is well supported by the statute's history and purpose.7

In its merits brief, Samsung argues that the Federal Circuit's total-profits rule conflicts with the text, history, and purpose of the statute.8

Samsung's textual argument is that Section 289 "limits recoverable total profit to that attributable to the 'article of manufacture' to which an infringing design is 'applied.' Such an article need not be the entire product as sold; many discrete 'articles of manufacture' may be combined into such a product."9 Samsung also notes that Section 289 limits recoverable total profit to that "made from the infringement."10 In other words, that limitation precludes an award of profit not attributable to infringement of the patented design.

Samsung's historical argument is that Congress enacted the statute to ensure that patentees recover more than nominal damages for products where the design was the principal feature—articles such as decorative wallpaper or carpet.11 Samsung argues that this rationale makes no sense for complex products like smartphones that embody hundreds of thousands of patents.12

Samsung's statutory purpose argument is that the Federal Circuit's automatic total profits rule would have disastrous consequences to innovation, competition, and small business.13

If the Supreme Court agrees with Apple, design patent infringement litigation should become a significant focus because of the amount of damages and the ease of proof of those damages. If the Supreme Court agrees with Samsung, the recent increase in design patent infringement litigation will likely be but a flash in the pan.

SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 15-927

On May 2, 2016, the Supreme Court granted SCA Hygiene's petition for a writ of certiorari on the following question: "Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act's six-year statutory limitations period, 35 U.S.C. § 286."

Section 286 of the Patent Act provides as follows: "Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action."14 The Federal Circuit has held that, in addition to Section 286, the equitable doctrine of laches is also a cognizable defense to patent infringement, further potentially shortening the six-year damages limitation period.15

Petitioner SCA argues in its petition for certiorari and in its opening merits brief that the plain text of Section 286 does not authorize such a shortening of the six-year period for infringement damages.16 In doing so, SCA relies on recent Supreme Court precedent from the Court's copyright jurisprudence—Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014)—to argue that laches, a doctrine historically developed by courts of equity, is not available as a defense to a claim for legal relief which is governed by a statute of limitations.17 In Petrella, the Court held that laches could not be used to shorten the three-year limitations period under the Copyright Act because this would, in effect, substitute the judgment of a district court for that of Congress.18 Laches, the Court explained, historically applied to "claims of an equitable cast for which the Legislature has provided no fixed time limitation."19 SCA argues that Petrella is controlling, and that the Federal Circuit's basis for finding a damages-barring laches defense within the Patent Act20 is inadequate.21

By contrast, respondent First Quality argues (in its opposition to SCA Hygiene Products' petition for certiorari22) that the Federal Circuit has for decades held that 35 U.S.C. § 282 includes a laches defense, and that the laches defense in Section 282 bars patentee from both legal and equitable relief.23 In addition, First Quality argues that, even before the 1952 Patent Act, courts routinely applied the doctrine of laches to bar both legal and equitable relief to patent infringement claims, and that Congress incorporated this judicial understanding into the statute.24

If the Supreme Court agrees with SCA, a patentee's unreasonable delay in bringing suit will no longer be a basis for barring or limiting damages for patent infringement within the six-year period prescribed in § 286. Either way, it seems clear that the same delay can affect injunctive relief and, in appropriate cases, may contribute to an equitable estoppel defense, which, if successful, would preclude all relief.

Life Technologies Corp. v. Promega Corp., No. 14-1538

On June 27, 2016, the Supreme Court granted Life Technologies' petition for a writ of certiorari to answer the following question: "Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales."25

35 U.S.C. § 271(f)(1) provides:

Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

Life Technologies assembles genetic testing kits that generate DNA profiles. The kits contain a number of components, including: (1) a primer mix; (2) Taq polymerase; (3) a PCR reaction mix including nucleotides; (4) a buffer solution; and (5) control DNA. Together, these components are capable of amplifying the DNA being studied, a process necessary to obtain a detectable amount of DNA for analysis.

Life Technologies manufactures one component of its kits in the U.S., the Taq polymerase, which it ships overseas to its facility in the United Kingdom for assembly with the other kit components and worldwide sale. It is undisputed that Taq polymerase is not especially made or especially adapted for use in the invention at issue.

Promega sued its field-limited licensee Life Technologies in 2010, alleging that Life Technologies had infringed a DNA replication patent by selling its kits into unlicensed fields. Promega sought damages for worldwide sales.

At trial, the jury returned a verdict for Promega, found that Life Technologies' infringement was willful, and awarded damages for all worldwide sales. The district court then granted judgment as a matter of law to Life Technologies, holding that Promega had failed to present sufficient evidence to sustain a jury verdict under Section 271(f)(1). The district court provided two main reasons for its decision: (1) Promega did not present any evidence that Life Technologies induced another party to combine any components outside the U.S. in an infringing manner (i.e., Life Technologies did all the combining itself); and (2) Life Technologies manufactures only a single component in the U.S., which is insufficient to meet Section 271(f)'s requirement that "all or a substantial portion" of the components be supplied from the U.S.

A split Federal Circuit reversed.26 The majority held that a party could induce itself within the meaning of Section 271(f)(1), and further, that a party may be liable under 271(f)(1) for supplying a single component for combination outside the U.S.22 With respect to the latter point, the majority reasoned that "substantial" in the statute means "important" or "essential," and not merely significant by volume or number.27

The Supreme Court granted certiorari only to address the second of the Federal Circuit's holdings. On that issue, Life Technologies argued in its petition that "a substantial portion" in Section 271(f)(1) refers to the quantity, not the subjective importance or relative significance, of the components supplied.28 Thus, according to Life Technologies, to meet Section 271(f)(1)'s "substantial portion" requirement, the portion must be a "large" or "considerable" quantity, not just a single component that is qualitatively "important."29 Life Technologies bases its argument, in part, on the difference between Congress' use of the plural "components" in Section 271(f)(1) and Congress' use of the singular "component" in Section 271(f)(2).30 Section 271(f)(2) provides a basis for infringement liability for the supply of a single component so long as it is "especially made or especially adapted for use in the invention and not a staple article or commodity of commerce" (which stricture prevents the application of Section 271(f)(2) to Life Technologies).31

Promega, in its opposition to Life Technologies' petition, argued that the Supreme Court should not adopt a bright-line rule that a single component can never be the basis for liability under Section 271(f)(1).32 According to Promega, "[s]ubstantiality is a fact question that requires a case-specific analysis of what is being supplied from the United States and its relationship to the patented invention across multiple dimensions, including not only quantity but also relative importance."33 A fact-specific inquiry properly gives courts flexibility and, in this particular case, the polymerase that Life Technologies supplied from the U.S. is a major component of the infringing kits.34

Petitioners' opening brief on the merits is due September 1, 2016.

Footnotes

1 E.g., Petition for a Writ of Certiorari at 17, Samsung Elecs. Co., Ltd. v. Apple Inc. (No. 15-777) ("Samsung Petition"). The jury also awarded $382 million in damages attributable to trade dress dilution and $149 million in damages attributable to utility patent infringement. Id. Those issues and damages awards are not the subject of this case.

2 Samsung Petition at 18.

3 35 U.S.C. § 101.

4 35 U.S.C. § 171.

5 Brief for Petitioners at 1, Samsung Elecs. Co., Ltd. v. Apple Inc. (No. 15-777) ("Samsung Brief").

76Id.

7 Brief in Opposition at 25, Samsung Elecs. Co., Ltd. v. Apple Inc. (No. 15-777) ("Apple Opposition to Samsung Petition").

8 Samsung Brief at 1.

9 Id. at 24–25.

10 Id.

11 Id.

12 Id.

13 Id. at 26. 

14 35 U.S.C. § 286.

15 E.g., A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc).

16 Petition for a Writ of Certiorari at, e.g., 14, SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, (No. 15-927) ("SCA Hygiene Prods. Petition"); Brief for Petitioners at 5, SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, (No. 15-927) ("SCA Hygiene Prods. Brief").

17 SCA Hygiene Prods. Brief at 14.

18 Petrella, 134 S.Ct. at 1967–68.

19 Id. at 1973.

20 The relevant text is as follows: "The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded: (1) Noninfringement, absence of liability for infringement or unenforceability." 35 U.S.C. § 282(b).

21 SCA Hygiene Prods. Brief at 4, 31.

22 As of this writing, First Quality Baby Products has not yet submitted its merits briefing. Many of its arguments, including, for example, its argument that Congress codified a laches defense in § 282, will likely be substantially similar if not the same in its merits briefing.

23 Brief in Opposition at 1–2, SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, (No. 15-927).

24 Id. at 15.

25 The full list of petitioners is Life Technologies Corp., Invitrogen IP Holdings, Inc., and Applied Biosystems, LLC. 

26 Promega Corp. v. Life Techs. Corp., 773 F.3d 1338 (Fed. Cir. 2014).

27 Id. at 1351–53.

28 Id. at 1353.

29 Petition for a Writ of Certiorari at 3–4, 22–23, Life Techs. Corp. v. Promega Corp. (No. 14-1538) ("Life Tech Petition"); see also Supplemental Brief of Petitioners at 2, Life Techs. Corp. v. Promega Corp. (No. 14-1538) ("Life Tech Supp. Brief").

30 Life Tech Petition at 23.

31 Id. at 4. 

32 Id.

33 Brief in Opposition at 1–2, Life Techs. Corp. v. Promega Corp. (No. 14-1538).

34 Id. at 26.

35 Id. at 2. 

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