United States: Apple v. Samsung: The Parties Weigh In On Next Steps

On Tuesday, December 6, 2017, the United States Supreme Court issued its first opinion in a design patent case in more than 120 years.  In the long-running smartphone saga between Apple and Samsung, the issue before the Supreme Court was the proper interpretation of a 35 U.S.C. § 289.  Under this statute, when an infringer is found to have applied a patented design to any "article of manufacture," that infringer is "liable to the [patent] owner to the extent of his total profit, but not less than $250[.]"

Relying on this statute, a jury awarded Apple $399 million in damages for Samsung's infringement of three of Apple's design patents, which are directed to the design and shape of the front face and bezel of smartphones, as well as arrangement of application icons on a screen.  On appeal, the Federal Circuit affirmed the jury verdict, identifying the entire Samsung smartphone, not its components, as the only permissible "article of manufacture" to be used for the purpose of calculating damages under § 289 because consumers could not purchase the components separately from the smartphone.

At the Supreme Court, the parties, including the Solicitor General, proposed different tests for the application of § 289 and calculation of profits. But, in a unanimous opinion, the Court made only a limited ruling that while the relevant "article of manufacture" may be the end-product as sold, it may also be only a component of that end-product.   Further, the Supreme Court broadly outlined two steps for a test under § 289:

(1) identify the "article of manufacture" to which the infringed design has been applied; and

(2) calculate the infringer's total profit made on that "article of manufacture."

But the Supreme Court declined to further develop a test for identifying the "article of manufacture" in general, or to specifically make a finding in this case, returning it to the Federal Circuit.

Under the Federal Circuit's Internal Operating Procedures (IOP 15), on remand from the Supreme Court, the Federal Circuit may, by majority vote of the active judges:

(i) retain the case (presumably with the en banc court);

(ii) refer the case to the original panel (or to the remaining judges and one or two newly selected judges); or

(iii) refer the case to a newly selected three-judge panel.

Here, Chief Judge Prost, Judge O'Malley, and Judge Chen—all still active judges— served on the original panel.  Apple Inc. v. Samsung Electronics, Co., 786 F.3d 983 (Fed. Cir. 2015).  Prior to Samsung's writ of certiorari, the en banc Federal Circuit denied Samsung's petition for rehearing.  Thus, it seems reasonably likely that the Federal Circuit would send the case back to the original panel.

Once this decision has been made, under IOP 15.3, the en banc court or the panel may require the parties to file statements on their positions regarding action to be taken by the court on remand.  The Court may also require additional briefs, schedule oral argument, summarily dispose of the case, remand to the trial court, or take any other action consistent with the opinion of the Supreme Court.

On January 12, 2017, the Federal Circuit issued an order reinstating the appeals and vacating the Court's prior judgment from 2015.  The parties have also filed statements, on their own accord, about next steps in the case.

On December 27, 2016, Apple filed a statement supporting continued panel review.  In its statement, Apple asked the panel to retain the case and affirm the district court's $399M judgment.  According to Apple, no further trial court proceedings are needed, because the identity of the relevant "article of manufacture" was never disputed at trial.  Moreover, Apple argues that based on the evidence presented, there was no basis on which the jury could have awarded infringer's profits on anything other than Samsung's entire phones. Because identification of the article of manufacture is a question of fact, and because, in Apple's view, Samsung failed to offer evidence supporting any other determination of "article of manufacture" other than the jury's conclusion that it should be the entire smartphone, the panel should affirm the jury's verdict.  Finally, Apple proposes that the panel could decide this case without further briefing, but suggests an abbreviated briefing schedule if the panel does not agree.  Apple reiterated many of these points in its reply statement, filed on January 18.

On January 12, Samsung filed a competing statement urging the Federal Circuit not to affirm the original award and instead to remand the case back to the district court.  In Samsung's view, the Supreme Court's ruling invalidates the premise underlying the jury's verdict and removes any basis for the $399M award.  As a result, Samsung argues that it is entitled to a new trial before a properly-instructed jury, and further that this trial should take place before the Federal Circuit resolves any "open legal issues" from the Supreme Court's decision.  Samsung argues that the Federal Circuit will have the benefit of an entire legal record before it.  In the event that the Federal Circuit does not remand, Samsung also requests briefing to explain its positions on how to define the relevant articles of manufacture, the methods to determine profits therefrom, who bears that burden of proof, and whether a judge or jury should resolve them.  On January 23, 2017, Samsung filed a reply arguing that Apple has forfeited its arguments for affirmance, having not raised them previously, and continuing to argue that the district court erred in refusing to give its proposed jury instruction about the distinction between the article of manufacture and the product.

In addition to the unsolicited statements and replies filed by each party thus far, both parties have proposed that if the Federal Circuit should not agree with its initial proposal (for affirmance or remand to the district court), then each party argues that it should be permitted to file the opening brief and reply brief, to advocate for its position and the opposing party should only be permitted a single brief.

In short, absent settlement, the case appears far from over.  The panel may agree with Apple (to affirm) or Samsung (to remand) or it may decide that it needs to consider the legal issues related to the test for identifying the "article of manufacture."  Unless the Court agrees with Apple, the case will eventually be passed back to the District Court for the Northern District of California to conduct a new damages trial.  At the new trial, the parties would be permitted to present evidence and arguments relevant to the new test (the Federal Circuit develops one) and render a verdict with a new damages award.  Given the history of this case, it is likely the losing party will then appeal to the Federal Circuit once again, and perhaps seek another review by the Supreme Court.

UPDATE: On February 7, 2017, the Federal Circuit rejected both sides' arguments and remanded this case to the district court for further proceedings. The Federal Circuit found that remand was appropriate because the district court is "better positioned to parse the record to evaluate the parties' competing arguments" about the jury instructions and determine if any additional proceedings, including a new damages trial, are needed.  The Court noted that the district court will "have the opportunity to set forth a test for identifying the relevant article of manufacture for the purposes of § 289, and to apply that test to this case."  The case now heads back to the Northern District of California.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
24 Jul 2018, Webinar, Washington, DC, United States

The program will consider arguments that have worked to avoid a finding of inequitable conduct or unclean hands and those that have not been successful.

9 Aug 2018, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan partners Shana Cyr and Barbara Rudolph will discuss best practices for patent counsel navigating the 30-month stay in Hatch-Waxman Act litigation.

5 Sep 2018, Webinar, Washington, DC, United States

Finnegan’s 2018 webinar series addresses challenges across the IP landscape in the United States. The series starts with one of the fundamentals—proving or disproving obviousness. The panelists will address what works and what doesn’t before U.S. Patent and Trademark Office (USPTO) examiners, before the Patent Trial and Appeal Board (PTAB), and before the courts.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions