Apple $548M Patent Win Against Samsung Survives Appeal, But No Trade Dress Award

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By Tony Dutra

May 18 --The Federal Circuit on May 18 carved $382 million off of the $930 million jury verdict for Apple and against Samsung in their long-running war on smartphone intellectual property.

The court affirmed design and utility patent infringement findings but reversed the district court's decision that features of Apple's iPhone were protectable under trade dress principles.

“Samsung’s resounding victory on Apple’s trade dress claims further underscores the importance and primacy of design patents when looking to protect and enforce design IP,” Christopher V. Carani of McAndrews Held & Malloy Ltd., Chicago, told Bloomberg BNA.

“The Supreme Court’s Walmart and TrafFix decisions from the early 2000s curtailed trade dress rights, and this decision continues that trend,” he said. “As trade dress rights are increasingly difficult to establish, design patent rights continue to become more important.”

Perry J. Saidman of DesignLaw Group LLC, Silver Spring, Md., was equally pleased with the court's distinction.

“It is clear that analysis of trade dress functionality is very different from analysis of design patent functionality,” he said. “There has been some design patent case law that conflated the two analyses, but this case should help put that to bed.”

“Of course, the very big deal is affirming the 100+ year old design patent 'total profit' damages rule, rejecting Samsung’s causation argument,” Perry Saidman said.

Design IP Experts Laud Court

The court rejected Apple's argument that elements of its phone design reflected only the company's touted “beauty,” when all evidence showed that the company intended non-protectable functionality gains as well. Even the iPhone's icons, registered with the Patent and Trademark Office, fell--deemed functional because they were designed to promote usability.

Design patent holders will be particularly pleased with the decision on patent infringement damages, though, as the court maintained its focus on the “overall design” and refused to read 35 U.S.C. §289 as allowing for an apportionment limited to the patented design elements.

“Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design,” the court said.

Elizabeth D. Ferrill of Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Washington, focused on the court's rejection of Samsung's arguments that the designs cover both functional and ornamental aspects, with the district court required to filter out functional aspects before determining the scope of the ornamental aspects.

“Today, the Federal Circuit took the opportunity to clarify its holding in Richardson v. Stanley Works, specifically noting that Richardson does not establish a rule that entire elements should be eliminated from the claim scope of a valid patent in analyzing infringement,” Ferrill said, citing Richardson v. Stanley Works, Inc., 597 F.3d 1288, 37 U.S.P.Q.2d 1816 (Fed. Cir. 2010)(50 PTD, 3/17/10).

“Samsung’s resounding victory on Apple’s trade dress claims further underscores the importance and primacy of design patents when looking to protect and enforce design IP.”
--Christopher V. Carani of McAndrews Held & Malloy

“Rather, the Federal Circuit said that the focus of the infringement determination should be on the ornamental aspects of the design,” she said. “This guidance--moving away from 'erasing’ certain parts of a design patent and instead focusing on the ornamental elements in the infringement test--should be a helpful to district courts, since the distinction appears to have been confused in the past.”

Saidman agreed.

“The court clarified that Richardson does not require 'factoring out' entire elements during Markman claim construction before analyzing infringement,” he said. “This had been a favorite way for accused infringers to try and avoid infringement.”

This Case to Date

Samsung Electronics Co. here appealed a $930 million verdict--$399 million for design patent infringement, $149 million for utility patent infringement and $382 million for trade dress dilution--in the U.S. District Court for the Northern District of California (43 PTD, 3/5/13; 227 PTD, 11/25/13).

In November 2013, the Federal Circuit ruled that Apple can't get an injunction against Samsung's smartphones and tablets based on design patents (U.S. Patent Nos. D593,087; D604,305; and D618,677) or trade dress protection, but Samsung could be forced to eliminate or modify certain features covered by utility patents or face an injunction (Apple Inc. v. Samsung Elecs. Co., 735 F.3d 1352, 108 U.S.P.Q.2d 1833 (Fed. Cir. 2013)(223 PTD, 11/19/13)). The case returned to district court for trial and eventually a damages determination.

Thirteen amicus briefs were filed in the appeal, generally focused on the design patent and trade dress questions . Oral argument was held Dec. 4 (239 PTD, 12/12/14).

Decision on Trade Dress

Apple’s registered trade dress claims a device with “rounded silver edges, a black face, and an array of 16 square icons with rounded edges.” Unregistered trade dress dilution claims were also at issue in the case, with a dispute between the parties as to the extent of their coverage.

TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 58 U.S.P.Q.2d 1001 (2001), set the standard for evidence of functionality to defeat a claim of trade dress in a particular product configuration.

Additional Ninth Circuit jurisprudence was applicable here, and the Federal Circuit relied considerably on a four-factor test in Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002, 1007, 48 U.S.P.Q.2d 1132 (9th Cir. 1998), which also featured the statement: “A product feature need only have some utilitarian advantage to be considered functional.”

“The court emphasized that the Ninth Circuit had a 'high bar' for establishing non-functionality, and although citing Inwood and TrafFix, proceeded to analyze functionality under an analysis that mirrors the [Patent and Trademark Office's]Morton-Norwich factors,” Saidman said, referring to the four factors in In re Morton-Norwich Prods. Inc., 671 F.2d 1332, 213 U.S.P.Q. 9 (C.C.P.A. 1982).

The appeals court clarified that “Richardson does not establish a rule that entire elements should be eliminated from the claim scope of a valid patent in analyzing infringement.”
--Elizabeth D. Ferrill of Finnegan, Henderson, Farabow, Garrett & Dunner

Every factor went against Apple when considering the unregistered trade dress, and the only difference with the registered trade dress analysis, the court said, was in the evidentiary presumption under the Lanham Act--the burden of production was initially on Samsung.

Apple's most concerted fight was to try to get protection on the aggregation of 16 icons on the iPhone's home screen, where each icon independently clearly mapped to a function.

“But Apple fails to explain how the total combination of the sixteen icon designs in the context of iPhone’s screen-dominated rounded-rectangular shape--all part of the iPhone’s 'easy to use' design theme--somehow negates the undisputed usability function of the individual elements,” the court said.

Decision on Design Patent Infringement

The design patents cover the shape, corners, translucent screen and colorful icon arrangement relevant to the iPhone and the iPad.

The court rejected Samsung's arguments--affecting both validity and infringement analyses--that smartphones are multi-function devices with separable ornamental and functional elements.

The Richardson court considered the Stepclaw, a carpentry tool combining a hammer, a climbing tool, a crowbar and a handle, and Samsung argued that the panel there filtered out the tool's functional elements.

But, the court here said, “the language 'dictated by their functional purpose' in Richardson was only a description of the facts there; it did not establish a rule to eliminate entire elements from the claim scope as Samsung argues.”

Other Samsung complaints on this topic related to jury instructions, and in each case the court supported the trial judge's language.

Most notably, Samsung contended that the jury should have been told to compare its smartphones to only the “ornamental” elements of the design patents, but the court was satisfied that the trial court's claim construction, limiting the claims to “the ornamental design” as shown in the patent figures, sufficiently got that point across.

Decision on Damages.

Section 289 of the Patent Act, 35 U.S.C. §289, is specifically directed to damages for design patent infringement. It makes the infringer “liable to the owner to the extent of his total profit, but not less than $250.”

“Of course, the very big deal is affirming the 100+ year old design patent 'total profit' damages rule, rejecting Samsung’s causation argument.”
--Perry J. Saidman of DesignLaw Group

The question was whether Congress meant the word “extent” to mean that, in every case, an infringement of a design patent required giving total profits to the patent owner. Nike Inc. v. Wal-Mart Stores Inc., 138 F.3d 1437, 46 U.S.P.Q.2d 1001 (Fed. Cir. 1998), outlined the problems of proof presented by apportionment for design patentees and seemed to confirm that “total profits” cannot be apportioned.

The court in the instant case made no doubt about that.

The opinion cited in a footnote an amicus brief filed by 27 law professors that awarding the defendant's entire profits “makes no sense in the modern world.”

“Those are policy arguments that should be directed to Congress,” the court said. “We are bound by what the statute says, irrespective of policy arguments that may be made against it.”

Decision on Utility Patents

The utility patents cover a “snap back” or “bounce back” feature (U.S. Patent No. 7,469,381); a “pinch-to-zoom” feature, using two fingers to zoom in or out (7,844,915); and “double-tap-to-zoom” capabilities (7,864,163).

Samsung contested the last two. In each case, the court concluded that the jury's weighing of competing experts' arguments on validity in favor of Apple was supported by substantial evidence.

Again, Samsung challenged the damages amount, and again the court affirmed the lower court's judgment. Part of the award was based on lost profits, and the court rejected Samsung's contentions that it had showed that noninfringing alternatives were available. Questions about the reasonable royalty part of the award were dependent on testimony of Apple's experts once more, and the court again saw no reason to upset the jury's verdict.

What's Next?

Samsung's utility patent concerns may be of lesser importance to the company, though.

On top of this case is another litigation between the parties decided in the Northern District of California (229 PTD, 11/28/14). In that case, now also before the Federal Circuit on appeal of a jury's $120 million award, the court is considering infringement of patented features for auto-correct, slide-to-unlock and quick links (No. 2014-1802 (argued March 4, 2015)).

The lower court, with help from Federal Circuit decisions, denied Apple's injunction requests, and Samsung claims that its newest phones no longer infringe any of the asserted Apple patents.

With the parties having settled with respect to non-U.S. patents as well, the end of this particular war may well be in sight. Even if a petition for writ of certiorari is forthcoming, the conflict now appears to be only about how much money in damages will flow from Samsung to Apple.

But some of Apple's patent claims are directed to features that are standard in the Android operating system, indicating a potentially larger problem for Android developer Google Inc. in the future.

Chief Judge Sharon Prost wrote the court's opinion, which was joined by Judges Kathleen M. O'Malley and Raymond T. Chen.

Kathleen M. Sullivan of Quinn Emanuel Urquhart & Sullivan LLP, New York, represented Samsung. William F. Lee of Wilmer Cutler Pickering Hale & Dorr LLP, Boston, represented Apple.

To contact the reporter on this story: Tony Dutra in Washington at

To contact the editor responsible for this story: Tom P. Taylor at

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