7 Design Patent Damages And The Jury's Confusion In Apple
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Design Patent Damages And The Jury's Confusion In Apple

Authored by Derek F. Dahlgren and Spencer J. Johnson for Law360

June 27, 2018PDF

In our last Law360 article on the just-settled smartphone design patent litigation between Apple and Samsung, we wrote about potential issues that may result from the level of guidance given to the jury in determining the article of manufacture to which the infringing designs at issue had been applied under 35 U.S.C. § 289. Specifically, we wrote about how the four-factor test and instructions given to the jury to determine the article of manufacture may not provide enough guidance to the jury, and how the jury verdict forms may not provide enough clarity to accurately interpret the jury’s decision.

The difficulty in interpreting the jury’s decision via the returned verdict form is clear (various outlets have discussed the lack of clarity, including Law360): no breakdown is given for amounts awarded for each design patent, and the article of manufacture on which damages were awarded is unknown, leaving interpreters of the decision with little actual knowledge about what took place in the jury room.

But what we do know indicates confusion on the part of the jurors as to how they should identify the article of manufacture. The jury sent two notes back into the court: The first asked for a demonstrative slide the jury had seen showing the display assembly with a breakdown of the components going into it; and the second asked for clarification of the instruction, “Design patents protect the ornamental appearance, including shape or configuration, of an article of manufacture.” Further, following the trial a juror stated that the four-factor test was challenging to apply according to reports.[1]

Beyond the general confusion faced by the jury, comments from a juror after the trial revealed a specific problematic conclusion reached by the jury in their decision-making process. Namely, that the article of manufacture for the graphical user interface (GUI) patent D604,305 was the entire phone because the claimed design cannot be seen without the rest of the phone.[2]

To examine why this conclusion is problematic, we can begin with the second question the jury sent to the court regarding design patents and ornamental appearance. While the jury’s first question sought information regarding what components made up the display assembly, the above quoted language from the second questions continues in the jury instructions, stating that, “Design patents do not protect the functional aspects of how the article claimed in the patent works.” The question from the jury may have related to this distinction, as it went on to ask “Can you clarify what you mean by the ornamental design includes configuration?”[3]

To clarify, 35 U.S.C. § 171 provides that design patents are available for “any new, original and ornamental design for an article of manufacture.” In reading this statute, the Federal Circuit has consistently held that a design patent “only protects the novel, ornamental features of the patented design.”[4] That is, design patents do not protect functional features.

Here, taking the juror’s statements on their face, the jury does not appear to have limited its consideration of the article of manufacture to the ornamental design claimed in the GUI patent as “a graphical user interface for a display screen or portion thereof, as shown and described.” Instead of only applying the four-factor test in determining the article to which the ornamental design was applied, the jury’s determination of the article of manufacture appears to have involved an inquiry into what portion of the phone is functionally required in order for the screen to actually display the GUI. Specifically, the second and third factors dealing with the relative prominence of the design within the product, and whether the design is conceptually distinct from the product as a whole, ask the jury to compare the scope of the design with the product. The outcome here, that the article of manufacture is the entire phone, could have been reached under the test if the screen was considered very prominent within the design or not distinct from the product as a whole. Instead, the test seems to have been almost dodged by looking into functional requirements. This is troubling, and not only for the reason that design patents are not intended to protect functional features by law.

First, the position that the entire phone is required to display the GUI is inaccurate, and opens the door only to additional confusion and undesired outcomes. While certain components such as the display assembly are likely required, other components such as the modem, camera, other sensors, and even the casing clearly would not be. Questions might be asked as to whether the battery is needed, or whether the display might show if the product had another source of power such as being plugged in.

While this may seem to be a minor point, it is important to discuss as many products are now including screens which will include some form of GUI. For example, would a jury evaluating damages for a GUI design patent on an in-flight entertainment system decide that the whole plane was the article of manufacture because more than the physical screen is required for the GUI to be displayed? Even if a narrower definition was found by a jury looking into functionality, would the plane’s engines be included as a source of power for the screens? Now extend this to any car, refrigerator, industrial equipment, or other device with a digital screen.

Effectively, the jury’s consideration that functional requirements require the article of manufacture to be the entire phone has nullified the Supreme Court’s unanimous 2016 decision, at least with respect to GUI design patents. There, the court held that the article is not required to be the end product sold to a consumer, avoiding the outcome of design patents automatically recovering total profits from multi-component consumer products.

Regardless of the fact that a single electronic device can have literally limitless designs displayed on it, the jury’s conclusion elevates GUI designs and vastly overvalues such designs as uniquely being able to claim total profits under § 289. This not only over-incentivizes GUI design over other categories of design, but also skews the balance toward design and away from technical innovation in ways that were discussed widely before the Supreme Court’s decision. Clearly, the Supreme Court did not intend to create a category of design patents for which the article of manufacture must always be the entire product, yet the interpretation applied by the jury here appears to do just that with regard to GUIs. Although the recent unanimous decision from the Supreme Court helped to correct a situation that allowed for overbroad damages awards for design patents, it looks like there is still a lot left to figure out with regard to design patents and the applicable article of manufacture. And while the settlement may resolve the financial dispute between Apple and Samsung, it does nothing to address the negative policy implications and the precedent established by the recent retrial decision. The impact of that decision is very likely to affect future design patents cases beyond just smartphones.

[1] See https://twitter.com/doratki/status/999786774510551040
https://mlexmarketinsight.com/insights-center/editors-picks/Data-Protection-Privacy-and-Security/north-america/ambiguous-design-patent-test-confused-apple-samsung-jury

[2] https://twitter.com/doratki/status/999789022485430272; https://twitter.com/doratki/status/999790352998350849
https://www.jdsupra.com/legalnews/apple-v-samsung-26106/

[3] https://twitter.com/stshank/status/999407852455251968

[4] OddzOn Prod., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997).

This article was originally published in Law360's Expert Analysis section on June 27, 2018. To read the article on Law360's site, please visit: https://www.law360.com/articles/1056859.