The U.S. Supreme Court has not reviewed a design patent case in over 100 years—until now.
On March 21, 2016, the Supreme Court agreed to review the highly publicized Apple v. Samsung case, in which Apple was awarded Samsung’s entire profits from smartphones that infringed Apple’s design patents covering the look of the iPhone.
The issue before the court is: Where a design patent covers only a component of a product, should damages be limited to the infringer’s profits attributable to the component, or should damages cover all of the infringer’s profits from the entire product?
In the utility patent world, the scope of damages is generally limited to the specific patented component rather than the entire product. For example, if a utility patent claim covering the legs of a dining table were infringed, the patent holder would normally only be entitled to a reasonable royalty proportional to the value of the table legs—not the entire table. It is more difficult to prove entitlement to “lost profit” damages or even a royalty based on the value of the entire product.
In contrast, in the design patent world, patent owners are entitled to recover the infringer’s own profits. Moreover, current law (as applied by the lower court in the Apple v. Samsung case) allows patent owners to recover all of the infringer’s profits for the associated product, regardless of whether the overall profits are connected to the particular design at issue. For example, if a design patent covering the table legs were infringed, the patent holder would be awarded all of the infringer’s profits attributable to the entire table, not just to the table legs.
As such, currently, design patents are a powerful tool for capturing large amounts of damages. If the Supreme Court reverses Apple v. Samsung, it will decrease the potency of design patents.
However, design patents still have unique value over utility patents even if the Supreme Court overturns Apple v. Samsung. Design patents give patent holders the ability to go after the infringer’s own profits (even if only a portion of them). This can be a significant benefit, especially when the patent owner’s profits are lower than the infringer’s. Design patents are also historically less expensive and faster to obtain than utility patents.
Eric Amundsen served as co-author.