Apple Wins Samsung’s Patent Lawsuit Appeal

In a decision released on May 18, 2015, the United States Court of Appeals for the Federal Circuit (Court of Appeals) affirmed in part the judgment from the US District Court for the Northern District of California (District Court) that Samsung Electronics Co, Ltd, Samsung Electronics America, Inc and Samsung Telecommunications America, LLC (collectively Samsung) infringed design and utility patents owned by Apple Inc. Although the Court of Appeals reversed the District Court’s findings with respect to Apple’s asserted trade dresses, the Court of Appeals affirmed the District Court’s findings with respect to Apple’s design and utility patents, awarding Apple approximately $548-million. The patents held to be infringed include US Design Patent Numbers D618,677, D593,087 and D604,305, and US Patent Numbers 7,469,381, 7,844,915 and 7,864,163.

Trade Dresses

Apple alleged that Samsung diluted Apple’s iPhone trade dresses under the Lanham Act. The Court of Appeals held that Apple’s asserted trade dresses were functional and therefore not protectable under the Lanham Act, reversing the District Court’s finding as a matter of law.

Utility Patents

Samsung challenged the validity of the asserted utility patents for being indefinite and anticipated. The Court of Appeals rejected both of these arguments.

Samsung also argued that non-infringing alternatives were available to it, and that therefore Apple was therefore only entitled to a reasonable royalty, and not an award of lost profits in respect of the infringement. The Court of Appeals held that Samsung failed to establish that the non-infringing alternative phones used to support its assertion provided comparable features to the infringing devices. Therefore, the Court of Appeals upheld the damages award in respect of the infringement of Apple’s utility patents.

Design Patents

Apple’s asserted design patents claimed certain design elements embodied by Apple’s iPhone.

Samsung argued, among other things, that any similarity between its products and the iPhone were limited to basic or functional elements of the design patents, and that it should therefore not be liable for infringement. Samsung also argued that, alternatively, if it is liable for infringement, it should not be liable for the entire profits of its infringing devices, but rather should only be liable for the portion of the profit attributable to the infringement of the designs. Specifically, Samsung argued that it should only be liable for profits from sales that Apple could establish were caused by the infringement of the designs or, alternatively, it should only be liable for the infringing “article of manufacture,” and not the entire infringing product. The Court of Appeals rejected all of Samsung’s arguments and upheld the decision of the District Court.

Notably, the Court of Appeals held that 35 USC § 289 provides that an infringer of a design “shall be liable to the owner to the extent of [the infringer’s] total profit.” According to the Court of Appeals, the clear statutory language prevented the adoption of a causality rule for the determination of design infringement damages. Additionally, in response to Samsung’s argument that it should not be liable for the entire infringing product, the Court of Appeals noted that the “innards” of Samsung’s devices are not sold separately from their infringing shells. The Court of Appeals therefore upheld damages for lost profits of the entire infringing product.