Rivals Apple and Samsung recently wrapped up a major smartphone patent lawsuit in the U.S. Court of Appeals for the Federal Circuit. In April 2011, Apple sued Samsung for trade dress dilution and patent infringement. The district court ruled in favor of Apple, awarding over $1 billion in damages. Samsung then appealed this ruling. The Federal Circuit reversed on trade dress but affirmed on the design and utility patents. The final award to Apple was lowered to $930 million.
In trial, Apple claimed that Samsung’s smartphones too closely resembles the shape of the iPhone, with its rectangular shape and rounded corners. Apple claimed that while unregistered, these elements, as well as the colorful icons with rounded corners, constituted protectable trade dress, because trade dress generally serves to identify the source of a product. Upon appeal, Samsung argued the functionality of these elements, and the Federal Circuit agreed, reversing the trade dress decision.
The Federal Circuit did not agree with Samsung on design patent infringement. The jury found that Samsung infringed 3 design patents on the front face of the smartphone, the peripheral bezel, and its graphical user interface. These nonfunctional aspects, also referred to as “ornamental design,” are protected with design patents through drawings.
This lawsuit was important for several reasons. The amount Samsung was initially ordered to pay reflected all of the profits associated with the products that contained these designs. Under design patent law, it doesn’t matter the import of the designs, the relative contribution to Samsung’s profits, or any effect on Apple; the total profits earned by Samsung’s product were awarded to Apple. Some argue this does not make sense for technology such as smartphones, which are comprised of thousands of elements. The idea that a minor design patent, which makes up only a small amount of the overall product, would be the one thing that drives a purchase decision is beyond our ability to measure. Should Apple really get ALL of Samsung’s profits for these smartphones when the product only contained minor infringement components?
On the other hand, many will argue that cases like these are the ONLY way to protect patented products against infringement. The law, written is 1887, clearly states, “…shall be liable to the owner to the extent of his total profit…”
Another important takeaway from this lawsuit is the difference between trade dress and design patent protection, and what is covered under each one with regards to functionality and ornamental aspects.
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