Samsung Electronics Co. v. Apple Inc.

Samsung Electronics v. Apple, decided December 6th, 2016. In a unanimous opinion by Justice Sotomayor, the Supreme Court reversed the Federal Circuit and held that, for a design-patent damages award under section 289, the relevant "article of manufacture" need not be the entire end product sold to the consumer. It can be a component of that product. The Court declined to set out a test for identifying the article, and remanded. Here's the brief.

Section 289 of the Patent Act gives design patent holders a distinctive remedy. An infringer is liable for the total profit from the article of manufacture to which the patented design was applied.

Apple released its first iPhone in 2007 and secured design patents covering elements of the phone's appearance — a black rectangular front face with rounded corners, a similar face with a raised rim, and a grid of sixteen colorful icons on a black screen.

After Apple's release, Samsung sold a series of smartphones that resembled the iPhone. Apple sued in 2011.

A jury found that several Samsung smartphones infringed Apple's design patents. Apple was awarded 399 million dollars in damages — Samsung's entire profit from the sale of the infringing phones.

The Federal Circuit affirmed that award. It rejected Samsung's argument that the damages should be limited to the infringing article of manufacture — such as the phone's screen or case — rather than the entire phone. The court reasoned that the components were not sold separately to ordinary consumers, so they were not distinct articles of manufacture. The Court granted certiorari.

The question was one of statutory interpretation: what is the "article of manufacture" for which section 289 awards total profit?

Section 289 first prohibits applying a patented design, or a colorable imitation, to any article of manufacture for sale, and prohibits selling any article of manufacture to which such a design has been applied. It then makes the violator liable to the owner to the extent of his total profit.

The Court explained that arriving at a section 289 award involves two steps: first, identify the article of manufacture to which the infringed design has been applied; second, calculate the infringer's total profit on that article. This case turned on a threshold matter — the scope of the term "article of manufacture." For a multicomponent product, must that article always be the end product sold to the consumer, or can it be a component of that product?

The Court held that the statutory text resolved the case.

An "article of manufacture," the Court explained, is simply a thing made by hand or machine — a broad definition. An "article" is just a particular thing, and "manufacture" refers to something made. A component of a product, no less than the product itself, is a thing made by hand or machine. That a component is integrated into a larger product does not put it outside the category of articles of manufacture.

The Court found this reading consistent with the rest of the Patent Act. Section 171(a) makes designs for an article of manufacture eligible for design patent protection, and the Patent Office and the courts have long allowed a design patent extending to only a component of a multicomponent product. Section 101's use of "manufacture" likewise reaches the parts of a machine considered separately.

Because the term embraces both a whole product and a component, whether sold separately or not, the Federal Circuit's narrower reading could not stand. Reading the phrase to cover only an end product gave it too narrow a meaning.

The Court then declined to go further.

The parties had asked the Court to decide whether, for each design patent here, the relevant article was the smartphone or a particular component. But only the United States had proposed a test; Samsung and Apple had not briefed the issue. The Court declined to lay one out without adequate briefing, left that first step to the Federal Circuit on remand, and reversed.

Samsung v. Apple settles the meaning of "article of manufacture" in section 289. The relevant article for a total-profit award is not always the finished product a consumer buys; in the case of a multicomponent product, it can be a single component. The decision rejected the Federal Circuit's rule that the article must be the end product whenever the components are not sold separately. But the Court left unresolved how to identify the relevant article in any given case, declining to announce a test and returning that question to the Federal Circuit.

Samsung Electronics Co. v. Apple Inc., 580 U.S. 53, decided December 6th, 2016. I'm Kyle Coleman. Thanks for watching.