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Supreme Court Overturns $399M Award in Apple v. Samsung

In a unanimous decision, the Supreme Court reversed the decision of the Federal Circuit that upheld Apple's $399 million award...
December 12, 2016
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By Colleen Gray

In a unanimous decision, the Supreme Court reversed the decision of the Federal Circuit that upheld Apple's $399 million award in Apple's design patent infringement case against Samsung. Samsung is still held guilty of infringement; but the amount of monetary damages owed must be reevaluated. In its opinion, the Court found that an infringing article of manufacture can encompass the product as a whole or a component of the product, an unsurprising result given that neither Apple nor Samsung contested this point in their briefs.

Section 289 allows a prevailing design patent plaintiff to recover the total profit of the infringing "article of manufacture." In the case below, the Federal Circuit interpreted "article of manufacture" to mean the entire product per se where the product cannot be broken down into distinct articles sold separately in commerce. So the profit calculation was made based on the revenues of Samsung's entire smart phones, not just on a portion of the revenues attributable to the appearance of the smart phones.

In reversing this determination, the Supreme Court reasoned that "article of manufacture" means "a thing made by hand or machine," and that the term did not lose this definition through its incorporation into a multi-component product, even where the components are not sold separately. Section 289 therefore does not preclude damages based on only a component of an overall product if that component is the relevant article of manufacture.

The Court declined to lay out a test to determine what is the relevant article of manufacture or rule on who has the burden of proof in such an inquiry.

The case has been remanded to the Federal Circuit for further proceedings. The Supreme Court noted that the Federal Circuit may address any remaining issues on remand, including the appropriate test to determine the relevant article of manufacture and who has the burden of proof in such a test. The Federal Circuit will also likely address whether the appropriate party met that burden or whether remand to the district court for further proceedings is necessary.

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