Broad Definition of “Article of Manufacture” Costs Apple $400MDecember 6, 2016

Since May 2015, Filewrapper, along with the intellectual property community, has been closely watching the heated Apple v. Samsung design patent and trade dress row.  On December 6th, the Supreme Court upset the controversial $400 million damages award to Apple, essentially holding that such penalties are available for the “article of manufacture,”which may not mean the product as a whole.

In a unanimous opinion authored by Justice Sotomayor, the Federal Circuit decision awarding profits based on sale of the entire phone was overturned, favoring a broad interpretation of the “article of manufacture”phrase contained within the patent statute. Applying this construction, the Supreme Court reasoned that profits are to be award based on features at issue, rather than the entire product.

The case is remanded for a determination by the Federal Circuit as to whether the “article of manufacture”within each design patent is the smartphone itself or a particular component. Nevertheless, this decision by the Court seems to indicate that in context of design patents, plaintiffs should be prepared to provide argument and evidence as to the value of the particular component of interest in addition to the value of the entire product.

The full decision is available here.

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