Supreme Court Adds Yet Another Smackdown To Patent Court, Says It Misinterpreted Patent Law In Apple/Samsung Case

from the not-how-patent-law-works dept

It’s becoming a fairly standard thing at this point: patent cases make their way up to the Supreme Court (after traveling through the patent appeals court at the Federal Circuit, better known as CAFC), then the Supreme Court smacks down the CAFC ruling and reminds the court that CAFC doesn’t seem to understand patent law at all. It’s happened many times, and now we’ve got another one with a short and sweet ruling that puts Apple’s famous big patent win against Samsung at risk. As you recall, Apple sued Samsung over copying iPhone/iPad designs, and after a long jury trial, Apple prevailed and was awarded $399 million. CAFC had upheld the award, despite Samsung noting (correctly) that since the design patents only covered a small part of the device, it was ridiculous to give Apple all the profits from the entire device.

The Supreme Court, in a unanimous smackdown of CAFC written by Justice Sotomayor, points out that patent law does not require the profits to be on the entire device, but could be on separate components.

This case involves the infringement of designs for smartphones. The United States Court of Appeals for the Federal Circuit identified the entire smartphone as the only permissible “article of manufacture” for the purpose of calculating §289 damages because consumers could not separately purchase components of the smartphones. The question before us is whether that reading is consistent with §289. We hold that it is not.

In short: just because one small piece of a larger product infringes, it doesn’t mean the patent holder should get all the profits.

The more weedy issue here was the definition of an “article of manufacture” which is how damages are calculated under patent law. Apple argued (and the lower courts agreed) that the single “article of manufacture” here was the total device (phone or tablet). Samsung, on the other hand, argued that there are lots of different components, each of which could be an “article of manufacture” and since it only infringed on a few distinct components, not all of the profit should be lost. As the ruling notes, it’s pretty clear that “article of manufacture” can refer to just components as well as to the full product.

“Article of manufacture” has a broad meaning. An “article” is just “a particular thing.” J. Stormonth, A Dictionary of the English Language 53 (1885) (Stormonth); see also American Heritage Dictionary, at 101 (“[a]n individual thing or element of a class; a particular object or item”). And “manufacture” means “the conversion of raw materials by the hand, or by machinery, into articles suitable for the use of man” and “the articles so made.” Stormonth 589; see also American Heritage Dictionary, at 1070 (“[t]he act, craft, or process of manufacturing products, especially on a large scale” or “[a] product that is manufactured”). An article of manufacture, then, is simply a thing made by hand or machine.

So understood, the term “article of manufacture” is broad enough to encompass both a product sold to a consumer as well as a component of that product. A component of a product, no less than the product itself, is a thing made by hand or machine. That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture.

And, of course, there’s the slap directed at CAFC’s wacky and wrong interpretation of patent law:

The Federal Circuit?s narrower reading of “article of manufacture” cannot be squared with the text of §289.

Of course, in unfortunately typical fashion, the Supreme Court punts on some of the bigger questions — including what is the proper “article of manufacture” here in this case. Instead, it just says that the lower courts used the wrong standard and kicks it back to them to try again. This means that this case, that has been going on for roughly half a decade, is going to go on even longer. Apple may still get its giant reward, but for now Samsung gets another chance to convince the courts to lower it to just the components, rather than the profit on the overall devices.

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Companies: apple, samsung

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Comments on “Supreme Court Adds Yet Another Smackdown To Patent Court, Says It Misinterpreted Patent Law In Apple/Samsung Case”

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Anonymous Coward says:

Ah... the Supreme SNORT

They solve problems without really solving problems. So typical of a bunch of washed out old coots!

Whatever, kinda tired of seeing them have to correct and not directly take the lower court to actual task. Of course Congress is the real aggressor here, when was the last time they demolished a court for failing to understand law?

Welp, the circus must go on!

Anonymous Coward says:

Re: Re: Ah... the Supreme SNORT

There is not a single part of government operating within their scope today. Nothing in government is operating as designed and your comment that they are smacks of gross ignorance.

Try reading the Constitution some time. You will not find the words narrow or restrained in Article III of the US Constitution which defines the creation and scope of power for the Supreme snort.

So the system was not designed, as you so put it, to be narrow or to avoid constitutional problems. And to put it directly as the founding papers imply, they are to be directly involved with constitutional situations regardless of the approach it takes towards the court.

SCOTUS has been all over the damn map and so have the people reading their rulings.

Doug D says:

Perhaps trivial nitpick.

I personally find it extremely useful when reporting on patents in the US to make a clear distinction between design patents and utility patents.

My understanding is that the case under discussion here is about a design patent, which some other countries describe via terms that do not include the word “patent” at all. (I’ve spoken with Europeans who were confused by this.) It doesn’t, for example, tell you anything about how the whole area of “can algorithms be patented?” is going.

DB (profile) says:

What is the value of a cell phone case/body?

For a narrow, literal interpretation: I could buy a replacement Galaxy S3 frame and back for under $5, including shipping from China. The front glass added another $1. The expensive parts are the display and touch sensor assembly, followed by the processor board.

I’m guessing that meant the broader view of a the additional value of a specific feature. There is some value in being mistaken for an iPhone. That value is higher for a cheap phone that is bought by status-focused people. It diminishes rapidly for a device that is equivalently featured and has status of its own, and for a product that is readily spotted as different. Both of which describe Samsung’s phones.

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