PublishedSeptember 15, 2017

CCIA Hosted Panel Discusses What May Happen In Wake Of SCOTUS Apple Samsung Design Patent Ruling

Washington — At a patent event at the National Press Club this week, panelists discussed an uptick in design patent cases since the Apple Samsung design patent ruling by the Supreme Court. CCIA patent counsel Josh Landau, who moderated the panel, noted that a jury had sided with Apple in its design patent claims on the bezel design of the iPhone and the arrangement of icons on the iPhone screen and awarded them the total net profits of several Samsung models totaling $399 million.

While the high court rejected the notion that the article of manufacture, and thus punitive damages, must be the entire phone, it sent it back to the lower courts to decide how to legally define the article of manufacture.

Harvard Law School professor Rebecca Tushnet said she sided with those who say that an article of manufacture is something made by people and that can be sold separately, whether or not it actually is sold separately.

“It’s a Solomon-like decision with neither side happy. Now lower courts are trying to devise a test on when an AoM is less than the whole item sold,” said Howard Hogan, partner at Gibson, Dunn & Crutcher.

“Now that SCOTUS got rid of a bad rule, we’ve got to create a good rule of what an AoM should be,” said Carl Cecere, counsel for the Hispanic Leadership Fund, the National Black Chamber of Commerce, and the National Grange.

Cecere was also concerned about the impact of these patent suits on competition. “The potential for weaponizing design patent damages is a real threat to competition… and to the development of innovation,” he said, noting that a company with patents can carve out a space and prevent a competitor from entering a market.

His prescription for defining the article of manufacture? If the patent holder claims less than the whole with a partial legal claim, then they shouldn’t get the entire value of the product.

Charles Duan, director of the Patent Reform Project at Public Knowledge, said, “Patents affect a lot of people – it’s not some obscure area involving just tech and pharmaceutical companies.

He added that it’s time to wonder if there is a systemic reason why SCOTUS is at odds with the Fed. Circuit court. His theory is that SCOTUS goes back to the origins of patent law like Lexmark and TC Heartland. He says the reason is that these historic cases relied on the ultimate purpose of patents — to promote science and the useful arts. He said the patent system has lost that perspective and now it’s all about rules and the principle to benefit the needs of the entire public have been forgotten.

Duan also speculated on why the USPTO has issued so many bad design patents since the 90s and thinks it’s because of the limited resources the PTO has available for searching for prior art designs, and the difficulty of doing that kind of search. As a result, those seeking to misuse the patent system turned to easy to get design patents because of the PTO issuing weak design patents. Until search gets better, we’ll end up with patents on fairly broad designs, patents which are easy to misuse.

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