Design Patent Damages After The Supreme Court - PowerPoint Presentation

Design Patent Damages After The Supreme Court +The Truth About Design Patents and Anticipation 19th Annual Berkeley-StanfordAdvanced Patent Law Institute December 6 & 7, 2018 Alan N. Herda, Partner

2 Design Patent Damages After the Supreme Court  Apple Inc. v. Samsung Electronics Co. Ltd. et al., No. 11-CV-01846-LHK Goal back at District Court:Identify the article of manufacture to which the infringed design has been applied, with the understanding that an “article of manufacture” encompasses both a product sold to a consumer and a component of that product.New trial necessary!On October 22, 2017, the District Court ordered a new trial on damages for the three design patents. The Order placed on the plaintiff the burden of persuasion to identify the article of manufacture and prove the amount of total profit on the sale of that article, as well as the initial burden of production.The Order required that the four-factor test proposed by the United States be the test for determining the article of manufacture for the purpose of arriving at a damages award under § 289.

3 The four-factor test for determining the article of manufacture for the purpose of arriving at a damages award under § 289:Scope of the design claimed in the design patent;The relative prominence of the design within the product as a whole;Whether the design is conceptually distinct from the product as a whole; andThe physical relationship between the design and the rest of the product, including:whether the design pertains to a component that a user or seller can physically separate from the product as a whole; andwhether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately. Design Patent Damages After the Supreme Court Apple Inc. v. Samsung Electronics Co. Ltd. et al., No. 11-CV-01846-LHK

4 VERDICT FORM Design Patent Damages After the Supreme Court Apple Inc. v. Samsung Electronics Co. Ltd. et al., No. 11-CV-01846-LHK We know the product, but what was the article of manufacture?????

5 Under prior law, total profit made from sales of infringing smartphones: $399 million in damagesThe 4 factors: claim scope, relative prominence, conceptual distinctness, physical relationship$533 million in damages (apply for GUI!)Design Patent Damages After the Supreme Court Apple Inc. v. Samsung Electronics Co. Ltd. et al., No. 11-CV-01846-LHK

6 At least two other district courts have adopted the 4-factor test: Nordock, Inc. v. Systems, Inc., NO. 11-CV-118 (E.D. Wis.)Columbia Sportswear North American, Inc. v. Seirus Innovative Accessories, Inc., No. 3:17-CV-01781 (S.D. Cal.)On appeal to the Federal CircuitWill the 4-factor test be blessed?Design Patent Damages After the Supreme Court Other decisions

The Truth About Design Patents and AnticipationSomewhat recent history… 2001 “[D]esign patent anticipation requires a showing that a single prior art reference is ‘identical in all material respects’ to the claimed invention.” Door-Master Corp. v. Yorktowne Inc., 256 F.3d 1308, 1312 (Fed. Cir. 2001) (citing Hupp v. Siroflex of America Inc., 122 F.3d 1456, 1461 (Fed. Cir. 1997)).2009“[T]he ordinary observer test must logically be the sole test for anticipation.” Int’l Seaway Trading Corp. v. Walgreens Corp. , 589 F.3d 1233, 1240 (Fed. Cir. 2009) The O.O.T.: “[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” Gorham Co. v. White, 81 US 511, 528 (1871).“identical in all material respects” = “substantially the same” ???See Saidman, 83 PTCJ 278, 12/23/2011.7

The Truth About Design Patents and Anticipation How does the MPEP address the foregoing question? MPEP 1504.02 provides that, for anticipation to be found:The prior art reference must be identical in all material respects.The claimed design and the prior art design must be substantially the same.The ordinary observer test must be applied because it is the sole test for anticipation. ADDITIONALLY , MPEP 1504.02 provides that: “Anticipation does not require that the claimed design and the prior art be from analogous arts. In re Glavas, 230 F.2d 447, 450, 109 USPQ 50, 52 (CCPA 1956). ‘… Accordingly, so far as anticipation by a single prior art disclosure is concerned, there can be no question as to nonanalogous art in design cases.’ Id. (internal quotation marks omitted).”One-two punch against design patent owners and applicants!Left jab with the ordinary observer test … Followed by a right cross with nonanalogous art!8

The Truth About Design Patents and Anticipation How can design patent owners/applicants protect themselves against the one-two anticipation punch? WITH THE TRUTH:“Since the ordinary observer test is the sole test for anticipation, the differences between the respective articles of manufacture to which the claimed and prior art designs are applied must be a factor when applying the ordinary observer test to determine whether the prior art design anticipates the claimed design.” (emphasis added).Why THE TRUTH is true:The Federal Circuit wants identical tests: “[W]e now conclude that the ordinary observer test must logically be the sole test for anticipation as well. In doing so, we will prevent an inconsistency from developing between the infringement and anticipation analyses, and we will continue our well-established practice of maintaining identical tests for infringement and anticipation.” Int’l Seaway Trading Corp., 589 F.3d at 1240. When applying the ordinary observer test to determine infringement, courts consider the differences between the articles of manufacture to which the claimed and accused designs are applied – some courts have found that the high degree to which the articles of manufacture differed was the dispositive factor as to why the ordinary observer test failed.If a difference between the articles is a factor when applying the ordinary observer test to determine infringement, then a difference between the articles is a factor when applying the ordinary observer test to determine anticipation.9

The Truth About Design Patents and Anticipation Example cases where degree of difference was dispositive factor P.S. Prods., Inc. v. Activision Blizzard, Inc., 140 F. Supp. 3d 795, 802-03 (E.D. Ark. 2014)The court held that the “ordinary observer” test failed because “no reasonable person would purchase defendants’ video game believing that they were purchasing plaintiffs’ stun gun.”Accused Video Game Design ≠ Patented Stun Gun Design  Ordinary Observer Test FailsCurver Luxembourg v. Home Expressions Inc., 2018 WL 340036 (D.N.J. Jan. 8, 2018) The court held that the “ordinary observer” test failed because—design features aside—a basket is not a chair and could not be mistaken for one.Accused Basket Design ≠ Patented Chair Design  Ordinary Observer Test Fails10

The Truth About Design Patents and Anticipation More example cases Kellman v. Coca-Cola Co., 280 F. Supp. 2d 670 (E.D. Mich. 2003)The court held that the “ordinary observer” test failed when “the articles of manufacture are so entirely different (i.e., a novelty hat versus a t-shirt or bottlecap) that no reasonable person would purchase the t-shirt or bottlecap thinking that he or she was purchasing the novelty hat.” Accused T-Shirt or Bottlecap Design ≠ Patented Hat Design  Ordinary Observer Test FailsVigil v. Walt Disney Co., No. C-97-4147 MHP (N.D. Cal. Dec. 1, 1998) The court found that a patented design for a hockey stick duck call was not substantially similar to defendant’s hockey stick key chain because the patented item was “not even an analogous article of manufacture” when compared to the accused item. Accused Key Chain Design ≠ Patented Duck Call Design  Ordinary Observer Test FailsPrior Art Design That IsSuper-Duper Nonanalogous to Claimed DesignClaimed Design ≠Ordinary Observer Test FailsNo Anticipation! 11

“Since the ordinary observer test is the sole test for anticipation, the differences between the respective articles of manufacture to which the claimed and prior art designs are applied must be a factor when applying the ordinary observer test to determine whether the prior art design anticipates the claimed design.” (emphasis added). See Kellman v. Coca-Cola Co. , 280 F. Supp. 2d 670, 679-80 (E.D. Mich. 2003); P.S. Prods., Inc. v. Activision Blizzard, Inc., 140 F. Supp. 3d 795, 802-03 (E.D. Ark. 2014); Vigil v. Walt Disney Co., No. C-97-4147 MHP at 9 (N.D. Cal. Dec. 1, 1998) aff’d in part and rev’d in part on other grounds 232 F.3d 911 (Fed. Cir. 2000) (unpublished table decision); and Curver Luxembourg v. Home Expressions Inc., Civ. No. 2:17- CV-4079-KM-JBC, 2018 WL 340036 at 8-9 (D.N.J. Jan. 8, 2018). Thank you! 12