Design Patent Remedies and Infringement: U.S. Legal Insights

1. DESIGN PATENTS FOLLOWING SAMSUNG V. APPLEWHERE ARE WE? NIKA ALDRICH May 1, 2019

2. REMEDIES FOR DESIGN PATENT INFRINGEMENT • Monetary Relief • 35 U.S.C. § 284 – Damages • “[A]dequate to compensate for the infringement, but in no event less than a reasonable royalty” • “court may increase the damages up to three times” for egregious conduct • 35 U.S.C. § 289 – Additional Remedy – Design Patents • Infringer’s “total profit, but not less than $250, [and] shall not twice recover the profit” • Injunctive Relief • eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006)

3. 35 U.S. Code § 289 - Additional remedy for infringement of design patent Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

4. 35 U.S. Code § 289 - Additional remedy for infringement of design patent Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacturefor the purpose of sale, or (2) sells or exposes for sale any article of manufactureto which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

5. Samsung Elects. Co., Ltd. v. Apple, Inc.,137 S. Ct. 429 (2017) “In the case of a design for a single-component product, such as a dinner plate, the product is the ‘article of manufacture’ to which the design has been applied. In the case of a design for a multicomponent product, such as a kitchen oven, identifying the ‘article of manufacture’ to which the design has been applied is a more difficult task.”

6. Samsung Elects. Co., Ltd. v. Apple, Inc.,137 S. Ct. 429 (2017) “In the case of a design for a single-component product, such as a dinner plate, the product is the ‘article of manufacture’ to which the design has been applied. In the case of a design for a multicomponent product, such as a kitchen oven, identifying the ‘article of manufacture’ to which the design has been applied is a more difficult task.”

7. Samsung Elects. Co., Ltd. v. Apple, Inc.,137 S. Ct. 429 (2017) “In the case of a design for a single-component product, such as a dinner plate, the product is the ‘article of manufacture’ to which the design has been applied. In the case of a design for a multicomponent product, such as a kitchen oven, identifying the ‘article of manufacture’ to which the design has been applied is a more difficult task.”

8. Samsung Elects. Co., Ltd. v. Apple, Inc.,137 S. Ct. 429 (2017) “[T]he term ‘article of manufacture’ is broad enough to encompass both a product sold to a consumer as well as a component of that product.” The United States as amicus curiae suggested a test [for identifying the relevant article of manufacture at the first step of the § 289 damages inquiry]. . . We decline to lay out a test for the first step of the § 289 damages inquiry . . .”

9. DOJ Four Factor Test • The scope and design claimed in plaintiff’s patent • The relative prominence of the design within the product as a whole • Is the design conceptually distinct from the product as a whole • The physical relationship between the patented design and the rest of the product

10. U.S. Amicus Brief The parties’ burdens: • Patentee bears ultimate burden of proving the infringement and the amount of infringer’s total profit. • Infringer bears burden of producing evidence that the relevant article of manufacture is some portion of the entire product as sold. • If AOM is less than total product as sold, then figure out infringer’s profits on the smaller identified AOM

11. Room for clarity in the DOJ 4-Factor AOM Test • Factor 2: “[T]he relative prominence of the design within the product as a whole. ... If the design is a minor component of the product, like a latch on a refrigerator, or if the product has many other components unaffected by the design, that fact suggests that the ‘article’ should be the component embodying the design.” But “if the design is a significant attribute of the entire product, affecting the appearance of the product as a whole, that fact might suggest that the ‘article’ should be the product.” DOJ Am. Br. at 28. • Factor 3: Whether the design is “conceptually distinct” from the product as a whole. For example, a book binding represents a “different concept” from the literary work it contains, such that “they are different articles. …. If the product contains other components that embody conceptually distinct innovations, it may be appropriate to conclude that a component is the relevant article.” Id. at 29. (Emphasis added)

12. Single v. Multi-Component

13. Single ComponentProduct v. Claim Infringing Product

14. Shell Scenario

15. Even if you know the AoM, how do you calculate profits?

16. Even if you know the AoM, how do you calculate profits?

17. Federal Circuit Cases 1. Advantek Marketing, Inc. v. Shanghai Walk-Long Tools Co., Ltd., 898 F.3d 1210 (Fed. Cir. 2018)

18. Advantek, 898 F.3d 1210 (Fed. Cir. 2018)

19. Advantek, 898 F.3d 1210 (Fed. Cir. 2018)

20. Advantek, 898 F.3d 1210 (Fed. Cir. 2018) “A competitor who sells a kennel embodying Advantek’s patented structural design infringes the D’006 patent, regardless of extra features, such as a cover, that the competitor might add to its kennel.2” 2 Of course, if the accused skeletal structure is only a component of an accused multicomponent product, Advantek would only be able to seek damages based on the value of the component, not the product as a whole. See Samsung, 137 S.Ct. at 434-35.

21. Open Issues Is the four factor test the right test? How to balance the factors? Whose burden to prove article of manufacture? Is the entire market value rule applicable? Article of manufacture: fact or law? Who decides the article of manufacture? Who determines the profits?

22. Columbia Sportswear North Am. Inc. v. Seirus Innovative Accessories, Inc., Appeal No. 2018-1329, -1331, -1728 (Fed. Cir.)

27. Shell Scenario – In Reverse?

29. Open Issues Is the four factor test the right test? How to balance the factors? Whose burden to prove article of manufacture? Is the entire market value rule applicable? Article of manufacture: fact or law? Who decides the article of manufacture? Who determines the profits?

30. Nika Aldrich Shareholder – IP Litigation 503-796-2494 Direct naldrich@schwabe.com INDUSTRY FOCUS Healthcare Technology PATENT EXPERIENCE • First chair trial attorney • Has argued multiple appeals • Adjunct Professor of Patent Law at Lewis & Clark Law School • Previously worked at the UN studying intellectual property at WIPO Medical Devices, Transducers, Sensors, MEMS, Computer Hardware, Computer Software, Pharmaceuticals, Apparel, Textiles, Food Technology