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iPhone Patent Verdicts Survive, But Not Trade Dress Verdict

The Federal Circuit on May 18, 2015, affirmed jury verdicts in favor of Apple on its design and utility patents but held that its trade dress is unprotectable. According to the Court, the evidence demonstrated that the claimed trade dress features of the Apple iPhone are functional. Apple, Inc. v. Samsung Electronics Co., Ltd., Fed. Cir., No. 2014-1335, 5/18/2015.

Background

Apple filed suit against Samsung in 2011, alleging violations of its rights under utility patent, design patent, and trade dress law. The design patents concern certain design elements of the iPhone, the utility patents concern certain user interface features of the iPhone, and the registered and unregistered trade dress rights concern the configuration of the iPhone.

Unregistered Trade Dress Functionality

Chief Judge Prost wrote that product configuration trade dress rights have been more difficult to establish than other forms of trade dress rights, and that Apple found no Ninth Circuit case finding a product configuration trade dress non-functional. With this in mind, the appellate court considered Apple’s product configuration rights under four-factor protectability test set out in Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002 (9th Cir. 1998).

With respect to the first factor, “utilitarian advantage,” the Court pointed out that the Ninth Circuit requires proof that the product feature serves no purpose other than identification, which cannot be reasonably inferred from the evidence. The Court next found that the second factor, Apple’s evidence of “alternative designs” does not help because the “mere existence” of other designs does not prove non-functionality. Nor was the Court persuaded that Apple’s advertising helped since it either involved the claimed trade dress or that it was not focused on utilitarian features. Finally, Apple offered no evidence that the asserted design was not relatively simple or inexpensive to manufacture, the Court concluded.

Registered Trade Dress Functionality

Federal registration of a product configuration provides prima facie evidence of non-functionality, however Apple offered nothing to rebut the presumed non-functionality of the registered product features, Judge Prost observed.

The Court rejected the argument that Samsung’s functionality argument improperly disaggregates the trade dress into individual elements. It pointed out that Apple failed to explain how the total combination of iPhone icon designs somehow negates the undisputed usability function of the individual elements. The iPhone’s usability advantage from the combination of its icon designs shows that the registered trade dress, viewed as a whole, is nothing other than a collection of functional parts with no separate, non-functionality in the overall appearance, the Court concluded.

Design Patents

Relying on Richardson v. Stanley Works, Inc., 597 F.3d 1288 (Fed. Cir. 2010), Samsung argued that the district court should have excluded the functional aspects of the design patents, i.e., elements dictated by their functional purpose, or which cover the structural aspects of the article.

The Federal Circuit was not persuaded. While Richardson construed a design with numerous components which were “dictated by their functional purpose,” the Court pointed out that the claim construction included the ornamental aspects of those components and did not exclude them in their entirety. The language “dictated by their functional purpose” in Richardson was only a description of the facts, Judge Prost explained, and did not establish a rule to eliminate entire elements from the claim scope.

The Court also rejected the argument that Lee v. Dayton-Hudson Corp., 838 F.2d 1186 (Fed. Cir. 1988), required the elimination of any structural aspect of the claim. Although Lee stated “[d]esign patents do not and cannot include claims to the structural or functional aspects of the article,” that statement was made in the context of addressing validity, Judge Prost pointed out.

Samsung also failed to persuade the Court that the jury instructions were deficient for failing to tell jurors to compare the Samsung phones to the overall “ornamental” appearance of Apple’s patented design. Jury instructions are reviewed as a whole, Judge Prost wrote, and as a whole they already limited the scope of the asserted design patents to the “ornamental” elements through the claim constructions.

Damages

The Court was not persuaded by Samsung’s argument that Apple failed to establish that any Samsung sales or profits were “caused” by an infringement of Apple’s limited design patents. Such causation would amount to the type of apportionment found to have been rejected by Congress in Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437 (Fed. Cir. 1998).

In reciting that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” Judge Prost explained, Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design. The clear statutory language prevents us from adopting a “causation” rule as Samsung urges, she wrote. The Court distinguished cases in which purchasers recognize distinct assembled components from this case, where the innards of Samsung’s smartphones and their shells were not sold separately to ordinary purchasers as distinct articles of manufacture.

Utility Patents

On Samsung’s indefiniteness argument directed to the claim term “substantially centered,” the Court held that is seeking a level of precision that exceeds the definiteness required of valid patents. On its anticipation argument, the Court found that the jury reasonably credited Apple’s expert who testified that the technology was not anticipated.

The case was remanded for a final judgment on all damages not predicated on Apple’s trade dress claim.

To read the Court’s opinion in this case, click here.

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