In a unanimous ruling in Samsung Electronics Co. v. Apple Inc., the Supreme Court held that when one or more ornamental elements of a multicomponent product infringe a design patent, damages may be calculated on the basis of the value derived from the infringing components alone, rather than the product as a whole.
In the courts below, Apple had won a $400 million damages award based on Samsung’s total profits from its infringing smartphones, even though Apple’s design patents covered only certain aspects of the phones’ external appearance.
In reversing the lower courts, the Supreme Court held that the relevant “article of manufacture” for calculating damages in this context could be the infringing component of a multicomponent device, rather than the device as a whole. But the Court declined to articulate a test for determining when damages should be based on the value derived from the infringing component, rather than the entire device. Nor did it provide guidance for how to calculate the profits attributable to an infringing component, when the component is never sold separately from the end product of which it is a part. Those issues will need to be addressed by the Federal Circuit on remand and fleshed out in future decisions by that court and the district courts.