Samsung Elecs. Co. v. Apple Inc.

• Decision Date: 06 December 2016
• Docket Number: No. 15–777.,15–777.
• Citation: 137 S.Ct. 429,196 L.Ed.2d 363
• Parties: SAMSUNG ELECTRONICS CO., LTD., et al. v. APPLE INC.
• Court: U.S. Supreme Court

137 S.Ct. 429

196 L.Ed.2d 363

SAMSUNG ELECTRONICS CO., LTD., et al.

v.APPLE INC.

No. 15–777.

Supreme Court of the United States

Argued Oct. 11, 2016.

Decided Dec. 6, 2016.

Kathleen M. Sullivan, New York, NY, for Petitioners.

Seth P. Waxman, Washington, DC, for Respondent.

Brian H. Fletcher for the United States as amicus curiae, by special leave of the Court.

Michael T. Zeller, B. Dylan Proctor, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, Victoria F. Maroulis, Brett J. Arnold, Quinn Emanuel Urquhart & Sullivan, LLP, Redwood Shores, CA, Kathleen M. Sullivan, William B. Adams, David M. Cooper, Cleland B. Welton II, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for Petitioners.

Harold J. McElhinny, Rachel Krevans, Erik Olson, Nathan B. Sabri, Christopher L. Robinson, Morrison & Foerster LLP, San Francisco, CA, William F. Lee, Mark C. Fleming, Lauren B. Fletcher, Eric F. Fletcher, Sarah R. Frazier, Steven J. Horn, Wilmer Cutler Pickering, Hale and Dorr LLP, Boston, MA, Seth P. Waxman, Wilmer Cutler Pickering, Hale and Dorr LLP, Washington, DC, for Respondent.

Justice SOTOMAYOR delivered the opinion of the Court.

Section 289 of the Patent Act provides a damages remedy specific to design patent infringement. A person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.” 35 U.S.C. § 289. 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.

This case involves the infringement of designs for smartphones. The United States Court of Appeals for the Federal Circuit identified the entire smartphone as the only permissible “article of manufacture” for the purpose of calculating § 289 damages because consumers could not separately purchase components of the smartphones. The question before us is whether that reading is consistent with § 289. We hold that it is not.

I

A

The federal patent laws have long permitted those who invent designs for manufactured articles to patent their designs. See Patent Act of 1842, § 3, 5 Stat. 543–544. Patent protection is available for a “new, original and ornamental design for an article of manufacture.” 35 U.S.C. § 171(a). A patentable design “gives a peculiar or distinctive appearance to the manufacture, or article to which it may be applied, or to which it gives form.” Gorham Co. v. White, 14 Wall. 511, 525, 20 L.Ed. 731 (1872). This Court has explained that a design patent is infringed “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same.” Id., at 528.

In 1885, this Court limited the damages available for design patent infringement. The statute in effect at the time allowed a holder of a design patent to recover “the actual damages sustained” from infringement. Rev. Stat. § 4919. In Dobson v. Hartford Carpet Co., 114 U.S. 439, 5 S.Ct. 945, 29 L.Ed. 177 (1885), the lower courts had awarded the holders of design patents on carpets damages in the amount of “the entire profit to the [patent holders], per yard, in the manufacture and sale of carpets of the patented designs, and not merely the value which the designs contributed to the carpets.” Id., at 443, 5 S.Ct. 945. This Court reversed the damages award and construed the statute to require proof that the profits were “due to” the design rather than other aspects of the carpets. Id., at 444, 5 S.Ct. 945 ; see also Dobson v. Dornan, 118 U.S. 10, 17, 6 S.Ct. 946, 30 L.Ed. 63 (1886) (“The plaintiff must show what profits or damages are attributable to the use of the infringing design”).

In 1887, in response to the Dobson cases, Congress enacted a specific damages remedy for design patent infringement. See S. Rep. No. 206, 49th Cong., 1st Sess., 1–2 (1886); H.R. Rep. No. 1966, 49th Cong., 1st Sess., 1–2 (1886). The new provision made it unlawful to manufacture or sell an article of manufacture to which a patented design or a colorable imitation thereof had been applied. An act to amend the law relating to patents, trademarks, and copyright, § 1, 24 Stat. 387. It went on to make a design patent infringer “liable in the amount of” $250 or “the total profit made by him from the manufacture or sale ... of the article or articles to which the design, or colorable imitation thereof, has been applied.” Ibid.

The Patent Act of 1952 codified this provision in § 289. 66 Stat. 813. That codified language now reads, in relevant part:

“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....” 35 U.S.C. § 289.

B

Apple Inc. released its first-generation iPhone in 2007. The iPhone is a smartphone, a “cell phone with a broad range of other functions based on advanced computing capability, large storage capacity, and Internet connectivity.” Riley v. California, 573 U.S. ––––, ––––, 134 S.Ct. 2473, 2480, 189 L.Ed.2d 430 (2014). Apple secured many design patents in connection with the release. Among those patents were the D618,677 patent, covering a black rectangular front face with rounded corners, the D593,087 patent, covering a rectangular front face with rounded corners and a raised rim, and the D604,305 patent, covering a grid of 16 colorful icons on a black screen. App. 530–578.

Samsung Electronics Co., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (Samsung), also manufacture smartphones. After Apple released its iPhone, Samsung released a series of smartphones that resembled the iPhone. Id., at 357–358.

Apple sued Samsung in 2011, alleging, as relevant here, that various Samsung smartphones infringed Apple's D593,087, D618,677, and D604,305 design patents. A jury found that several Samsung smartphones did infringe those patents. See id., at 273–276. All told, Apple was awarded $399 million in damages for Samsung's design patent infringement, the entire profit Samsung made from its sales of the infringing smartphones. See id., at 277–280, 348–350.

The Federal Circuit affirmed the design patent infringement damages award.¹ In doing so, it rejected Samsung's argument “that the profits awarded should have been limited to the infringing ‘article of manufacture’ ”—for example, the screen or case of the smartphone—“not the entire infringing product”—the smartphone. 786 F.3d 983, 1002 (2015). It reasoned that “limit[ing] the damages” award was not required because the “innards of Samsung's smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.” Ibid.

We granted certiorari, 577 U.S. –––– (2016), and now reverse and remand.

II

Section 289 allows a patent holder to recover the total profit an infringer makes from the infringement. It does so by first prohibiting the unlicensed “appli[cation]” of a “patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale” or the unlicensed sale or exposure to sale of “any article of manufacture to which [a patented] design or colorable imitation has been applied.” 35 U.S.C. § 289. It then makes a person who violates that prohibition “liable to the owner to the extent of his total profit, but not less than $250.” Ibid. “Total,” of course, means all. See American Heritage Dictionary 1836 (5th ed. 2011) (“[t]he whole amount of something; the entirety”). The “total profit” for which § 289 makes an infringer liable is thus all of the profit made from the prohibited conduct, that is, from the manufacture or sale of the “article of manufacture to which [the patented] design or colorable imitation has been applied.”

Arriving at a damages award under § 289 thus involves two steps. First, identify the “article of manufacture” to which the infringed design has been applied. Second, calculate the infringer's total profit made on that article of manufacture.

This case requires us to address a threshold matter: the scope of the term “article of manufacture.” The only question we resolve today is whether, in the case of a multicomponent product, the relevant “article of manufacture” must always be the end product sold to the consumer or whether it can also be a component of that product. Under the former interpretation, a patent holder will always be entitled to the infringer's total profit from the end product. Under the latter interpretation, a patent holder will sometimes be entitled to the infringer's total profit from a component of the end product.²

A

The text resolves this case. The term “article of manufacture,” as used in § 289, encompasses both a product sold to a consumer and a component of that product.

“Article of manufacture” has a broad meaning. An “article” is just “a particular thing.” J. Stormonth, A Dictionary of the English Language 53 (1885) (Stormonth); see also American Heritage Dictionary, at 101 (“[a]n individual thing or element of a class; a particular object or item”). And “manufacture” means “the conversion of raw materials by the hand, or by machinery, into articles suitable for the use of man” and “the articles so made.” Stormonth 589; see also American Heritage Dictionary, at 1070 (“[t]he act, craft, or process of manufacturing products, especially on a large scale” or “[a] product that is manufactured”). An article of manufacture, then, is simply a thing made by hand or machine.

So understood, the term “article of...