Derek F. Dahlgren

Apple v. Samsung is not over. Samsung has stated it is going to file a petition for certiorari later this year with the Supreme Court. In its petition, Samsung is likely to challenge, among other things, the Federal Circuit’s analysis of the district court’s claim construction and what these design patents truly cover. Samsung likely will also challenge the award of hundreds of millions of dollars (the total profits Samsung received on the phones found to be infringing). If the Supreme Court takes the case the Court will be presented with novel and important legal questions that may affect the damages award, both the underlying finding of liability and the proper measure of damages. Additionally, the foundation of Apple’s damages award is crumbling at the Patent Office, with one of the key design patents being rejected on multiple grounds.

Two independent errors warrant reversal, but to be fair, the district court did not have the benefit of the Supreme Court’s decision in Teva. Now, the Federal Circuit has the opportunity to address the interplay of Teva with claim construction in design patents. This is a much needed clarification.

The Federal Circuit has a unique opportunity to clarify the law concerning damages under § 289 in the Apple v. Samsung case. Focusing on the scope of infringement and causation can give meaning to the language of § 289 and its legislative history, while also alleviating concerns about absurd results such as the award of total profits from a $100,000 piece of construction equipment when a lug nut with a patented design is applied to the piece of equipment. Infringement of the lug nut’s design should not result in lost profits on the $100,000 piece of equipment, but to affirm the holding in the instant case could indeed lead to such an absurdity.

From a patent challenger’s perspective, Alice further reinforces the need to evaluate whether an early dispositive motion under § 101 can end the litigation. In crafting such motions, it is important to clearly define the abstract idea and to demonstrate how it is merely well-understood, routine, conventional activity. Additionally, it may be helpful to articulate how the claims do not recite any technological improvement. Another strategy is to petition the PTO to institute a covered business method (CBM) patent review. A CBM proceeding may be preferred as the evidentiary burden is lower compared to district court litigation. Currently, the PTO has taken the position that § 101 is an available basis for challenging claims in a CBM proceeding. However, please note that the availability of §101 is being challenged at the Federal Circuit.

Patent exhaustion is one of the most fundamental restrictions on patent rights. Under this doctrine, an authorized sale of a patented article moves it outside the scope of the U.S. patent monopoly. With respect to the vended article, the patent right is extinguished and the patentee can no longer sue for infringement. One question that remains unsettled, however, is the role of territoriality. That is, where must the authorized sale take place? For well over a century courts have struggled to answer whether extraterritorial sales qualify for purposes of patent exhaustion.