Ambiguous design patent test confused Apple-Samsung jury

31 May 2018 7:35am

25 May 2018. By Mike Swift and Amy Miller

It didn’t take a rocket scientist, or even a patent attorney, to guess a jury might be flummoxed by the four-factor “article of manufacture” test at the heart of the design patent damages trial between Apple and Samsung. The trial finally ended late Thursday with a $538.6 million verdict for Apple.

The ambiguous test approved by US District Judge Lucy Koh required the jury to consider the scope of the design claimed in the patent, “the relative prominence” of the design element within the whole product, whether the design was “conceptually distinct” from the product, and “the physical relationship” between the patented design element and the rest of the product.

One hundred different people might come up with 100 different answers for that four-part riddle. Sure enough, a lay jury that included a bookstore manager, a school bus driver, a bookkeeper, a school district computer support specialist and a technical writer struggled mightily with the test, particularly on the patent for the design of the front face of an iPhone — the D’677 patent.

Ultimately, the jury split the difference between Apple’s argument that the article of manufacture was the whole phone, requiring Samsung to pay $1.067 billion, and Samsung’s argument that article of manufacture was the patented components, requiring a damages award of just $28 million.

For a patent covering the array of software icons on the home screen of an iPhone, the jury accepted Apple’s argument that article of manufacture was the whole phone, because it was impossible to see the icons without a fully operating smartphone.

But the jury was divided on that question for the D’677 patent (see here), which claims the design for the front face of an iPhone. The jurors ultimately agreed with Samsung that the article of manufacture was the component.

For much of this week’s deliberation, however, two jurors felt the article of manufacture was the whole phone; the other six thought it was the display assembly. That split persisted until near the end of deliberations Thursday, when Christine Calderon, a 26-year-old technical writer with Cisco Systems, told MLex she was the only remaining juror who thought the article of manufacture for the D’677 was the whole phone.

“I saw both sides,” said Calderon, who said she found the four-factor test “challenging” because the terminology was so confusing. “I thought we were going to be a hung jury, but then we found out we had to make a decision.”

— Trouble with front face patent —

At various times during the trial, Samsung lawyers John Quinn and William Price waved the wafer-thin glass screen and front face of a smartphone, severed from the rest of the device, in the air for the jury to see. From the way the lawyers handled it, the front face looked like it weighed only a few ounces, the type of an inconsequential object you might discover had fallen between the seats of your car during a clean-up.

Samsung damages expert Michael Wagner testified that the window glass at the heart of the front face only cost Apple $3 to $5. Calderon found Wagner to be a credible witness. “He seemed like a proud and honest man,” she said.

Both sides did a good job, Calderon said. But she felt like Apple’s lawyers talked more slowly and took time to explain and define things more clearly. Samsung’s lawyers talked faster and their arguments seemed more complicated. “It was a lot of information for me,” she said.

The D‘677 “was the patent we had the most discussions about,” agreed another juror, Caitrin Bravo, 35, who manages a Barnes & Noble bookstore in San Martin, California.

The jury, Bravo told MLex, had an easier time deciding the article of manufacture question for the D’305 patent, which covered the array of software icons — known as the graphical user interface, or GUI — was the complete phone, because you needed the user interface to use the phone.

But for the D’677 patent on the iPhone’s front face, “you could apply that black face to anything,” she said.

— Samsung concerns —

Thursday’s verdict (see here) likely means that Apple and Samsung’s seven-year legal battle over smartphone patents is over at the district court level.

But Samsung will likely appeal the verdict, perhaps involving Koh’s jury instructions for the article of manufacture test, to the US Court of Appeals for the Federal Circuit. Quinn told Koh after the jury verdict was read that it was “not supported by the evidence.”

Koh asked Quinn if he had specific concerns that the jury’s article of manufacture determinations were inconsistent.

“We have every concern,” Quinn said.

Koh told Quinn that the jury was still in the courthouse, and she could send them back with further instructions.

“We’re not asking for that,” Quinn said. “We’re comfortable doing this the ordinary way.”

Design patents are powerful, lucrative pieces of intellectual property. They allow a patent holder to recover an infringer’s entire profits from the sale of an infringing product — not just a portion.

The US Patent and Trademark Office has been issuing design patents since the 19th century, and some of the earliest covered included things like the design of silverware, rugs and saddles. Since then, it’s been presumed that the article of manufacture — the basis for damage awards — is the entire product.

But determining damages for design patents that cover an incredibly complicated 21st century device like a smartphone, which might include more than 200,000 patents, is much more problematic.

In a 2016 decision that prompted the last Apple-Samsung trial, the US Supreme Court said that for a complex product like a smartphone, the article of manufacture could be either a component of the product, or the full product (see here). During the case, the US Solicitor General proposed a four-factor test to make that determination.

The Apple-Samsung jury was the second to deal with the four-factor test. The first jury verdict, which involves patent litigation between Columbia Sportswear and Seirus Innovative Accessories over the design of a wavy heat-reflective material in a jacket, is already before the Federal Circuit.

The size of the potential damages in a design patent case, and the uncertainty about the interpretation of the article of manufacture test, might seem like a formula for patent trolling, where patent holders file abusive claims against product-makers, aimed at scaring them into paying nuisance settlements.

But there are strong arguments that the Apple verdict won’t cause that to happen. First, the case is unique, a fact acknowledged several times by both sides during the trial. It’s arguably the most important consumer electronics product of the past decade.

Second, there are always ways to design around a valid design patent because a product’s appearance can be changed easily, said Christopher Carini, a prominent design patent litigator in Chicago.

“These design laws have been on the books for over a century; the mad rush to the courthouse hasn’t happened, why would we think it would happen now? I do not subscribe the ‘sky is falling’ narrative,” Carini said. “The notion that an Apple victory will lead to design patent trolling is a long shot. I’ve been practicing design patent law for 20 years, long before it became vogue. I have not once heard of a successful design patent trolling effort.”