But you think that that’s only relevant at question 2 rather than at question 1, which is the question of whether it’s the body or the whole car that the design is being applied to? PETITIONER:Samsung Electronics Co., Ltd., et al. Is that — is that basically what you said? Those — we agree with all those factors as relevant, but I do think directly, you know, speaking to the question that you raised, the first factor that I mentioned, the relative prominence of the design within the product of the whole is in essence asking — and it is a relevant question in determining the article of manufacture — whether the patented design is likely to cause the consumers to purchase the infringing product thinking it to be the patentee’s product. I see my time is expired. And second, what is the product to which it has been applied? And when they look at a patent for a claim construction, we’re asking for part of the test to be very similar. And when that is the case, all parties now agree that the patent-holder is entitled only to the profits from that infringing article and not to all —. What happened was, we put in our initial papers saying — there’s a pretrial statement that the parties have to file saying, these are — the phones are the — the phones were infringed. You’d have to apply numerous factors to determine what is the article of manufacture there. Now, the government would say, go to the second test, which takes in some of the things that you were talking about, to figure out how much of the profits that VW makes from the Bug are attributable to the shape of the car. It’s the other thing — if I were the juror, I wouldn’t know what to do under your brief. The — we know from Samsung’s own documents in this case, for example, that are recounted in our brief, Samsung realized that it faced what this executive called a crisis of design. (Investor.apple.com, … But I have a question on the general issue, which I think is tough. Apple was awarded $399 million in damages—Samsung’s entire profit from the sale of its infringing smartphones. Now, they could if they had, if they had wanted to, suggested to the jury no, no, no, the relevance —. I would want to hear as — as to the article, what’s the article —. Opinion for Apple Inc. v. Samsung Electronics Co., Ltd. — Brought to you by Free Law Project, a non-profit dedicated to creating high quality open legal information. So there should — there shouldn’t be profits awarded based on the entire price of the phone. And we think that’s a mistake, and we understand all parties to agree with that now. I’d have the iPhone in the jury room; I’d — I’d look at it. The case is submitted. We’ll hear argument first this morning in Case No. We’re claiming a very specific front face and surrounding bezel, and by the way, ignore everything that’s outside the dotted lines. So the hard cases, like the Bug, one can reasonably say that it’s either the body or the car. And what it underscores, and in appropriate cases it may be appropriate, like the cup-holder example, but what it underscores is the very —. And so, logically, I think the way to approach it would be identify the article and then let the patent-holder make the argument that even though the article may be just a part of the product sold — and here, maybe it’s just the case of the front face — really, that’s what sells it. The Solicitor General has proposed a test with four factors to determine the article question. I mean, I don’t see how that’s going to tell you whether the shape of the body is distinctive or not. [�/��-�:�5�ω�/MUm���-�E��̄m��8ܤEK��e�kR�0F�4�!��v�E����{���)��T��*�����"��E���vd�ϒ���MՆN��6�o� &�S1���fDu���X�P^���[!E&���g�1��08 � O�&2�J���e����� ��;���XYd){ �,�T�n�����kh��P��F"�^ �m��>��2�zC�i��J�-|�d�YeE�4e��3�H����*���F2`�m� ��LF��R+o���P��|����z�mUs=�E���@~��y�oO���Ҝ�+)췆=)�LL_��b1[j��zh�ݬ&})Yj ewlo�����+h�'iO�=�ޢ> :�N�D2x��6�1l��핋-�P2O�{�C�NF$"��P�P8�1؇�p�{� s�en������T����Wr�h͡��(�ED�NQ�m&O��U|'x6D�y�"�MP��|�#�6E���rl�F��� ���{Ta��A�e��L��0oʲ ���2 �|n 6����3���Uj#�I�R� �d�E|L`iB��'�=f��4�)�S2�j�^�YN�� �u1�3��xc���'�q�~f6��sʻ�� ��H3I. However, One 2005 design patent"at the heart of the dispute is Design Patent 504,889", which consists of a one-sentence claim about the ornam… And when the witnesses got on to talk about infringement, they didn’t say the whole phone, the look and feel. So this is a test that the government has articulated here at oral argument. Your Honor, I’ll answer briefly, and then I’d like to reserve my time. Courts haven’t always done that. And why does that matter, Your Honor? What Congress did not say is you can’t segregate the proper article from the other articles that make up the product. The profits are awarded on the article of manufacture to which the design is applied. Do you agree with that? So you’d have expert testimony on all of that. And subsidiary questions subsumed in what the damages are are also always the plaintiff’s burden, as the entire market value rule in the Federal Circuit shows. That’s the government’s test in a nutshell. I’d like to reserve the balance of my time, Mr. Chief Justice. So, Justice Kennedy, our test is very simple. In two separate lawsuits, Apple accused Samsung of infringing on three utility patents (United States Patent Nos. In the D’305, it is the display screen on which the graphical user interface appears. You cannot talk to me about article of manufacture. Apple Inc. v. Samsung Electronic Co., Ltd. was the first of a series of ongoing lawsuits between Apple Inc. and Samsung Electronics regarding the design of smartphones and tablet computers; between them, the companies made more than half of smartphones sold worldwide as … So besides the jury instruction, what was the legal error? We’re getting a little more with article of manufacture than we do with a pure causation test, and plaintiffs should be happy for that. One could have been consumer demand evidence, Justice Kennedy, as you suggested. 47 Bergen St--Floor 3, Brooklyn, NY 11201, USA, Sorry, but copying text is forbidden on this The patents on the handle, but nobody really cares about the sipping cup of the spoon. It’s applied to the outside in a physical sense. After the verdict, Samsung moved for judgment as a matter of law. Because I said no apportionment, she shut us out of both theories. Suppose the Volkswagen Beetle design was done in three days, and it was a stroke of genius and it identified the car. I don’t know. Samsung accused Apple of infringing on United States Patent Nos. First, through ordinary accounting that would look to the cost of goods sold in relation to revenues for the relevant component. We tried at every juncture to get the correct rule of law adopted. What they did is they went back into history. Asserted claim 6 of the 604 patent is directed to a “unified search” that uses heuristic modules to search multiple data storage locations. APPLE INC., a California corporation, Plaintiff and Counterdefendant, v. SAMSUNG ELECTRONICS CO., LTD., a Korean corporation; Samsung Electronics America, Inc., a New York corporation; Samsung Telecommunications America, LLC, a Delaware limited liability company, Defendants and Counterclaimants. Case: 14-1335 Document: 158-1 Page: 2 Filed: 05/18/2015 . But — and so accounting evidence or indirect evidence through consumer survey. Obviously, it’s not a transistor or some circuit or the software. Publisher. But I am like Justice Kennedy, which is, how do we announce the right test for that? Experts would come in and say, but it’s 90 percent of the profits. And his report then said, well, but I believe that only 1 percent of the value of the phone is due to the design or the design of the iconic front face of the phone. We think the fact-finder should bear in mind this Court’s observation in Gorham. Is there any difference in practical terms between that and your causation argument or apportionment? Co., 909 F.Supp.2d 1147 (N.D.Cal.2012) (“Injunction Order ”). Juries should be instructed that the article of manufacture either is the Beetle exterior or there might be, Justice Breyer, still today, there might be cases of unitary articles, just like the Dobson rugs. And then you say this component is 10 percent of the cost and 20 percent of the revenue, and we — we do a bottom-up calculation and try to do it that way. But the Federal Circuit held that Section 289 of the Patent Act entitles the holder of a single design patent on a portion of the appearance of the phone to total profit on the entire phone. Just because you can show that most of the profit comes from the Beetle exterior does not mean the car is the article of manufacture. Article of manufacture is the article of manufacture. In a case in which the jury heard evidence as to competing articles of manufacture, as to what total profits should be applied to, the jury would be told, if you find infringement, total profits are awarded on the article of manufacture to which the patented design was applied for the purpose of sale and to which it gives peculiar or distinctive appearance. That is correct, Your Honor. The court reasoned that such a limit was not required because the … There’s two steps here in our test. The district court upheld the jury’s findings. So that’s twice. This is what they were arguing, and they put on an expert that gave total profits. In the spring of 2011, Apple began litigating against Samsung in patent infringement suits, while Apple … Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops and sells consumer electronics, computer software, and online services.It is considered one of the Big Five companies in the U.S. information technology industry, along with Amazon, Google, Microsoft, and Facebook.. That was apportionment, Judge Koh said. {-V�B����{)0�H��ӞW��M�Eԍ>��^�p#;L�C���\��y�b���5A�Gʡ�D� And that, she wouldn’t allow him to do because that was apportionment. In neither trial did Samsung, either in argument, statement, or witness testimony, ever identify for the jury any article of manufacture other than the phones themselves. On August 21, 2012, a jury returned a verdict that 26 Samsung products infringed Apple’s patents or diluted And if I could just remind you that we’ve reprinted the patents for you to see, and they may look like an iPhone on page 7, which is the D’677. DOCKET NO. 4 SAMSUNG ELECTRONICS CO. v. APPLE INC. Opinion of the Court released its iPhone, Samsung released a series of smartphones that resembled the iPhone. Yeah, but in a physical sense — that — you can answer it easily, and that’s what the Chief Justice was talking about. Justice Ginsburg, if I leave you with the most important disagreement we have with the government and with Apple, the burden is on the plaintiff. There’s no doubt the steam engine had plenty of working components, but a design is not a component. Furthermore the Apple Pay has been made available in the Us market in 2014 October, will be launched by the start of 2015 calendar year. And so what, besides the jury instruction — because I’m assuming that a proper instruction was given — what would have been the legal error? That’s what I understand the government’s analysis to be. And the district court said, I forbade apportionment. That that’s what a jury has to be told to do, to decide how much value the design is to the product being sold. And you’re answering “no” to my question. I just don’t see how we can get away from that word. Both parties, not the government, both parties kind of leave it up and say, oh, give it to the juror. And thus there is no — no reasonable juror in these trials could possibly have awarded total profits on anything other than the phones, unless this Court holds —. That is, to — to disgorge the profits from the article to which the design was applied. can send it to you via email. There were two trials below. This case was tried under the improper rule of law. That does not come into the question of what is the article. Shouldn’t have given you that second option. Thank you, counsel. As to the second factor, how prominent is the design feature, I think that’s one that cuts in favor of finding that the design does cover the whole article. Instead, the relevant article of manufacture to which a patented design may be applied will sometimes be a part or a component of a larger product sold in commerce. And we said, no, no, we’re not asking for apportionment; we’re asking for article of manufacture. Why is that? But we think that courts could sensibly look to the way that courts have handled other analogous questions, and I point to two areas of law where that’s happened. In other words, suppose I think that people who buy VW Bugs buy them because of the look of the car. b5c��g�Iff:c]43�[�y�(û���R���ŞI�k��� ��D=���睍�(�/(�������ΠNt����b���$�G��5!�#�{��A�+I�����k5�aN�M�h�Q�Bnj�<6�7�!������ �@��->Jj"I��g���|L.�Ac��s�DU�;�j��욘�2������V8g����i�9ME&�e L0iK�9?�Q�Q�>H�jW����7�T��Ϣ�@�3�IkKX����fjyYe"��D�Y&�,��n�o�6, ��W�x�U��+��ʄ:��Ac���Ȳ%�_�3�D^��� �>I��mK�l�:O�f�_��&�D۵�� o����r$�E?Q�����Yt2��jm�恳�'Yoq@�9.䦱���OKj.��L�4 ����X-�������0��� So I think it will depend on — on the circumstances of the case. Now, the difficulty with that — I mean, I think that’s what courts have generally done. Maybe it’s a good time to turn to Justice Breyer’s question. Once the fact-finder makes that judgment, that’s the test that we proposed, and that’s, I think, I took to be Justice Sotomayor’s question. May he — may he complete his answer to my question? We said very clearly article of manufacture is less than the total phone and profit should be limited to the profit from the article. It only comes into the second inquiry, which is how much of the profits are attributable to that article. They want to pay for the cool way it looks. The jury held that Samsung had infringed on Apple’s patents and awarded over $1 billion in damages. They want the car that has a certain trunk. Just to summarize briefly, first, the court of appeals correctly held that Section 289’s provision for an award of total profits means that the patent-holder can recover all of the profits from the sale of the infringing articles and manufacture and not just the portion of the profits that the patent-holder can prove was caused by or attributable to the design as opposed to other features of the article. But the reason we think it’s consistent with Congress’s purpose, Your Honor, is that what Congress was trying to do was provide a rule that gives design-patent holders total profit from the article of manufacture. Justice Ginsburg, the only thing that Samsung was precluded from doing — and this happened in the Daubert ruling with respect to their expert report, Mr. Wagner’s report — was they — he was not allowed to present evidence about that — about the value of design to the total product as a whole. So you must remand and tell the nation’s economy that no one can claim a partial design patent on a portion of a front face of an electronic device and come in and get the entire profits on the phone. Two reasons. This hypothetical is not helpful to me, because I can’t get over the thought that nobody buys a car, even a Beetle, just because they like the way it looks. I don’t know where in the record you would have enough to survive your argument. I don’t understand how that helps on this question. 7,469,381, 7,844,915, and 7,864,163) and four design patents (United States Patent Nos. Then I think the question is the best way to determine that, at least that I can think of right now, would be consumer surveys addressed to, to what extent are people who buy Bugs making their purchasing decisions based on the look of the car, and to what extent are they instead valuing other things like —. apple vs samsung. I’ll answer Justice Ginsburg first and then Justice Breyer. And in those cases, very often a patent would apply to part of a larger product sold in commerce, and the fact-finder would say you’re entitled to the profits that are attributable to the infringing part, but not the whole machine. But what if you — you were saying it’s an open — it would be a difficult question. Jump to Page . So I think the test we propose at page 9 goes to the first of the two questions that I was speaking to, which is what’s the article of manufacture to which the design has been applied? Apple Inc. appeals from an order of the U.S. District Court for the Northern District of California denying Apple's request for a permanent injunction against Samsung Electronics Company, Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively, “Samsung”). A jury found Samsung liable for infringement and dilution and awarded over $1 billion in damages to Apple. There’s an article of manufacture here, but it may be less than the entire phone. That is correct, Your Honor. In this sense, Justice Kennedy, the vernacular sense of “apportionment,” once you — if you — if the jury answers the question at step 1 and says no, no, no, the article of manufacture is the refrigerator latch or the cup-holder, how do we determine total profits from the sale of that thing? In April 2011, Apple Inc. (Apple) sued Samsung Electronics, Co., Ltd. (Samsung) and argued that certain design elements of Samsung’s smartphones infringed on specific patents for design elements in the iPhone that Apple holds. The district court shut us out of article of manufacture as the basis for total profit, and it shut us out of causation or apportionment, which we don’t press here. So now take the second part of the test and apply it to the Bug. They said we’re claiming a very specific front face, and by the way, ignore the home button. Now, the test that we ask the Court to announce on remand. The article to — to which the law applies? Let me give you an example with a phone’s front face. We tried over and over and over again to get the article of manufacture’s theory embraced, and we were rejected. I — maybe I’m not grasping the difficulties in the case. You should look at the patent, and, Justice Kennedy, with respect — you shouldn’t just look at the — at the phones in the jury room. But, Your Honor, as to the Beetle, we concede that the total profit from the article of manufacture may sometimes be a substantial part of the total profit on the product. Samsung appealed. If you read the Federal Circuit’s decision, they were saying people buy — bought this product mostly — this was their argument to the jury and it sold the Federal Circuit — because of the look of this phone, that, you know, all smartphones basically function the same. And, Your Honor, the statute does support our test because the statute asks us to look at the article of manufacture to which the design has been applied. This case sort of stopped at the first step. The patented design is something that’s applied to an article of manufacture. If the jury credited them, could you — and you were properly — it was a properly instructed jury, could you overturn that finding? Future Growth Plans: Apple Inc. Do you endorse that part of the government’s test? Security, Unique A jury found that several Samsung smartphones did infringe … If that’s so, it should be open to the patent-holder to prove that the bulk of the profits come from the exterior of the car. So when you say what it’s applied to, you’re not talking about it in terms of the physical world, so what is — what are you talking about? So I think the — the Sheldon case that’s cited on page 27 of our brief from this Court that was a Copyright Act case but discussed these problems sort of generally discussed how you apportion the portion — the profits from a movie that are attributable to the script as opposed to the actors or the directors or other things. Yes, Justice Kagan. Samsung vs. Apple's Business Model: An Overview . 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