Monday, October 12, 2015

Design patent damages stuck in the year 1887?

An opinion piece in ComputerWorld suggests that Samsung/Apple litigation may alter patent law.

Samsung questioned why it should have to pay the large judgment immediately. Not only had one of the key patents been invalidated, but Samsung also publicly stated it was appealing to the Supreme Court. It argued that the order of immediate payment could result in irreparable harm, and on Friday a judge issued an emergency temporary stay of the judgment.

This particular case may seem narrow and petty, but larger issues are at stake. The applicable 1887 law giving rise to the majority of the hundreds of millions of dollars in damages, for example, says an infringer is liable “to the extent of his total profits.” But if Apple infringed an unimportant patent of a tiny firm, could that firm be awarded Apple’s “total profits” of tens of billions of dollars? It’s not at all clear in today’s modern economy of highly complex products that “total profit” refers to the entire product, if it ever did. The phrase “to the extent” appears to be an important modifier. So is additional text noting that any award shouldn’t exceed “twice the profit made from the infringement.” Isn’t a plain reading that any award related to the harm of the infringement? Put another way, if the infringement isn’t shown to cause the harm, the remedy doesn’t make sense.



EtCentric had discussed the 1887 law:

•“The no apportionment language (i.e. disgorgement of infringer’s ‘total profits’) was placed in the Patent Act in 1887 in response to a 1886 U.S. Supreme Court case regarding infringement of a design patent on a carpet design, whereby the Court said the design patentee was only entitled to 6 cents in damages — the portion of the damages attributable to the design,” Carani explains.
•“In response to that holding, a holding that members of Congress felt was a miscarriage of justice, the 1887 Patent Act was enacted and provided a remedy for ‘total profit’ without apportionment for design patent infringement,” he adds.



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