Petitioners Brief — Samsung Elecs. Co. v. Apple Inc., 136 S. Ct. 1453 (2016) (No. 15-777)

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JUN 1

IN THE

Supreme Court of the Anited States

SAMSUNG ELECTRONICS Co., LTD., SAMSUNG

ELECTRONICS AMERICA, INC., AND SAMSUNG

TELECOMMUNICATIONS AMERICA, LLC,

Petitioners,

APPLE INC.,

——

Respondent.

On Writ of Certiorari to the

United States Court of

for the Federal Circuit

BRIEF FOR PETITIONERS

MICHAEL T. ZELLER

B. DYLAN PROCTOR

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

865 S. Figueroa Street

10th Floor

Los Angeles, CA 90017

(213) 443-3000

VICTORIA F. MAROULIS

DRETT J. ARNOLD

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

555 Twin Dolphin Drive

5th Floor

Redwood Shores, CA 94065

(650) 801-5000

KATHLEEN M. SULLIVAN

Counsel Of Record

WILLIAM B. ADAMS

DAVID M. COOPER

CLELAND B. WELTON II

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

51 Madison Avenue

22nd Floor

New York, NY 10010

(212) 849-7000

kathleensullivan@

quinnemanuel.com

Counsel for Petitioners

June 1, 2016

a ee NN eR

~ (202) 7869-0086 — WasnincTon,D C 20002

WILSON-EPES PRINTING CO , INC

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nen

~ 2016

THE CLERK

QUESTION PRESENTED

Section 171 of the Patent Act authorizes issuance of

a design patent on “any new, original and ornamental

design for an article of manufacture.” 35 U.S.C. 171.

Section 289 of the Patent Act authorizes district

courts to award infringer’s profits as a remedy for

design-patent infringement “to the extent of [an

infringer’s] total profit, but not less than $250,”

provided that a design-patent holder “shall not twice

recover the profit made from the infringement.” 35

U.S.C. 289.

The Federal! Circuit held that Section 289, if elected

as a remedy, automatically entitles a design-patent

holder to recover all of an infringer’s profits made

from sales of any product found to bear a patented

design, without regard to the design’s contribution to

that product’s value or sales. The question presented

is:

Where a patented design is applied only to a

component of a product, should an award of infringer’s

profits be limited to profits attributable to that

component?

(i)

RULE 29.6 STATEMENT

Samsung Electronics America, Inc. (“SEA”) is a

wholly-owned subsidiary of Samsung Electronics Co.,

Ltd. (“SEC”), a publicly held corporation organized

under the laws of the Republic of Korea. SEC is not

owned by any parent corporation and no other publicly

held corporation owns 10% or more of its stock. No

other publicly held corporation owns 10% or more of

SEA’s stock. Effective January 1, 2015, Samsung

Telecommunications America, LLC (“STA”) merged

with and into SEA, and therefore STA no longer exists

as a separate corporate entity.

TABLE OF CONTENTS

Page

QUESTION PRESENTED ............................0000. i

RULE 29.6 STATEMENT ........................0c0ceeeeee ii

TABLE OF AUTHORITIES ...........................0000. vi

TT csccencnsipacheebemnsteheseaaniniaebeasaens

CPEIIS OD MAID cc csccccccccccccscesccssoscosssssesecesesens

PES IE ee a Re ee Sr oe

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED...............................

ERENT AN NS ECT Te

A. Factual Background ........................0:sss00000

B. Statutory Background ................................ 11

1. Patent Acts Prior To 1887..................... 11

2. The Dobeom Cases .........0.cccccscrssssssssssees 11

3. The Patent Act Of 1887.................0....... 12

4. The Patent Acts Of 1922 And 1946...... 15

5. The Patent Act Of 1952................000...... 15

C. Regulatory Background.............................. 17

D. Proceedings Below ........................cc000000000e 19

1. District Court Proceedings.................... 19

2. The Federal Circuit Decision................ 22

SUMMARY OF ARGUMENT ............................. 24

AES 8 NLS Oa Ere 27

TABLE OF CONTENTS—Continued

SECTION 289 ALLOWS ONLY TOTAL

PROFIT ATTRIBUTABLE TO INFRINGE-

MENT OF THE PATENTED DESIGN ...

A. The Text Of Section 289 Allows Only

Total Profit Attributable To Infringe-

ment Of The Patented Design.............

1. “Article Of Manufacture” To Which

The Design Is “Applied” .................

2. “Made From The Infringement” ....

3. Background Principles Of Causa-

CEE FEE TI occccccscescccvesccoveszessse:

B. Section 289’s History Shows Congress's

Purpose To Allow Only Total Profit

Attributable To Infringement Of The

PII bnihscnessnssemeursiuahdenibasnnes

1. The 1887 Congress Sought To

Ensure Meaningful Recovery For

Infringement Of Patented Designs

By Decorative Articles Whose

Value Was Driven By Design ........

2. Post-1887 Legislative Develop-

ments Confirm Section 289’s

C. Practical Consequences Counsel In-

terpreting Section 289 As Allowing

Only Total Profit Attributable To

Infringement Of The Patented Design

Page

TABLE OF CONTENTS—Continued

1. The Entire-Profits Rule Would

Create Disproportionate Awards

And Risk Multiple Recoveries .......

2. The Entire-Profits Rule Would

Harm Innovation, Competition

And Small Businesses....................

3. Section 289 Provides A Practical

Alternative To Section 284 Even

As Properly Limited.......................

Il. THE PROPER CONSTRUCTION OF

SECTION 289 NECESSITATES REVER-

SAL OR VACATUR OF THE JUDG-

EE MIITE nakeccnbitsdsnesarcubnasesasseodiiebenese

A. The Record Contains No Proof Of

Total Profit From The Relevant

Articles Of Manufacture......................

B. The Record Contains No Proof Of

Total Profit Made From The Infringe-

REE IEE, SI SN pane ne ee ee

C. At A Minimum, A New Trial Is

I viicchaniccueiiabadsscsevndubvesnteuinccenense

SET ialnccickevsasesiecsuntesediekerennestoneabivignnnions

Page

TABLE OF AUTHORITIES

CASES Page(s)

Aro Mfg. Co. v. Convertible Top

Replacement Co.,

ey EE iadadsscatnticscesccinciveccaiiace 15

Bigelow Carpet Co. v. Dobson,

10 F. 385 (C.C.E.D. Pa. 1882)................... 12

Bonito Boats, Inc. v.

Thunder Craft Boats, Inc.,

NN Boos a csccesdunssideenckudces 31, 39

Bush & Lane Piano Co. v. Becker Bros.,

222 F. 902 (2d Cir. 1915)........ 21, 22, 32, 33, 44

Bush & Lane Piano Co. v. Becker Bros.,

234 F. 79 (2d Cir. 1916)................ 23, 32, 33, 53

Carbice Corp. v. Am. Patents Dev. Corp.,

cass diinwsaicedbthisksinigsessapeose 35

Carey v. Piphus,

lane satnaeeneutinoes 36

Davis v. Gap, Inc.,

246 F.3d 152 (2d Cir. 2001)...................... 38

Dean v. Mason,

4 § GQ. __ : EE sees a nemmee 11

Dobson v. Dornan,

Se I isiidcccacidsvstiindameinnene 11, 12, 40

Dobson v. Hartford Carpet Co.,

ee I eat dses\cdnaccestovcncentise 11, 12, 40

Dowagiac Mfg. Co. v.

Minn. Moline Plow Co.,

Se is IE I ok soins coceuccudsnecvicécdensncues 33, 53

vll

TABLE OF AUTHORITIES—Continued

Page(s)

Dura Pharm., Inc. v. Broudo,

| ee 36

eBay, Inc. v. MercExchange, LLC,

BE Pes i sscecicccécnccsccssvoscesscececnss 36, 51

Egyptian Goddess, Inc. v. Swisa, Inc.,

543 F.3d 665 (Fed. Cir 2008)................... 52

Elwood v. Christy,

144 Eng. Rep. 537 (1865).......................... 40

FCC v. Fox Television Stations, Inc.,

cn: scan instcucdinbooiecs 39

Garretson v. Clark,

10 F Cas. 40 (C.C.N.D.N.Y. 1878)........... 11

Garretson v. Clark,

ee Ry SEED oeccxsncckecccsecescensacsene 11, 12, 37

Gorham v. White,

SE I sinc ins cedesbinctanestbavenenesies 31

Graham v. John Deere Co. of Kansas City,

ERS an 39

Hazelquist v. Guchi Moochie Tackle Co.,

437 F.3d 1178 (Fed. Cir. 2006)................. 52

Holmes v. Sec. Investor Prot. Corp.,

Se ls MI co isciidecadabcecssavenctescedecs 36

John Hancock Mut. Life Ins. Co. v.

Harris Trust & Sav. Bank,

ce. isencsatenccecses 27

Lindy Pen Co. v. Bic Pen Corp.,

982 F.2d 1400 (9th Cir. 1993).........000000.... 38

viii

TABLE OF AUTHORITIES—Continued

Page(s)

Littlefield v. Perry,

Oc anciccedabtenntsieteivssonssesenense 37

Lucent Techs., Inc. v. Gateway, Inc.,

580 F.3d 1301 (Fed. Cir. 2009)................. 53

Meyer v. Holley,

ee I ccncsicnivonnadoaoubidvwrseteces 35

Mishawaka Rubber & Woolen Mfg. Co. v.

S.S. Kresge Co.,

ee Se icnnssnctossconeeieienveniessceses 38

Nike, Inc. v. Wal-Mart Stores, Inc.,

138 F.3d 1437 (Fed. Cir. 1998)................. 23

Nordock, Inc. v. Systems Inc.,

803 F.3d 1344 (Fed. Cir. 2015)................. 45, 50

Norfolk Redevelopment & Hous. Auth. v.

Chesapeake & Potomac Tel. Co. of

Virginia,

I in caceceioneneccennsnersnies 35

Pac. Coast Marine Windshields Ltd. v.

Malibu Boats, LLC,

2014 WL 4185297

(M.D. Fla. Aug. 22, 2014)........cccccc0cccceeee 45

Paroline v. United States,

Rn, ee I . . cccccccdssesossccssrce 36

ResQNet.com, Inc. v. Lansa, Inc.,

594 F.3d 860 (Fed. Cir. 2010)................... 38

Richardson v. Stanley Works, Inc.,

597 F.3d 1288 (Fed. Cir. 2010)................. 52

TABLE OF AUTHORITIES—Continued

Page(s)

Riley v. California,

Foe ee Be L,Y | earn 4

Rite-Hite Corp. v. Kelley Co.,

56 F.3d 1538 (Fed. Cir 1995)................... 38

Riter-Conley Mfg. Co. v. Aiken,

203 F. G60 (3d Cir. 1913).......................... 30

Root v. Ball,

20 F Cas. 1157 (C.C.D. Ohio 1846).......... 17

Sandifer v. U.S. Steel Corp.,

eee 28

Seymour v. McCormick,

as See een 47

Sheldon v. Metro-Goldwyn Pictures Corp.,

309 U.S. 3O0 (1940)............ccc000000.0....00.005-. 34, 37

In re Stevens,

173 F.2d 1015 (C.C.P.A. 1949) ......0000000.... 31

Stevens v. Gladding,

Be I Ge GI asiceccccenscicsvssceseconssccscceoe: 11

Tide- Water Oil Co. v. United States,

og? S| 30

Tilghman v. Proctor,

Bee WP BO Cece cenecccccecscversessccesesses 37

Trans-World Mfg. Corp. v.

Al Nyman & Sons, Inc.,

750 F.2d 1552 (Fed. Cir. 1984)................. 33, 34

United States v. Bestfoods,

Se Ry OP 0 i eiiedccicaccssvecceseciscocsvvscvcece 35

TABLE OF AUTHORITIES—Continued

Page(s)

Univ. of Texas Sw. Med. Ctr. v. Nassar,

Ee EE Ge iddscneccécmiccctovsecnnssscens 36

Weinberger v. Romero-Barcelo,

eo ccc vuscnnuunemeneduone 36

WesternGeco L.L.C. v.

ION Geophysical Corp.,

791 F.3d 1340 (Fed. Cir. 2015)................. 53

Ex parte Wiessner,

1898 Dec. Comm’r Pat. 236 ...................... 18, 30

Young v. Grand Rapids Refrigerator Co.,

268 F 966 (6th Cir. 1920).............000000000.. 33

In re Zahn,

617 F.2d 261 (C.C.P.A. 1960) ................... 19

CONSTITUTION, STATUTES AND

REGULATION

Se Se ES I OO, A, sd sccceccsvsccemnensos 4, 39

Be ee I CIID cicindiccccecnocrncesacvssctcocnes 35

8 | a ERIN SARE Tig ee ee ee es Dee 29

I 3

A RTE A ee ee oy Eee 4

| ae, ) Seer erences i, 17, 28, 31, 55

I 30

SE Re EE TEN iis ciniecesemntoninulineaibanndiodsborenaunte 15, 52, 53

35 U.S.C. 289.. i, 1, 2, 4, 11, 15, 16, 20, 23, 24, 25,

26, 27, 28, 31, 34, 35, 38, 39, 40, 43, 44, 47, 52,

53, 56, 57, 58, 59

TABLE OF AUTHORITIES—Continued

Page(s)

I sud eskeewandocbuase 18, 55

Act of April 10, 1790, Ch. 7, § 4,

aT I cccbseusbeunubeies 11

Act of Feb. 15, 1819, Ch. 19,

I ae cedee 11

Act of July 8, 1870, Ch. 230, § 59,

so ccesinnsanencbaes 11

Act of Feb. 4, 1887, Ch. 105, §§ 1, 2

24 Stat. 387, 387-88 ...................... 13, 16, 43, 44

Act of Feb. 21, 1922, Ch. 58, § 8,

I I I cna sniiscacoininnneconssevscsesnsevespes 15, 43

Act of Aug. 1, 1946, Ch. 726, § 1,

a odanuilene 15, 43

Act of July 19, 1952, Ch. 950, § 289,

Ss Wi CII occescccocccecccsssscccdeses 16, 43, 44

LEGISLATIVE MATERIALS

18 CONG. REC. 834 (1887)..... 14, 15, 40, 41, 42, 43

H.R. REP No. 49-1966 (1886)........... 14, 40, 41, 42

S. Rep. No. 49-206 (1886)...............0.....00000... 14, 40

OTHER AUTHORITIES

Adam Liptak, Supreme Court to Hear

Samsung Appeal on Apple Patent Award,

N.Y. TIMES (Mar. 21, 2016), http://www.

nytimes.com/2016/03/22/technology/supr

eme-court-to-hear-samsung-appeal-on-

apple-patent-award.html.......................... 50

xii

TABLE OF AUTHORITIES—Continued

Page(s)

ALEXANDER M. BURRILL, A LAW DICTIONARY

AND GLOSSARY (2d ed. 1871)..................... 30

Alex Cocotas, Samsung Maintains Lead In

The Smartphone Market, Despite iPhone

5, BUSINESS INSIDER AUSTRALIA (Feb. 9,

2013), http:’//www.businessinsider.com.au

/samsung-is-the-smartphone-king-2013-2 10

Bartlett Cleland, Flawed by design, THE

HILL (Oct. 12, 2015), http://thehill.com/

blogs/congress-blog/technology/256563-

SRI idocccscsecsssenctovassesemieioonmvons 51, 52

BLACK’S LAW DICTIONARY (lst ed. 1891) ..... 29, 31

BLACK’S LAW DICTIONARY (4th ed. 1951) .... 29, 31

Clark D. Asay, Copyright’s Technological

Interdependencies, 18 STAN. TECH. L.

ITED wacesenissacessnssnmeenncecsaanainaae 9

Frederic H. Betts, Some Questions Under

the Patent Act of 1887, 1 YALE L.J. 181

CO iicisnscilaesdicdcnmndaeciandtinitalin ites Sa 39

Gary L. Griswold, 35 USC 289—After Apple

v. Samsung, Time for a Better-Crafted

Judicial Standard for Awarding “Total

Profits”?, PATENTLYO (Aug. 14, 2015),

http://patentlyo.com/patent/20 15/08/

griswold-patent-damages.html ................ 51

xiii

TABLE OF AUTHORITIES—Continued

Page(s)

Giuseppe Macri, Patent Trolls are Already

Abusing the Apple v. Samsung Ruling,

INSIDESOURCES (Oct. 1, 2015), http://

www.insidesources.com/patent-trolls-are

-already-abusing-the-apple-v-samsung-

Si gh RR

Guidelines for Examination of Design

Patent Applications for Computer-

Generated Icons, 61 Fed. Reg. 11380

SL Se

Jason Rantanen, Apple v. Samsung: Design

Patents Win, PATENTLYO (May 18, 2015),

http://patentlyo.com/patent/20 15/05/samsu

ng-design-patents.html.............................

Jeff John Roberts, Apple, rounded corners

and the new debate over design patents,

FORTUNE (Aug. 19, 2015), http://fortune.

com/2015/08/19/apple-patents-rounded-

Kent German, A Brief History of Android

Phones, CNET (Aug. 2, 2011), http://www.

cnet.com/news/a-brief-history-of-android-

Letter from Thomas Jefferson to Isaac

McPherson (Aug. 1813), in VI WRITINGS OF

THOMAS JEFFERSON (Washington ed.)......

Mike Musgrove, Apple Seeks To Muscle Into

Telecom With iPod Phone, WASHINGTON

ros?r, dan. 10, 3007, at Dl........................

X1V

TABLE OF AUTHORITIES—Continued

Page(s)

Perry J. Saidman, The Crisis in the Law of

Designs, 89 J. PAT. & TRADEMARK OFF.

I 19, 46

RESTATEMENT (FIRST) OF RESTITUTION § 136

(Reale ATE I A al hl 37

RESTATEMENT (THIRD) OF RESTITUTION AND

UNJUST ENRICHMENT § 51(4) (2011)......... 37

RESTATEMENT (THIRD) OF RESTITUTION AND

UNJUST ENRICHMENT § 51(5) (2011) ........ 36

Samsung Handsets Through The Ages: A

Photo Tour of Phone Firsts, ZDNET

(May 28, 2015), http://www.zdnet.com/

pictures/samsung-handsets-through-the-

ages-a-photo-tour-of-phone-firsts/............ 5

Steve Lebsock, Court battle over design

patents could affect Colorado economy,

THE BUSINESS TIMES (Nov. 17, 2015),

http://thebusinesstimes.com/court-

battle-over-design-patents-could-affect-

EER IP LD 49

STEWART RAPALJE & ROBERT L. LAWRENCE,

A DICTIONARY OF AMERICAN AND ENGLISH

FERRERS nee ECA SENS SEN i DP 30

THEODORE SEDGWICK, A TREATISE ON THE

MEASURE OF DAMAGES (7th ed. 1880)....... 36, 37

Tony Dutra, Design Patents Up, But

Samsung Case Ruling Could Bring

Down, BLOOMBERG BNA (April 20, 2016),

http://www.bna.com/design-patents-

samsung-n57982070078/ .................0600006.. 51

TABLE OF AUTHORITIES—Continued

Page(s)

U.S. PATENT & TRADEMARK OFFICE, MANUAL

OF PATENT EXAMINING PROCEDURE (9th

ns a S . 55

Vintage Mobiles, GSM History, http://www.

gsmhistory.com/vintage-mobiles/............. 5

WEBSTER’S COMPLETE DICTIONARY OF THE

ENGLISH LANGUAGE (1880 ed.) ................. 29, 31

WILLIAM D. SHOEMAKER, PATENTS FOR

DESIGNS (1929).................ccccccccccccsscseccoceee. 31

WILLIAM L. SYMONS, THE LAW OF PATENTS

FOR DESIGNS (1914) .000000000co ccc ccccccceeccecceeeeee 17, 18

INTRODUCTION

The Federal Circuit interpreted Section 289 of the

Patent Act as requiring Samsung to pay its entire

profits on eleven smartphones for infringing Apple’s

narrow design patents on portions of a smartphone’s

front face and a grid of colorful icons on a single

display screen. There is no dispute that Samsung’s

phones embody hundreds of thousands of other

patented features that Apple does not own, or that

consumers buy smartphones for their functional

technologies—their apps, their cameras, their web

capabilities, their navigation functions—and not as

decorative objects to be used as paperweights or hung

on a wall.

But the Federal Circuit read Section 289 as entitling

a design-patent holder to nothing less than the entire

profits on a product bearing a patented design—no

matter how minor the component to which the design

is applied and no matter how little the design

contributes to the product’s overall value. Under the

Federal Circuit's rule, an infringer of a patented cup-

holder design must pay its entire profits on a car,

an infringer of a patented marine-windshield design

must pay its entire profits on a boat, an infringer of a

patented, preinstalled musical-note icon design must

pay its entire profits on a computer, and so on.

The Federal Circuit’s entire-profits rule conflicts

with the text, history, and purpose of Section 289. In

authorizing an infringer’s profits remedy for design-

patent infringement, Section 289 is naturally read to

limit any such recovery to total profit from the “article

of manufacture” to which the design is “applied” and

to total profit “made from the infringement.” Under

those two clear textual limitations, recovery for

infringement of a claimed design that covers only a

component of a product is limited to total profit from

the component, not total profit from the product.

The relevant legislative history confirms that, in

enacting Section 289’s predecessor, Congress intended

no wholesale departure from the traditional principles

of causation and equity that inform all of patent law

To the contrary, the proponents of the 1887 Patent Act

stated that they intended no such result, but aimed

merely to afford meaningful recovery to holders of

design patents for carpets, wallpapers and oil-cloths.

While Congress determined that such articles derive

their value from their design, it made no similar

assumption about complex products like smart-

phones, whose value is overwhelmingly driven by

functionality.

The Federal Circuit’s automatic entire-profits rule

would have disastrous practical consequences that

Congress surely did not intend. The rule would create

extreme asymmetry between design patents and utility

patents, which are governed by ordinary rules of

causation and proportionality. By making the most

trivial design patent worth exponentially more than

the most innovative utility patent, the rule would

distort the patent system and harm innovation and

competition. The rule would encourage companies to

divert research and development from useful tech-

nologies to ornamental designs. It would encourage

design-patent holders to litigate even weak infringe-

ment claims in a quest for outsized awards. And it

would encourage non-practicing entities to use design

patents as the next big thing for extracting holdup

value from targeted businesses, with such extortionate

demands posing especially grave threats to small

businesses for whom a single design misstep could be

an existential threat. Congress could not have in-

tended any of these results.

The judgment below should be reversed or at a

minimum vacated and remanded for new trial.

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the

Federal Circuit (Pet. App. la-36a) is reported at 786

F.3d 983. The order of the court of appeals denying

rehearing en banc (Pet. App. 154a-155a) is unreported.

The order of the U.S. District Court for the Northern

District of California denying in relevant part

Samsung’s post-trial motion for judgment as a matter

of law, new trial or remittitur (Pet. App. 114a-153a) is

reported at 926 F Supp. 2d 1100. The district court’s

order denying similar motions after partial retrial (J.A.

340-47) is unreported but available at 2014 WL

549324 (N.D. Cal. Feb. 7, 2014).

JURISDICTION

The court of appeals denied rehearing en banc on

August 13, 2015. Pet. App. 154a-155a. Samsung filed

its petition for a writ of certiorari on December 14,

2015, pursuant to the Chief Justice’s order extending

the time in which to file. The Court granted the

petition on March 21, 2016, limited to the second

question presented therein (Pet. i).

The Court has jurisdiction under 28 U.S.C. 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

U.S. Constitution art. I, § 8, cl. 8 provides in pertinent

part that:

The Congress shall have Power ... To promote

the Progress of Science and useful Arts, by

securing for limited Times to Authors and

Inventors the exclusive Right to their respec-

tive Writings and Discoveries.

Relevant provisions of the Patent Act, 35 U.S.C. 1,

et seq., are reproduced at Pet. App. 156a-158a.

STATEMENT

This case arises from the award of $399 million—the

entirety of Samsung’s profits on eleven accused

smartphones—for infringement of two narrow Apple

design patents. Samsung faces the potential award of

its entire profits on an additional five phones in a

partial damages retrial that has been stayed pending

resolution of the question presented here. The courts

below held that Section 289 of the Patent Act

automatically entitles a design-patent holder to an

award of the infringer’s total profit on the entire

product as sold—no matter how partial the patent or

how limited the contribution of the patented feature to

the product’s value or sales.

A. Factual Background

As this Court has acknowledged, smartphones have

become “a pervasive and insistent part of daily life” for

“a significant majority of American adults.” Riley v.

California, 134 S. Ct. 2473, 2484 (2014). Samsung has

long been an industry leader in the field of mobile

; et<

jamsung was the first mobile-phone manufacture

for example, to introduce devices that incorporate

umeras, MP3 music players, and voice recognitio!

Before Apple’s iPhone ever entered the marke

Samsung had developed mockups and prototyps

for round-cornered rectangular flat-screened sn

including ones that showed grids of ic:

Apple, by contrast, was a latecomer to the mobile-

phone industry, announcing the iPhone in January

2007 and launching it in June 2007° And while

Samsung launched around 50 new models a year, at

times selling over 100 different phone models at once

through numerous carriers (J.A. 133; J.A. 143-44),

Apple offered only one new product a year, selling only

through AT&T until it slowly added other carriers

years later (J.A. 133; J.A. 139-40).

The three narrow Apple design patents at issue in

this case claim only partial features of a smartphone’s

design. While Apple often speaks as if the patents

cover the “iconic” “look and feel” of the entire iPhone,

the patents in fact claim neither something “iconic”

nor any kind of “look and feel.” They rather claim only

the limited subject matter depicted within the solid

lines in the drawings below. The broken lines indicate

features that Apple specifically disclaims—or in other

words, that Apple concedes are outside the patents’

protected scope.

Apple’s D618,677 (“D’677”) patent claims a black,

rectangular front screen face with rounded corners but

specifically disclaims the surrounding rim or “bezel,”

the circular home button on the front, and the sides,

top, bottom and back of the device (i.e., the rest of the

phone):

* E.g., Mike Musgrove, Apple Seeks To Muscle Into Telecom

With iPod Phone, WASHINGTON PostT, Jan. 10, 2007, at D1,

available at http://www.washingtonpost.com/wp-dyn/content/arti

cle/2007/0 1/09/AR2007010900698 html.

Apples D9593,08% DOS) patent, like the Dt

laims a rectangular front face with rounded corne:

minus the black shading and with the addition of

bezel; the patent specifically disclaims the sides, back

yp, and bottom of the device (1.e., the rest of tl

hiate i } 1<¢ well t sf} ro

ione), 2S Well aS [ea ]

user interface screens

patent specifically disc!

nartphone except that sp

At trial, Apple’s experts repeatedly confirmed that

each of the asserted design patents claims only nar-

row, specific portions of a smartphone’s overall design.

See, e.g., J.A. 149-53 (Bressler) (D’677 and D’087); J.A.

169-70, 174-76 (Kare) (D’305).

Apple made no effort below to prove that Samsung’s

entire profits on the accused phones resulted from the

narrow design features claimed in its three design

patents. Nor could it, for Apple has never disputed

that smartphones derive their value principally from

functionality. For example, in patent license discussions

preceding this lawsuit, Apple asserted to Samsung

that “/s/oftware creates the largest share of product

value” and that the “(o]perating system, applications,

user interface, and services are the key to a

differentiated customer experience.” J.A. 494 (some

emphasis omitted).

Moreover, the undisputed evidence in the record

shows that consumers purchased Samsung and other

Android* phones overwhelmingly because of their

functional, non-design features. For example, Apple’s

own market research showed that purchasers of

Android phones valued the functional and other

non-design features those phones offered, including

(i) larger screens, (ii) choice of wireless carrier, (iii)

trust in the Google brand, (iv) the Android app market,

(v) integrated Google services, and (vi) turn-by-turn

GPS navigation. J.A. 486-87 Apple’s own customers,

moreover, rated the iPhone’s functional features like

web capabilities, ease of use, availability of apps, and

‘ Android is an operating system for mobile devices, developed

by Google and available for free use by manufacturers. See, e.g.,

Clark D. Asay, Copyright’s Technological Interdependencies, 18

STAN. TECH. L. REV. 189, 228-29 (2015).

improved battery life as more valuable than “attrac-

tive appearance and design.” J.A. 465-68; J.A. 474.

And, according to additional Apple market data, a

phone’s “design” in general was a reason for only 1%

of Apple purchases and 5% of Android purchases,

far below other considerations such as _ services,

multimedia functions, ease of use, and brand. J.A.

355; J.A. 505.

Apple’s survey data about smartphone purchases

across the industry likewise showed that the top

features consumers valued were screen quality, access

to email and the web, larger screens, operating

system, brand, video cameras, GPS location services

and navigation, video conferencing, and multiple

cameras. J.A. 485. Although third-party data also

showed that “physical design” rated as having 23%

importance in consumer purchasing decisions for

smartphones, that category predominantly comprised

considerations like the size or brightness of the

display screen, or the size and weight of the phone

itself. J.A. 438. In contrast, “visual appeal” had just

5% importance overall. Id.

Finally, Samsung’s chief strategy officer confirmed

that, after Samsung adopted Google’s Android operat-

ing system for its flagship Galaxy products and began

offering larger screens than Apple, its share of the

smartphone market rose considerably. J.A. 144-47;

see also J.A. 231-32; J.A. 302.°

* See also, e.g., Alex Cocotas, Samsung Maintains Lead In The

Smartphone Market, Despite iPhone 5, BUSINESS INSIDER

AUSTRALIA (Feb. 9, 2013), http://www.businessinsider.com.au/

samsung-is-the-smartphone-king-2013-2; Kent German, A Brief

History of Android Phones, CNET (Aug. 2, 2011), http://www.

cnet.com/news/a-brief-history-of-android-phones/.

B. Statutory Background

Section 289 of the Patent Act codifies, as modified, a

provision added to the Patent Act in 1887 The history

of the provision warrants brief review.

1. Patent Acts Prior To 1887

The earliest Patent Acts provided only for remedies

at law. See, e.g., Act of April 10, 1790, Ch. 7, § 4, 1

Stat. 109, 111. In 1819, Congress provided for

injunctive relief for patent infringement. See Act of

Feb. 15, 1819, Ch. 19, 3 Stat. 481. Equity courts held

that they could also award an accounting of infringer’s

profits. See, e.g., Stevens v. Gladding, 58 U.S. 447, 455

(1855). In 1870, Congress provided that equity courts

could also award legal damages in patent cases. See

Act of July 8, 1870, Ch. 230, § 59, 16 Stat. 198, 207

While the holder of a patent claiming an entire

machine could recover in equity profits on the entire

machine, e.g., Dean v. Mason, 61 U.S. 198, 203 (1857),

the holder of a partial (“improvement”) patent was

required “to separate or apportion the defendant’s

profits and the patentee’s damages between the

patented feature and the unpatented features,” or to

show that “the profits and damages are to be

calculated on the whole machine, for the reason that

the entire value of the whole machine, as a marketable

article, is properly and legally attributable to the

patented feature.” Garretson v. Clark, 111 U.S. 120,

121 (1884) (quoting Garretson v. Clark, 10 F Cas. 40,

44 (C.C.N.D.N.Y. 1878)).

2. The Dobson Cases

In 1885, a consolidated set of design-patent cases

reached this Court. See Dobson v. Hartford Carpet

Co., 114 U.S. 439 (1885); see also Dobson v. Dornan,

118 U.S. 10 (1886). The patent-holders sought to

enforce patents claiming intricate carpet designs. See

Dobson, 114 U.S. at 440.° Having initially sought

disgorgement of infringer’s profits as well as legal

damages, id. at 441, the plaintiffs waived all claim for

infringer’s profits because the defendants had made

no profits, and each thus sought only lost-profits

damages, id. at 441-43. A special master rejected the

plaintiffs’ efforts to prove those damages by multiply-

ing the number of infringing units the defendants had

sold by the plaintiffs’ own profit margins, and thus

awarded nominal damages of six cents per patent. /d.

at 441-42. The circuit court reversed. Bigelow Carpet

Co. v. Dobson, 10 F 385 (C.C.E.D. Pa. 1882).

This Court reversed the circuit court and reinstated

the special master’s award, finding the proof insuffi-

cient to show non-speculative lost profits. Dobson, 114

U.S. at 444-47; see also Dobson, 118 U.S. at 16-18

(similar). Citing Garretson, the Court held that the

patent-holders had failed to show, as a basis for

calculating their lost profits, either the likelihood that

they would have sold the same number of carpets as

defendants had or the “value which the designs

contributed to the carpets.” Dobson, 114 U.S. at 443.

3. The Patent Act Of 1887

In response to concerns about the Dobson cases,

Congress enacted the Patent Act of 1887. The act

* The carpet patents, U.S. Patent Nos. D6,822 (filed Aug. 8,

1873); D10,778 (filed July 24, 1878); D10,870 (filed Sept. 10,

1878); and D11,074 (filed Feb. 12, 1879), are available at

http//pdfpiw .uspto.gov/.piw?Docid=D0006822; http://pdfpiw.usp

to.gov/.piw?Docid=D0010778; http://pdfpiw.uspto.gov/.piw? Docid

=D0010870; and http://pdfpiw.uspto.gov/.piw?Docid=D001 1074,

respectively.

added the following civil remedy for design-patent

infringement:

[H]ereafter, during the term of letters patent

for a design, it shall be unlawful for any

person other than the owner of said letters

patent, without the license of such owner, to

apply the design secured by such letters

patent, or any colorable imitation thereof, to

any article of manufacture for the purpose of

sale, or to sell or expose for sale any article of

manufacture to which such design or color-

able imitation shall, without the license of

the owner, have been applied, knowing that

the same has been so applied. Any person

violating the provisions, or either of them, of

this section, shall be liable in the amount of

two hundred and fifty dollars; and in case the

total profit made by him from the manufac-

ture or sale, as aforesaid, of the article or

articles to which the design, or colorable

imitation thereof, has been applied, exceeds

the sum of two hundred and fifty dollars, he

shall be further liable for the excess of such

profit over and above the sum of two hundred

and fifty dollars....

{[Njothing in this act contained shall prevent,

lessen, impeach, or avoid any remedy at law

or in equity which any owner of letters patent

for a design, aggrieved by the infringement of

the same, might have had if this act had not

been passed; but such owner shall not twice

recover the profit made from the infringe-

ment.

Act of Feb. 4, 1887, Ch. 105, §§ 1, 2, 24 Stat. 387, 387-

88.

The legislative history reveals three key points.

First, the act’s proponents viewed the new statute as

applying to decorative items like “carpets and wall-

papers and oil-cloths.” H.R. REP. No. 49-1996, at 3

(1886); see 18 CONG. REC. 834-36 (1887) (House floor

debate referring repeatedly to carpets, oil-cloths and

wall-papers). The act’s proponents expressly assumed

that designs drove consumer demand for those goods.

See 18 CONG. REC. 835 (statement of Rep. Martin) (“[I|f

it had not a design which attracted the eye and made

it desirable, then no »ne would think of buying the

carpet.”).

Second, the act’s proponents were concerned that

proof difficulties left holders of design patents on goods

like carpets with “no effectual money recovery for

infringement,” H.R. REP. No. 49-1966, at 1, discourag-

ing applications for design patents, see id.; S. REP. No.

49-206, at 1 (1886). Thus, they provided for a statu-

tory floor of $250 “in liquidated damages.” 18 CONG.

REC. 836 (statement of Rep. Martin).

Third, the act’s proponents assured potential oppo-

nents that they intended no departure from ordinary

principles of causation and equity. For example, when

Representative Hammond asked whether entire

profits could be awarded “whether those profits arise

from the use of the design alone or from various other

circumstances which may enter into the manufac-

ture,” Representative Martin replied that “no such

purpose was had in view by anyone who favored or

urged the passage of the bill.” Jd. at 835. And when

Representative Hammond asked whether “the plain-

tiff may recover the entire profit upon the article of

product, without any proof that this arises from the

use of the design in question,” Representative Martin

responded, “I can not put any such construction on this

law.” Id.

Moreover, in floor debate, several speakers empha-

sized that the proposed act, which contained an

express knowledge requirement, was limited to cases

of “willful” appropriation of a patented design. /d. at

836 (colloquies between Representative Martin and

Representatives Butterworth and Croxton).

4. The Patent Acts Of 1922 And 1946

In 1922, Congress revised the general remedies

provision for patent infringement to allow a “reason-

able sum” rather than nominal damages as the floor

for actual damages. Act of Feb. 21, 1922, Ch. 58, § 8,

42 Stat. 389, 392.

In 1946, Congress further amended the general

patent remedies provision to establish a “reasonable

royalty” as a statutory floor for patent infringement

damages under what is now 35 U.S.C. 284. Act of Aug.

1, 1946, Ch. 726, § 1, 60 Stat. 778. The 1946 Act also

eliminated infringer’s profits as a general patent

remedy, see Aro Mfg. Co. v. Convertible Top Replace-

ment Co., 377 U.S. 476, 505-06 (1964) (plurality

opinion), but made no change to the design-patent

infringer’s-profits provision.

5. The Patent Act Of 1952

In 1952, Congress revised and codified various

provisions of the Patent Act. The amended version of

the design-patent infringer’s profits provision, codified

at 35 U.S.C. 289, states:

Whoever during the term of a patent for a

design, without license of the owner, (1) applies

the patented design, or any colorable imita-

tion 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,

recoverable in any United States district

court having jurisdiction of the parties.

Nothing in this section shall prevent, lessen,

or impeach any other remedy which an owner

of an infringed patent has under the provi-

sions of this title, but he shall not twice

recover the profit made from the infringement.

Act of July 19, 1952, Ch. 950, § 289, 66 Stat. 792, 813-

14.

Like its 1887 predecessor, Section 289 imposes

liability on one who “applies” a design to an “article of

manufacture,” provides a $250 statutory floor for

recovery, and specifies that a patent-holder may not

“twice recover the profit made from the infringement.”

The 1952 statute, however, differs from its 1887

predecessor in two notable respects. Compare id. with

Act of Feb. 4, 1887, 24 Stat. at 387-88.

First, the 1952 statute strikes the phrase “knowing

that the same has been so applied,” making Section

289 a strict-liability provision and eliminating the

willfulness requirement that had played an important

role in the 1887 congressional! debate.

Second, the 1952 statute eliminates reference to

“the total profit made ... from the manufacture or sale

... of the article or articles to which the design ... has

been applied,” instead adding the words “to the extent

of ... total profit.” By eliminating “manufacture or

sale” as the source of that total profit, Sectiom 289 left

in place only the guidance that “total profit” must be

profit made from the relevant “article of manufacture”

and “the profit made from the infringement.”

C. Regulatory Background

Section 171 authorizes issuance of a patent to

“|w]hoever invents any new, original and ornamental

design for an article of manufacture.” 35 U.S.C. 171.

The Patent Office in the nineteenth century allowed a

design-patent application to include a written claim

for the entirety of a product’s design and additional!

written claims for discrete portions of the design. See,

e.g., Root v. Ball, 20 F. Cas. 1157, 1158 (C.C.D. Ohio

1846); WILLIAM L. SYMONS, THE LAW OF PATENTS FOR

DESIGNS 88-91 (1914) (“SYMONS”). For example,

Design Patent No. 17 for the ornamental! design of a

stove included separate written claims for the top,

middle, and bottom segments of a single stove design

D17

U.S. Patent No. D17 (issued July 12, 1844), available at

http//pdfpiw .uspto.gov/.piw? Docid=D0000017

The practice of including multiple written claims

lasted until Ex parte Wiessner, 1898 Dec. Comm’r Pat.

236, which ruled that multiple claims in a single

design patent were no longer permissible. See SYMONS,

at 88. Patent Office practice today allows only a single

claim per design patent, with the claim defined by the

drawing. 37 C.F.R. 1.153 (“No description, other than

a reference to the drawing, is ordinarily required. ...

More than one claim is neither required nor permitted.”).

The Patent Office soon began allowing design

patents to use a combination of full and dotted lines,

with the full lines depicting the claimed portion of the

product design and the dotted lines denoting portions

disclaimed by the patent. See SYMONS, at 95. For

example, Design Patent No. D23,882, for the body of a

coffee or tea pot, used dotted lines for the lid and

handle “to indicate the appearance of a complete pot”

though they formed “no part of the present design”:

OCBICN

MC ROcsELE

SO8T Fon CUFTFE OR Tha Pore

Nv 93,602 Pig / Patosted lec 18, (894

a/ 7, , bad

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D23,882°

"US. Patent No. D23,882 (filed Nov. 21, 1894), available at

http://pdfpiw uspto.gov/.piw?Docid=D0023882.

The practice of partial claiming—i.e., patenting a

design that covers only a portion of a product—has

thus been permitted for well over a century. In 1980,

the Federal Circuit’s predecessor expressly approved

the practice, holding that “the statute is not limited to

designs for complete articles, or ‘discrete’ articles, and

certainly not to articles separately sold.” In re Zahn,

617 F.2d 261, 268 (C.C.P.A. 1980). Partial claiming

enables issuance of multiple design patents claiming

discrete portions of a single product. See, e.g., Perry J.

Saidman, The Crisis in the Law of Designs, 89 J. PAT.

& TRADEMARK OFF. Soc’y 301, 319-22 (2007).

D. Proceedings Below

1. District Court Proceedings

Apple filed this action in the U.S. District Court for

the Northern District of California in 2011, alleging

that 19 Samsung smartphones infringed the D’677,

D’087 and/or D’305 patents.’ After a jury trial and

a partial retrial on damages, the juries awarded

Samsung’s entire profits on eleven smartphones to

Apple for design-patent infringement. J.A. 279-80;

J.A. 339; J.A. 349-50; Pet. App. 116a, 133a, 150a-151a.

Of those eleven phones, six were found to infringe only

the D’305 patent and four were found to infringe only

the D’677 patent.'”

* Apple also asserted dilution of certain of its unregistered and

registered trade dresses, and infringement of certain of its utility

patents. Those aspects of the case are not at issue here.

J.A. 273-76. The Captivate, Continuum, Droid Charge, Epic

4G, Gem, and Indulge were found to infringe only the D’305

patent. The Galaxy S II (AT&T), Galaxy S II (Epic 4G Touch),

Galaxy S II (Skyrocket), and Galaxy S II (T-Mobile) were found

to infringe only the D'677 patent. Only the Infuse 4G was found

to infringe both the D’305 and D’677 patents. The D’087 patent

The district court (Koh, J.) repeatedly rejected

Samsung’s attempts to limit any profits award under

Section 289 to total profit attributable to infringement

of Apple’s narrow claimed designs.

First, the district court excluded Samsung’s expert

evidence calculating the portion of Samsung’s profits

attributable to design and to the patented features,

ruling that any “apportionment of damages [is] in

clear contravention of 35 U.S.C. § 289.” J.A.87 Had

Samsung’s expert been permitted to testify in full, he

would have concluded—based on Apple’s own research

showing that consumers valued such non-design

features as choice of cellular carrier, price, brand,

multimedia functionality, ease of use, size of screen,

web capabilities, and camera quality more highly than

design, see J.A. 25-55; J.A. 67-85; J.A. 465-68; J.A.

474—that at most 5% of Samsung’s total profit per

phone could be linked to design in general, with at

most 1% attributable to the specific claimed designs.

J.A. 81; J.A. 83-85.

Second, the district court rejected Samsung’s pro-

posed jury instructions limiting any total profit award

to the amount attributable to infringement of a

patented design and the article of manufacture to

which the design is applied. J.A. 246-47 The first (No.

42) would have instructed the jury to award only profit

“that is attributable to whatever infringement you

have found.” J.A. 203-04. The second (No. 42.1) would

have instructed the jury:

[YJou should award only those profits which

were derived from the article of manufacture

to which Apple’s patented design was applied.

was not the basis for any part of the $399 million award but is at

issue in a stayed partial retrial on remand. See infra, at 24 n.13.

The article to which Apple’s design was

applied may be the same as or different from

Samsung’s devices as sold because devices

offered for sale may incorporate a single

article of manufacture or several articles of

manufacture. The article of manufacture to

which a design has been applied is the part or

portion of the product as sold that incor-

porates or embodies the subject matter of the

patent. Where the article of manufacture is a

case or external housing of the device, then

only the profits from the sale of the case or

external housing of the device should be

awarded. Under these instructions, an award

of profits for design patent infringement

should not include profits earned from the

technology by which the devices operate or

from any other functions of the devices.

J.A. 206-07 (citing Bush & Lane Piano Co. v. Becker

Bros., 222 F 902, 904 (2d Cir. 1915)).

Instead, the district cou:t instructed the jury that,

“li]f you find infringement by any Samsung defendant

.... you may award Apple that Samsung Defendant's

total profit attributable to the infringing products.”

Pet. App. 165a (emphasis added). The instruction

then stated that the “total profit” of any Samsung

defendant “means the entire profit on” the phone and

“not just the portion of profit attributable to the design

or ornamental aspects covered by the design.” Id.'!

'' See also J.A. 268 (Instruction No. 53) (“In relation to design

patents, Apple ... may elect to prove the defendant's profits as its

measure of potential recovery with respect to the sale of each unit

of an infringing product.”) (emphasis added).

Third, the district court ruled, on post-trial motions,

that the jury had properly awarded “all of Samsung’s

profits on the design-patent-infringing products,” find-

ing any lesser amount “clearly foreclosed by Federal

Circuit precedent.” Pet. App. 133a. The district court

ruled the same way on post-trial motions following a

partial damages retrial resulting from errors not

relevant here. J.A. 347 n.8. There is no dispute that

the combined design-patent judgments from the two

trials awarded Apple $399 million—Samsung’s entire

profits on eleven smartphones. J.A. 348-50.'”

2. The Federal Circuit Decision

The Federal Circuit affirmed the design-patent

infringement judgment (Pet. App. 19a-27a) as well as

the $399 million profits award for that infringement

(Pet. App. 27a-29a). The Federal Circuit rejected

Samsung’s argument that any profits award should be

limited to profits from “the portion of the product as

sold that incorporates or embodies the subject matter

of the patent.” Pet. App. 29a. The court held that

Section 289’s “clear statutory language prevents us

from adopting a ‘causation’ rule,” even if that “makes

no sense in the modern world.” Pet. App. 28a & n.1.

The court rejected Samsung’s reliance on Bush &

Lane Piano Co. v. Becker Bros., 222 F 902 (2d Cir.

‘ The parties’ damages experts disagreed as to whether

Samsung’s entire profits on the phones should be measured as

gross or operating profits. Compare J.A. 190-95 (Apple’s expert

Terry Musika calculating profit as revenues minus costs of

goods sold) with J.A. 221-26 (Samsung’s expert Michael Wagner

calculating profit as revenues minus costs of goods sold minus

operating expenses). The jury chose operating profit as the

proper measure, and thus multiplied Apple’s expert's gross-profit

numbers by 40 percent to arrive at Samsuny’s entire operating

profits per phone. See Pet. App. 127a-130a.

1915) (“Piano I”), and Bush & Lane Piano Co. v. Becker

Bros., 234 F 79 (2d Cir. 1916) (“Piano ITI”) (together,

the Piano Cases). In those cases, the Second Circuit,

interpreting Section 289’s predecessor, limited profits

for infringement of a patented design for a piano case

to total profit on the case, not total profit on the entire

piano. The Federal Circuit reasoned that, unlike a

piano and a piano case, the “innards of Samsung’s

smartphones were not sold separately from their

shells as distinct articles of manufacture to ordinary

purchasers.” Pet. App. 29a. That reasoning over-

looked that the Piano Cases had rejected that very

argument. See Piano II, 234 F. at 83 (noting that the

argument that pianos and piano cases were separately

marketed was “unsupported by the evidence” and

holding, in any event, that the existence of a “separate

market ... makes no difference in the rule of law”).

The Federal Circuit also read its own prior decision

in Nike Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437

(Fed. Cir. 1998), as precluding any ruling that in-

fringer’s profits under Section 289 should be “limited

to the profit attributable to the infringement.” Pet.

App. 27a. The court omitted to note that Nike did not

address the scope of infringer’s profits under Section

289, but instead considered only whether infringer’s

profits constitute “damages” for purposes of Section

287(a)’s marking requirement. See 138 F.3d at 1439,

1443.

The Federal Circuit made no attempt to reconcile its

interpretation with the statutory language specifying

that the patent-holder “shall not twice recover the

profit made from the infringement.” 35 U.S.C. 289.

The Federal Circuit denied rehearing en banc. Pet.

App. 154a-155a.""

SUMMARY OF ARGUMENT

I. Section 289 of the Patent Act authorizes the award

of infringer’s profits for design-patent infringement.

The Federal Circuit interpreted that provision, if

elected as a remedy, as automatically requiring dis-

gorgement of an infringer’s entire profits from the

product bearing a patented design—no matter how

complex the product and no matter how minor the

patented design in relation to the product as a whole.

The Federal Circuit thus affirmed a judgment requir-

ing Samsung to pay its entire profits on eleven smart-

phones for infringing Apple’s narrow, partial design

patents on portions of a phone’s front face and a grid

of icons on a single display screen.

A. The text of Section 289 compels reversal. Section

289 provides that a design-patent infringer may be

liable “to the extent of his total profit.” But that

obviously cannot mean all of a company’s worldwide

profit. It also cannot mean all profit on an entire

product as sold if the relevant design patent applies

only to a minor component of the product. To the

contrary, Section 289 limits recoverable total profit to

that attributable to the “article of manufacture” to

which an infringing design is “applied.” Such an

‘ On remand from the decision below, Samsung faces a

potential entire-profits award on five additional phones for

infringing any of the three design patents at issue (the D’677, the

D’087, or the D’305) in a partial damages retrial resulting from

the Federal Circuit's reversal (Pet. App. 6a-18a) of Samsung’s

trade-dress liability on those phones. That trial is stayed, along

with supplemental damages proceedings, pending this Court's

decision. Dist. Ct. Dkt. No. 3472 at 1-2.

article need not be the entire product as sold; many

discrete “articles of manufacture” may be combined

into such a product. Section 289 also limits recover-

able total profit to that “made from the infringement.”

That limitation precludes the award of profit not

attributable to infringement of the patented design.

Any doubt that these two textual provisions limit the

profits available under Section 289 is resolved by the

presumption that Congress intends to follow back-

ground principles of causation and equity absent a

clear statement to the contrary. In enacting Section

289 and its predecessors, Congress made no such clear

statement.

B. The legislative history confirms that Congress

intended no radical departure from background princi-

ples of causation and equity in enacting Section 289.

In enacting the predecessor statute in 1887, Congress

sought to ensure that holders of design patents for

carpets, wallpapers, and oil-cloths would receive more

than nominal damages from counterfeiters who in-

fringed their patented designs. Congress assumed

that “designs are the principal feature” of such articles

and that, as to a decorative carpet or wallpaper, “it is

the design that sells the article.” Congress never

suggested that the same assumption would hold for

complex products like smartphones, which (unlike

carpets) embody hundreds of thousands of functional

features having nothing to do with any patented

design. To the contrary, the congressman speaking for

the House Patent Committee stated that he could “not

put any such construction” on the 1887 Act. Legisla-

tive developments since 1887 have only reconfirmed

that Section 289 limits any total profit award to

the total profit attributable to infringement of the

patented design.

C. The Federal Circuit’s automatic entire-profits

rule, if not reversed, would have disastrous practical

consequences that Congress cannot have intended. It

would invite such wildly disproportionate results as

the award of the entire profits on a car for infringe-

ment of a patented cup-holder design. It would also

potentially generate multiple recoveries by holders of

multiple design patents all claiming ciscrete portions

of a single product as sold—or at a minimum, a race to

the courthouse to see who can obtain the first outsized

award. By making design patents exponentially more

valuable than utility patents, the automatic entire-

profits rule would discourage innovation and com-

petition, encourage companies to divert resources

from new and useful technologies to ornamental!

designs, and pose the threat of crippling liability to

businesses—especially small businesses—found to

infringe even a single design patent.

II. Under the correct interpretation of Section 289,

the judgment below should be reversed and entry of

judgment directed for Samsung. The record contains

no proof that all of the profits on Samsung’s accused

phones are attributable to the specific “articles of

manufacture” to which Apple’s patented designs were

“applied”—namely, a phone’s front face, front face

with bezel, and single icon grid display. To the con-

trary, the undisputed evidence shows that consumers

value far more highly such non-design features

as apps, battery life, screen size and turn-by-turn

navigation. The record likewise contains no proof that

all of Samsung’s profits were “made from the

infringement” of Apple’s narrow claimed designs as

opposed to the countless other functional technologies

that lead consumers to buy smartphones. At a mini-

mum, a new trial is required under the proper

interpretation of Section 289.

ARGUMENT

Il. SECTION 289 ALLOWS ONLY TOTAL

PROFIT ATTRIBUTABLE TO INFRINGE-

MENT OF THE PATENTED DESIGN

Section 289 provides that one who “(1) applies the

patented design ... to any article of manufacture ..., or

(2) sells or exposes for sale any article of manufacture

to which such design ... has been applied shall be

liable to ... the extent of his total profit, but not less

than $250.” 35 U.S.C. 289. It further provides that a

design-patent holder remains free to pursue other

remedies available under the Patent Act, “but he shall!

not twice recover the profit made from the infringe-

ment.” Id.

In providing for a remedy “to the extent of [the

infringer’s} total profit,” Section 289 sets forth “words

of limitation.” John Hancock Mut. Life Ins. Co. v.

Harris Trust & Sav. Bank, 510 U.S. 86, 105 (1993).

But the question remains, “total profit” from what? No

one argues that the answer is Samsuny’s total profit

on all its worldwide sales. Some lesser limitation must

necessarily apply.

Three textual reasons compel the conclusion that

recoverable “total profit” must be limited to total profit

attributable to infringement of the patented design:

(1) the text of the statute refers to the “article of

manufacture” to which an infringing design is

“applied”; (2) recoverable total profit must be that

“made from the infringement”; and (3) the Patent Act

is presumptively read in light of background principles

of causation and equity. Section 289’s legislative

history supports the same conclusion, as does the fact

that the Federal Circuit’s automatic entire-profits rule

would have disastrous consequences that Congress

could not possibly have intended.

A. The Text Of Section 289 Allows Only

Total Profit Attributable To Infringe-

ment Of The Patented Design

Two phrases in the text of Section 289 clearly

foreclose the Federal Circuit’s entire-profits rule.

First, the term “article of manufacture” is naturally

read to mean an entire product only where the design

is “applied” to the entire product, and not where (as

here) the design is “applied” only to a component of the

product. Second, the phrase “made from the infringe-

ment,” which embodies basic principles of causation, is

naturally read to limit recoverable profits to those

attributable to infringement of the patented design.

Were there any doubt about the proper interpretation

of either phrase, they should be read in light of

background principles of causation and equity that

compel the same conclusion.

1. “Article Of Manufacture” To Which

The Design Is “Applied”

Section 289 twice uses the term “article of manufac-

ture” to mean that to which “the patented design” is

or “has been applied.” 35 U.S.C. 289. Section 171

similarly authorizes issuance of a design patent to one

who “invents any new, original and ornamental! design

for an article of manufacture.” 35 U.S.C. 171 (empha-

sis added). Thus, where a claimed design covers only

a component of a product as sold (like a phone’s front

face, a cup-holder, or a marine windshield), the rele-

vant “article of manufacture” is the component (the

phone’s front face, the cup-holder, or the marine

windshield), and not the entire product (the phone, the

car, or the boat), and the relevant “total profit” is that

attributable to the component.

The ordinary meaning of the terms “article,”

“manufacture,” and “applied” at the time of the

relevant enactments supports this interpretation.

“Dictionaries from the era of ... enactment” are

instructive. Sandifer v. U.S. Steel Corp., 134 S. Ct.

870, 876 (2014).

Article. To the 1887 Congress, an “article” could be

something less than an entire product as sold. The

1880 Webster’s Dictionary defined an “article” as “[a]

distinct part” or a “particular one of various things.”

WEBSTER’S COMPLETE DICTIONARY OF THE ENGLISH

LANGUAGE 78 (1880 ed.) (“WEBSTER’S 1880”). The 1891

Black’s Law Dictionary defined an “article” as “one of

several things presented as connected or forming a

whole.” BLACK’S LAW DICTIONARY 92 (lst ed. 1891)

(“BLACK’S 1ST”). Similar definitions would have been

known to the 1952 Congress. See BLACK’S LAW

DICTIONARY 143 (4th ed. 1951) (“BLACK’S 4TH”) (same);

cf. 17 U.S.C. 101 (recognizing that an “article” can be

“part of” another useful article).

Manufacture. As the 1887 and 1952 Congresses

likewise would have known, a “manufacture” too could

be something less than an entire product as sold. The

1880 Webster’s Dictionary defined a “manufacture”

simply as “[a]ny thing made from raw materials by the

hand, by machinery, or by art.” WEBSTER’S 1880 at

810. The 1891 Black’s Law Dictionary likewise

defined “manufacture” as a “useful product made

directly by human labor, or by the aid of machinery

directed and controlled by human power.” BLACK’S 1ST

at 751.'* Thus, more than one manufacture could be

combined to form a larger product. Pre-Federal Circuit

precedent, for example, recognized that individual

components of a building—such as “doors, windows,

floors, supporting columns, wall construction, and

other parts”—are each a “manufacture,” no less than

the building as a whole is a “manufacture.” Riter-

Conley Mfg. Co. v. Aiken, 203 F 699, 702 (3d Cir

1913). The same is true elsewhere in the Patent Act.

For example, Section 271 defines as infringement the

sale or importation of a “manufacture” that is “a

component ... of a patented machine [or] manufac-

ture.” 35 U.S.C. 271(c) (emphasis added).

Article of Manufacture. As neither an “article”

nor a “manufacture” need be the entirety of a device or

product as ultimately sold, the same is true when the

terms are taken in combination. An “article of manu-

facture” is simply a particular thing made by human

skill. As the Commissioner of Patents explained in

Wiessner, a patent applicant may claim “the entire

design” for a product but may also claim, under

separate design patents, designs for that product’s

components, which themselves may constitute “sepa-

rate articles of manufacture.” 1898 Dec. Comm’r Pat.

at 242; see id. (“There is hardly a limit to the number

of articles which may be united in a new idea of shape

or configuration to form a new design ....”) (emphasis

added). Thus, as one early treatise noted, although

'* Accord Tide- Water Oil Co. v. United States, 171 U.S. 210, 216

(1898) (“The primary meaning of the word ‘manufacture’ is

something made by hand, as distinguished from a natural

growth....”); 2 ALEXANDER M. BURRILL, A LAW DICTIONARY AND

GLOSSARY 180 (2d ed. 1871) (“A thing made by art.”); 2 STEWART

RAPALJE & ROBERT L. LAWRENCE, A DICTIONARY OF AMERICAN

AND ENGLISH LAW 791 (1888) (“Anything made by art”).

some “articles cannot ... be separated into their

constituent parts,” many are subdivisible into numer-

ous components constituting distinct “articles of

manufacture” for purposes of Section 289. WILLIAM D.

SHOEMAKER, PATENTS FOR DESIGNS 351-52 (1929).

Applied. To “apply” one thing to another is “[t]o use

or employ [it] for a particular purpose.” BLACK’S 1ST

at 80.'° Under Section 171, the purpose of a patented

design is to give a specified “ornamental” appearance

to an “article of manufacture.” The statute therefore

does not protect non-ornamenta! designs, and features

“concealed or obscure[d] in normal use” are not eligible

for a design patent. Jn re Stevens, 173 F.2d 1015, 1016

(C.C.P.A. 1949). Thus, for example, a patented design

for a smartphone’s front face is “applied” only to the

front face—and necessarily not to the circuits, micro-

chips, speakers, processors and other internal, non-

design features that give a smartphone its functional-

ity. It follows that Section 289 allows awards only of

that total profit attributable to the externally observ-

able component to which the patented design is

“applied.”

See also WEBSTER’S 1880 at 66 (same); BLACK’S 4TH at 128

(same).

'© To be “ornamental,” a design must provide “an aesthetically

pleasing appearance.” Bonito Boats, Inc. v. Thunder Craft Boats,

Inc., 489 U.S. 141, 148 (1989); see also Gorham v. White, 81 U.S.

511, 524-25 (1871).

Prior to the decision below, every relevant judicia

lecision interpreted Section 289’s predecessor accord

ingly, holding that infringer’s profits for design

patents are limited to those from the article of manu

facture to which the patented design was applied. Fo:

example, in the Piano Cases, the patented design

claimed only a piano’s external casing as depicted i:

the patent drawing, not a plano» internal structur

ran entire piano

037.001

Piano I, 222 F. at 903-04: Pia i

Asked “whether the proftits made by the defenda

ould be tne entire profits | the aie ~ | the pla

ratent i} mw I I (

and case or the profits upon the sale of the case which

alone is the sole subject of the patent,” Piano J, 222 F

at 903, the Second Circuit answered unequivocally the

latter, id. at 904; Piano II, 234 F. at 81-82 (citing

Dowagiac Mfg. Co. v. Minn. Moline Plow Co., 235 U.S.

641, 646 (1915)). Nor did the Second Circuit find

relevant whether pianos and cases have separate

commercial markets; to the contrary, what mattered

was that the piano and the case “are different articles.”

Piano II, 234 F. at 82 (emphasis added). As the Second

Circuit reasoned by way of analogy, a design patent

“for a ‘book binding” cannot “be so identified with the

entire book as to give all the profits on a work of

literary genius to the patentee of a binding,” even if

“the binding was manufactured with and for that one

book, and has no separate commercial existence.” Id.

at 81-82.

Similarly, in Young v. Grand Rapids Refrigerator

Co., 268 F. 966, 974 (6th Cir. 1920), the asserted

design patents (Nos. D46,305 and D48,958) claimed

designs for refrigerator latch casings—not for a refrig-

erator or even for the entirety of a latch. The Sixth

Circuit rejected the notion that an infringer might owe

the entire profits on a refrigerator bearing an infring-

ing latch, explaining that the patent-holder had not

even “seriously contended” that Congress had required

such a disproportionate result. Id.

The Federal Circuit drew a similar distinction in

Trans-World Manufacturing Corp. v. Al Nyman &

Sons, Inc., 750 F.2d 1552 (Fed. Cir. 1984), a multiple-

article case where the plaintiff held a design patent for

a display rack for eyeglasses. The court rejected the

plaintiffs attempt to recover profits earned on sales of

eyeglasses displayed on an infringing rack, explaining

that “the patented design has not been applied to the

articles that Nyman sells—the eyeglasses—but only to

the display racks.” Jd. at 1567 (emphasis added).

Because the patented design was not “applied to” the

eyeglasses, sales of eyeglasses furnished no basis for

Section 289 infringer’s profits. Jd.

Thus, Section 289 does not authorize disgorgement

of infringer’s profits earned on sales of an entire

product unless (unlike here) that entire product is the

“article of manufacture” to which the patented design

is “applied.” Where (as here) the “article of manufac-

ture” to which the design is “applied” instead is merely

a component of that product, profits under Section 289

are textually limited to total profit from the

component.

2. “Made From The Infringement”

Apart from the limitation that the term “article

of manufacture” places on the remedy set forth in

Section 289, the provision’s final clause provides a

complementary limitation by prohibiting a patent-

holder from “twice recover|ing] the profit made from

the infringement.” 35 U.S.C. 289 (emphasis added).

That phrase embodies basic principles of causation

and reinforces the interpretation that recoverable

profits under Section 289 are limited to those

attributable to infringement of the patented design.

Nor does it matter that the phrase appears in the

double-recovery clause: There would be no need to

specify that Section 289 does not authorize a double

recovery of the profit made from the infringement if

the statute did not authorize a single recovery of the

profit made from the infringement in the first place.

This Court enforced a similar limitation as to the

Pictures Corp. , 309 U.S. 390 (1940). There, the statute

entitled the copyright-holder to recover “all the profits

which the infringer shall have made from |the}

infringement.” 17 U.S.C. 25(b) (1940) (emphasis

added). While the statute thus provided “for recovery

of ‘all’ the profits,” this Court held that such language

was “plainly qualified by the words ‘which the

infringer shall have made from such infringement.”

309 U.S. at 399. The “made from the infringement”

language in Section 289 compels a similar limitation

on the term “to the extent of his total profit.”

3. Background Principles Of Causation

And Equity

Were there any doubt about the above interpreta-

tion of Section 289’s text (there is not), it is resolved by

applying the canon that Congress is presumed to

follow traditional background rules of causation and

equity unless it clearly states otherwise. Section 289

evinces no clear congressional intent to make any

wholesale departure from traditional principles of

causation and equity.

A statute cannot “abrogate a common-law principle”

unless it “speak[s] directly to the question addressed

by the common law.” United States v. Bestfoods,

524 U.S. 51, 63 (1998) (internal quotation marks

omitted); see Norfolk Redevelopment & Hous. Auth. v.

Chesapeake & Potomac Tel. Co. of Virginia, 464 U.S.

30, 35 (1983) (“clear and explicit” language is required

to repeal a common-law rule) (internal quotation

marks omitted). Patent infringement “is essentially a

tort,” Carbice Corp. v. Am. Patents Dev. Corp. , 283 U.S.

27, 33 (1931), and when Congress fashions a statutory

tort, it “legislates against a legal background of ordi-

nary tort-related ... rules and consequently intends its

legislation to incorporate those rules.” Meyer uv.

Holley, 537 U.S. 280, 285 (2003).

One such ordinary tort-related rule—indeed, a

“cardinal” rule—is that compensation is limited to “the

injury caused to plaintiff by defendant’s breach of

duty.” Carey v. Piphus, 435 U.S. 247, 254-55 (1978)

(emphasis added; citation and internal quotation

marks omitted). This Court has repeatedly held that

Congress intended to adopt common-law causation

requirements in fashioning statutory torts.'*

Similarly, in interpreting the Patent Act, any

“major departure from the long tradition of equity

practice should not be lightly implied.” eBay, Inc. v.

MercExchange, LLC, 547 U.S. 388, 392 (2006) (quoting

Weinberger v. Romero-Barcelo, 456 U.S. 305, 320

(1982)). Causation is a basic principle of equity as it

is at law. See RESTATEMENT (THIRD) OF RESTITUTION

AND UNJUST ENRICHMENT § 51(5) (2011) (“RESTATEMENT

(THIRD)”) (“In determining net profit the court may

apply such tests of causation and remoteness ... as

reason and fairness dictate, consistent with the object

of restitution.”).

These long-settled legal and equitable principles

“hardly could have been foreign to the many lawyers

in Congress” in 1887 and 1952. Carey, 435 U.S. at 255.

Treatises from the 1887 Act’s era explain that causa-

tion principles would be “applied to the construction of

statutes,” 1 THEODORE SEDGWICK, A TREATISE ON THE

MEASURE OF DAMAGES 150-51 (7th ed. 1880), and that,

in the absence of conduct so wrongful “as to give a

'* See, e.g., Carey, 435 U.S. at 255-56 (42 U.S.C. 1983); Holmes

v. Sec. Investor Prot. Corp., 503 U.S. 258, 265-268 (1992) (RICO);

Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 343-45 (2005) (fraud

under Securities Exchange Act); Univ. of Texas Sw. Med. Ctr. v.

Nassar, 133 S. Ct. 2517, 2524-25 (2013) (Title VII employment

discrimination); Paroline v. United States, 134 S. Ct. 1710, 1718-

20 (2014) (restitution under Violence Against Women Act).

right to exemplary or vindictive damages, the extent

of remuneration is restricted ... to the immediate

consequence of the illegal act,” id. at 144. And in 1887,

the equity courts had long limited both damages and

profits in patent cases to amounts attributable to the

infringement. See Garretson, 111 U.S. at 121-22. For

instance, in Littlefield v. Perry, 88 U.S. 205 (1874), this

Court held that an infringer’s-profits award was

limited to those “profits received by the defendant|] as

the direct result of the use within the assigned terri-

tory of the several inventions involved in the case.” /d.

at 229; see also, e.g., Tilghman v. Proctor, 125 U.S. 136,

146 (1888) (“The profits ... which he must account for,

are not those which he might reasonably have made,

but those which he did make, by the use of the

plaintiffs’ invention.”) (emphasis added).

Likewise, the 1952 Congress would have understood

that the equitable remedy of restitution should not

amount to a penalty but rather enforces a duty to

return “the value of the benefit thereby received.”

RESTATEMENT (FIRST) OF RESTITUTION § 136 (1937); see

RESTATEMENT (THIRD) § 51(4) (noting that an account-

ing of profits is designed to avoid “the imposition of a

penalty,” and thus is limited to “the net profit

attributable to the underlying wrong”). As this Court

had stated just a decade earlier in interpreting the

ples governing equity jurisdiction,” infringer’s profits

are awarded “not to inflict punishment but to prevent

an unjust enrichment by allowing injured complain-

ants to claim that which ... is theirs, and nothing

beyond that.” Sheldon, 309 U.S. at 399 (emphasis

added; internal quotation marks omitted).

Causation requirements universally govern dis-

gorgement and other remedies elsewhere in intellec-

tual property law—whether for trademarks,’ copy-

right,” or utility patents.?' By using the phrase “to the

extent of his total profit” in Section 289, Congress did

not evince any clear intent to exempt design patents

wholesale from this universal regime. At most,

Congress relieved a holder of a design patent for a

single-article product like a carpet of the need to prove

that the patented design causes the value of the article

to which it is applied. Thus a carpet design-patent

holder need not show that the design (rather than the

weave or fiber) caused the total profit on the carpet.

But Congress did not address multicomponent prod-

ucts at all, much less relieve a holder of a design

patent for a mere component of a multicomponent

product of the obligation to show that the component

caused the value of the entire product.

Reading Section 289 in conformity with background

principles of causation and equity is further reinforced

' See, e.g., Mishawaka Rubber & Woolen Mfg. Co. v. S.S.

Kresge Co., 316 U.S. 203, 205-06 (1942) (holding that the

“plaintiff of course is not entitled to profits demonstrably not

attributable to the unlawful use of his mark”); Lindy Pen Co. v.

Bic Pen Corp., 982 F.2d 1400, 1408 (9th Cir. 1993) (holding that

an accounting under 15 U.S.C. 1117(a) is intended to award

profits only on sales that are “attributable to the infringing

conduct”).

” See, e.g., Davis v. Gap, Inc., 246 F.3d 152, 160 (2d Cir. 2001)

(holding that the term “gross revenue” under 17 U.S.C. 504(b)

means “gross revenue reasonably related to the infringement, not

unrelated revenues”).

*! See, e.g., Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1545

(Fed. Cir. 1995) (en banc) (under 35 U.S.C. 284, a patent-holder

seeking lost profits must establish “the sales and profits lost ...

because of the infringement”); ResQNet.com, Inc. v. Lansa, Inc.,

594 F.3d 860, 869 (Fed. Cir. 2010) (per curiam) (similar for

reasonable royalty).

by the canon of constitutional avoidance. As far back

as the late nineteenth century, scholars recognized

that interpreting the design-patent profits remedy too

broadly would lead to “absurd consequences or to

unconstitutional results” by granting a remedy “wholly

disproportioned to the wrong committed.” Frederic H.

Betts, Some Questions Under the Patent Act of 1887,

1 YALE L.J. 181, 189 (1892). The Patent Clause

authorizes Congress to grant patentees “an exclusive

right to the profits arising from [their inventions].”

Graham v. John Deere Co. of Kansas City, 383 U.S. 1,

9 n.2 (1966) (quoting Letter from Thomas Jefferson to

Isaac McPherson (Aug. 1813), in VI WRITINGS OF

THOMAS JEFFERSON, at 180-81 (Washington ed.)). But

the Clause confers no similar authority to award

design-patent holders vast profits not arising from

their inventions, as the Federal Circuit read Section

289 to do here. To the contrary, the Patent Clause

bars “enlarge[ment of] the patent monopoly without

regard to the innovation, advancement or social

benefit gained thereby.” Graham, 383 U.S. at 5-6; see

Bonito Boats, 489 U.S. at 146. The decision below thus

raises serious constitutional questions that the statute

should be “construed to avoid.” FCC v. Fox Television

Stations, Inc., 556 U.S. 502, 516 (2009).

B. Section 289’s History Shows Congress’s

Purpose To Allow Only Total Profit

Attributable To Infringement Of The

Patented Design

1. The 1887 Congress Sought To Ensure

Meaningful Recovery For Infringe-

ment Of Patented Designs By

Decorative Articles Whose Value

Was Driven By Design

Section 289’s legislative history confirms the textual

limitations on “total profit” discussed above. The 1887

Act was modeled on British patent-infringement

statutes, see S. REP. No. 49-206, at 2, which limited

infringer’s profits to “the profits which the defendants

have actually made by the infringement of the patent.”

Elwood v. Christy, 144 Eng. Rep. 537, 538 (1865)

(emphasis added); see also id. at 539 n.1. The

legislative history makes clear that the act’s propo-

nents believed that the act embodied that basic

causation principle.

Congress enacted the predecessor statute to Section

289 in 1887 in response to this Court’s decisions in the

Dobson cases. See supra, at 12-14. Congress was

concerned that the Dobson decisions would eliminate

any effective remedy for holders of design patents for

decorative articles like “beautiful carpets, wall-papers

and oil-cloths” by requiring that a patent-holder prove

the value of the design as distinct from the value of

non-design features in the article. E.g., H.R. REP No.

49-1966, at 1, 3; 18 CONG. REC. 834, 835 (statement of

Rep. Martin).

Congress's response to the Dobson cases was based

on its express assumption that “designs are the princi-

pal feature” of carpets, wallpapers, and oil-cloths. 18

CONG. REC. 835 (statement of Rep. Martin). As the

House Patent Committee report stated, “it is the

design that sells the article, and so that makes it

possible to realize any profit at all.” H.R. Rep. No. 49-

1966, at 3. And as Representative Martin stated,

speaking for the House Patent Committee, the

patented design is what “add[s] value to carpeting, oil-

cloths, wall-paper, and things of that sort,” and “the

advantages to which the manufacturers are entitled

by reason of securing these designs, shall not be taken

from them by infringements.” 18 CONG. REC. 835

(statement of Rep. Martin).

Congress nowhere expressed any similar assumption

with respect to a multicomponent product comprising

(unlike a carpet) more than one article of manufacture.

To the contrary, the legislative history refers repeat-

edly and exclusively to “beautiful carpets, wall-papers

and oil-cloths.” E.g., H.R. REP. No. 49-1966, at 3.

When asked in floor debate “[t]}o what particular kinds

of designs” the bill applied, Representative Martin,

speaking for the House Patent Committee, replied

that “[iJt applies to designs for carpets, oil-cloth,

wallpaper, &c.” 18 CONG. REC. 834 (statement of Rep.

Martin).

The 1887 Act’s proponents were concerned that

designs for decorative items like carpets and wall-

paper were uniquely susceptible to counterfeiting:

The patent is obtained for a certain figure, or

figures, which will be employed in making

carpet, or oil-cloth, or wall-paper, or anything

of that kind. ...

The moment he gets a patent for that design

there must be left in the Patent Office a

lithograph of it, and that lithograph can be

obtained by anyone who wants if for a few

cents. Those who infringe the patents purchase

these lithographs of designs. They have a full

description of the design and make an exact

counterfeit, or imitation; so exact hardly any

man can see the difference between them.

18 CONG. REC. 835 (statement of Rep. Martin).

The concern about counterfeiting reinforces that the

proponents of the 1887 Act viewed the new remedy as

embodying principles of causation. Congress deter-

mined that copying a design for a carpet or wallpaper

was the cause of any profits a counterfeiter might

make on the carpet or wallpaper. In contrast, propo-

nents of the new remedy denied that it would abrogate

long-accepted principles of causation in other cases.

Thus, when asked whether “the plaintiff may

recover the entire profit upon the article of product,

without any proof that this arises from the use of

the design,” Representative Martin, speaking for the

House Patent Committee, responded that he “[could]

not put any such construction on this law.” 18 CONG.

REC. 835 (emphasis added). And when pressed as to

whether an infringer could be ordered to disgorge all

of his profits “whether those profits arise from the use

of the design alone or from various other circumstances

which may enter into the manufacture,” Representa-

tive Martin insisted that “no such purpose was had in

view by any one [in the committee] who favored or

urged the passage of the bill.” Jd. (emphasis added).

As the House Report stated, under the new remedy,

a design patent-holder should “recover[] nothing

beyond” “the profit made on the infringing article.”

H.R. REP. No. 49-1966, at 3 (emphasis added).

2. Post-1887 Legislative Developments

Confirm Section 289’s Narrow

Purpose

Congress’s subsequent amendments to the Patent

Act make even clearer that Section 289, as codified in

1952, was not intended to impose the draconian

penalty required by the Federal Circuit's entire-profits

rule.

First, the 1922 and 1946 Acts provided a reasonable

royalty as the floor for all patent infringement awards.

See Act of Aug. 1, 1946, 60 Stat. 778; Act of Feb. 21,

1922, 42 Stat. at 392. Thus, by 1952, Congress had

solved the problem that had prompted it to provide in

the 1887 Act for a minimum of $250 in infringer’s

profits in the first place—namely, that design-patent

holders might be left merely with nominal damages if

unable to prove causation of lost or infringer’s profits.

Second, the 1952 Act removed the 1887 Act’s

knowledge requirement, omitting the phrase “know-

ing that the [patented design] has been ... applied” to

an article of manufacture. Compare Act of Feb. 4,

1887, 24 Stat. at 387 with Act of July 19, 1952, 66 Stat.

at 813. The 1887 Congress had viewed the knowledge

requirement as a vital safeguard. Proponents of the

act assured the House that “no man will suffer either

penalty or damage unless he willfully appropriates the

property of another.” 18 CONG. REC. 836 (colloquy

between Representatives Butterworth and Martin).

Congress did not explain its elimination of the

knowledge element in the 1952 Act, but Congress can

hardly be understood to have intended to impose a

punitive, overcompensatory remedy for what it

rendered a strict-liability tort.

Third, in the 1952 Act, Congress also removed the

language specifying that the awardable infringer’s

profits were “from the manufacture or sale ... of the

article or articles to which the design ... has been

applied ...." Compare Act of Feb. 4, 1887, 24 Stat. at

387 (emphasis added) with Act of July 19, 1952, 66

Stat. at 813-14. The dissent in Piano J had relied upon

that language to conclude that the patent-holder was

entitled to the entire profits from sales of the pianos,

which were purportedly “the article[s] which the

complainant manufactures and sells.” 222 F. at 905-

06 (Ward, J., dissenting) (emphasis added). As the

Piano I majority made clear, that view was erroneous

at the time, see id. at 904-05, but the error is even

clearer under the post-1952 statutory language. Con-

gress expressed no intent in 1952 to override the

holding of the Piano Cases and adopt the dissenting

view in those cases instead.

The 1952 Congress thus reinforced the 1887

Congress’s assurances of Section 289’s conformity with

traditional common-law and equitable principles of

causation and proportionality.

C. Practical Consequences Counsel Inter-

preting Section 289 As Allowing Only

Total Profit Attributable To Infringe-

ment Of The Patented Design

In addition to conflicting with the text, history and

purpose of Section 289, the Federal Circuit’s entire-

profits rule would harm innovation and competition

and create risks of multiple recoveries and races to the

courthouse. Limiting awards under Section 289 to

profits attributable to infringement of the patented

design—which is the natural and sensible reading for

all the reasons given above—avoids these harmful

effects.

1. The’ Entire-Profits Rule Would

Create Disproportionate Awards

And Risk Multiple Recoveries

The Federal Circuit’s entire-profits rule would lead

to disproportionate awards in any patent case that

involves (as here) a design patent claiming only a

small component of a product’s overall design. Design-

patent defendants would have to hand over all of their

profits on a computer for infringement of a single

patented, preinstalled graphical-interface icon, all

profits from a boat for infringing a patent on the

design of a marine windshield, all profits on a car for

infringing a patented cup-holder design, and so on.

The prospect of such absurd outcomes is not hypo-

thetical. The Federal Circuit’s ruling has already

prompted an increasing number of cases where

disproportionate profits awards are sought or ordered.

See, e.g., Nordock, Inc. v. Systems Inc., 803 F.3d 1344,

1354-55 (Fed. Cir. 2015) (vacating and remanding a

district court’s profits award as inadequate where

limited to the “profits attributable to a small portion

of the dock levelers at issue”—namely, the portion to

which the patented design was applied) (citing the

Federal Circuit decision below), pet. for cert. filed, No.

15-978 (Jan. 28, 2016); Pac. Coast Marine Windshields

Ltd. v. Malibu Boats, LLC, 2014 WL 4185297, *11

(M.D. Fla. Aug. 22, 2014) (ruling that the holder of

a design patent on a marine windshield was entitled

to all profits from “the sale of its boats with the

linfringing] windshield”) (citing the district court

ruling below).

Moreover, the practice of partial claiming ensures

that there will be many more requests for such

disproportionate awards. The purpose of patenting

partial design details is to broaden the range of

potentially infringing products and to increase the

chances of prevailing on infringement. See, e.g.,

Saidman, supra, 89 J. PAT. & TRADEMARK OFF. SOC’y

at 319-23. Apple, for example, holds some patents for

the entire external design of an iPhone (for example,

U.S. Patent No. D580,387 (“D’387”)), but has also

patented numerous discrete narrow, partial features

of the overall iPhone design.” Proving infringement

of a patent like the D’387 is difficult, given the many

obvious dissimilarities between an iPhone and a

Samsung Galaxy or other competing phone as a whole.

Rather than sue on the D’387 or similar entire-design

patent, therefore, Apple instead engaged in “standard

and well-accepted patent gamesmanship,” id. at 319,

by picking and choosing which separate narrow design

patents to sue on. And this gamesmanship yielded

Apple the same amount of infringer’s profits as if it

had obtained an infringement finding on the D’387

or any other patented design for the entire external

design of a smartphone. The Federal Circuit’s entire-

profits rule thus divorces the remedy entirely from the

scope of the infringement.

““ Apple holds thirteen patents covering external design

features of the original iPhone, twelve of which are for only

limited aspects of the phone: U.S. Patent No. D558,756 (filed Jan.

5, 2007); U.S. Patent No. D558,757 (filed Jan. 5, 2007); U.S.

Patent No. D558,758 (filed Jan. 5, 2007); U.S. Patent No.

D580,387 (filed Jan. 5, 2007); U.S. Patent No. D581,922 (filed

July 30, 2007); U.S. Patent No. D586,800 (filed July 30, 2007);

U.S. Patent Nu. D593,087 (filed July 30, 2007); U.S. Patent No.

D601,558 (filed Feb. 13, 2009); U.S. Patent No. D613,736 (filed

May 19, 2009); U.S. Patent No. D618,677 (filed Nov. 18, 2008);

U.S. Patent No. D618,678 (filed Feb. 23, 2009); U.S. Patent No.

D627,343 (filed Sept. 15, 2009); U.S. Patent No. D634,319 (filed

June 21, 2010).

In addition, the entire-profits rule would invite

wasteful and duplicative litigation. It appears to per-

mit multiple recoveries of a manufacturer’s profits on

the same product. For example, a boat manufacturer

whose boat is found to infringe separately-owned

design patents for a boat’s windshield, rooftop and seat

might have to pay its entire profits from the boat three

times over A computer manufacturer might have to

hand over all of its profits to any number of patent-

holders who own the rights to particular patented,

preinstalled icon designs. And so on.

As this Court has recognized, there is an obvious

injustice in a rule by which an infringer may have

to pay “his whole profits to each of a dozen or more

several inventors of some small improvement.” Seymour

v. McCormick, 57 U.S. 480, 490 (1853). And even if the

first award of total profit could be deemed to have

exhausted all profits from sales of a product, the risk

of missing out on the Section 289 lottery would at a

minimum cause a race to the courthouse among design

patent owners to obtain the first and largest windfall

recovery.

2. The Entire-Profits Rule Would Harm

Innovation, Competition And Small

Businesses

By grossly over-rewarding design patents, the

entire-profits rule would also impede both competition

and innovation. Companies would use the threat of

potentially devastating design-patent infringement

awards as a tool to stifle competition in the market-

place. Non-practicing entities or “trolls” would seize

upon design patents as their new weapon of choice.

And innovators would be encouraged to focus their

energies on minor designs rather than groundbreaking

technologies, given the far greater litigation value of

even the most trivial design patent.

First, by authorizing disproportionate awards, the

entire-profits rule would make design patents the new

weapon of choice in efforts to quash new market

entrants. As commentators have recognized, the

entire-profits rule “poses a real danger for companies

everywhere.”’ Under the rule, a company holding a

design patent could obtain disgorgement of its com-

petitor’s entire profits on a competing product—no

matter how much technological or design innovation

the competing product contributes—so long as the

competing product somewhere replicated a patented

snippet of a design. For example, Apple could assert

its patent on a circular button, shown below, against

any other “electronic device” with a circular button,

and reap the entire profits on that product (as opposed

to the total profit attributable to the button):

D747,310"

Companies are already using design patents in

this way. For example, Microsoft has sued software

developer Corel for alleged infringement of (among

*! Jeff John Roberts, Apple, rounded corners and the new

debate over design patents, FORTUNE (Aug. 19, 2015),

http-//fortune.com/20 15/08/19/apple-patents-rounded-corners/.

“ U.S. Patent No. D747,310 (filed Sept. 9, 2013), available at

http://pdfpiw. uspto.gov/. piw?Docid=D0747310.

other patents) a design patent for the tiny graphical

arrow shown in the lower right corner of the middle

box below:

D550,237"

See Microsoft Corp. v. Corel Corp., No. 5:15-cv-5836-

EJD, Dkt. No. 37 at 12-13 (N.D. Cal., San Jose

Division, filed Dec. 18, 2015).

The risks of the entire-profit rule are perhaps most

grave for small businesses, for whom a design-patent

lawsuit can now be an existential threat.”° One small

business is already facing a remand by the Federal

* U.S. Patent No. D550,237 (filed May 22, 2006), available at

http://pdfpiw.uspto.gov/.piw? Docid=D0550237

*° See Steve Lebsock, Court battle over design patents could

affect Colorado economy, THE BUSINESS TIMES (Nov. 17, 2015),

http://thebusinesstimes.com/court-battle-over-design-patents-

could-affect-colorado-economy/ (the “real losers” from the entire-

profits rule may be “smaller enterprises, entrepreneurs and

manufacturers that are now at risk of paying total profits”).

Circuit for a determination of its entire profits on a

product found to infringe a design patent for a small

component. See Nordock, 803 F.3d at 1356-57

Second, the entire-profits rule would stifle innova-

tion by distorting the incentives that drive invention

and undermining the value of technology. In all other

areas of intellectual-property law, the scope of avail-

able damages is tied to the scope of the infringement.

But the entire-profits rule for design-patent infringe-

ment makes the value of any single design patent, no

matter how minor or trivial, greater than the value

of all the utility patents in a smartphone or other

technological device combined. The rule thus encour-

ages companies to focus research and development on

design patents rather than technologies. As one

commentator put it, “the Federal Circuit’s ruling

could allow design patent law to swallow utility patent

law, making the ornamental design more important

than the underlying technology.””’

Third, as commentators have recognized, the entire-

profits rule would lead inexorably to “an explosion of

design patent assertions and lawsuits” given the

power and leverage that design-patent holders now

can wield.” There has been a surge in applications for

design patents recently—design patent “application

filings are up almost 50 percent compared to a decade

ago,” and “(t]he PTO has added 80 new design

“7 Adam Liptak, Supreme Court to Hear Samsung Appeal on

Apple Patent Award, N.Y. TIMES (Mar. 21, 2016), http://www.ny

times.com/20 16/03/22/technology/supreme-court-to-hear-samsung

-appeal-on-apple-patent-award.htm! (quoting Prof. David

Opderbeck, Seton Hall University).

“ Jason Rantanen, Apple v. Samsung: Design Patents Win,

PATENTLYO (May 18, 2015), http://patentlyo.com/patent/2015/05/

samsung-design-patents.htm].

examiners over the last three years to address the

increase,” more than doubling their previous ranks.”

Design-patent appeals to the Federal Circuit have

tripled since last year.*° And non-practicing entities

have already started relying on the decision below to

demand large payments for purported design-patent

infringement,*' thus supporting predictions that the

entire-profits rule would enable design-patent litiga-

tion to “becom{e] the next business model for patent

assertion entities.”

As cautioned in eBay, 547 U.S. at 396-97 (Kennedy,

J., concurring), patent-holders should not be permitted

to leverage a patent on “a small component of [a]

product” for competitive gain far beyond that war-

ranted by the patent’s value and inventive contribu-

tion. But the entire-profits rule creates a “perverse

incentive ... to bring design patent infringement cases,

even with the weakest merits, intended to motivate

“? Tony Dutra, Design Patents Up, But Samsung Case Ruling

Could Bring Down, BLOOMBERG BNA (April 20, 2016),

http://www.bna.com/design-patents-samsung-n57982070078/.

” Td.

"' See Giuseppe Macri, Patent Trolls are Already Abusing

the Apple v. Samsung Ruling, INSIDESOURCES (Oct. 1, 2015),

http://www.insidesources.com/patent-trolls-are-already-abusing-

the-apple-v-samsung-ruling/.

“ Gary L. Griswold, 35 USC 289—After Apple v. Samsung,

Time for a Better-Crafted Judicial Standard for Awarding “Total

Profits”?, PATENTLYO (Aug. i4, 2015), http://patentlyo.com/

patent/20 15/08/griswold-patent-damages.html; see also Bartlett

Cleland, Flawed by design, THE HILL (Oct. 12, 2015),

http://thehill.com/blogs/congress-blog/technology/256563-flawed-

by-design (“Design patents have become increasingly attractive

as a new target” for “patent trolls”).

defendants to settle and avoid the unbalanced risk

should damages be assessed.”*’

3. Section 289 Provides A Practical

Alternative To Section 284 Even As

Properly Limited

Interpreting Section 289 to limit awards of in-

fringer’s profits as described above does not render the

statute duplicative, but rather leaves a robust remedy

distinct from the damages remedy provided in Section

284.

First, as to any design patents that claim designs

that cover the entirety of a preduct as sold,* the entire

profits from the product’s sales still might be subject

to disgorgement under Section 289. In such cases, the

article of manufacture might be considered coexten-

sive with the product as sold, or infringement of the

patented design might be considered responsible for

the entirety of the profits earned on such sales.

Second, even as to multicomponent products, Sec-

tion 289 might be a preferable remedy where proof of

infringer’s profits is easier as a practical matter than

proof of lost profits or a reasonable royalty under

Section 284. For example, an infringer’s-profits case

might be based on actual sales records, obviating any

need to prove the hypothetical revenues that the

plaintiff would have made but for the infringement or

™ Cleland, supra, note 32.

“ See, e.g., Richardson v. Stanley Works, Inc., 597 F.3d 1288,

1290 (Fed. Cir. 2010) (patent (No. D507,167) for complete design

of carpentry tool); Egyptian Goddess, Inc. v. Swisa, Inc. , 543 F.3d

665, 668 (Fed. Cir. 2008) (patent (No. D467,389) for complete

design of fingernail buffer); Hazelquist v. Guchi Moochie Tackle

Co., 437 F.3d 1178, 1179 (Fed. Cir. 2006) (patent (No. D363,113)

for complete design of one-piece fishing lure).

to reconstruct a hypothetical negotiation to determine

the amount of a royalty.

Third, a patent-holder’s recovery under Section 289

as properly interpreted might in certain cases exceed

recovery under Section 284. For example, Congress

appeared to contemplate in 1887, when it added

Section 289’s predecessor, that a design-patent

infringer (e.g., a counterfeiter) might often have lower

costs and higher profit margins than a patent-holding

competitor. In such cases, the gain from infringement

of the patented design might well exceed the patent-

holder’s losses. And a reasonable royalty is rarely so

large as to eliminate the infringer’s entire profit. See,

e.g., WesternGeco L.L.C. v. ION Geophysical Corp., 791

F.3d 1340, 1353 (Fed. Cir. 2015).

For all these reasons, the practical consequences

of the Federal Circuit’s entire-profits rule counsel its

rejection.

Il. THE PROPER CONSTRUCTION OF SEC-

TION 289 NECESSITATES REVERSAL OR

VACATUR OF THE JUDGMENT BELOW

The Federal Circuit affirmed a judgment awarding

Samsung’s entire profits from sales of eleven

smartphones—even though Apple presented no proof

that Samsung’s profits arose from the articles of

manufacture to which Apple’s narrow design-patent

claims were applied or that Samsung’s profits

otherwise resulted from infringement of the patented

designs. This was unquestionably Apple’s burden. See

Piano II, 234 F at 82 (citing Dowagiac, 235 U.S. at

646); see generally Lucent Techs., Inc. v. Gateway, Inc.,

580 F.3d 1301, 1324 (Fed. Cir. 2009) (“The burden of

proving damages falls on the patentee.”). Thus, the

district court cannot rightly have awarded Samsung’s

entire profits from the accused phones, and the

Federal Circuit’s judgment should be reversed or at

the very least vacated and the case remanded for

further proceedings.

A. The Record Contains No Proof Of Total

Profit From The Relevant Articles Of

Manufacture

The relevant articles of manufacture here are not

the entirety of Samsung’s accused phones, as the

Federal Circuit held (Pet. App. 29a). The relevant

articles of manufacture here are the discrete com-

ponents of those phones to which Apple’s narrow

design patent claims were applied. See supra, at 6-9.

Specifically, as to the D’677, which shows a design

for a black rectangular front face with rounded corners

(see supra, at 6-7), the relevant article of manufacture

is the round-cornered, glass front face of the smart-

phone. That is the portion of the smartphone to which

the D’677 design was applied. Indeed, Apple’s own

witness Peter Bressler explained that the asserted

design extended only to the portions of the device

shown in full lines in the patent drawings, and that

the portions shown in dotted lines were disclaimed and

outside the claimed scope. J.A. 149-50. Thus, as the

D’677 patent drawings show and Apple’s expert

Bressler confirmed, the claimed design does not cover

even the en; ire front face of the smartphone, much less

the entire smartphone. /d.; J.A. 577-78; see also J.A.

243 (Apple’s expert Bressler admitting that Apple did

not own “the use of a rectangular shape with rounded

corners for an electronic device”).

Similarly, as to the D’087, which shows a design

for a rectangular front face with rounded corners

plus bezel (see supra, at 7-8), the relevant article of

manufacture is the round-cornered, glass front face of

the smartphone plus its surrounding rim. For this

patent too, Apple’s expert Bressler testified that,

based on the patent drawings, the asserted design was

limited to a front face and bezel. J.A. 153.*°

And, for the D’305, which shows a design for a

particular grid of sixteen colorful icons on a black

screen (see supra, at 8), the relevant “article of

manufacture” to which the patent is “applied” is the

display screen that sits beneath a smartphone’s glass

front face.** It is that display to which the patented

menu of icons is temporarily applied. Apple’s own

witness Susan Kare confirmed the limited scope of the

D’305. She testified that that patent claims only a

specific menu of icons, not any other portion of the user

interface, and that, in the accused Samsung devices,

that menu was neither on the start-up screen nor on

the home screen, but rather was shown several layers

” It is irrelevant that Apple titled the D’677 and D’087 as for

an “Electronic Device” (J.A. 531; J.A. 567). While “|tihe title of

the design must designate the particular article,” 37 C.F.R.

1.153(a), the title cannot determine the scope of the claimed

design. To the contrary, the Patent Office examines the claim as

depicted in the patent drawing for patentability, and that claim

defines the scope of the patent. See id. (“No description, other

than a reference to the drawing, is ordinarily required.”); U.S.

PATENT & TRADEMARK OFFICE, MANUAL OF PATENT EXAMINING

PROCEDURE (“MPEP”) 1503.01 (9th ed. Nov. 2015), available at

http//www.uspto.gov/web/offices/pac/mpep/mpep-1500.pdf (“[T}he

illustration in the drawing views is its own best description”).

*” A design for a “computer-generated icon” may be patented

only if the icon is “shown on a computer screen, monitor, jor] other

display panel.” Guidelines for Examination of Design Patent

Applications for Computer-Generated Icons, 61 Fed. Reg. 11380,

11381 (March 20, 1996); see also MPEP 1504.01(a) (“a computer-

generated icon must be embodied in a computer screen, monitor,

other display panel, or portion thereof, to satisfy 35 U.S.C. 171”).

deep in the interface. J.A. 169-70; J.A. 174-76; see also

J.A. 176 (Apple’s Kare admitting that Apple does not

“own|} the right to have a colorful matrix of icons” or

“icons arranged in rows and columns in a grid

matrix”).*”

Notwithstanding that Apple, as the patent-holder,

had the burden to prove its damages, it presented no

evidence of Samsung’s profits from the relevant arti-

cles of manufacture. Apple might have, for example,

sought to use survey evidence similar to that in the

record to demonstrate the value that consumers

assign to the relevant articles of manufacture in the

accused products. And Apple might have sought to

show the price differential between smartphones with

and without articles embodying the infringing designs.

But it did neither.

Instead, Apple presented only Samsung’s overall

profits from the accused smartphones—even in the

face of abundant evidence from its own surveys

showing the numerous non-design reasons that con-

sumers rank much higher than design in purchasing

smartphones. See supra, at 9-10. Since Apple failed

to differentiate among the numerous articles of manu-

facture constituting a smartphone, Apple’s profits

evidence was insufficient as a matter of law and

Samsung was entitled to judgment dismissing Apple’s

claims for infringer’s profits under Section 289.

" Apple titled its patent application for the D’305 “Graphical

User Interface for a Display Screen or Portion Thereof” (J.A. 554),

eliminating any doubt that the relevant “article of manufacture”

is the display.

B. The Record Contains No Proof Of Total

Profit Made From The Infringement

Whether or not the relevant “article of manufacture”

for determining the profits awardable under Section

289 is the entirety of each accused Samsung smart-

phone as sold to consumers, Apple failed to present

evidence sufficient to support an award of any

infringer’s profits, let alone Samsung’s entire profits,

from the accused phones. As shown above, Section 289

requires the patent-holder to prove the amount of

profits attributable to the infringement of its design

patents. But Apple presented no proof that Samsung’s

profits were attributable to infringement of the

narrow, partial claims asserted here.

Indeed, Apple failed to offer any properly designed

and administered consumer survey as evidence of the

extent to which consumers bought the accused smart-

phones because of the patented designs. Instead, as

noted, Apple relied solely on Samsung’s total profit on

the accused phones without regard to whether the

designs claimed here caused any of that profit.

As Apple’s own market research in the record below

reveals, however, consumers purchased Samsung and

other Android phones overwhelmingly for their non-

design features, such as screen size and quality,

multimedia functions, and choice of wireless carriers.

See supra, at 9 (citing J.A. 486-87); see also supra, at

10 (citing J.A. 355; J.A. 438; J.A. 505) (comparable

findings from third-party surveys). And Apple’s

evidence showing that “design” might have mattered

to some consumers considered design in general, not

the specific patented design features that Apple chose

to assert. See supra, at 10. Indeed, even Apple has

recognized that the value of a smartphone does not

rest principally in the phone’s design: Apple sought,

in a presentation to Samsung prior to this very

lawsuit, to extract royalty payments for Samsung’s

products based on their functional features, asserting

that “/s/oftware creates the largest share of product

value.” JA. 494. And Apple recognized that

“lo)perating system, applications, user interface, and

services are the key to a differentiated customer

experience.” Jd. (emphasis removed).

Thus, Apple failed to show that any of Samsung’s

profits were attributable to infringement of the

claimed designs, and Apple’s own consumer surveys

showed that design, even in general, had a minimal

role in consumer purchasing decisions. Since Apple

failed to prove that its narrow designs caused any

measure of Samsung’s sales or profits, the Federe!

Cireuit’s judgment should be reversed and entry of

judgment directed for Samsung.

C. At A Minimum, A New Trial Is Necessary

If judgment is not directed for Samsung, at the

very least, the Federal Circuit’s judgment should be

vacated based on instructional error, and the case

remanded for further proceedings including a new

trial with instructions that properly interpret Section

289.

First, the Federal Circuit erred in approving the

district court’s instruction that, under Section 289, the

jury should award the “total profit attributable to the

infringing products.” Pet. App. 29a; see id. 165a. Such

an instruction disregards both that the relevant “arti-

cle of manufacture” for determining total profit under

Section 289 was the component to which the patented

design was applied (see supra, at 28-34) and that

Section 289 limits recoverable total profit to the profit

“made from the infringement” (see supra, at 34-35).

Second, for the reasons given above, the district

court erred in declining to give Samsung’s proposed

instruction that the jury “should award only those

profits which were derived from the article of

manufacture to which Apple’s patented design was

applied” and that “[t]he article of manufacture to

which a design has been applied is the part or portion

of the product as sold that incorporates or embodies

the subject matter of the patent.” J.A. 206-07

(emphases added). See supra, at 20-21.

Third, for the reasons given above, the district court

erred in rejecting Samsung’s proposed instruction that

would have limited recoverable infringer’s profits to

those profits “attributable to whatever infringement

you have found.” J.A. 204. That instruction reflects

the traditional common-law and equitable principles

of causation incorporated into Section 289 that tie

monetary recovery to actual loss or gain from wrongful

conduct. See supra, at 20.

CONCLUSION

The judgment of the court of appeals should be

reversed or vacated.

MICHAEL T. ZELLER

B. DYLAN PROCTOR

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

865 S. Figueroa Street

10th Floor

Los Angeles, CA 90017

(213) 443-3000

VICTORIA F. MAROULIS

BRETT J. ARNOLD

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

555 Twin Dolphin Drive

5th Floor

Redwood Shores, CA 94065

(650) 801-5000

Respectfully submitted,

KATHLEEN M. SULLIVAN

Counsel Of Record

WILLIAM B. ADAMS

DAVID M. COOPER

CLELAND B. WELTON II

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

51 Madison Avenue

22nd Floor

New York, NY 10010

(212) 849-7000

kathleensullivan@

quinnemanuel.com

Counsel for Petitioners

June 1, 2016

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.