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

Supreme Court of the United States

SAMSUNG ELECTRONICS Co., LTD., SAMSUNG

ELECTRONICS AMERICA, INC., AND SAMSUNG

TELECOMMUNICATIONS AMERICA, LLC,

Petitioners,

Vv.

APPLE INC.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

REPLY 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

BRETT 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

TEN nn ae AN a be mn =

WALSON-EPes Printine Co .iInc. — (202) 788-0006 -— WasrHiwcTon,D C 20002

August 29, 2016

TABLE OF CONTENTS

TABLE OF AUTHORITIES ................. iiiaatdeiin

TT ison cli teninnnddndansnesbeipteonnnanancts

I Edatinicipesctlensicssistauenacinsieitiitlindesimiigatiiinivanignadbonns

I.

IT.

SECTION 289 PRECLUDES RECOV-

ERY OF THE TOTAL PROFIT ON

AN ENTIRE PRODUCT WHERE A

PATENTED DESIGN IS APPLIED

ONLY TO A COMPONENT OF THE

ITI citbiicetilaiindiciidihcatbisrssidaaliaaiuaietatbiateindann

A. An “Article Of Manufacture” Under

Section 289 May Be Less Than An

Entire Product, As Apple And The

Government Now Agree ......................

B. Congress Did Not Abrogate Back-

ground Principles Of Causation In

Enacting Section 289....................:00008

C. Apple And Its Amici Fail To Dispel

The Adverse Practical Consequences

Of The Federal Circuit’s Rule .............

CONTRARY TO APPLE’S ARGUMENT,

THIS COURT SHOULD REVERSE OR

VACATE THE JUDGMENT BELOV .....

A. Apple Cannot Rewrite The Decisions

1. The District Court’s Jury Instruc-

tions Misconstrued Section 289.....

2. The Federal Circuit Misconstrued

ERR iS aS a

11

13

TABLE OF CONTENTS—Continued

B. This Court Should Reverse And

Direct Judgment For Samsung...........

1. The Patent Claims Themselves

Delimit The Relevant Articles Of

TREAT RES CERN ADA TET

2. Apple Bore The Burden Of

Identifying The Relevant Articles

Of Manufacture ....................cccccseees

3. No Properly Instructed Jury Could

Have Found For Apple On This

PN icanidisdiienlinnedunintabtidebteseniyibtandss

C. Alternatively, This Court Should

APPENDIX

APPENDIX A: Plaintiff's Exhibit 8, Photo-

graphs of Apple Products (excerpts) ..........

APPENDIX B: Defendants’ Exhibit 2519,

Presentation: Mini-Teardown Samsung

Galaxy S (T-Mobile Vibrant) (excerpts).....

Page

15

15

16

18

20

23

la

4a

CASES

ill

TABLE OF AUTHORITIES

Page(s)

Alaska Dep’t of Envti.

Conservation v. EPA,

540 U.S. 461 (2004)................0..ce eee eee 17

Apple Inc. v. Samsung Elecs. Co.,

678 F.3d 1314 (Fed. Cir. 2012)................. 9

Aro Mfg. Co. v. Convertible Top

Replacement Co..,

os vntcsicevsvevbindannicnnnasteas 8

Boyle v. United Techs. Corp.,

487 U.S. 500 (1988)..................cccccccceeseeeees 19

Burrage v. United States,

BP Os ats Ie GI icvtssccccssnscccncesescecesccess 5

Contessa Food Prods., Inc. v. Conagra, Inc.,

282 F.3d 1370 (Fed. Cir. 2002).................. 10

CSX Transp., Inc. v. McBride,

GP Is WP SE iv nveccccccceceesecscccssscencconse 5

Dowagiac Mfg. Co. v. Minn. Moline Plow Co.,

BD SPs BO Conn cnccsccnsncsnccsccssesecssenses 5

eBay, Inc. v. MercExchange, LLC,

DET UE. BE CIGD ona nccncccecccccccccnccsccscesseee 5

Gorham v. White,

GO AP CO av ocecsccccccecceniececconccacccaes 9

Hertz Corp. v. Friend,

BU Ps WO Gi cevinencsnsvecnsncssnssvensesnancei 22

Hunter v. Cty. of Sacramento,

652 F.3d 1225 (9th Cir. 2011)......00000000..... 13

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

580 F.3d 1301 (Fed. Cir. 2009)................. 16

iv

TABLE OF AUTHORITIES—Continued

Markman v. Westview Instruments, Inc.,

i‘, gs) @ |, Seas

Medtronic, Inc. v. Mirowski Family

Ventures, LLC,

BOS B. Ce. BEB CBGIS) 0.00000 0c0ccecceseceressceeseee

Meyer v. Holley,

fit S|. ene

Nordock, Inc. v. Systems Inc.,

803 F.3d 1344 (Fed. Cir. 2015)...............

Pac. Coast Marine Windshields Ltd. v.

Malibu Boats, LLC,

2014 WL 4185297

(M.D. Fla. Aug. 22, 2014)..................00004.

Pearson v. Duane,

A oss cdoeuiediagecoianeeees

Schaffer v. Weast,

BE TD, Gp cn cceenevesececnecsennczosscesses

Sheldon v. Metro-Goldwyn Pictures Corp.,

BE EEE, Ba Ci ocecevscesccnsccsccccssesesesese.

Story Parchment Co. v. Paterson

Parchment Paper Co.,

y kik ef) | rrr

Teva Pharms. USA, Inc. v. Sandoz, Inc.,

| oe | | ee

Transp. Line v. Hope,

OB U.S. BOT CIBTT)....00.000rccccrerccesccccccesseees

Uniloc USA, Inc. v. Microsoft Corp.,

632 F.3d 1292 (Fed. Cir. 2011)...............

Page(s)

2 16

= 13

7 16

Vv

TABLE OF AUTHORITIES—Continued

Page(s)

United States v. Texas,

Se ee I caiccecsoncececnsntacusynsersuntnes 5

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

oe ee eS yg) rere 16

STATUTES

SS a.” SEE aeesonn rene aemm 17

I orc ccacentallatacsiiceidaaanienienans 17

SEI IIIII. cid cteccosisosinbentbacsencuunceaneiinl 11, 12, 18

SE ES HI vc. Chnniasssiedusscecaesnpeenstesntindgeunepennnes 8

is Te ee 1, 2, 4, 5, 6, 9, 10, 11,

12, 13, 15, 17, 20

i a oa en La alnteaaeadehaens 5

LEGISLATIVE MATERIALS

18 CONG. REC. 834 (1887)...............cc0cceceeeee 6

H.R. REP No. 49-1996 (1886)........................ 6, 17

S. REP. No. 49-206 (1886) ...................:00cceeees 18

OTHER AUTHORITIES

McCorRMICK ON EVIDENCE § 337 (7th ed.

STII tihashasreach nickle calacice i danieacatiniiancnadichdeasnlatbeiaes 17

Michael Macagnone, Apple v. Samsung

Could Spur ‘Patent Trolls,’ Tech Cos.

Warn, LAW360 (Aug. 2, 2016)................... 7

William F. Lee & A. Douglas Melamed,

Breaking the Vicious Cycle of Patent

Damages, 101 CORNELL L. REV 385

TT nsec nincieholaasotaiiianbmmeiniasbagpucsioumeten 8

INTRODUCTION

In its brief, Apple makes a remarkable about-face.

It now admits, agreeing with Samsung and the gov-

ernment, that Section 289 does not require an award

of the total profit on an entire product as sold. It now

admits, agreeing with Samsung and the government,

that the “article of manufacture” to which a patented

design is “applied” may be only a component of a prod-

uct. And it now admits, agreeing with Samsung and

the government, that, where the patented design is

applied only to a component of a product, the total

profit under Section 289 is the profit attributable to

the component, not the product. Those admissions are

correct and compel reversal on the record here.

Apple nonetheless urges affirmance, suggesting

that the district court and the Federal Circuit did

not actually apply an entire-product rule after all. But

the record will not bear such an attempt to rewrite the

rulings below. Apple argued before, during, and after

trial that Section 289 precludes any award less than

the total profit on an entire product as sold. The dis-

trict court agreed, instructing the jury that Section

289 precludes any award less than the total profit on

an entire product as sold. And the Federal Circuit

affirmed, holding that Section 289 precludes any

award less than the total profit on an entire product

as sold.

Apple also suggests that it was Samsung’s burden to

show that Apple’s patented designs applied only to

components of the accused phones, and that Samsung

failed to do so. But it was Apple, not Samsung, that

bore the burden of proving infringer’s profits. And

it was thus Apple’s burden to show that the patented

designs were applied to the entire phones, not

2

Samsung’s burden to show that they were not.

Because Apple put all its chips at trial on entitlement

to Samsung’s total profit on the entire phones as a

matter of law, it failed to make any such factual show-

ing. Nor could it have done so, for the unambiguous

evidence in the record, including the admissions of

Apple’s own witnesses, shows that Apple’s design

patents here cover only narrow components of a

phone—namely the front face, the front face with

bezel, and a single array of icons.

This Court therefore should reverse, and make clear

that Section 289 has the meaning on which Apple,

Samsung and the government now agree. If the Court

declines to reverse, it should nonetheless vacate and

remand for the parties to litigate the appropriate

amount of infringer’s profits under the correct inter-

pretation of Section 289.

ARGUMENT

I. SECTION 289 PRECLUDES RECOVERY

OF THE TOTAL PROFIT ON AN ENTIRE

PRODUCT WHERE A PATENTED DESIGN

IS APPLIED ONLY TO A COMPONENT OF

THE PRODUCT

A. An “Article Of Manufacture” Under Sec-

tion 289 May Be Less Than An Entire

Product, As Apple And The Govern-

ment Now Agree

The parties and the government have reached

consensus before this Court that Section 289 permits

an award of infringer’s profits from a component of

a product rather than the entire product. As the

government rightly explains, “(t]he phrase ‘article of

manufacture’ ... encompasses any item that is made

3

by human labor, including manufactured items that

are not sold as separate commodities but instead func-

tion as components of a larger product.” U.S. Br. 17;

see Resp. Br. 36; Pet’r Br. 29-31. As the parties and

the government likewise agree, the Patent Office and

the lower courts (e.g., in the Piano Cases) have “con-

strued the term ‘article of manufacture[]’ ... to include

components of larger products.” U.S. Br. 19; see Resp.

Br. 37, 40-41; Pet’r Br. 32-34. And all agree that, in

1952, Congress enacted Section 289 against that

backdrop. See U.S. Br. 19; Resp. Br. 30, 37; Pet’r Br.

44.

The parties and the government also now agree

that, where the relevant article of manufacture is a

component of a product, it follows that total profit is

limited to that attributable to the component, not the

entire product. For instance, Apple concurs with the

government and Samsung that “[t}he source of the

‘total profit’ for which the infringer ‘shall be liable” is

the “sale of the ‘article of manufacture to which the

design has been applied.” Resp. Br. 29 (quoting U.S.

Br. 11); see Pet’r Br. 24. And as the government ex-

plains, no separate sale of the component is required,

because “the sale of the complete product in commerce

is properly viewed as a sale of the component as well.”

U.S. Br. 19.

In contrast to these now-uniform positions, the

Federal Circuit held categorically that no component

may constitute an “article of manufacture” under

' Apple’s amici likewise concede that the relevant article of

manufacture can be less than the entire product as sold. See, e.g.,

ACT Br. 9 (“the ‘article of manufacture’ will not always be the

finished product that is sold in commerce”); Bison Br. 8 (“the

article of manufacture is not necessarily the entire product sold

to consumers’).

4

Section 289 unless it is “sold separately” to consumers.

Pet. App. 29a. As the government rightly states, the

Federal Circuit held that “the relevant ‘article of

manufacture’ is invariably the entire product as sold.”

U.S. Br. 8 (emphasis added). This reading of the

Federal Circuit’s rule is beyond serious dispute; even

Apple's amici agree that the Federal Circuit’s test

“considers whether the portion of the product contain-

ing the patented design is sold separately.” Nordock

Br. 2; see AIPLA Br. 6 (similar).

The Federal Circuit’s holding is contrary to the

statutory text, as the government correctly shows

(U.S. Br. 17-19) and as Samsung has consistently

argued (see Pet’r Br. 20-23, 28-34). Apple no longer

contends otherwise. Compare Resp. Br. 35-38 with

BIO 29-31. This Court should now confirm that

Section 289 permits an award of infringer’s profits in

a case like this one based on only a component of an

entire product.

B. Congress Did Not Abrogate Back-

ground Principles Of Causation In

Enacting Section 289

Background principles of causation likewise counsel!

interpreting “article of manufacture” as encompassing

a product component to which a patented design is

applied and not necessarily the entire product. Any

other imserpretation would permit windfalls unteth-

ered from the infringement. For example, infringe-

ment of a patented cupholder design could result in

an award of the total profit on a car—without proof

that the cupholder caused the entire car’s value. As

amici 50 Intellectual Property Professors explain (Br.

8), “basic principles of remedies law require a plaintiff

5

to show some connection between the damages and the

infringement.” See Pet’r Br. 35-39.

Apple and the government do not deny (see Resp. Br.

33-34; U.S. Br. 15) that Congress is presumed to have

“intend[ed] its legislation to incorporate” centuries-old

requirements of causation and proportionality, and

that this presumption may be overcome only if the

statute “speak(s] directly’ to the question.” Meyer v.

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

States v. Texas, 507 U.S. 529, 534 (1993)); see, e.g.,

eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391-

92 (2006).

Contrary to Apple’s assertion (Br. 33-34), Congress

made no such plain statement abrogating traditional

principles of causation here. To the contrary, Section

289 contains language expressly invoking causation

principles. The phrase “total profit” begs the question

of causation: total profit from what? The only plain

language in Section 289 touching on causation indi-

cates that the answer is “profit made from the infringe-

ment,” a standard “requirement of but-for causation,”

Burrage v. United States, 134 S. Ct. 881, 887-89 (2014)

(reviewing phrases like “results from,” “based on” and

“by reason of”); see Sheldon v. Metro-Goldwyn Pictures

Corp., 309 U.S. 390, 399 (1940); Dowagiac Mfg. Co. v.

Minn. Moline Plow Co., 235 U.S. 641, 648-51 (1915).?

* Apple identifies no statute in which Congress has been found

to have eliminated the requirement to prove causation. Apple

cites (Br. 34) CSX Transportation, Inc. v. McBride, 564 U.S. 685

(2011), but the statute there did not “eliminate[] the concept of

proximate cause,” id. at 700—it merely provided “a relaxed stand-

ard of causation,” id. at 691-92. And it did so explicitly by limiting

liability to cases where “injury or death resultled) in whole or in

part” from negligent conduct. 45 U.S.C. 51 (emphasis added).

Section 289 contains no similar language.

6

Nor, contrary to Apple’s suggestion (Br. 33), did the

1887 Congress signal any intent to abandon back-

ground principles of causation in enacting Section

289’s predecessor. To the contrary, the members of

Congress who spoke in favor of the bill focused exclu-

sively on products like “carpeting, oil-cloths, wall-

paper, and things of that sort”—-products as to which

“designs are the principal feature.” 18 CONG. REC.

834-35 (1887) (Rep. Martin);* see, e.g., H.R. Rep. No.

49-1996, at 3 (1886) (discussing decorative items

like “carpets and wall-papers and oil-clothes”).

Accordingly, when Congress found that “design sells

the article” and “makels] it possible to realize any

profit at all,” it did not find that “design drives sales”

in general, but rather that design drives sales where

(as with rugs) the design and product are nearly

coextensive. Thus, far from abrogating causation,

Congress at most exercised its fact-finding power to

presume causation in a limited class of cases where it

determined that the design causes sales of the article

of manufacture to which the design is applied—treliev-

ing a design-patent holder of the evidentiary burden of

proving as much. Congress did not indicate that it

would endorse any similar presumption for products

where (as here) design is not “the principal feature.”

‘ Apple disparages (Br. 33) Representative Martin's credibility

because he said he was not perfectly “familiar with the |1887

Act's! language employed about patents”—but he was speaking

there of the “colorable imitation” clause, not the remedies provi-

sion. 18 CONG. REC. 835.

7

C. Apple And Its Amici Fail To Dispel The

Adverse Practical Consequences Of The

Federal Circuit’s Rule

Apple does not dispute the harms the Federal Cir-

cuit’s rule would cause to innovation and competition

except to suggest (Br. 57-60) that they are speculative.

They are not. As amici supporting Samsung explain,

this Court’s affirmance of the Federal Circuit’s rule

would “transform a design patent into a sort of

super-utility patent, allowing a design patentee to con-

trol an industry in a way that would be nearly impos-

sible with utility patents.” CCIA Br. 5; see Public

Know. Br. 8. And it would open up new frontiers of

litigation that would stifle the very innovation that the

patent system seeks to encourage, leaving “legally un-

sophisticated entrepreneurs” (Engine Advocacy Br.

16) and “small companies lacking diverse product

lines” (HLF Br. 8) especially vulnerable. See Internet

Ass’n Br. 28.

Apple protests (Br. 57, 59) that, if such consequences

were likely, they already would have come about. But

cases like this one have not arisen frequently in the

past only because the Federal Circuit had never

before announced a rule that a design patent for a com-

ponent of a complex product like a smartphone could

be a litigation ticket to total profit on the entire phone.

Affirmance would create new and “outsized incen-

tives” for design-patent applications and lawsuits

(Engine Advocacy Br. 24), inspire a new “cottage

industry of opportunistic litigation” (Public Know. Br.

16), and embolden patent trolls to use design patents

as their new weapon of choice (CCIA Br. 15-16).*

* See Michael Macagnone, Apple v. Samsung Could Spur

‘Patent Trolls,’ Tech Cos. Warn, LAW360 (Aug. 2, 2016),

8

Apple alternatively suggests (Br. 58) that there is no

reason to fear such negative consequences because

design similarities can arise only through deliberate

copying. Not so. To begin with, Apple’s tired refrain

that Samsung supposedly “copied” the iPhone may

have worked with a jury but should be disregarded in

this Court, especially in light of the record evidence

that Samsung and others independently developed

rectangular, round-cornered, flat-faced phones before

Apple released the iPhone."

In any event, Apple’s suggestion is unavailing

because “[platent infringement is a strict liability

offense,” William F. Lee & A. Douglas Melamed,

Breaking the Vicious Cycle of Patent Damages, 101

CORNELL L. REV. 385, 403-04 (2016); see Aro Mfg. Co.

v. Convertible Top Replacement Co., 377 U.S. 476, 484

(1964). Thus, contrary to Apple’s suggestion (Br. 30

n.7), “notice and marking requirement(s]” would

not protect against innocent infringement. See 35

U.S.C. 287 (either marking or actual notice permits

recovery for infringement). Indeed, Apple did not

mark its phones with the patents at issue, and

Samsung was already designing and selling accused

phones by the time Apple gave notice. See Pet. App.

141a. Moreover, design patents are easily issued,

often in a crowded field, and often for designs that

http://www .law360.com/appellate/articles/822904/apple-v-sam

sung-could-spur-patent-trolls-tech-cos-warn.

* See Pet’r Br. 5; J.A. 262-64; J.A. 354; J.A. 506-10; J.A. 217-

18; J.A. 211. Apple’s suggestion (Br. 2, 9, 52) that Samsung

“copied” Apple's front face out of a “crisis of design” is especially

disingenuous; the referenced “crisis” concerned problems with an

old, pre-Android operating system, not the look of Samsung’s

products. See J.A. 417 (referring to Windows-based phone, see

JA. 410); J.A. 147; J.A. 300; Dkt. 2842 at 1047.

9

include structural and non-ornamental functional

features. Cf. Pet. App. 10a-18a (holding Apple’s trade

dresses on the same designs invalid as functional).

Thus, contrary to Apple’s suggestion (Br. 58), award-

ing the total profit on an entire product containing

an infringing component will impose punitive

consequences on many innocent infringers who have

no intent to copy an ornamental design. See Pet’r Br.

50-51; Internet Ass’n Br. 24-27

Nor are Apple and its amici correct to suggest that

ordinary infringement rules will prevent dispropor-

tionate design-patent awards under the Federal

Circuit’s interpretation of Section 289. Some amici

argue that a finding of infringement necessarily

means that an infringer has “captured sales” of

an entire product, making the total profit on the

entire product an appropriate remedy. See Industrial

Design Prof'ls Br. 25; Cleveland Golf Br. 15-16; see also

Resp. Br. 53-54. But that is incorrect, for design-

patent law (unlike other areas of law such as trade-

mark) does not require any showing of consumer con-

fusion, nor was there any evidence below that any

consumer bought a Samsung phone thinking it was

an iPhone. Cf. Pet. App. 162a (instructions); id. 24a

(affirming same). Thus, it is wrong to suggest that an

infringement finding is a proxy for causation.

Apple asserts that the ordinary consumer “would

never confuse a cupholder design with a car or think

that a cupholder gave a car its ‘peculiar or distinctive

appearance.” Resp. Br. 53 (quoting Gorham v. White,

81 U.S. 511, 525 (1871)). But Apple overlooks that

the governing “ordinary observer” test compares the

claimed design and the portions of the accused product

that correspond to that design, disregarding other

product design features. See, e.g., Apple Inc. v.

10

Samsung Elecs. Co., 678 F.3d 1314, 1326-27 (Fed. Cir.

2012) (requiring comparison of only claimed features

of design patents for invalidity analysis); Contessa

Food Prods., Inc. v. Conagra, Inc., 282 F.3d 1370, 1378

(Fed. Cir. 2002) (same for infringement analysis;

“lilf features appearing in the figures are not desired

to be claimed, the patentee is permitted to show the

features in broken lines to exclude those features from

the claimed design”). Thus, contrary to amici’s argu-

ment (Industrial Design Prof'ls Br. 30), it is irrelevant

whether an ordinary observer would confuse a Jeep

with a Porsche in a case involving infringement of a

cupholder design. Yet under the Federal Circuit's

rule, infringement of the cupholder design would still

entitle the patent-holder to the total profit on the Jeep

that incorporated the cupholder—a plainly untenable

result.

In contrast, no adverse practical consequences will

flow from awarding only profits from the “article of

manufacture” to which a design is applied. Apple’s

amici suggest (see Nike Br. 21-30; Tiffany Br. 14-19;

Crocs Br. 17-21) that a _ total-profit-on-the-product

rule is needed to deter counterfeiters. But where a

patented design is applied to an article that is

coextensive with a product (like a rug or a shoe), the

total profit on the product will still be available under

Section 289. And if the patented design is applied only

to a component of a product (like a heel or a sole of a

shoe), then any infringement would not amount to

“counterfeiting,” and an award of the total profit on the

entire product would be disproportionate. Moreover,

design-patent holders still may obtain awards of lost

profits under Section 284—obviating amici’s concern

that consumers would be diverted to counterfeit prod-

ucts. There is thus no need to require disgorgement of

all profits on products as sold in all instances, no

1]

matter how trivial the patented design; counterfeiting

will be deterred even absent such a draconian rule.

Il. CONTRARY TO APPLE’S ARGUMENT,

THIS COURT SHOULD REVERSE OR

VACATE THE JUDGMENT BELOW

Abandoning its defense of the entire-product rule on

the merits, Apple suggests that the courts below did

not in fact limit Section 289 awards to the total profit

on the entire product and that Samsung in any event

was obliged to show that the relevant “articles of

manufacture” were not its entire phones. Both of

Apple’s suggestions are incorrect.

A. Apple Cannot Rewrite The Decisions

Below

1. The District Court’s Jury Instruc-

tions Misconstrued Section 289

a. As the government recognizes (U.S. Br. 31-32),

the district court instructed the jury—at Apple's

request—to award all of Samsung’s profits on the

products it sold by “equatling] the relevant ‘article of

manufacture’ with the accused phones as a whole.”

See Pet. App. 165a (Instruction No. 54); see also Pet’r

Br. 21, 58-59.

Contrary to Apple’s suggestion (Br. 47), viewing that

instruction in “context” cannot dispel its invocation of

an entire-product rule. The district court’s instruc-

tions used the words “product” and “article” inter-

changeably in phrases like “profits from sales of

products” and “profit on the sale of the article” (or

“total profit attributable to the infringing products”

and “all profit earned by that defendant on sales of

articles”). Pet. App. 165a (emphases added); id. (also

indiscriminately using “articles” in relation to revenue

12

and “products” in relation to costs). Apple is also

wrong to suggest (see Br. 45, 47) that the phrase “may

award” meant that the jury could find an “article of

manufacture” less than the entire product. That

instruction just meant that the jury may award either

total profit under Section 289 or a lost-profits or rea-

sonable-royalty remedy under Section 284. J.A. 268-

y 2

And far from telling the jurors that the instruction

allowed them to determine the articles of manufacture

for themselves (see Resp. Br. 42-48), Apple argued the

opposite in closing. Capitalizing on the instruction it

had obtained, Apple told the jury: “[Ajs [the district

judge] just told you, Congress awards the entire profit

on a product, not just part of that product.” Dkt. 1997

at 4124 (emphasis added).

Apple likewise errs in suggesting (Br. 45-46) that

Samsung somehow assented to the district court’s

instructions. Apple buries in a footnote its admission

that Samsung’s operative proposed instruction re-

ferred to profits on “articles,” not “products.” Jd. 46

n.16; J.A. 203-04. And Samsung plainly objected to

the district court’s instruction. J.A. 246-47

b. Apple also fails to justify the court’s failure

to give Samsung’s proposed article-of-manufacture

instruction. See J.A. 206-07 (Instruction No. 42.1); see

also Pet’r Br. 20-21. Contrary to Apple’s suggestion

(Br. 44), there was ample evidence in the record to

support that instruction. See infra, at 20-22. But

Apple successfully objected by arguing that, under

Section 289, “a patent holder may recover total profits

on ‘the article of manufacture” and that “[t]he Federal

Circuit in Nike explains that this refers to the product

that is sold.” J.A. 208 (emphasis added).

13

Apple’s new attacks on Samsung’s proposed instruc-

tion are unfounded. Contrary to Apple’s suggestion

(Br. 44), Samsung did not ask the court to tell the

jury that the “article of manufacture” was a portion of

the product as a matter of law, but rather that “(t]he

article to which Apple’s design was applied may be the

same as or different from Sam_.uing’s devices as sold”

(J.A. 207 (emphasis added)). Also contrary to Apple’s

suggestion (Br. 45), the court could have properly told

the jury that, where the relevant article of manufac-

ture was only a “part or portion of the product,” the

award should not include profits from other parts of

the product, including “the technology by which the

devices operate or from any other functions of the

devices.” J.A. 207. Even if Samsung’s proposed

instruction had been deficient, the district court was

obliged to modify it rather than omit it altogether. See,

e.g., Hunter v. Cty. of Sacramento, 652 F.3d 1225, 1235

n.11 (9th Cir. 2011).®

2. The Federal Circuit Misconstrued

Section 289

The Federal Circuit adopted the same categorical

rule as the district court. Rather than defend the

Federal Circuit’s rule, Apple now seeks (Br. 41) to

rewrite the decision below to try to take advantage of

the government’s argument (U.S. Br. 25-27) that

determining the relevant article of manufacture is a

question for the finder of fact based on the totality of

* Transportation Line v. Hope, 95 U.S. 297 (1877) (cited in

Resp. Br. 45), is not to the contrary. This Court there held that

the charge given on the issue was correct, and thus there was no

duty to give a competing and erroneous instruction in its place;

nothing was said about omitting an instruction on an issue

altogether. /d. at 299-301.

14

the circumstances. But contrary to Apple’s assertion,

the Federal Circuit nowhere suggested that the

district court’s instructions had allowed the jury here

to decide as a factual matter what the relevant articles

of manufacture were, or to determine profits accord-

ingly. See Pet. App. 29a.

Any doubt that the Federal Circuit adopted a cate-

gorical product-as-sold rule is dispelled by that court’s

own interpretation and application of the decision

below. In Nordock, Inc. v. Systems Inc., 803 F.3d 1344

(Fed. Cir 2015), pet. for cert. filed, No. 15-978 (Jan. 28,

2016), the plaintiff's expert calculated profits based on

the entire product (a dock leveler), and the defendant's

expert calculated profits based on the accused compo-

nent as shown in the patent (a lip and hinge plate).

The Federal Circuit did not treat the choice between

the two as an issue of fact but rather held, as a matter

of law, that “the article of manufacture at issue is a

dock leveler” rather than the “lip and hinge plate”

because the defendant did not sell “a ‘lip and hinge

plate’ separate from the leveler as a complete unit.”

Id. at 1354-56. In support, the Federal Circuit cited

its decision in this case. Id. at 1354 (citing Pet. App.

29a).’

’ Contrary to Apple's suggestion (Br. 55), Pacific Coast Marine

Windshields Ltd. v. Malibu Boats, LLC, 2014 WL 4185297 (M.D.

Fla. Aug. 22, 2014), applied the same categorical rule, relying on

the district court's decision below, id. at *11 (citing Pet. App.

133a). The court ruled as a matter of law that “Pacific is entitled

to Malibu's profits from the sale of its boats with the windshield”

because “Malibu sells boats, to which patented windshields have

been applied.” Id. (emphasis added).

15

B. This Court Should Reverse And Direct

Judgment For Samsung

The Federal Circuit’s misinterpretation of Section

289 necessitates reversal. On the existing record, no

reasonable jury could find that the relevant articles

of manufacture were Samsung’s entire phones. And

because Apple adopted an all-or-nothing strategy, it

furnished no basis for a reasonable jury to award

profits on any article of manufacture less than the en-

tire phones. Samsung is therefore entitled to entry of

judgment in its favor.

1. The Patent Claims Themselves

Delimit The Relevant Articles Of

Manufacture

While the government identifies (U.S. Br. 27-29)

four “considerations” to guide the determination of the

article of manufacture to which a design has been ap-

plied (all of which favor Samsung, see infra, at 20-22),

the patent claim itself is by far the most important.

As Apple acknowledges (Br. 53), the scope of the in-

fringer’s profits remedy should be tied to the scope of

infringement. See Pet’r Br. 50; U.S. Br. 23-24. But the

infringement inquiry compares a claimed design with

the corresponding portion of the accused product, not

with other unaccused portions of the product or

the product as a whole. The “article of manufacture”

used to determine infringer’s profits should likewise

correspond to the patent claim and the portion of the

product accused of infringing it, in keeping with tradi-

tional principles of causation. Accordingly, where, as

here, a patent holder asserts only a partial claim

against only discrete portions of a product, the corre-

sponding article of manufacture cannot be the entire

product.

16

And because the principal consideration for the

article-of-manufacture inquiry is the patent claim

itself, in most instances the determination may be

conducted by a court rather than a jury. The district

courts, rather than juries, determine claim construc-

tion, Markman v. Westview Instruments, Inc., 517 U.S.

370, 390 (1996), even where fact disputes exist, Teva

Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 835

(2015). Similarly here, judicial “construction” of the

article of manufacture to which a design patent is

applied would promote “uniformity” and eliminate

“uncertainty” as to what the patent procvects. Mark-

man, 517 U.S. at 390.

2. Apple Bore The Burden Of Identify-

ing The Relevant Articles Of Manu-

facture

Apple, as the party seeking infringer’s profits, bore

the burden of identifying the relevant articles of man-

ufacture. The “ordinary default rule” is that “plaintiffs

bear the burden of persuasion regarding the essential!

aspects of their claims.” Schaffer v. Weast, 546 U.S.

49, 56-57 (2005). “Absent some reason to believe that

Congress intended otherwise ... the burden of persua-

sion lies where it usually falls, upon the party seeking

relief.” Id. at 56,57 Thus, in patent cases, “|t]he bur-

den of proving damages falls on the patentee.” Lucent

Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed.

Cir. 2009); see Uniloc USA, Inc. v. Microsoft Corp. , 632

F.3d 1292, 1315 (Fed. Cir. 2011). And, likewise, it is

traditionally the plaintiffs burden to prove causa-

tion—i.e., that the legal wrong caused injury. See, e.g.,

Univ. of Texas Sw. Med. Ctr. v. Nassar, 133 S. Ct.

2517, 2524 (2013).

17

Nothing in the text of Section 289 reveals any intent

to impose any burden of proof on defendants, in sharp

contrast to other profits-disgorgement statutes that

explicitly shift burdens to defendants, see, e.g., 15

U.S.C. 1117(a) (trademark); 17 U.S.C. 504(b) (copy-

right). Moreover, the legislative history is clear that

the default burden applies: “the patentee recovers the

profit actually made on the infringing article if he can

prove that profit.” H.R. REP. No. 49-1966, at 3 (empha-

sis added).*

The government proposes (U.S. Br. 31) shifting the

burden to defendants based on a supposed asymmetry

of information. But the “peculiar means of knowledge”

mentioned in Alaska Department of Environmental

Conservation v. EPA, 540 U.S. 461, 494 n.17 (2004);

see Medtronic, Inc. v. Mirowski Family Ventures, LLC,

134 S. Ct. 843, 851 (2014) (similar), refers to situations

where there is “exclusive knowledge in one party” such

that that party alone can prove or disprove a fact at

issue. 2 MCCORMICK ON EVIDENCE § 337 (7th ed.

2013) (emphasis added). There is no reason to believe

that design-patent defendants will have exclusive

access to relevant information that the plaintiff does

not already have or could not obtain in discovery.

Apple does not suggest in its brief that it lacked any

information relevant to determining the articles

of manufacture. And, in any event, Congress has

already addressed any potential problems of proof by

setting a statutory minimum floor for potential

recovery. See H.R. REP. No. 49-1966, at 3 (“[Tlo meet

—_——

* Apple cites authorities (Br. 38) holding that damages are gen-

erally an issue of fact, but those cases say nothing about shifting

the burden of proving damages to defendants. See Story Parch-

ment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 562

(1931); Pearson v. Duane, 71 U.S. 605, 614 (1867).

18

the case when the exact profit in dollars and cents

cannot be proved ... the bill prescribes a minimum

recovery of $250.”); S. Rep. No. 49-206, at 2 (1886)

(similar); see also 35 U.S.C. 284. There is thus no

statutory basis for shifting any burden to design-

patent defendants.

3. No Properly Instructed Jury Could

Have Found For Apple On This

Record

Apple’s failures of proof warrant entry of judgment

for Samsung. Apple neither opposed nor appealed the

district court’s proper instruction that it was Apple’s

burden “to prove the defendant’s profits.” J.A. 268.

Apple made a strategic decision to prove only Sam-

sung’s profits on the entire accused phones. See Resp.

Br. 21. And even though it was asserting only patents

with narrow claims, Apple chose not to offer any

alternative calculation of profits attributable to the

components of Samsung’s phones corresponding to the

claimed designs. To the contrary, Apple insisted in the

district court that it was entitled as a matter of law to

Samsung’s total profit on its entire phones.*

But Apple presented no evidence that the entire

Samsung phones were the relevant articles of manu-

* See, e.g., Dkt. 940-1 at 21; Dkt. 1059-1 at 12 (Apple's Daubert

motion to preclude Samsung’s damages expert from testifying

to any total-profit amount less than that on the entire phones),

Dkt. 1189 at 18 (Apple’s pretrial statement, arguing that it was

“entitled to recover all of Samsung's profits relating to the

accused products”) (emphasis added); Dkt. 1323 at 21 (Apple's

trial brief, arguing that it was entitled to “all profits received

by the infringer for sale of the product”) (emphasis added); supra,

at 12.

19

facture. Apple tries to overcome that glaring defi-

ciency now by suggesting (Br. 54) that the three

asserted patents together evoke the “look and feel” of

an iPhone and thus make the entire phone the rele-

vant article of manufacture. But “look and feel” is not

a patentable subject matter, and the three narrow

designs that Apple actually patented and asserted

here (a front face, a front face with bezel and a specific

array of icons) claim only fractional portions of a

phone. See Pet’r Br. 6-9. In any event, Apple omits to

mention that its supposed three-patent combination

played no role whatsoever in the $399 million award.

To the contrary, the jury found that ten of the eleven

phones at issue infringed only a single patent, and that

none of those phones infringed all three. See Pet’r Br.

19 & n.10."°

The only reasonable conclusion is that the relevant

articles of manufacture were less than the entire

phones. But Apple offered no proof of Samsung’s total

profit from anything less than the entire phones,

thereby failing to prove the total profit attributable to

the relevant articles of manufacture. In these circum-

stances, reversal is warranted. See, e.g., Boyle v.

United Techs. Corp., 487 U.S. 500, 513 (1988) (judg-

ment may be entered for defendant “without a new

trial” where “the evidence presented in the first trial

would not suffice, as a matter of law, to support a jury

verdict” for the plaintiff under correct instructions).''

Apple cites (Br. 21-22 n.6) evidence that it intended to make

a “beautiful object” (e.g., J.A. 97) and that some consumers value

“design” in general (J.A. 107-10; J.A. 310), but such evidence

shows nothing about whether profits on any Samsung phone were

attributable to any of the narrow patented designs.

'' Apple asserts (Br. 48-49) that Samsung did not challenge

the sufficiency of the evidence, but ignores that Samsung argued

20

C. Alternatively, This Court Should

Vacate And Remand For Further

Proceedings

1. If Samsung is not entitled to judgment as a

matter of law, then at minimum a new trial on design-

patent damages is warranted because the district

court failed to properly instruct the jury. See supra, at

11-13. Contrary to Apple’s new argument (Br. 42-44),

ample evidence supported instructing the jury that the

relevant articles of manufacture could be something

less than Samsung’s entire phones, as application of

the government’s four considerations (U.S. Br. 27-29)

makes clear:

First, the jury heard undisputed evidence that “the

scope of the design[s} claimed in the plaintiffs

patent[s)” was limited to discrete portions of the

products. The parties’ experts agreed that the patents

were limited in scope to the front face, bezel, and

single GUI screen, with all other design elements

disclaimed. J.A. 149-50; J.A. 153; J.A. 169; J.A. 175;

Dkt. 1840 at 2579-80.

Second, the jury also heard abundant evidence

concerning “the relative prominence of the design(s]

within the product[s}) as a whole” and whether there

were “other components unaffected by the design|s].”

For the D’677 and D’087 patents, Apple’s media

articles about Samsung’s devices showed that non-

accused components, particularly the entire “curved

plastic back” casing on the phones and “curved candy

below that no properly instructed jury could have awarded

Samsung's entire profits on the accused phones. See Samsung

C.A. Br. 39-40. Apple is thus wrong to suggest (Br. 49 n.20) that

there must be a damages retrial if this Court holds that the courts

below interpreted Section 289 incorrectly.

21

bar shape,” were distinct parts of the phones’ external

appearance that did not embody the claimed designs.

J.A. 359-61. The evidence also showed that Apple

changed the appearance of the back and sides of the

iPhone, not the front face, to offer new designs to

consumers. Reply App. la-3a. For the D’305 patent,

the jury heard that the “applications screens” found

to infringe on the Samsung phones were buried

several layers deep in the user interface. J.A. 174-76.

And there was substantial evidence regarding the

importance of functionality in the parties’ smart-

phones that was unrelated to the designs at issue. See

Pet’r Br. 9-10, 57-58.

Third, the jury also heard unequivocal evidence that

the patented designs were “conceptually distinct

from the product(s] as a whole.” Apple’s experts, in

their infringement analyses, intentionally ignored

numerous dissimilar portions of Samsung’s product

designs that did not correspond to the patent claims.

Dkt. 1611 at 1016, 1050-51, 1059; J.A. 175. Further,

for the D’677 and D’087 patents, Apple’s own exhibit

described the phones’ various accused and unaccused

external features as distinct components. J.A. 359.

And the jury heard hours of testimony and saw exhib-

its about numerous applications and GUI screens that

are displayed on the phones quite apart from the

specific array of icons depicted in the D’305 patent—

including, for example, the home screen, web browser,

contacts program, and picture gallery. E.g., Dkt. 1695

at 1741-1907; J.A. 174-76; J.A. 495; Reply App. 5a,

lla.

Fourth, as to the “physical relationship between

the patented design and the rest of the product,” the

jury heard that each “design pertains to a component

that a user or seller can physically separate from the

22

product” or “is embodied in a component that is

manufactured separately from the rest of the product.”

For the D’677 and D’087 patents, witnesses described

how the various parts of the phones were separately

manufactured and assembled in relation to one

another, including the glass surface and bezel. J.A.

127-29; Dkt. 1840 at 2605, 2610; see J.A. 99-100. The

jury also saw an Apple presentation showing all of the

components of a Samsung phone separated. Reply

App. 4a-1la. And for the D’305 patent, the jury heard

that the applications menu was separable because it

could be changed through a software update without

needing to alter any other part of the phone. See Dkt.

2842 at 996, 1030; see also Dkt. 1842 at 3195-96.

There was ample evidence in the record entitling

Samsung to its requested instruction, and at mini-

mum a new trial is warranted.

2. A new trial would be especially warranted if this

Court were to adopt a new and sui generis rule impos-

ing a burden on design-patent defendants to prove the

relevant article of manufacture and the profits there-

from. The parties never joined issue on the burden

question, and the courts below never decided it.

Because no such rule was raised or contemplated in

the courts below, Samsung should have a “fair oppor-

tunity to litigate [its] case in light of [the Court’s] hold-

ing.” Hertz Corp. v. Friend, 559 U.S. 77, 95-97 (2010).

23

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

August 29, 2016

APPENDIX

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