Samsung Electronics Co. v. Apple Inc.

On December 6, 2016, the U.S. Supreme Court delivered its ruling in Samsung Electronics Co. v. Apple Inc., a crucial design patent case. Apple originally sued Samsung for infringing design patents on the iPhone’s front face and graphical user interface. A jury awarded Apple $399 million, representing Samsung’s entire profits from infringing smartphones. Samsung appealed, arguing that damages should be limited to profits from the specific infringing components, not the whole device. The Supreme Court unanimously held that the term “article of manufacture” under the Patent Act is broad enough to refer to either the final product sold to consumers or a component of that product. The Court remanded the case for lower courts to determine the proper damages calculation.

The U.S. Supreme Court ruled 8-0 in favor of Samsung, vacating the previous damages award. The Court determined that the relevant “article of manufacture” could be either the finished product or a component, and remanded the case to the Federal Circuit to establish the appropriate legal test for identifying the article of manufacture in calculating damages.

Whether damages for design patent infringement must always be calculated based on the total profits from the entire end product sold to consumers, or can be limited to the profits attributable solely to the specific infringing component.

The decision fundamentally reshaped design patent litigation by rejecting automatic total-profit damages. It encouraged a more proportional apportionment of damages in technology disputes, reduced the risk of catastrophic penalties for minor design elements, and significantly influenced patent portfolio strategies, licensing negotiations, and settlement dynamics throughout the consumer electronics industry.