Samsung Electronics Co., Ltd., Et. Al. v. Apple Inc.

When determining a damages award for patent infringement under section 289 of the Patent Act, the relevant “article of manufacture” does not solely refer to the product sold to consumers but can also refer to components of the product.

Respondent owns various design patents on its first-generation iPhone. A jury found that Petitioner’s smartphones infringed Respondent’s patents that covered a rectangular front face with rounded corners and a grid of colorful icons on a black screen. As a result, Respondent was awarded $399 million in damages, representing the entire profit that Petitioner made from the sales of its infringing smartphones. Pursuant to section 289 of the Patent Act, a person who, without license of the patent owner, manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.” The Federal Circuit rejected Petitioner’s argument that the damages should have been limited to the profits from the infringing articles of manufacture (the front face and screen) rather than the entire product (the smartphone). The Federal Circuit explained that the components of Petitioner’s smartphones were not distinct articles of manufacture because they were not sold separately to consumers. The Supreme Court held that the term “article of manufacture” includes both the product sold to consumers and components of the product. Looking at the dictionary definition, the court concluded that an article of manufacture is a thing made by hand or machine, which includes components. This interpretation is consistent with other sections in the Patent Act, such as section 171, which permits design patents for components of a multicomponent product. Reversed and Remanded.