Month: April 2019

by Scott Locke, Dorf & Nelson LLP

from Volume 8 (2018-2019)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

The United States Patent and Trademark Office (“USPTO”) has the privilege of reviewing hundreds of thousands of inventions each year before the public learns about them. Consequently, the USPTO is uniquely positioned as a funnel through which the Government can collect information about new technologies and determine which ones have implications for the safety and welfare of the nation. Under the Invention Secrecy Act, the Commissioner for Patents may order that an invention for which patent protection is sought be kept secret if disclosure of the invention might be detrimental to national security.

In order for the USPTO to review patent applications and then to do its part in protecting national security, while respecting the rights of inventors, the Invention Secrecy Act provides for the implementation of a framework with three primary components: (1) the screening phase, which applies to all patent applications; (2) the maintenance of secrecy phase, which applies to those inventions for which the Government has made a determination of risk to national security; and (3) the compensation phase, which is the phase during which a patent applicant or patentee can request compensation for either or both the loss due to being required to keep the invention secret and the government’s use of the invention prior to issuance of the patent. Failure of inventors to abide by the terms of and to follow the procedures promulgated under the Invention Secrecy Act can have dire consequences, and thus, applicants and persons who counsel them should be aware of its contours, how the USPTO implements it, and how courts interpret it.

by Perry J. Saidman, Saidman DesignLaw Group, LLC

from Volume 8 (2018-2019)

Download this Article in PDF format from The Jerome Hall Law Library’s Digital Repository.

The Supreme Court in Samsung Electronics Co. v. Apple, Inc. wrestled with the question of determining the meaning of “article of manufacture” in 35 U.S.C. § 289 when it comes to calculating the total profit of the infringer that is awarded to the patentee.

In its Petition for Certiorari, Samsung raised the novel theory that the article of manufacture could be less than the entire product sold by the infringer. The Supreme Court agreed to hear the following issue, as framed in Samsung’s Petition:

Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

Samsung argued that for a multi-component product, such as a smartphone, the article of manufacture needs to be defined in terms of only portions or components of the smartphone. Since Apple’s design patents were drawn to portions of the iPhone, rather than the entire iPhone, Samsung sought to limit its liability to its total profit on those portions. This would have greatly reduced the jury award of $399 million, which had been based on the total profit derived from Samsung’s sales of their entire smartphones to which the patented designs had been applied.

The Supreme Court said that the only question before it was narrow: “[W]hether, in the case of a multicomponent product, the relevant ‘article of manufacture’ must always be the end product sold to the consumer or whether it can also be a component of that product.”

Looking to the statutory text, the Supreme Court concluded that the term “article of manufacture,” as it is used in § 289, “encompasses both a product sold to a consumer and a component of that product.” The Court further indicated that the term “article of manufacture” is “broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not.” The Court declined, however, to “set out a test for identifying the relevant article of manufacture at the first step of the § 289 damages inquiry.”

Thus, the narrow question left unanswered from Samsung is how to determine the relevant article of manufacture for a multi-component product, such as a kitchen oven (the example given by Justice Sotomayor). If the product is a single component product, such as a dinner plate (again, Justice Sotomayor’s example), there is no issue, because, as she put it, “the product [sold to a consumer] is the ‘article of manufacture’ to which the design has been applied.”

The meaning of “total profit” was not at issue; as the Court stated: “‘[t]otal,’ of course, means all.” Thus, the Court left undisturbed the long-standing design patent rule against apportionment of the infringer’s total profit, as well as its sister rule prohibiting an inquiry into causation.

As noted above, the Court left formulation of a test for determining the article of manufacture to the lower courts in future litigation.