From the Desk of the Attorney General

December 26 - January 1, 2017

More than the sum of its parts

By Lee Rudofsky
Arkansas Solicitor General

A smartphone may be more than the sum of its parts, but not necessarily for patent infringement law. In a unanimous decision written by Justice Sonia Sotomayor, the U.S. Supreme Court has held that an “article of manufacture” under the Patent Act need not be only the end product sold to consumers, but may be a component of that product even if not separately  available to consumers. In so holding, the Court reversed nearly $400 million in damages awarded to Apple in its infringement suit against Samsung with respect to several design patents related to Apple’s iPhone, first released in 2007.

Apple sued Samsung in 2011 for patent infringement, and a jury concluded Samsung infringed Apple’s patents as to the front face of the iPhone and its grid of 16 colorful icons on a black screen. The damage award at issue in the Supreme Court was part of the entire profit Samsung made from the sale of its infringing smartphones. The Federal Circuit upheld the award, concluding that the relevant term “article of manufacture” applied to the entire infringing product — the smartphone. The Court rejected Samsung’s argument that any damage awarded should have been parsed as to the infringing “innards” of the smartphones, such as its screen or case. The Court held that the innards were not sold separately to consumers and, thus, were not the relevant “article of manufacture” for a damage award for patent infringement.

The Supreme Court though disagreed. It held that, in the case of a multi-component product, damages for patent infringement need not be for the end product sold to consumers, but could be for only the components of the product infringed. The Court explained its view by an analogy to single-component products like dinner plates and multi-component products like kitchen ovens. Smartphones fall in the latter category. The Court, however, did not resolve whether Samsung’s infringement here was as to smartphones as a whole or as to their component parts, leaving that question for the lower court on remand.

The victory for Samsung likely portends limits on damage awards for alleged infringement challenges generally and specifically in further pending litigation between Samsung and Apple.

Leslie Rutledge is the 56th Attorney General of Arkansas. Elected on Nov. 4, 2014, she is the first woman and first Republican in Arkansas history to be elected to the office.