Last week I provided an overview of the key issues in Samsung v. Apple, Samsung's appeal to the Supreme Court of Apple's design patent damages win. Thanks to CNET, Samsung's opening brief has meanwhile been published (this post continues below the document):
That opening brief is really very interesting. Recommended reading. I'll talk about the issues it raises and the points it makes over time. The next procedural step is for "friends of the court" supporting Samsung (or supporting neither party) to file their submissions tomorrow.
The first part of Samsung's opening brief that I wish to comment on underscores the need for a Supreme Court ruling that will, hopefully, restore sanity. Otherwise, a company might have to disgorge its total, unapportioned profits from the sale of a product only because it uses a tiny arrow like this one (this post continues below the image):
This is one of the patents Microsoft is presently asserting against Corel. Last summer I reported on Corel drawing first blood by suing Microsoft over a bunch of preview-related patents. A few months later, Microsoft retaliated with the assertion of six utility patents and four design patents. The Electronic Frontier Foundation named one of Microsoft's design patents-in-suit the "stupid patent of the month" of December 2015 because it merely covered the design of a slider. But that patent isn't nearly as bad as U.S. Design PAtent No. D550,237, which practically just covers a tiny arrow positioned in the lower right corner of a rectangle. If you look at the drawings, particularly this one, note that the dotted lines mark the parts that aren't claimed. What's really claimed is just a rectangle with another rectangle inside and that tiny graphical arrow in the bottom right corner.
If the EFF considered the slider patent the stupid patent of a given month, it might as well consider labeling the tiny-arrow-in-a-corner patent the stupid patent of the century.
This is not about Microsoft-bashing. It's all about a systemic problem.
If the world's largest software maker, with an annual R&D budget on the order of $10 billion, countersues a smaller software company and 40% of its assertions are design patents, one of which covers a tiny arrow in a corner, it's clear that the legal uncertainty currently surrounding design patent damages due to the decisions made in Apple v. Samsung by the Federal Circuit and the district court makes design patents disproportionately "valuable" since litigation is all about getting leverage.
As Samsung's lawyers put it in their opening brief, "the entire-profits rule for design-patent infringement makes the value of any single design patent, no matter how minor or trivial, greater than the value of all the utility patents in a smartphone or other technological device combined. The rule thus encourages companies to focus research and development on design patents rather than technologies. As one commentator [Prof. David Opderbeck, Seton Hall University] put it, ''the Federal Circuit's ruling could allow design patent law to swallow utility patent law, making the ornamental design more important than the underlying technology.'""
The following section of Samsung's brief discusses the "disastrous practical consequences" of the Federal Circuit ruling (if it was affirmed):
"The rule would create extreme asymmetry between design patents and utility patents, which are governed by ordinary rules of causation and proportionality. By making the most trivial design patent worth exponentially more than the most innovative utility patent, the rule would distort the patent system and harm innovation and competition. The rule would encourage companies to divert research and development from useful technologies to ornamental designs. It would encourage design-patent holders to litigate even weak infringement claims in a quest for outsized awards. And it would encourage non-practicing entities to use design patents as the next big thing for extracting holdup value from targeted businesses, with such extortionate demands posing especially grave threats to small businesses for whom a single design misstep could be an existential threat. Congress could not have intended any of these results."
Apple and Microsoft, two highly profitable technology companies, may see short-term value in design patents. They may hope that design patents just give them the leverage they need to obtain favorable settlements/license deals. But in the long run, nobody except for patent trolls and failed businesses will really want any of those disastrous things to happen.
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