On August 13 – the U.S. Court of Appeals for the Federal Circuit denied a petition for rehearing en banc in the Apple-Samsung patent dispute. The National Grange has closely followed this lawsuit for its impact on Grange members’ access to advanced telecommunications technologies. Last month we filed an Amicus brief urging the court to reconsider the $399 million penalty imposed for alleged design patent infringement covering basic shapes.
The Court’s decision yesterday is a blow to industries and consumers. The decision itself was no more than a paragraph and ignores several industry briefs that were filed in response to the hearing en banc, including one from the Grange. As the law currently stands, a design patent infringement can result in the infringing entity being liable for the total profits earned on the product in which the design is incorporated regardless of the importance of the patented design. This is a far cry from reasonable royalty damages used for utility patents, meaning that an infringer is liable only for damages correlating with the patent(s)’ contribution to the overall product.
As we explained in our blog, the current interpretation of design patent law (Section 289 of the U.S. patent code) opens the door for businesses and individuals to seek outsized settlements for design patents, further incentivizing trolling and patent assertion. The federal court has had several opportunities to update its interpretation of Section 289, but now it’s possible the issue could go before the Supreme Court. Without clarification, design patents could become the new target for trolls and ultimately impact consumers, particularly those in rural areas where access and price for technology is critical.