apple v. samsung (the merits appeal) - apple's brief
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Apple v. Samsung (the merits appeal) - Apple's BriefTRANSCRIPT
Nos. 2014-1335, -1368
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
APPLE INC., a California corporation,
Plaintiff-Cross Appellant, v.
SAMSUNG ELECTRONICS CO., LTD., a Korean corporation, SAMSUNG ELECTRONICS AMERICA, INC., a New York corporation,
SAMSUNG TELECOMMUNICATIONS AMERICA LLC, a Delaware limited liability company,
Defendants-Appellants.
Appeals from the United States District Court for the
Northern District of California in case no. 11-CV-1846, Judge Lucy H. Koh.
BRIEF FOR PLAINTIFF-CROSS APPELLANT APPLE INC.
RACHEL KREVANS RUTH N. BORENSTEIN NATHAN B. SABRI CHRISTOPHER L. ROBINSON MORRISON & FOERSTER LLP 425 Market Street San Francisco, CA 94105 (415) 268-7000 MARK D. SELWYN WILMER CUTLER PICKERING HALE AND DORR LLP 950 Page Mill Road Palo Alto, CA 94304 (650) 858-6000 July 28, 2014
WILLIAM F. LEE MARK C. FLEMING LAUREN B. FLETCHER WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 (617) 526-6000 JAMES L. QUARLES III WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Avenue, N.W. Washington, DC 20006 (202) 663-6000 Counsel for Plaintiff-Cross Appellant Apple Inc.
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CERTIFICATE OF INTEREST
Counsel for Plaintiff-Cross Appellant Apple Inc. certifies the following:
1. The full name of every party or amicus represented by us is:
Apple Inc.
2. The name of the real party in interest represented by us is:
Not applicable.
3. All parent corporations and any publicly held companies that own 10 percent or more of the stock of the party or amicus curiae represented by me are:
None.
4. The names of all law firms and the partners or associates that appeared for the party or amicus now represented by me in the trial court or agency or are expected to appear in this court are:
MORRISON & FOERSTER LLP: Ruchika Agrawal (former), Deok Keun Matthew Ahn (former), Charles S. Barquist, Jason R. Bartlett, Ruth N. Borenstein, Brittany N. DePuy (former), Francis Chung-Hoi Ho (former), Richard S.J. Hung, Michael A. Jacobs, Esther Kim, Grant L. Kim, Alexei Klestoff (former), Rachel Krevans, Kenneth Alexander Kuwayti, Jack Williford Londen, Harold J. McElhinny, Andrew Ellis Monach, Erik J. Olson, Marc J. Pernick (former), Taryn Spelliscy Rawson, Christopher Leonard Robinson, Nathaniel Bryan Sabri, Jennifer Lee Taylor, Alison Margaret Tucher (former), Christopher James Wiener, Patrick J. Zhang (former) WILMER CUTLER PICKERING HALE AND DORR LLP: David B. Bassett, James C. Burling, Robert Donald Cultice, Andrew J. Danford, Michael A. Diener, Christine E. Duh, Mark D. Flanagan, Mark C. Fleming, Eric Fletcher, Lauren B. Fletcher, Sarah R. Frazier, Richard Goldenberg, Robert J. Gunther, Jr., Liv Leila Herriot, Michael R. Heyison, Peter James Kolovos, Derek Lam, Gregory H. Lantier, Brian Larivee, William F. Lee, Andrew L. Liao, Joseph J. Mueller, Kevin Scott Prussia, James L. Quarles, III, Michael Saji (former), Brian Seeve, Mark Daniel Selwyn, Ali H. Shah (former),
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Victor F. Souto, Thomas G. Sprankling, Timothy Davis Syrett, Nina S. Tallon, Samuel Calvin Walden, Emily R. Whelan, Jeremy S. Winer COOLEY LLP: Benjamin George Damstedt, Jesse L. Dyer (former), Timothy S. Teter TAYLOR & COMPANY LAW OFFICES, LLP: Joshua Ryan Benson, Stephen McGeorge Bundy, Stephen E. Taylor MAVRAKAKIS LAW GROUP LLP: Kenneth H. Bridges (former), Michael T. Pieja
Dated: July 28, 2014 /s/ William F. Lee WILLIAM F. LEE
WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 (617) 526-6000
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TABLE OF CONTENTS
Page
CERTIFICATE OF INTEREST ................................................................................. i
TABLE OF AUTHORITIES .................................................................................... vi
STATEMENT OF RELATED CASES ..................................................................... 1
JURISDICTIONAL STATEMENT .......................................................................... 2
INTRODUCTION ..................................................................................................... 2
STATEMENT OF ISSUES ....................................................................................... 4
STATEMENT OF FACTS ........................................................................................ 5
A. Apple’s Revolutionary iPhone And iPad Products ............................... 5
B. Apple’s Intellectual Property ................................................................ 6
1. Apple’s design patents ................................................................ 6
2. Apple’s iPhone trade dresses ...................................................... 9
3. Apple’s utility patents ............................................................... 11
C. Samsung Deliberately Copied Apple’s iPhone And iPad. .................. 12
D. Samsung’s Infringement And Dilution Allowed Samsung To Take Significant Market Share From Apple. ................................. 17
E. Apple Brought This Lawsuit To Halt Samsung’s Copying. ............... 19
SUMMARY OF ARGUMENT ............................................................................... 22
STANDARD OF REVIEW ..................................................................................... 25
ARGUMENT ........................................................................................................... 26
I. THE DESIGN-PATENT JUDGMENT SHOULD BE AFFIRMED. .............................. 26
A. The Design-Patent Instructions On Scope And Infringement Were Proper. .................................................................. 27
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1. Overall appearance .................................................................... 27
2. Deceptive similarity .................................................................. 31
3. Prior art ..................................................................................... 32
B. Substantial Evidence Supports The Jury’s Infringement Findings. .............................................................................................. 33
1. D’677 and D’087 patents .......................................................... 33
2. D’305 patent .............................................................................. 41
C. The Jury’s Damages Award For Design-Patent Infringement Was Legally Proper And Supported By Substantial Evidence. .......................................................................... 45
II. THE TRADE-DRESS JUDGMENT SHOULD BE AFFIRMED. ................................. 53
A. Substantial Evidence Supports The Jury’s Finding That Apple’s Trade Dresses Were Famous. ................................................ 54
B. Substantial Evidence Supports The Jury’s Finding That Apple’s Trade Dresses Are Non-Functional. ...................................... 58
1. Samsung’s functionality argument ignores the statute and governing precedent................................................ 58
2. The record contains substantial evidence that Apple’s trade dresses are non-functional. ................................. 60
3. Samsung’s aesthetic functionality argument fails. ................... 62
C. Substantial Evidence Supports The Jury’s Likely-Dilution Finding. ................................................................................................ 63
D. Samsung’s Constitutional Argument Is Waived And Incorrect. .............................................................................................. 66
E. Substantial Evidence Supports The Damages Award. ........................ 67
1. Samsung’s jury instruction challenge is waived and meritless. ................................................................................... 68
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2. Substantial evidence supports the jury’s willful-dilution finding. ......................................................................... 69
3. Substantial evidence supports the damages amount. ................ 73
III. THE UTILITY-PATENT JUDGMENT SHOULD BE AFFIRMED. ............................. 76
A. Substantial Evidence Supports The Jury’s Finding That Claim 8 Of The ’915 Patent Is Not Inherently Anticipated. ............... 76
B. Claim 50 Of The ’163 Patent Is Not Indefinite. .................................. 78
C. Substantial Evidence Supports The Second Jury’s Lost-Profits Award. ..................................................................................... 80
1. Samsung’s non-infringing alternatives argument rests on an incorrect standard. ................................................... 80
2. Substantial evidence showed that the Intercept and Galaxy Ace were not acceptable, available alternatives. ............................................................................... 81
3. Apple presented sufficient evidence of demand. ...................... 83
D. Substantial Evidence Supports The Reasonable-Royalty Awards. ................................................................................................ 86
IV. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN DENYING A NEW TRIAL. ................................................................................. 88
A. Samsung Shows No Instructional Error. ............................................. 88
B. The Damages Award Is Not Excessive Or Against The Weight Of The Evidence. .................................................................... 89
C. The District Court Permissibly Excluded Samsung’s Late-Disclosed Evidence. ............................................................................ 89
CONCLUSION ........................................................................................................ 91
CERTIFICATE OF SERVICE
CERTIFICATE OF COMPLIANCE
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TABLE OF AUTHORITIES
CASES
Page(s) Abbott Laboratories v. Syntron Bioresearch, Inc., 334 F.3d 1343
(Fed. Cir. 2003) .............................................................................................. 77
Aero Products International, Inc. v. Intex Recreation Corp., 466 F.3d 1000 (Fed. Cir. 2006)..................................................................................... 52
American Seating Co. v. USSC Group, Inc., 514 F.3d 1262 (Fed. Cir. 2008) .............................................................................................................. 82
Andrew Corp. v. Gabriel Electronics, Inc., 847 F.2d 819 (Fed. Cir. 1988) .............................................................................................................. 78
Apple Inc. v. Samsung Electronics Co., 678 F.3d 1314 (Fed. Cir. 2012) ............................................................................................ 1, 7, 8, 39, 50
Apple Inc. v. Samsung Electronics Co., 695 F.3d 1370 (Fed. Cir. 2012) ................................................................................................................ 1
Apple Inc. v. Samsung Electronics Co., 727 F.3d 1214 (Fed. Cir. 2013) ................................................................................................................ 1
Apple Inc. v. Samsung Electronics Co., 735 F.3d 1352 (Fed. Cir. 2013) .............................................................................................. 1, 11, 12, 64
ATD Corp. v. Lydall, Inc., 159 F.3d 534 (Fed. Cir. 1998) ...................................... 90
Au-Tomotive Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062 (9th Cir. 2006) ...................................................................................... 62
B&H Manufacturing Co. v. Bright, No. CVF016619, 2005 WL 1342815 (E.D. Cal. May 10, 2005) ......................................................... 71, 75
Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145 (7th Cir. 1994) ...................... 71
Bergstrom v. Sears, Roebuck & Co., 496 F. Supp. 476 (D. Minn. 1980) .............................................................................................................. 45
Best Lock Corp. v. Ilco Unican Corp., 94 F.3d 1563 (Fed. Cir. 1996) ............. 30, 38
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Bilski v. Kappos, 130 S. Ct. 3218 (2010) ................................................................. 49
Blockbuster Videos, Inc. v. City of Tempe, 141 F.3d 1295 (9th Cir. 1998) .............................................................................................................. 72
Bobrick Washroom Equipment, Inc. v. American Specialties, Inc., Nos. 12-56653, 13-55471, 2014 WL 1243801 (9th Cir. Mar. 26, 2014) .............................................................................................................. 59
Bollinger v. Oregon, 305 F. App’x 344 (9th Cir. 2008) .......................................... 68
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989).................... 67
Boyd v. City & County of San Francisco, 576 F.3d 938 (9th Cir. 2009) ................ 26
Braintree Laboratories, Inc. v. Novel Laboratories, Inc., 749 F.3d 1349 (Fed. Cir. 2014)..................................................................................... 25
Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555 (Fed. Cir. 1992) .............................................................................................. 25
Bush & Lane Piano Co. v. Becker Brothers, 222 F. 902 (2d Cir. 1915) ........... 51, 52
Bush & Lane Piano Co. v. Becker Brothers, 234 F. 79 (2d Cir. 1916) ................... 51
Catalina Lighting, Inc. v. Lamps Plus, Inc., 295 F.3d 1277 (Fed. Cir. 2002) .................................................................................................. 25, 49, 52
Chisom v. Roemer, 501 U.S. 380 (1991) ................................................................. 50
Clamp Manufacturing Co. v. Enco Manufacturing Co., 870 F.2d 512 (9th Cir. 1989) ............................................................................................... 64
Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252 (9th Cir. 2001) ........................................................................................................ 25, 55
Commil USA, LLC v. Cisco Systems, Inc., 720 F.3d 1361 (Fed. Cir. 2013), pets. for cert. filed, Nos. 13-896, 13-1044 (U.S.) .............................. 26
Continental Can Co. v. Monsanto Co., 948 F.2d 1264 (Fed. Cir. 1991)................. 77
Conversive, Inc. v. Conversagent, Inc., 433 F. Supp. 2d 1079 (C.D. Cal. 2006) ............................................................................................. 65
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Crocs, Inc. v. International Trade Commission, 598 F.3d 1294 (Fed. Cir. 2010) .............................................................................................. 28
Dang v. Cross, 422 F.3d 800 (9th Cir. 2005) .................................................... 26, 88
Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005) .............................................................................................................. 78
DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009) ........................................................................................ 83, 84
Disc Golf Association v. Champion Discs, Inc., 158 F.3d 1002 (9th Cir. 1998) ............................................................................................... 60
Dobson v. Bigelow Carpet Co., 114 U.S. 439 (1885) ............................................. 47
Dobson v. Dornan, 118 U.S. 10 (1886) ................................................................... 46
Dobson v. Hartford Carpet Co., 114 U.S. 439 (1885) ............................................ 47
DSU Medical Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (en banc in part) ............................................................................................. 26, 82
Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc) ...................................................................................... 27, 28, 29, 38
Energy Transportation Group v. William Demant Holding A/S, 697 F.3d 1342 (Fed. Cir. 2012), cert. denied, 133 S. Ct. 2010 (2013) ....................................................................................................... 25, 73
Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) .......................................... 77
Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837 (9th Cir. 1987) .............................................................................................................. 59
Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005) .............................................................................................................. 66
Funai Electric Co. v. Daewoo Electronics Co., 616 F.3d 1357 (Fed. Cir. 2010) .............................................................................................. 85
Good Sportsman Marketing LLC v. Li & Fung Ltd., No. 07-cv-395, 2010 WL 2640385 (E.D. Tex. June 29, 2010) .............................................. 29
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Gorham Manufacturing Co. v. White, 81 U.S. (14 Wall.) 511 (1871) ........ 27, 31, 32
Gracie v. Gracie, 217 F.3d 1060 (9th Cir. 2000) .................................................... 69
Graham v. John Deere Co., 383 U.S. 1 (1966) ....................................................... 50
Grain Processing Corp. v. American Maize-Products Co., 185 F.3d 1341 (Fed. Cir. 1999)..................................................................................... 81
Grosvenor Properties Ltd. v. Southmark Corp., 896 F.2d 1149 (9th Cir. 1990) ............................................................................................... 68
Harman v. Apfel, 211 F.3d 1172 (9th Cir. 2000) ..................................................... 90
High Point Design LLC v. Buyers Direct, Inc., 730 F.3d 1301 (Fed. Cir. 2013) .............................................................................................. 29
Highway Cruisers of California, Inc. v. Security Industries, Inc., 374 F.2d 875 (9th Cir. 1967) ......................................................................... 71
In re E.R. Fegert, Inc., 887 F.2d 955 (9th Cir. 1989) .............................................. 66
Intel Corp. v. Terabyte International, Inc., 6 F.3d 614 (9th Cir. 1993) .................. 75
Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982) ............................................................................................................. 58
I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27 (1st Cir. 1998) ......................... 67
Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628 (9th Cir. 2008) ................................. 54
Kaufman Co. v. Lantech, Inc., 926 F.2d 1136 (Fed. Cir. 1991) ........................ 75, 83
Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042 (9th Cir. 1998) ............................................................................................... 59
L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993) ........................................................................................................ 29, 33
Leatherman Tool Group, Inc. v. Cooper Industries, Inc., 199 F.3d 1009 (9th Cir. 1999) ...................................................................................... 62
Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 633 F.3d 1158 (9th Cir. 2011) ...................................................................................... 63
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Lindy Pen Co. v. Bic Co., 982 F.2d 1400 (9th Cir. 1993) ....................................... 74
Los Angeles Memorial Coliseum Commission v. National Football League, 791 F.2d 1356 (9th Cir. 1986) ......................................................... 25
Lyons Partnership, L.P. v. Morris Costumes, Inc., 243 F.3d 789 (4th Cir. 2001) ............................................................................................... 65
Malletier v. Dooney & Bourke, Inc., 561 F. Supp. 2d 368 (S.D.N.Y. 2008) .............................................................................................................. 57
Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) ............................................ 48
Microsoft Corp. v. i4i Limited Partnership, 131 S. Ct. 2238 (2011) ...................... 79
Molski v. M.J. Cable, Inc., 481 F.3d 724 (9th Cir. 2007) ........................................ 26
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) .......................... 79
New York City Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F. Supp. 2d 305 (S.D.N.Y. 2010) ........................................................... 57
Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437 (Fed. Cir. 1998) ......................................................................................23, 46, 47, 48, 49
OddzOn Products, Inc. v. Just Toys, Inc., 122 F.3d 1396 (Fed. Cir. 1997) .............................................................................................................. 28
Otter Products, LLC v. Berrios, No. 13-4384, 2013 WL 5575070 (C.D. Cal. Oct. 10, 2013) ............................................................................... 70
Park B. Smith, Inc. v. CHF Industries, Inc., 811 F. Supp. 2d 766 (S.D.N.Y. 2011) ............................................................................................. 29
PHG Technologies, LLC v. St. John Cos., 469 F.3d 1361 (Fed. Cir. 2006) .............................................................................................................. 30
Phoenix Engineering & Supply Inc. v. Universal Electric Co., 104 F.3d 1137 (9th Cir. 1997) ....................................................................... 91
Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221 (Fed. Cir. 2011)................ 74, 87
Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351 (Fed. Cir. 2012) ............................................................... 75, 82
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Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358 (Fed. Cir. 2009) .............................................................................................. 25
Richardson v. Stanley Works, Inc., 597 F.3d 1288 (Fed. Cir. 2010) ....................... 28
Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (en banc) ..... 76, 81, 83
Rosco, Inc. v. Mirror Lite Co., 304 F.3d 1373 (Fed. Cir. 2002) .............................. 29
Schnadig Corp. v. Gaines Manufacturing Co., No. C-1978-E, 1977 WL 23183 (W.D. Tenn. July 20, 1977) ................................................ 51
Schnadig Corp. v. Gaines Manufacturing Co., 620 F.2d 1166 (6th Cir. 1980) .............................................................................................................. 48
Seattle Box Co. v. Industrial Crating & Packing, Inc., 731 F.2d 818 (Fed. Cir. 1984) .............................................................................................. 78
Slimfold Manufacturing Co. v. Kinkead Industries, Inc., 932 F.2d 1453 (Fed. Cir. 1991)..................................................................................... 84
SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312 (Fed. Cir. 2006) .............................................................................................................. 26
Snake River Valley Electric Association v. PacifiCorp, 357 F.3d 1042 (9th Cir. 2004) ............................................................................................... 68
SynQor, Inc. v. Artesyn Technologies, Inc., 709 F.3d 1365 (Fed. Cir.), cert. denied, 134 S. Ct. 648 (2013) .............................................. 26, 31, 77, 88
Talking Rain Beverage Co. v. South Beach Beverage Co., 349 F.3d 601 (9th Cir. 2003) .................................................................................. 59, 61
TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) .................. 53
Trans-World Manufacturing Corp. v. Al Nyman & Sons, Inc., 750 F.2d 1552 (Fed. Cir. 1984) ..................................................................... 47
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) ................................... 72
United States v. Sine, 493 F.3d 1021 (9th Cir. 2007) .............................................. 91
United States v. Snow, 462 F.3d 55 (2d Cir. 2006) ................................................. 51
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Untermeyer v. Freund, 58 F. 205 (2d Cir. 1893) ......................................... 46, 48, 51
Versa Products Co. v. Bi-Fold Co. (Mfg.), 50 F.3d 189 (3d Cir. 1995) .................. 66
Versata Software, Inc. v. SAP America, Inc., 717 F.3d 1255 (Fed. Cir. 2013) .............................................................................................................. 77
Verve, LLC v. Crane Cams, Inc., 311 F.3d 1116 (Fed. Cir. 2002) .......................... 78
Visa International Service Association v. JSL Corp., 610 F.3d 1088 (9th Cir. 2010) ............................................................................................... 25
Vision Sports, Inc. v. Melville Corp., 888 F.2d 609 (9th Cir. 1989) ....................... 53
Whitserve LLC v. Computer Packages, Inc., 694 F.3d 10 (Fed. Cir. 2012), cert. denied, 133 S. Ct. 1291 (2013) .................................................. 87
Winarto v. Toshiba America Electronics Components, Inc., 274 F.3d 1276 (9th Cir. 2001) ...................................................................................... 60
Wong v. Regents of University of California, 410 F.3d 1052 (9th Cir. 2005) .............................................................................................................. 89
Young v. Grand Rapids Refrigerator Co., 268 F. 966 (6th Cir. 1920) .................... 51
STATUTES AND RULES
15 U.S.C. § 1117(a) ................................................................................................. 69, 73 § 1121 .............................................................................................................. 2 § 1125(c) ........................................................................................................ 63 § 1125(c)(1) ................................................................................................... 67 § 1125(c)(2)(A) .............................................................................................. 54 § 1125(c)(4)(A) .............................................................................................. 59 § 1125(c)(5)(B)(i) .................................................................................... 70, 72
28 U.S.C. § 1292(c)(2) ..................................................................................................... 2 § 1295(a)(1) .................................................................................................... 2 § 1331 .............................................................................................................. 2 § 1338 .............................................................................................................. 2 § 1367 .............................................................................................................. 2
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35 U.S.C. § 289 .................................................................................................. 23, 45
Design Patent Act of 1887, Act of Feb. 4, 1887, ch. 105, § 1, 24 Stat. 387 .................................................................................................... 47
Fed. R. Civ. P. 37 ..................................................................................................... 89
LEGISLATIVE MATERIALS
18 Cong. Rec. 834 (Jan. 20, 1887) ........................................................................... 47
OTHER AUTHORITIES
Chisum, Donald S., Chisum on Patents (2013) ....................................................... 48
Cotter, Thomas F., Apple v. Samsung and Awards of Defendant’s Profits: The Potential for Overcompensatory Damages in Design Patent Infringement Cases, IntellectualIP (Aug. 29, 2012), http://intellectualip.com/2012/08/29/apple-v-samsung-and-awards-of-defendants-profits-the-potentially-for-overcompensatory-damages-in-design-patent-infringement-cases/ ............................................. 46
Cotter, Thomas F., Reining in Remedies in Patent Litigation: Three (Increasingly Immodest) Proposals, 30 Santa Clara High Tech L.J. 1 (2013) ................................................................................................... 48
Federico, P.J., Commentary on the New Patent Act, 75 J. Pat. & Trademark Off. Soc’y 161 (1993) ................................................................. 50
Lemley, Mark A., A Rational System of Design Patent Remedies, 17 Stan. Tech. L. Rev. 219 (2013).......................................................... 46, 48, 53
McCarthy, J. Thomas, McCarthy on Trademarks and Unfair Competition (4th ed. 2014) ................................................................ 54, 59, 65
McKenna, Mark P. & Strandburg, Katherine J., Progress and Competition in Design, 17 Stan. Tech. L. Rev. 1 (2013) .............................. 30
Risch, Michael, Functionality and Graphical User Interface Design Patents, 17 Stan. Tech. L. Rev. 53 (2013) .................................................... 46
Vaca, Ryan, Design Patents: An Alternative When the Low Standards of Copyright Are Too High?, 31 S. Ill. U. L.J. 325 (2007) ........................... 30
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STATEMENT OF RELATED CASES
This Court previously resolved three appeals in this case.
The first appeal arose from the district court’s denial of Apple’s motion for a
preliminary injunction. Apple Inc. v. Samsung Elecs. Co., No. 2012-1105, 678
F.3d 1314 (Fed. Cir. May 14, 2012) (Bryson, J., joined by Prost, J.; opinion
concurring in part and dissenting in part by O’Malley, J.) (“Apple I”), pet. for reh’g
denied (June 19, 2012). On remand from that appeal, the district court entered a
preliminary injunction from which Samsung appealed (No. 2012-1506). That
appeal was voluntarily dismissed after the jury’s verdict.
The second appeal arose from the district court’s denial of Apple’s and
Samsung’s requests to seal certain confidential record material. Apple Inc. v.
Samsung Elecs. Co., Nos. 2012-1600, 2012-1606, 2013-1146, 727 F.3d 1214 (Fed.
Cir. Aug. 23, 2013) (Prost, J., joined by Bryson & O’Malley, JJ.).
The third appeal arose from the district court’s denial of Apple’s request for
a permanent injunction. Apple Inc. v. Samsung Elecs. Co., No. 2013-1129, 735
F.3d 1352 (Fed. Cir. Nov. 18, 2013) (Prost, J., joined by Bryson & O’Malley, JJ.)
(“Apple III”).
This Court also previously resolved an appeal in a separate case involving
the same parties and some of the same accused products arising from the district
court’s grant of Apple’s motion for a preliminary injunction. Apple Inc. v.
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Samsung Elecs. Co., No. 2012-1507, 695 F.3d 1370 (Fed. Cir. Oct. 11, 2012)
(Prost, J., joined by Moore & Reyna, JJ.) (“Apple II”), pet. for reh’g denied (Jan.
31, 2013).
Counsel are unaware of any other case pending in this Court or any other
court that will directly affect or be directly affected by this Court’s decision in the
pending appeal.
JURISDICTIONAL STATEMENT
The district court had jurisdiction under 15 U.S.C. § 1121 and 28 U.S.C.
§§ 1331, 1338, and 1367. The court determined that Apple is entitled to
supplemental damages and pre-judgment interest (A90-A96), but has not yet
awarded those amounts or post-judgment interest. This Court has jurisdiction
under 28 U.S.C. § 1295(a)(1) or § 1292(c)(2).
INTRODUCTION
Apple spent years and millions of dollars developing innovative designs and
features for its iconic iPhone and iPad, which revolutionized the smartphone and
tablet computer markets. As Time Magazine recognized when it named the iPhone
“Invention of the Year” in 2007, one of Apple’s “basic insights about technology is
that good design is actually as important as good technology.” A27150. The
iPhone’s design was “widely hailed for its beauty,” and that beauty helped “[s]et[]
the standard for screen centric design.” A25162; A25261. The innovative features
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of Apple’s touch-controlled user interface were also praised as groundbreaking
technology.
Threatened by Apple’s success and desperate to increase its share of the
smartphone market, Samsung chose to compete not by innovating in its own way,
but by copying Apple’s designs and features. The record contained unusually
extensive evidence of copying, as Samsung transformed much of its smartphone
line into iPhone clones. Samsung’s plan worked: it collected billions of dollars
and dramatically increased its market share at Apple’s expense. Apple brought this
litigation in an effort to end Samsung’s unfair competition.
After a three-week trial, a jury decided that twenty-six of Samsung’s
smartphones and tablets violated Apple’s intellectual property rights in one or
more ways—in fact, five Samsung phones were found to infringe Apple’s design
patents, dilute Apple’s trade dresses, and infringe Apple’s utility patents. The
district court upheld the jury’s infringement, dilution, and validity findings but
ordered a partial retrial on damages for certain products. For Samsung’s more than
21 million acts of infringement and dilution, the two juries collectively awarded
$930 million in damages.
On appeal, Samsung contends that Apple should recover nothing at all.
Samsung seeks to belittle Apple’s intellectual property rights and particularly
Apple’s design patents, though it tellingly does not challenge the design patents’
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validity. Samsung also tries to downplay the extent of its mimicry, but
overwhelming evidence demonstrated that Samsung faced a “crisis of design”
(A25349) and addressed it with shameless copying. Samsung raises a host of other
appellate arguments, often with the barest of explanation, but the few legal issues
Samsung presents are not preserved or are foreclosed by precedent. Most of
Samsung’s points are factual and invite this Court to reconsider quintessential jury
questions, including the application of multi-pronged tests in which several factors
must be weighed and none is dispositive. When viewed in light of the entire
record and the jury’s correct (and mostly unchallenged) instructions, Samsung has
not come close to the standard required to overturn any portion of the verdict.
The judgment should be affirmed.
STATEMENT OF ISSUES
1. Whether the design-patent judgment should be affirmed, where the
jury was correctly instructed and substantial evidence supports its infringement
findings and damages award.
2. Whether the trade-dress judgment should be affirmed, where the jury
was correctly instructed and substantial evidence supports its willful-dilution
findings and damages award.
- 5 -
3. Whether the utility-patent judgment should be affirmed, where
substantial evidence supports the jury’s finding that the ’915 patent is not
anticipated and the district court correctly held the ’163 patent not indefinite.
4. Whether the district court acted within its discretion in denying a new
trial.
STATEMENT OF FACTS
A. Apple’s Revolutionary iPhone And iPad Products
When Apple’s iPhone was unveiled in January 2007, it was unlike any
smartphone on the market. The iPhone’s unique design and user interface were the
result of years of research and development within Apple. A40485-A40486;
A40752-A40753. Those attributes received immediate critical acclaim and soon
became iconic. E.g., A27141-A27144 (New York Times describing iPhone as
“gorgeous” with a “shiny black [front face], rimmed by mirror-finish stainless
steel” and a “spectacular” user interface); A27145-A27149 (Wall Street Journal
describing iPhone as “a beautiful and breakthrough handheld computer,” featuring
a “clever finger-touch interface”); A27150-A27151 (TIME magazine naming
iPhone “Invention of the Year” and listing its “pretty” design and “whole new kind
of [user] interface” as the top two reasons). The iPhone’s unique design and user
interface brought Apple enormous success. A40627-A40628.
- 6 -
Three years later, Apple’s release of the iPad created an entirely new market
for tablet computers. A40622-A40623. Like the iPhone, the iPad was
immediately praised for its groundbreaking user interface. A27157-A27160 (USA
Today describing iPad as “fun” and “simple” with a touch-controlled user interface
allowing users to “pinch to zoom in or out”); A27161-A27164 (Wall Street Journal
describing iPad as a “beautiful new touch-screen device” with a “finger-driven,
multitouch user interface” that could displace “the mouse-driven interface that has
prevailed for decades”). Again, the iPad’s intuitive and easy-to-use interface was
critical to its instant commercial success. A40628.
B. Apple’s Intellectual Property
Apple’s “unique user experience” portfolio protects elements of the iPhone’s
and iPad’s product design, graphical user interface, and touchscreen operation that
differentiate Apple’s products in the marketplace. A41961-A41962; A41969-
A41970; A42017. As part of that portfolio, the asserted patents and trade dresses
protect “areas that [Apple] do[es] not want people to copy.” A42019:15-16.
1. Apple’s design patents
The iPhone design is protected by, among others, U.S. Design Patent Nos.
618,677 (“D’677 patent”), 593,087 (“D’087 patent”), and 604,305 (“D’305
patent”).
- 7 -
The D’677 patent claims the iPhone’s distinctive front face, notably the
combination of its form factor (a particular rectangular shape with rounded
corners), black color, speaker slot, and reflective or transparent surface extending
edge-to-edge:
A1313-A1314; see A41016-A41019; Apple I, 678 F.3d at 1317.
- 8 -
The D’087 patent claims the iPhone’s distinctive appearance, notably the
combination of its form factor (the particular rectangular shape with rounded
corners), flat contour of the front face, and bezel (the raised edge separating the
glass display from the rest of the device) extending from the front of the device to
the sides:
A1298; see A41021-A41022; Apple I, 678 F.3d at 1317.
- 9 -
The D’305 patent claims the design of the iPhone’s graphical user interface,
including the arrangement of rows of colorful icons in square containers with
rounded corners:
A20066; see A41370-A41371.
2. Apple’s iPhone trade dresses
The distinctive design of the iPhone’s front face together with its graphical
user interface is further protected by Apple’s iPhone trade dresses. Apple’s
registered trade dress (No. 3,470,983) claims the overall visual impression of the
iPhone’s front face, including the rounded silver edges, black face, and array of
distinctive icons:
- 10 -
A1330-A1331; see A41503.
Apple’s unregistered iPhone trade dress, embodied by the iPhone 3G and
3GS, describes:
• a rectangular product with four evenly rounded corners;
• a flat, clear surface covering the front of the product;
• a display screen under the clear surface;
• substantial black borders above and below the display screen and
narrower black borders on either side of the screen; and
• when the device is on, a row of small dots on the display screen, a matrix
of colorful square icons with evenly rounded corners within the display
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screen, and an unchanging bottom dock of colorful square icons with
evenly rounded corners set off from the display’s other icons.
A41504; A90090; see Apple III, 735 F.3d at 1358.
3. Apple’s utility patents
Various functions of Apple’s unique user interface are protected by utility
patents, including U.S. Patent Nos. 7,469,381 (“’381 patent”), 7,844,915 (“’915
patent”), and 7,864,163 (“’163 patent”).
The ’381 patent claims the “bounce-back” feature used by the iPhone and
iPad: when a user scrolls beyond the edge of an electronic document, the device
causes the document to bounce back so that no space beyond the document’s edge
is displayed. A1082-A1083 (claim 19); A41742-A41746; see Apple III, 735 F.3d
at 1358.
The ’915 patent claims the multi-touch display functionality of the iPhone
and iPad, which allows the operating system to distinguish single-touch commands
for scrolling through materials from multi-touch gestures for enlarging or
modifying a document or image (e.g., a two-fingered “pinch-to-zoom” gesture).
A1136 (claim 8); A41823-A41824; see Apple III, 735 F.3d at 1358.
The ’163 patent claims the “double-tap-to-zoom” capability of the iPhone
and iPad, which allows a user to enlarge and center an electronic document’s text
by tapping twice on a portion of the document and to re-center the screen over
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another portion of the document with a second gesture. A1250 (claim 50);
A41837-A41838; see Apple III, 735 F.3d at 1358.
C. Samsung Deliberately Copied Apple’s iPhone And iPad.
Samsung and Apple are fierce competitors. But rather than compete through
innovation, Samsung opted to copy Apple’s iPhone and iPad in a calculated and
meticulous way. After the iPhone took the market by storm, the head of
Samsung’s mobile division told its highest executives that Samsung faced “a crisis
of design.” A25349. The iPhone’s success reshaped consumer expectations and
convinced Samsung’s executives that “when our [user interface] is compared to the
unexpected competitor Apple’s iPhone, the difference is truly that of Heaven and
Earth.” Id. Samsung acknowledged that the iPhone had “[s]et[] the standard for
screen-centric design” (A25185) and that “Apple ha[d] overtaken Samsung as the
most stylish brand overall” (A25174).
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Before the iPhone, Samsung’s phones differed markedly in their shape,
button configuration, and role of the screen:
A24679.
After the iPhone’s success, Samsung transformed many of its products into
iPhone clones:
A24681.
- 14 -
These Samsung phones mimicked not only the iPhone’s physical design but
also its distinctive user-interface design:
A90143. As Apple’s graphic design expert testified, the similarities were “beyond
coincidental.” A41409:24-25. An internal Samsung document showed that
Samsung studied the iPhone’s icons and included specific “directions for
improvement” to make Samsung’s graphical user interface and icons more like
Apple’s. E.g., A25487; A25492; A25496; see A41414-A41416.
The market noticed. A WIRED magazine article entitled “Samsung Vibrant
Rips Off iPhone 3G” observed that Samsung’s design “is shockingly similar to the
iPhone 3G: [t]he rounded curves at the corners, the candybar shape, the glossy,
black finish and the chrome-colored metallic border around the display.” A24687
(“[T]here’s little to make the phone notable, apart from its striking similarity to the
iPhone.”). The Wall Street Journal explained that Samsung’s Vibrant “has
- 15 -
rounded corners and a prominent border that make it look very much like last
year’s iPhone 3GS model.” A24688.
Samsung copied not only the iPhone’s appearance, but also Apple’s
innovative user interface, including the “bounce-back,” “pinch-to-zoom,” and
“double-tap-to-zoom” features covered by Apple’s ’381, ’915, and ’163 utility
patents. Samsung’s documents show that this copying was no accident.
For example, Samsung resolved to add Apple’s “fun” bounce effect after a
side-by-side comparison to the iPhone:
- 16 -
A25694; see A25957, A26011 (Samsung identifying lack of Apple’s “bounce
effect” in Samsung’s products as “serious” and “critical” defect); A41764-A41773.
Likewise, Samsung chose to “[a]dopt [d]ouble-[t]ap as a supplementary
zooming method,” using the iPhone as a “design benchmark.” A25343. That
decision again resulted from a side-by-side comparison to the iPhone:
A25423 (Samsung comparing its Galaxy S1 to the iPhone); see A25327; A25332;
A25338; A40829-A40830.
- 17 -
Samsung similarly implemented Apple’s “pinch-to-zoom” feature after an
extensive consumer study reported that “[g]estures like the two fingered pinch” are
“fun” and “add a game-like quality to interactions.” A25178.
D. Samsung’s Infringement And Dilution Allowed Samsung To Take Significant Market Share From Apple.
Samsung’s strategy was highly successful. Before July 2010, Samsung was
losing market share. A42050-A42051. But after launching its infringing and
diluting products, Samsung was able to undercut Apple’s pricing to “directly go
after … potential iPhone purchasers.” A26384. This created “an abrupt upward
swing” in Samsung’s share of the smartphone market (A42051:20-23), the
beginning of a jump from 5% to 20% in just two years:
- 18 -
A90104; see A42050-A42052.
Samsung’s infringement and dilution yielded enormous profits. Samsung
sold over 21 million infringing and diluting products in the United States in only
two years, generating nearly $8 billion in revenue and well over $2 billion in gross
profits. A42047; A42060.
Samsung’s significant market growth came directly at Apple’s expense, as
the district court found and Samsung’s own documents confirm. E.g., A61-A62;
- 19 -
A101-A102; A26311 (graph showing Apple’s market share decrease in late 2011
while Samsung’s grew).
E. Apple Brought This Lawsuit To Halt Samsung’s Copying.
In August 2010, Apple asked Samsung to stop copying Apple’s designs and
features. A41964-A41968; A90061-A90062; see also A25831; A25834. When
Samsung refused, Apple brought this lawsuit.
After a three-week trial, a first jury found that Samsung infringed six of
Apple’s design and utility patents, that Samsung’s infringement of five patents was
subjectively willful, and that no asserted patent was invalid. A633-A640. The jury
also found that two of Apple’s iPhone trade dresses were protectable and willfully
diluted by Samsung. A641-A645. The verdict confirmed that nearly all of
Samsung’s accused products violated multiple forms of Apple’s intellectual
property:
- 20 -
Samsung Product D’677 D’087 D’305 Trade Dress ’381 ’915 ’163
Captivate X X X Continuum X X X Droid Charge X X X X Epic 4G X X X X Exhibit 4G X X X Fascinate X X X X X X Galaxy Ace X X Galaxy Prevail X X X Galaxy S (i9000) X X X X X X X Galaxy S 4G X X X X X X X Galaxy S II (AT&T) X X X X Galaxy S II (i9100) X X X X Galaxy S II (T-Mobile) X X X Galaxy S II (Epic 4G) X Galaxy S II (Skyrocket) X Galaxy S II Showcase X X X Galaxy Tab X X X Galaxy Tab 10.1 (WiFi) X X X Gem X X X Indulge X X X Infuse 4G X X X X X Mesmerize X X X X X X Nexus S 4G X X Replenish X X Transform X Vibrant X X X X X X
A632-A643. The first jury awarded over $1 billion in damages. A646-A647.
The district court upheld the jury’s infringement, dilution, and validity
findings. A49-A88. The court did not disturb the jury’s subjective willfulness
finding, although it granted JMOL that Samsung’s patent infringement was not
- 21 -
willful because Samsung’s defenses were “objectively reasonable.” A74-A80.
The court upheld $639,403,248 in damages awarded for thirteen infringing and
diluting products but, for the other thirteen infringing products, concluded that “the
jury awarded an impermissible form of damages for some period of time” during
which Samsung purportedly lacked notice of some asserted patents. A109; see
A114; A8169. The court ordered a partial retrial on damages for those products.1
Following a six-day retrial, a second jury awarded Apple $290,456,793 for
the thirteen remaining products. A116; A652-A653. After the two trials, the
damages awarded were:
1 Although Apple disagrees with the district court’s grant of JMOL on willfulness, reverse-engineering of the first jury’s damages award, grant of a partial retrial, and denial of Apple’s renewed permanent injunction request, Apple is not pressing those issues on appeal.
- 22 -
Samsung Product Damages Fascinate $143,539,179 Galaxy Ace $0 Galaxy S (i9000) $0 Galaxy S 4G $73,344,668 Galaxy S II (AT& T) $40,494,356 Galaxy S II (i9100) $0 Galaxy S II (T-Mobile) $83,791,708 Galaxy S II (Epic 4G) $100,326,988 Galaxy S II (Skyrocket) $32,273,558 Galaxy S II Showcase $22,002,146 Galaxy Tab 10.1 (WiFi) $833,076 Mesmerize $53,123,612 Vibrant $89,673,957
Samsung Product Damages Captivate $21,121,812 Continuum $6,478,873 Droid Charge $60,706,020 Epic 4G $37,928,694 Exhibit 4G $2,044,683 Galaxy Prevail $22,143,335 Galaxy Tab $9,544,026 Gem $4,831,453 Indulge $9,917,840 Infuse 4G $99,943,987 Nexus S 4G $10,559,907 Replenish $3,046,062 Transform $2,190,099
A100-A114; A646-A647; A652-A653; A8169. The district court denied all post-
retrial motions and entered judgment against Samsung for $929,780,039. A1;
A116-A117.
SUMMARY OF ARGUMENT
I. Design-Patent Infringement. Overwhelming evidence demonstrated
that Samsung’s copied product and user-interface designs were substantially the
same as Apple’s patented designs. Samsung’s claims of instructional error depend
on misstating this Court’s precedents, which make clear (for example) that a design
is ornamental as long as it is not “dictated by function.” The evidence, including
expert testimony and several alternative designs, easily permitted the jury to find
that Apple’s patented designs are not dictated by function and were infringed when
viewed in light of the substantially different prior art.
- 23 -
As for damages, 35 U.S.C. § 289 expressly allows recovery of an infringer’s
“total profit.” Samsung and its amici seek to rewrite the statute to include an
apportionment requirement, but the district court correctly rejected that argument
as “clearly foreclosed by Federal Circuit precedent.” A100 (citing Nike, Inc. v.
Wal-Mart Stores, Inc., 138 F.3d 1437, 1442-1443 (Fed. Cir. 1998)). Samsung does
not challenge the jury’s damages award under the correct legal standard, and the
amount awarded is well-supported.
II. Trade-Dress Dilution. The evidence readily supports the jury’s fact-
intensive finding that Samsung diluted Apple’s iPhone trade dresses. Apple’s
advertising strategy, its “astounding” iPhone sales, and the media’s admiration of
the iPhone’s “gorgeous” design and graphical user interface demonstrated the
widespread recognition and fame of Apple’s trade dresses. The difficulty of
manufacturing the iPhone’s edge-to-edge glass surface and bezel, combined with
the availability of several alternative designs, further proved Apple’s trade dresses
to be non-functional. And the “confusingly similar” designs employed by
Samsung’s copied products amply permitted a finding of likely dilution.
As for damages, Samsung waived its objection to the willful-dilution
instruction, which is correct in any event. The jury was justified in finding
willfulness based on the extensive copying evidence, which demonstrated
Samsung’s intent to trade on the recognition of Apple’s popular designs. Samsung
- 24 -
made no effort to satisfy its burden to prove any apportionment of its profits, and
Apple proved its own lost profits through its expert’s market-share analysis.
III. Utility-Patent Infringement. Samsung does not contest infringement
of Apple’s three utility patents or validity of Apple’s ’381 patent. Substantial
evidence supports the jury’s finding of no anticipation for the ’915 patent because
the Nomura reference fails to disclose the claimed “event object.” The district
court correctly concluded that the phrase “substantially centered” does not render
the asserted claim of the ’163 patent indefinite. And the damages award is well-
supported; Apple’s experts straightforwardly applied the Panduit and Georgia-
Pacific factors to the evidence to prove Apple’s lost profits and a reasonable
royalty.
IV. Denial Of New Trial. The district court did not abuse its discretion in
denying a new trial. The damages award is neither excessive nor against the
weight of the evidence; it reflects Samsung’s extensive copying, which resulted in
over 21 million infringing and diluting products that generated well over $2 billion
in profits for Samsung. The court also acted within its discretion in excluding
Samsung’s purported “independent development” evidence as a sanction for
Samsung’s failure to timely disclose it.
- 25 -
STANDARD OF REVIEW
A verdict can be overturned only if “the evidence, construed in the light
most favorable to the nonmoving party, permits only one reasonable conclusion,
and that conclusion is contrary to that of the jury.” Revolution Eyewear, Inc. v.
Aspex Eyewear, Inc., 563 F.3d 1358, 1370-1371 (Fed. Cir. 2009) (discussing Ninth
Circuit law). This Court does not “weigh the evidence or assess the credibility of
witnesses.” Id. at 1371.
Trade-dress functionality, fame, and dilution are factual questions reviewed
for substantial evidence. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252,
1258 (9th Cir. 2001); Visa Int’l Serv. Ass’n v. JSL Corp., 610 F.3d 1088, 1090 (9th
Cir. 2010). So, too, are design-patent infringement and utility-patent anticipation.
Catalina Lighting, Inc. v. Lamps Plus, Inc., 295 F.3d 1277, 1287 (Fed. Cir. 2002);
Energy Transp. Grp. v. William Demant Holding A/S, 697 F.3d 1342, 1351 (Fed.
Cir. 2012). Indefiniteness is a legal issue reviewed de novo. Braintree Labs., Inc.
v. Novel Labs., Inc., 749 F.3d 1349, 1359 (Fed. Cir. 2014).
A jury’s damages award must be upheld “unless the amount is ‘grossly
excessive or monstrous,’ clearly not supported by the evidence, or based only on
speculation or guesswork.” Brooktree Corp. v. Advanced Micro Devices, Inc., 977
F.2d 1555, 1580 (Fed. Cir. 1992) (quoting Los Angeles Mem’l Coliseum Comm’n
v. NFL, 791 F.2d 1356, 1360 (9th Cir. 1986)).
- 26 -
Jury instructions are reviewed de novo, but only prejudicial error warrants a
new trial. SynQor, Inc. v. Artesyn Techs., Inc., 709 F.3d 1365, 1379 (Fed. Cir.
2013) (new trial appropriate only “‘when errors in the instructions as a whole
clearly mislead the jury’” (quoting DSU Med. Corp. v. JMS Co., 471 F.3d 1293,
1304 (Fed. Cir. 2006) (en banc))); Dang v. Cross, 422 F.3d 800, 805 (9th Cir.
2005) (prejudicial error only “when, looking to the instructions as a whole, the
substance of the applicable law was [not] fairly and correctly covered”).2
Denial of a new trial is reviewed for abuse of discretion, Molski v. M.J.
Cable, Inc., 481 F.3d 724, 728 (9th Cir. 2007), as are evidentiary rulings, Boyd v.
City & Cnty. of S.F., 576 F.3d 938, 943 (9th Cir. 2009).
ARGUMENT
I. THE DESIGN-PATENT JUDGMENT SHOULD BE AFFIRMED.
Samsung does not challenge the district court’s claim constructions or the
jury’s validity findings for Apple’s design patents.3 Samsung’s challenges to the
jury instructions and the substantial evidence supporting the infringement verdict
are meritless.
2 Stray language in Commil USA, LLC. v. Cisco Systems, Inc., 720 F.3d 1361, 1365 (Fed. Cir. 2013) (cited at Samsung Br. 19) cannot overrule SynQor. 3 A single sentence asserting, without proposing alternative constructions, that the court did not “itself construe[] the design patents so as to properly limit their scope” (Br. 22-23) is insufficient. See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1320 (Fed. Cir. 2006).
- 27 -
A. The Design-Patent Instructions On Scope And Infringement Were Proper.
Congress authorized the grant of design patents to encourage innovation in
the decorative arts. Design patents protect that which gives a “peculiar or
distinctive appearance” to an article of manufacture; such ornamental designs may
increase demand or enhance the article’s salable value. Gorham Mfg. Co. v. White,
81 U.S. (14 Wall.) 511, 525 (1871). Design-patent infringement turns on whether
two designs are “substantially the same” as measured by “an ordinary observer,
giving such attention as a purchaser usually gives.” Id. at 528. The district court
correctly instructed the jury under these well-established principles. A1390-
A1401.
1. Overall appearance
Samsung challenges the instruction that infringement occurs if “‘the overall
appearance of an accused Samsung design is substantially the same as the overall
appearance of the claimed Apple design patent.’” Br. 22 (quoting A1394-A1395)
(emphasis Samsung’s); see also id. (challenging instructions that Apple’s design
patents “‘encompass[] the design’s visual appearance as a whole’” and protect
“ornamental appearance, including shape or configuration” (quoting A1390-
A1391, A1401)). But “the proper inquiry” for infringement is “whether the
accused design has appropriated the claimed design as a whole.” Egyptian
Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 677 (Fed. Cir. 2008) (en banc); see also
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Crocs, Inc. v. ITC, 598 F.3d 1294, 1303 (Fed. Cir. 2010) (“‘[T]he deception that
arises is a result of the similarities in the overall design, not of similarities in
ornamental features in isolation.’ The ordinary observer test applies to the
patented design in its entirety[.]” (citation omitted)); Richardson v. Stanley Works,
Inc., 597 F.3d 1288, 1295 (Fed. Cir. 2010) (infringement inquiry considers
“similarities in the overall design,” not “an element-by-element comparison”).4
Contrary to Samsung’s assertion, the district court was not required to
instruct the jury to “factor out” aspects of Apple’s designs that were “dictated by
their functional purpose.” Br. 22-23. In Egyptian Goddess, the en banc Court
listed “distinguishing between those features of the claimed design that are
ornamental and those that are purely functional” as an issue the trial court could,
but was not required to, discuss with the jury. 543 F.3d at 680 (citing OddzOn
Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1399, 1405 (Fed. Cir. 1997)).
Ultimately, “[p]roviding an appropriate measure of guidance to a jury without …
unduly invading the jury’s fact-finding process is a task that trial courts are very
4 Emphases are added unless otherwise indicated.
- 29 -
much accustomed to, and any attempt by an appellate court to guide that process in
detail is likely to do more harm than good.” Id.5
Nor did the instructions lead the jury to include purely functional elements
in its infringement analysis. The fact that an article’s design has functional aspects
does not diminish a design patent’s protection; “[a]n article of manufacture
necessarily serves a utilitarian purpose.” L.A. Gear, Inc. v. Thom McAn Shoe Co.,
988 F.2d 1117, 1123 (Fed. Cir. 1993). As Samsung acknowledges (Br. 23), the
design of a useful article is only deemed to be purely functional, and thus beyond a
design patent’s scope, “when the appearance of the claimed design is ‘dictated by’
the use or purpose of the article.” L.A. Gear, 988 F.2d at 1123; see also High
Point Design LLC v. Buyers Direct, Inc., 730 F.3d 1301, 1316 (Fed. Cir. 2013);
Rosco, Inc. v. Mirror Lite Co., 304 F.3d 1373, 1378 (Fed. Cir. 2002) (“‘[T]he
5 Despite Samsung’s assertions (Br. 21, 23), Richardson does not require a court “to wholly ‘factor out’ any element that serves a functional purpose.” Good Sportsman Mktg. LLC v. Li & Fung Ltd., 2010 WL 2640385, at *4 (E.D. Tex. June 29, 2010); see Park B. Smith, Inc. v. CHF Indus., Inc., 811 F. Supp. 2d 766, 780 (S.D.N.Y. 2011) (Richardson was not “a change in law” regarding design-patent scope).
- 30 -
design must not be governed solely by function[.]’” (alteration in original)).6 But
a design “is not dictated solely by its function,” for example, “when alternative
designs for the article of manufacture are available.” Best Lock Corp. v. Ilco
Unican Corp., 94 F.3d 1563, 1566 (Fed. Cir. 1996).7
The district court correctly instructed the jury—multiple times—that
Apple’s design patents protect an article’s “ornamental” design. A1390-A1391
(D’677, D’087, and D’305 patents each “claim[] the ornamental design”); A1403
(design patent “cover[s]” “ornamental aspects”); A40261 (“A design patent
protects the ornamental design of an article of manufacture.”). The court further
instructed that a patented design is not “ornamental” if “the overall appearance of
[the] design is dictated by how the article claimed in the patent works.” A1401.
And the court explained how to “determin[e] whether a design is dictated by
functionality” by considering alternative designs, advertising, and other factors.
Id.
6 See McKenna & Strandburg, Progress and Competition in Design, 17 Stan. Tech. L. Rev. 1, 45 (2013) (one of Samsung’s amici recognizing that “design patent[s] … cover[] … articles that combine ornamental and functional aspects (as long as design, as a whole, is not ‘dictated by function’)”); Vaca, Design Patents: An Alternative When the Low Standards of Copyright Are Too High?, 31 S. Ill. U. L.J. 325, 348 (2007) (one of Samsung’s amici explaining that “[t]he ornamental requirement means that the design must not be governed solely by function”). 7 PHG Technologies, LLC v. St. John Cos., 469 F.3d 1361 (Fed. Cir. 2006), did not rule that alternative designs cannot have any significant differences from the patented design (Br. 23); it simply stated that alternatives cannot be so inferior “that they are not truly ‘alternatives.’” 469 F.3d at 1367.
- 31 -
Even if this Court were to conclude that an instruction to factor out purely
functional elements could sometimes be appropriate, there was no need for one
here. The district court correctly determined that no design element raised by
Samsung was “dictated by function,” and the evidence confirmed that. A52;
A43775; see A41093-A41094; A43476-A43478; A43484-A43485; infra pp. 36-
38, 43-44. Thus, even under Samsung’s erroneous view of the law, no new trial is
warranted. See SynQor, 709 F.3d at 1379 (new trial warranted only “‘when errors
in the instructions as a whole clearly mislead the jury’”).
2. Deceptive similarity
Samsung (Br. 24-25) identifies no error in the instruction on the “ordinary
observer” test for infringement, which tracked the Supreme Court’s language.
Compare Gorham, 81 U.S. (14 Wall.) at 528 (infringement occurs “if, in the eye of
an ordinary observer, giving such attention as a purchaser usually gives, two
designs are substantially the same, if the resemblance is such as to deceive such an
observer, inducing him to purchase one supposing it to be the other”), with A1394
(“Two designs are substantially the same if, in the eye of an ordinary observer,
giving such attention as a purchaser usually gives, the resemblance between the
two designs is such as to deceive such an observer, inducing him to purchase one
supposing it to be the other.”).
- 32 -
The district court did not tell the jury that lack of real-world deception was
“irrelevant,” as Samsung asserts (Br. 24). The court simply made clear that proof
of actual deception was not required (A1394 (“You do not need, however, to find
that any purchasers actually were deceived[.]”)), as Gorham ruled and even
Samsung accepts. See 81 U.S. (14 Wall.) at 530 (expert testimony regarding what
“ordinary purchasers would be likely to mistake” is sufficient); Br. 25 (test
considers similarity “through the eyes of a hypothetical ordinary observer”).
Nothing in Samsung’s cases (Br. 24-25) suggests otherwise, nor does Samsung
show any prejudice from the instructions given.
3. Prior art
Far from inviting the jury to “disregard or minimize” prior art (Br. 25-26),
the district court expressly instructed that each juror “must familiarize yourself
with the prior art admitted at trial” in determining infringement. A1394. The court
then provided “guidelines” explaining how to apply the prior art in an infringement
analysis. E.g., id. (“When the claimed design is visually close to prior art designs,
small differences between the accused design and the claimed design may be
important in analyzing whether the overall appearances of the accused and claimed
designs are substantially the same.”). Samsung identifies no error in these
instructions, nor prejudice.
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B. Substantial Evidence Supports The Jury’s Infringement Findings.
Apple presented overwhelming infringement evidence, including documents
showing that Samsung copied Apple’s designs, expert testimony describing how
Apple’s and Samsung’s designs were substantially the same, and physical exhibits
of the infringing phones, prior art, and alternative designs. Samsung, by contrast,
proffered no expert testimony regarding design-patent infringement. The record
clearly justified the jury’s infringement findings.
1. D’677 and D’087 patents
Apple’s industrial design expert, Peter Bressler, testified that an ordinary
observer familiar with the prior art would find the designs of several Samsung
phones “substantially the same” as Apple’s claimed designs. A41011-A41012;
A41058. For the D’677 patent, he explained how the Samsung phones’ “flat,
uninterrupted surface … is rectangular in proportions described in the ’677 patent,”
“runs edge to edge across the front of the phone,” “is transparent and is black,”
“has a display that is centered on the face of the phone,” and has “a lozenge shaped
speaker slot.” A41053:17-24; see A41018-A41019; A41051-A41060. Even
considering any minor differences in individual elements (Br. 30),8 the jurors could
8 Samsung points to the “metallic words” on its phones (Br. 30), but those are irrelevant to infringement. A41062; see L.A. Gear, 988 F.2d at 1126 (rejecting “avoidance of infringement by labelling”).
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observe the overall similarity for themselves by comparing the D’677 patent’s
figures with Samsung’s phones, which they had in the jury room:
A90145; see A24703; A24709; A24712; A24715; A24717; A24719; A24721;
A24723; A24725; A24736; A24740; A24748.
Likewise, Mr. Bressler described how the Samsung phones’ “continuous flat
face that is the length to width proportions described in this patent,” “curved
corners,” “centered display,” and “bezel” created the same overall visual
impression as Apple’s D’087 design. A41061:6-12; see A41021-A41022;
A41062-A41067. He explained that “minor difference[s]”—like the “uneven
thickness” of the Samsung phones’ bezel (Br. 31)—did not negate the designs’
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overall similarity. A41134-A41136. Again, the jurors could see for themselves
that the overall designs were substantially the same:
A90147; see A24709; A24712; A24748.
Samsung raises three arguments in response, all meritless. First, Samsung
tries to sidestep the striking similarity between its phones and Apple’s patented
designs by arguing that Apple presented no proof that a specific purchaser was
actually deceived. Br. 28-29. But as explained above (pp. 31-32), infringement
requires only that a hypothetical “ordinary observer” likely be deceived by
Samsung’s substantially similar designs, and Apple proved that in spades. E.g.,
A41058; A41065-A41066; see also A27254-A27255 (WIRED article describing an
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infringing Samsung phone’s design as “shockingly similar” to the iPhone);
A24687-A24690 (summaries of articles detailing the similarities between the
iPhone and Samsung’s products).
Second, Samsung’s view that an infringement analysis must factor out any
element with even an iota of functional value (Br. 26) misstates the law. See supra
pp. 27-31. Mr. Bressler appropriately applied the governing “ordinary observer”
test. A41011-A41012; A41052; A41058. Nor does “uncontroverted evidence”
show Apple’s claimed features to be purely functional or structural. Br. 27.9 Chris
Stringer, an Apple industrial designer, testified about the design team’s focus on
creating a beautiful object. A40485; A40494; A40497. Philip Schiller, an Apple
marketing executive, testified that a primary reason for the iPhone’s success is that
“people find the iPhone designs beautiful.” A40627:11-15; see A40630-A40631;
A40638-A40639; A40722-A40723. Press coverage also emphasized the iPhone’s
beauty. E.g., A24903-A24906; A27141-A27144; A27150-A27152.
Mr. Bressler further testified that “[n]one of the [claimed] elements,” such as
the screen, rounded corners, and particular rectangular form factor (Br. 28), was
“dictated by function.” A41093:21-22. He reached that conclusion based on his
9 Samsung is wrong to suggest (Br. 27) that simply having a “display element,” “clear cover,” or “speaker at the top” renders Apple’s designs functional. Apple’s designs do not claim, for example, a “clear cover,” but rather a reflective surface extending across the device’s entire front face; nothing about the function of a “clear cover” over the display portion requires that patented design element.
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industrial design experience and the “number of different alternative designs that
performed the same or similar functions to those that were in the patents”
(A41093:23-A41094:8), as the jury saw:
A24767; see A43617. Samsung’s own validity expert conceded that several “fully
featured smartphones” employed “different design[s]” from the D’677 and D’087
patents. A42641-A42644; see A42629 (“In no way did I say that there aren’t
alternative designs[.]”). The jurors could examine phones embodying alternative
designs (A27203-A27204) and make their own judgment about whether function
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dictated any aspects of the claimed designs. See Best Lock, 94 F.3d at 1566
(design not functional when alternative designs available).
Third, though not contesting the jury’s validity findings, Samsung contends
(Br. 32-34) that the prior art somehow refutes Apple’s infringement proof. Not so.
Mr. Bressler described the differences between the D’677 and D’087 patents and
the prior art, opining that Apple’s designs provide an “extraordinarily different
overall impression.” A43608:17-A43609:11; see A43610-A43613.10 He testified
that these “significant differences” “substantiate[d]” his infringement opinion.
A41055-A41056; see A41063; Egyptian Goddess, 543 F.3d at 677 (“If the accused
design has copied a particular feature of the claimed design that departs
conspicuously from the prior art, the accused design is naturally more likely to be
regarded as deceptively similar to the claimed design, and thus infringing.”).
Based on Mr. Bressler’s testimony and their own inspection, the jurors could
easily see the substantial differences between Apple’s patents and the prior art.
The JP’383 patent did not disclose a front face transparent from edge-to-edge
(A43602-A43603):
10 Samsung’s attorney used the words “little details” in cross-examining Mr. Bressler (Br. 33 (quoting A43624)); Mr. Bressler did not use or adopt them.
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A29577 (diagonal lines represent transparent portion). The JP’383 also lacked the
D’677 patent’s front speaker slot and the D’087 patent’s distinctive bezel, and its
height and width proportions were noticeably different from both patented designs.
A43602-A43603.
The JP’638 patent disclosed a front face that was not flat, but instead slanted
diagonally toward the back of the phone at both top and bottom, “which create[d]
an extraordinarily different overall impression” (A43608:22-A43609:11):
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A27590-A27591; see Apple I, 678 F.3d at 1326-1327 (distinguishing JP’638 from
D’087 patent). Additionally, the JP’638 did not have a transparent face extending
edge-to-edge beyond the display, it was not black, its speaker slot was “smaller”
and differently placed, and the width of its frame was different. A43608-A43609.
The KR’547 patent’s noticeably smaller screen created “a very different
overall impression” from the “almost-full faced display of the ’677 and ’087”
patents (A43610:9-A43611:3):
A29569. The KR’547 also was squarer, had “pointier corners” and a unique “belt
line … around it,” and did not specify that its front cover was black or transparent
anywhere other than the smaller, narrower display. A43610:9-A43611:3.
Samsung did not even attempt to compare the LG Prada phone to the D’087
patent and, as Mr. Bressler explained, it had a noticeably smaller screen that
conveyed a “different all over impression” from the D’677 patent (A43611:15-22):
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A5684. The Prada was also “longer and narrower,” and its display was “not
centered” and had a “very large key” running across the bottom. A43611:15-25.
2. D’305 patent
Dr. Susan Kare, Apple’s graphic design expert, testified that thirteen
Samsung phones had display screens that produced substantially the same “overall
visual impression” as the D’305 patent. A41376:5-9; see A41370-A41385. She
identified common features including the “regular grid,” “ro[ws] of four icons,”
“colorful mix of icons that are square with rounded corners,” and “mix of icon
styles.” A41379:3-7. The jurors could again see the striking overall similarity for
themselves:
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A90153; see A24694; A24696; A24698; A24700; A24704; A24710; A24713;
A24726; A24732; A24734; A24737; A24741; A24749.
Samsung’s responses are again meritless. First, Samsung complains that
Apple presented no evidence of “actual consumer deception” (Br. 29), but there
was no need to. See supra pp. 31-32. Even so, Dr. Kare testified that Samsung’s
display screens create an overall visual impression that is “confusingly similar” to
the iPhone (A41387:22-A41388:7) and that she herself actually “mistook” an
infringing Samsung phone for an iPhone (A41391:13-A41392:11). Dr. Kare also
explained that Samsung deliberately modified its icons to look more like Apple’s,
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which had “instant recognizability” (A41484:1-17) and “set the standard” in the
industry (A25261). See supra pp. 14-15.
Second, Samsung contends that the D’305 patent is “overwhelmingly …
functional” (Br. 27-28, 31-32), but the record shows otherwise. Mr. Schiller
testified that the D’305 design is “a beautiful set of icons.” A40630:21-22. Dr.
Kare disagreed “100 percent” with Samsung’s assertion that an average consumer
could not use a smartphone unless it had “color[ful]” “rounded squares” as icons.
A43476:21-A43477:12. As she testified, there is no mechanical need for “icons …
to be enclosed in a container”—all that is required is “a target for your finger, and
that doesn’t need to be enclosed in a fence.” A43477:21-A43478:25. Dr. Kare
further explained that, even if icons were used, they need not be rectangular or
colorful. A43478 (“ovals and squares and circles” can be used, and “[s]ometimes
black and white is strong and terrific”).
Dr. Kare also identified several alternative designs (A41403-A41409); the
jury saw the following:
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See A27203-A27204, A27206, A27476-A27477 (admitted as physical exhibits).
As Dr. Kare explained, the Blackberry Torch had a user interface “that performed
approximately the same functionality” but demonstrated “you could do a design
that doesn’t look confusingly similar” to the D’305 patent. A41408:22-
A41409:10; see A43484-A43485. The Blackberry Storm had “almost
monochromatic icons” that are “irregular[ly] shaped.” A43483:18-A43484:7; see
A24941. And the Pantech Hotshot used a “mix of icon shapes,” a “different grid”
pattern, and icons “not in containers.” A43480:9-16; A43481:10-21; see A43481-
A43482. These alternatives support the jury’s finding that Apple’s designs are
ornamental, not dictated by function.
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C. The Jury’s Damages Award For Design-Patent Infringement Was Legally Proper And Supported By Substantial Evidence.
The verdict forms only asked the juries to award damages on a per-product
basis; they did not parse out the damages awarded by intellectual property right
(i.e., design patent, utility patent, or trade dress) or by the form of damages (i.e.,
Samsung’s profits, Apple’s lost profits, or reasonable royalty). A646-A647; A652-
A653. Samsung speculates that the juries awarded $399 million for design-patent
infringement, consisting of Samsung’s profits from eleven infringing phones. Br.
12, 35. Even accepting that speculation, the $399 million judgment should be
affirmed, because the district court properly instructed both juries that they could
award Samsung’s profits for design-patent infringement and substantial evidence
supports the amounts.
1. The “total profit” instruction was proper.
A design-patent holder is entitled to an infringer’s “total profit,” 35 U.S.C.
§ 289, and the district court instructed the jury accordingly. A1403. Section 289’s
language defeats Samsung’s apportionment argument; “it is unlikely that Congress
would have used such all-encompassing language if it intended that a design
patentee could only recover profits attributable solely to the design or ornamental
qualities of the patented article.” Bergstrom v. Sears, Roebuck & Co., 496 F. Supp.
476, 495 (D. Minn. 1980). As several of Samsung’s amici have admitted
elsewhere, “current law required” the district court to instruct the jury as it did.
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E.g., Lemley, A Rational System of Design Patent Remedies, 17 Stan. Tech. L.
Rev. 219, 220-221 & n.3 (2013) (not awarding “Samsung’s entire profits” would
have been “wrong as a matter of law”).11
The straightforward reading of § 289—that “total profit” means “all profits”
and not “some profits”—is well-supported by the statute’s history and purpose.
Before 1887, the law was as Samsung now wishes: design-patent holders “could
recover only the proportionate amounts [of profits] that were proven to be
attributable to the patented feature.” Nike, 138 F.3d at 1441; see also Untermeyer
v. Freund, 58 F. 205, 211 (2d Cir. 1893). This rule created “particularly difficult
problems of proof for design patentees.” Nike, 138 F.3d at 1441. The remedy’s
inadequacy became apparent in the Dobson cases, where the Supreme Court held
several carpet design patents infringed, but awarded only six cents in damages
because the patentees “could not show what portion of their losses or the
infringers’ profits was due to the patented design and what portion was due to the
unpatented carpet.” Id. (discussing Dobson v. Dornan, 118 U.S. 10 (1886);
11 See also Cotter, Apple v. Samsung and Awards of Defendant’s Profits: The Potential for Overcompensatory Damages in Design Patent Infringement Cases, IntellectualIP (Aug. 29, 2012), http://intellectualip.com/2012/08/29/apple-v-samsung-and-awards-of-defendants-profits-the-potentially-for-overcompensatory-damages-in-design-patent-infringement-cases/ (the jury’s award “is permissible under design patent law”); Risch, Functionality and Graphical User Interface Design Patents, 17 Stan. Tech. L. Rev. 53, 60 (2013) (“[D]esign patents allow for much greater damages [than copyright]: all of the defendant’s profits.” (citations omitted)).
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Dobson v. Hartford Carpet Co., 114 U.S. 439 (1885); Dobson v. Bigelow Carpet
Co., 114 U.S. 439 (1885)).
In response, Congress passed the Design Patent Act of 1887, which
“provide[d] a new rule of recovery for design patents.” 18 Cong. Rec. 834, 834
(Jan. 20, 1887). Congress’s special remedy entitled a design-patent holder to the
“total profit” of an infringer who illegally “appl[ied] the [patented] design … to
any article of manufacture for the purpose of sale.” Act of Feb. 4, 1887, ch. 105,
§ 1, 24 Stat. 387, 387. As the House Committee on Patents explained, “[i]t [wa]s
expedient that the infringer’s entire profit on the article … be recoverable”—this
sum was “not apportionable.” 18 Cong. Rec. at 834.
This Court has interpreted § 289 accordingly, holding that the statute
“requires the disgorgement of the infringers’ profits to the patent holder, such that
the infringers retain no profit from their wrong.” Nike, 138 F.3d at 1448; see id. at
1441 (“The Act of 1887, specific to design patents, removed the apportionment
requirement when recovery of the infringer’s profit was sought.”); Trans-World
Mfg. Corp. v. Al Nyman & Sons, Inc., 750 F.2d 1552, 1567 (Fed. Cir. 1984) (§ 289
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was enacted to overturn the Dobson rule that “an apportionment was required”).12
Congress has declined opportunities to modify or eliminate this remedy. See 7-20
Chisum on Patents § 23.03[5] (2013) (“In 1946, Congress abolished the recovery
of infringer profits for infringement of utility patents but left unchanged the special
‘total profit’ provision for design patents.”); Nike, 138 F.3d at 1443.
2. Samsung’s and its amici’s attempts to read new requirements into § 289 should be rejected.
Samsung’s and its amici’s requested amendment to § 289 must come, if at
all, from Congress, “not by the Judiciary forecasting Congress’ likely disposition.”
Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 458-459 (2007). Samsung’s amici
elsewhere concede that their desired policy change requires congressional action.
E.g., Lemley, supra, at 232; Cotter, Reining in Remedies in Patent Litigation:
Three (Increasingly Immodest) Proposals, 30 Santa Clara High Tech L.J. 1, 21
(2013).
Samsung attempts to recast its “apportionment” argument as a “causation”
requirement, yet offers no direct authority for its assertion that Apple could recover
12 Decisions predating this Court’s formation hold similarly. See Schnadig Corp. v. Gaines Mfg. Co., 620 F.2d 1166, 1171, 1173 (6th Cir. 1980) (“The patent law gives the right to recover all profits from an infringement [of a design patent].” (internal quotation marks omitted)); Untermeyer, 58 F. at 212 (“The rule which congress declared for the computation of [design-patent] profits [in the 1887 Act] was the total profit from the manufacture or sale of the article to which the design was applied, as distinguished from the pre-existing rule of the profit which could be proved to be attributable to the design.”).
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only the portion of profits “‘attributable to whatever infringement [the jury]
found.’” Br. 36 (quoting A6982).13 Samsung is thus forced to rely chiefly on
cases discussing “other patent remedies” such as lost profits, reasonable royalties,
and injunctions. Br. 36-37. But remedies governed by different statutory
provisions cannot justify disregarding § 289’s clear language and precedent
applying it.
Nor does the phrase “he shall not twice recover the profit made from the
infringement” impose a causation/apportionment requirement (Br. 37; 27 Law
Professors Br. 13-14). That language merely “insure[s] that a patentee [can]not
recover both the profit of an infringer and some additional damage remedy from
the same infringer, such as a reasonable royalty.” Catalina Lighting, 295 F.3d at
1291 (internal quotation marks omitted). That phrase does not negate § 289’s
express grant of an infringer’s “total profit” as an available remedy. Congress
would not have contradicted its own clear language in such a backhanded manner;
it “does not, one might say, hide elephants in mouseholes.” Bilski v. Kappos, 130
13 Samsung’s attempt to differentiate this “causation” requirement from the “apportionment” requirement rejected in Nike and other cases (Br. 37 n.4; supra pp. 45-48) is sophistry; the two concepts are effectively identical. Compare Br. 36 (arguing for instruction limiting the award to profit “‘attributable to whatever infringement you have found’” (quoting A6982)), with Nike, 138 F.3d at 1441 (old apportionment rule “required [the patentee] to show what portion of the infringer’s profit … was due to the [infringing] design”).
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S. Ct. 3218, 3250 (2010) (Stevens, J., concurring) (internal quotation marks
omitted).
Samsung’s passing citation (Br. 37) to Graham v. John Deere Co., 383 U.S.
1 (1966), also does not support reading in an apportionment/causation requirement.
Graham speaks to constitutional limitations on patentability, not limits on
remedies. Id. at 3. And amici’s assertion that the deletion of a phrase from the
1887 Act “suggests an intent” to impose a causation requirement (27 Law
Professors Br. 14) is unavailing. Section 289 is “a consolidation of two sections of
the old statute,” which unsurprisingly required “some revision in language.”
Federico, Commentary on the New Patent Act, 75 J. Pat. & Trademark Off. Soc’y
161, 203 (1993). When Congress intends to change a statute’s well-established
meaning, it makes such intent “explicit in the statute, or at least … mention[s] it at
some point in the … legislative history.” Chisom v. Roemer, 501 U.S. 380, 396
(1991). Congress did neither here.14
14 Though not necessary, the evidence did show a causal relationship between design and sales. E.g., A26412, A26458, A26460 (J.D. Power & Associates survey concluding that 45% of smartphone owners chose their model “because they liked its overall design and style”); A40639:5-7 (“85 percent of [Apple] customers believed that … the appearance and design was important to their purchase of the iPhone.”); A25003 (Samsung market research identifying the iPhone’s “[b]eautiful design” as a reason driving Apple’s success); A27189; A27195; A27202; A40627; supra pp. 12-15 (summarizing copying evidence); Apple I, 678 F.3d at 1328 (“evidence that Samsung’s employees believed it to be important to incorporate the patented feature into Samsung’s products is certainly relevant” to establishing causation).
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Samsung is left with the argument that § 289’s phrase “article of
manufacture” means the specific portion of the product that “‘incorporates or
embodies’” the patented design. Br. 38 (quoting A6984). Samsung cites no
Supreme Court or Federal Circuit decision adopting its novel interpretation, instead
invoking a pair of century-old Second Circuit opinions. Br. 38-39 (citing Bush &
Lane Piano Co. v. Becker Bros., 222 F. 902, 904-905 (2d Cir. 1915), and Bush &
Lane Piano Co. v. Becker Bros., 234 F. 79, 81-82 (2d Cir. 1916)).15 It is not clear
whether the Piano cases are good law even in the Second Circuit, as they conflict
directly with earlier circuit precedent. See Untermeyer, 58 F. at 211-212; Bush &
Lane, 222 F. at 905-906 (Ward, J., dissenting); see also United States v. Snow, 462
F.3d 55, 65 n.11 (2d Cir. 2006) (“[A] prior decision of a panel of this court binds
all subsequent panels ‘absent a change in law[.]’”).
Even on their own terms, the Piano cases only rejected a patentee’s attempt
to recover damages on two related, but analytically distinct, items—a piano and a
piano case—where the design patent covered only the piano case. Whereas a
15 Samsung also cites two cases in a footnote (Br. 39 n.5); neither supports its argument. Schnadig Corp. v. Gaines Mfg. Co., 1977 WL 23183, at *3 (W.D. Tenn. July 20, 1977), ruled only that the holder of a sofa design patent could not recover profits from the sale of an entirely different piece of furniture that was “not includ[ed]” in the patented design. Young v. Grand Rapids Refrigerator Co., 268 F. 966, 974-975 (6th Cir. 1920), involved the design of a de minimis portion of a refrigerator, where the patentee did not “seriously contend[] that all the profits from the refrigerator belonged to” him.
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customer in 1915 could “have [a] piano placed in any one of several cases,” Bush,
222 F. at 903, Apple’s and Samsung’s customers cannot select the smartphone
casing or user interface separately from the smartphone. Rather, the iPhone’s
sleek, minimalist body (D’087 and D’677) and its brightly-colored user-interface
(D’305) are what people envision when they think of the iPhone. See, e.g.,
A24904-A24905; A25173-A25174; A25261; supra pp. 5-6. It is by no means
“absurd” (Br. 39) to award Samsung’s “total profit” in this circumstance. Even the
Piano court agreed that, had the piano case been “inseparable from the article to
which it is attached, or of which it is a part,” it would be “justice” to give the
patentee “the entire profits made by the sale of the article.” 222 F. at 904. By
contrast, forcing a jury to “attribute” some portion of profits to the look and feel of
Apple’s designs would impermissibly return to the Dobson regime, which
Congress enacted § 289 to overturn.
Nor is there any risk of double recovery. Any concern that a patentee with
multiple overlapping design patents could recover an infringer’s profits several
times over (CCIA Br. 4, 8-9) is foreclosed by § 289 itself, which prohibits “twice
recover[ing]” an infringer’s profits. See Aero Prods. Int’l, Inc. v. Intex Recreation
Corp., 466 F.3d 1000, 1018 (Fed. Cir. 2006) (explaining inquiry for “determining
whether there has been an impermissible double recovery”); Catalina Lighting,
295 F.3d at 1291 (“§ 289 prohibits a double recovery of an infringer’s profits”);
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A8205 (Samsung describing § 289 as “barring double recovery”). And this case
does not involve multiple patentees seeking total profits from a single infringer
(Br. 39); if that hypothetical concern ever materialized, an infringer could always
invoke impleader, as one of Samsung’s amici explains. Lemley, supra, at 231.
***
Samsung does not dispute that the juries, as instructed, had substantial
evidence on which to award Samsung’s profits. E.g., A42059-A42081; A24945-
A24949; A24961; A50692-A50705; A51165-A51185; A29791-A29795; A29810-
A29811; A31116-A31154. The Court should accordingly affirm the design-patent
award.
II. THE TRADE-DRESS JUDGMENT SHOULD BE AFFIRMED.
“[T]rade dress involves the total image of a product, and may include
features such as size, shape, color, color combinations, texture, or graphics.”
Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 613 (9th Cir. 1989) (internal
quotation marks omitted). “[P]rotection for trade dress exists to promote
competition” because trade dress signifies “the origin, sponsorship, or approval of
… goods.” TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28
(2001). The law protects against dilution because the “diminution or whittling
away of the value of a [trade dress], resulting from use by another, constitutes an
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invasion of the senior user’s property right and good will in his [trade dress].” 4
McCarthy on Trademarks and Unfair Competition § 24:73 (4th ed. 2014).
Samsung raises no legal challenges to the judgment that it diluted Apple’s
iPhone trade dresses, other than an unsupported constitutional argument and a
cursory objection to a jury instruction, neither of which was preserved below. Its
quibbles with the jury’s findings of fame, non-functionality, likely dilution, and
damages all collapse under substantial record evidence.
A. Substantial Evidence Supports The Jury’s Finding That Apple’s Trade Dresses Were Famous.
Trade dress is “famous if it is widely recognized by the general consuming
public of the United States as a designation of source of the goods or services of
the mark’s owner.” 15 U.S.C. § 1125(c)(2)(A). Samsung does not dispute that the
jury was properly instructed that fame turns on four statutory factors, with none
being dispositive: (i) advertising and publicity, (ii) amount, volume, and extent of
sales, (iii) actual recognition, and (iv) registration. See id.; A1418; Jada Toys, Inc.
v. Mattel, Inc., 518 F.3d 628, 635 (9th Cir. 2008). As the district court concluded,
a “significant pool of evidence” supports the jury’s finding that Apple’s trade
dresses were famous in July 2010 when Samsung’s diluting uses began. A60-A61.
(i) Advertising and publicity. Apple spent roughly $370 million on
iPhone advertising before July 2010. A40654-A40655; A24902; A24965.
Contrary to Samsung’s assertion (Br. 44), much of that advertising prominently
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displayed Apple’s trade dresses. Mr. Schiller testified that Apple’s “marketing
strategy [was] to make the product the biggest, clearest, most obvious thing in our
advertisements.” A40641:8-A40642:3. The jury saw a representative television ad
for the original iPhone and print and outdoor ads for the iPhone, iPhone 3G, and
iPhone 3GS. A40643-A40644; A24896; see also A24897-A24898. As Apple’s
marketing expert Russell Winer explained, “the extent [of] Apple’s advertising for
the trade dresses has been extremely important” and was “all very well
orchestrated to create a high degree of distinctiveness of the trade dress elements.”
A41508:3-16; see A40641-A40642; A40656-A40657.16
The jury received a list of “clips from popular news and TV shows”—
including the Today Show, Saturday Night Live, and the Simpsons—“that include
[Apple] products.” A40653; A24900. The jury also received a summary of iPhone
press coverage, including a Wall Street Journal review describing the original
iPhone as “the world’s most influential smart phone since its debut a year ago,
widely hailed for its beauty” and a USA Today review of the iPhone 3G
mentioning the “mind-boggling hype and hysteria surrounding the first [iPhone]’s
debut” and lauding the iPhone 3G’s appearance. A24904-A24905; A40606-
16 Samsung contends (Br. 45 n.10) that some advertisements did not depict the trade dresses’ every detail. But “it is crucial” to “focus not on the individual elements, but rather on the overall visual impression that the combination and arrangement of those elements create.” Clicks Billiards, 251 F.3d at 1259.
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A40607. The summary noted that these and several other reviews contained color
graphics showing the protected trade dresses. A24904-A24905. The evidence
further included a TIME magazine cover story prominently featuring the iPhone’s
front face and graphical user interface, which again showed Apple’s trade dress.
A40609-A40610; A27150-A27152.
(ii) Amount, volume, and extent of sales. Apple introduced significant
evidence of the iPhone’s success and sales growth, including a chart showing over
23 million U.S. sales by June 2010. A24901; see A40614-A40615; A41508:22-23
(sales “have been astounding”). Samsung criticizes Apple’s sales chart as not
differentiating among different iPhone models (Br. 46), but the chart tracked only
sales before the iPhone 4’s release in June 2010. A24901.17 It therefore included
sales of the original iPhone (embodying the registered trade dress) and the iPhone
3G and 3GS (embodying the unregistered trade dress). Additionally, Mr. Schiller
explained that each iPhone model sold “extremely well” (A40615:8), and Apple’s
damages expert agreed that “Apple’s sales dramatically spike when it comes out
with a new phone” (A42119:20-24).
(iii) Actual recognition. Abundant evidence showed the iPhone trade
dresses’ actual recognition. One survey Samsung cites (Br. 46-47) showed that
17 The iPhone 3G was released in July 2008, the iPhone 3GS in June 2009, and the iPhone 4 in June 2010. See A24904-A24905.
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nearly 40% of consumers associated a Samsung phone with Apple (A41701)—a
result only possible for a highly-recognized trade dress. Moreover, by June 2007,
“Apple’s iPhone ha[d] been the subject of 11,000 print articles” and “69 million
hits on Google,” making it indeed a “‘household name’” (Br. 47). A25162.
Numerous press articles prominently displayed the iPhone’s front face and
graphical user interface, praising their designs. E.g., A24904; see supra pp. 5-6,
55-56. And by February 2010, Samsung’s executives recognized that “[t]he
iPhone ha[d] become the standard” for “consumers and the industry” alike.
A25346; see also A25185 (Samsung consultant concluding that the iPhone “[s]ets
the standard for screen-centric design”). As Dr. Winer concluded, the “Apple trade
dresses are among the most distinctive in the world, and particularly in the U.S.,
and have a very high degree of recognition.” A41511:7-9; see A41510; A41588-
A41589.
(iv) Registration. Samsung does not dispute (Br. 47) that this factor
supports the jury’s finding of fame for Apple’s registered trade dress. A20036-
A20038; A41511-A41512. And Apple’s unregistered trade dress does not become
non-famous simply because it is unregistered (Br. 47). Strong evidence of fame
remains under the other statutory factors (A60; A41512; see supra pp. 54-57);
indeed, unregistered trademarks are routinely held famous. E.g., New York City
Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F. Supp. 2d 305, 321-322
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(S.D.N.Y. 2010); Malletier v. Dooney & Bourke, Inc., 561 F. Supp. 2d 368, 391
(S.D.N.Y. 2008).
B. Substantial Evidence Supports The Jury’s Finding That Apple’s Trade Dresses Are Non-Functional.
A trade dress is functional, and thus unprotectable, only “if it is essential to
the use or purpose of the article or if it affects the cost or quality of the article.”
Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982). Samsung
improperly deconstructs Apple’s trade dresses into discrete elements (Br. 49-50,
52) and ignores the governing four-factor test for evaluating functionality—the test
on which the jury was instructed. A57-A58; A1412; A1415.
1. Samsung’s functionality argument ignores the statute and governing precedent.
Samsung does not challenge the instruction that “[a] trade dress is non-
functional if, taken as a whole, the collection of trade dress elements is not
essential to the product’s use or purpose or does not affect the cost or quality of the
product even though certain particular elements of the trade dress may be
functional.” A1412; see also A1415 (“To determine whether a product’s particular
shape or form is functional, you should consider whether the design as a whole is
functional[.]”).
Despite conceding the correctness of viewing trade dresses “‘as a whole’”
(Br. 42-43), Samsung disaggregates Apple’s trade dresses into elements with one
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or more purported functions (Br. 49-52). But “[a] defendant cannot avoid liability
… by segregating out individual elements of the trade dress … and arguing that no
one of these is valid and protectable in and of itself. It is the total combination of
elements of the ‘trade dress’ as defined by the plaintiff that is at issue.” 1
McCarthy § 8:2; see 15 U.S.C. § 1125(c)(4)(A) (functionality depends on viewing
“the claimed trade dress, taken as a whole”); Kendall-Jackson Winery, Ltd. v. E. &
J. Gallo Winery, 150 F.3d 1042, 1050 (9th Cir. 1998) (“[T]he proper inquiry is not
whether individual features of a product are functional …, but whether the whole
collection of features taken together are functional[.]”); Fuddruckers, Inc. v. Doc’s
B.R. Others, Inc., 826 F.2d 837, 842 (9th Cir. 1987) (“We examine trade dress as a
whole to determine its functionality; functional elements that are separately
unprotectable can be protected together as part of a trade dress.” (citation
omitted)); Bobrick Washroom Equip., Inc. v. American Specialties, Inc., 2014 WL
1243801, at *1 (9th Cir. Mar. 26, 2014) (“The district court correctly viewed the
… product design as a whole, and did not base its determination merely on the
conclusion that the component parts of the [trade dress] were functional.”).
Samsung fails to acknowledge, let alone apply, the Ninth Circuit’s well-
established test for determining functionality, which “considers four factors: (1)
whether advertising touts the utilitarian advantages of the design, (2) whether the
particular design results from a comparatively simple or inexpensive method of
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manufacture, (3) whether the design yields a utilitarian advantage, and (4) whether
alternative designs are available.” Talking Rain Beverage Co. v. South Beach
Beverage Co., 349 F.3d 601, 603 (9th Cir. 2003). No factor is dispositive; all are
considered together. Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002,
1006 (9th Cir. 1998). The jury was instructed to apply this test (A1415), and
Samsung does not challenge that instruction. Samsung presents no argument of
evidentiary insufficiency under the concededly correct standard, which is sufficient
ground for affirmance. See Winarto v. Toshiba Am. Elecs. Components, Inc., 274
F.3d 1276, 1283 (9th Cir. 2001) (JMOL for insufficient evidence only appropriate
“if, under the governing law, there can be but one reasonable conclusion as to the
verdict”). As the next section shows, the evidence of non-functionality was
plentiful.
2. The record contains substantial evidence that Apple’s trade dresses are non-functional.
Each of the four statutory factors supports the jury’s factual finding that
Apple’s trade dresses are non-functional.
(i) Advertising. Far from touting any utilitarian advantage of the iPhone
design, Apple’s advertising used a “product as hero” approach “to showcase th[e]
products as predominantly as we can.” A40641-A40642; A40656-A40657. A
television ad for the original iPhone simply portrayed “the distinctive design very
clearly.” A40644:22; see A27139. The jury also saw examples of print ads
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prominently displaying Apple’s iPhone trade dresses without suggesting that they
had utilitarian advantage. A24896; see supra p. 55.
(ii) Manufacture. The iPhone design did not result from a “comparatively
simple or inexpensive method of manufacture.” Talking Rain, 349 F.3d at 603.
Rather, as Mr. Stringer testified, “[p]roducing the glass was very challenging
[because] [w]e were putting glass in close proximity to hardened steel” and
“putting holes in the glass.” A40495. Manufacturing the bezel also “was
challenging” because Apple “had to use a very high, high grade of steel … [t]hat
was incredibly hard to polish … [and] was very, very difficult to machine[.]”
A40496:3-15. Mr. Bressler similarly testified that Apple’s design features “were
particularly difficult and more expensive,” as they required “develop[ing] a glass
that was not breakable enough, scratch resistant enough” and “special machining
processes to create the receiver slot in the glass and to machine the [steel] bezel.”
A41097:7-13.
(iii) Utilitarian advantage. As Mr. Bressler explained, the iPhone’s
physical design did not “contribute unusually … to the usability” of the device.
A41095:11-12. Indeed, Mr. Stringer testified that the design team was “looking
for a new, original, and beautiful object, something that would really wow the
world.” A40485:5-7. He described multiple preliminary iPhone designs (A40486-
A40492; A27231-A27238) and, when asked why the final design was chosen,
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explained that “[i]t’s very simple. It was the most beautiful of our designs.”
A40494:10-18.18
(iv) Alternative designs. Mr. Stringer’s testimony, and the exhibits
showing other iPhone prototypes, demonstrated numerous alternative designs.
A27231-A27238; A40486-A40492. Mr. Bressler and Dr. Kare identified several
other alternatives, and Apple introduced examples. A24767-A24821; A41095-
A41096; A41404; A41408-A41409; A43485.
3. Samsung’s aesthetic functionality argument fails.
Samsung suggests that Apple’s unregistered trade dress is “aesthetically
functional.” Br. 51. As the jury was instructed (A1415), the relevant question for
such a defense is “whether protection of the feature as a [trade dress] would
impose a significant non-reputation-related competitive disadvantage.”
Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1072 (9th Cir.
2006). Samsung is right that Apple created a “‘beautiful object’” (Br. 51), but “the
fact that a trademark is desirable does not, and should not, render it unprotectable.”
Au-Tomotive Gold, 457 F.3d at 1072; see id. at 1073 (“The concept of an
‘aesthetic’ function that is non-trademark-related has enjoyed only limited 18 This distinguishes Leatherman Tool Group, Inc. v. Cooper Industries, Inc., 199 F.3d 1009 (9th Cir. 1999), which “h[e]ld only that in a product configuration case there must be some aspect of the configuration which is nonfunctional”; “the arrangement and combination of the parts [cannot be] designed to result in superior performance.” Id. at 1013 & n.6. The evidence shows that Apple’s trade dresses were developed for beauty and distinctiveness, not for “superior performance.”
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application.”). Samsung cites no case holding a trade dress unprotectable merely
because it is beautiful, nor any evidence showing that protecting the iPhone’s trade
dress would put Samsung at a significant non-reputation-related disadvantage.
C. Substantial Evidence Supports The Jury’s Likely-Dilution Finding.
Six statutory factors bear on the likelihood of dilution by blurring. 15
U.S.C. § 1125(c). The jury was properly instructed that it “may consider” all six,
which should “be weighed … given the facts and circumstances of the case.”
A1419. Samsung does not challenge that instruction and, as the district court
confirmed, “significant evidence” supports the jury’s dilution finding. A61-A62.
(i) Degree of similarity. Dr. Kare testified that Samsung’s user interface
displays were “confusingly similar” to the iPhone’s home screen. A41387-
A41388; see A41391-A41399. Dr. Winer likewise testified that Samsung’s
products “look similar” to Apple’s iPhone trade dresses and noted several press
publications describing that perceived similarity. A41514:12-23; see A24687-
A24690; supra pp. 5-6, 55-56. Additionally, the jurors could assess the similarity
themselves by examining Samsung’s products.
Samsung identifies tiny purported variations in the home screen icons. Br.
53-54. But Apple’s trade dresses protect the iPhone’s entire front face, including
its overall shape, relative screen size, bezel, and (while turned on) home page of
colorful icons, all of which Samsung’s devices possess. See Levi Strauss & Co. v.
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Abercrombie & Fitch Trading Co., 633 F.3d 1158, 1172 (9th Cir. 2011) (trade-
dress owner need only show “similarity” to the trade dress, not that the accused
device is “identical, nearly identical, or substantially similar”).
(ii) Acquired distinctiveness. Consumer survey expert Hal Poret testified
that Apple’s trade dresses have acquired distinctiveness (i.e., secondary meaning),
citing survey results that 61-68% of consumers who saw Apple’s iPhone trade
dresses associated them with Apple. A41581-A41582; A41588-A41589. Apple’s
advertisements also prominently displayed the iPhone’s design. A24896; A27139;
see supra p. 55; Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir.
1989) (finding acquired distinctiveness where design was “prominently featured”
in advertising).
(iii) Exclusivity of use. Boris Teksler, Apple’s Director of Patent and
Licensing Strategy, testified that Apple’s trade dresses are part of the unique user
experience that “keeps [Apple] unique in the market place” and that Apple
“do[es]n’t wish to share” or allow “other people to make.” A41961-A41963; see
supra p. 6. As this Court previously determined, that evidence supports finding
that Apple retains exclusive use of its trade dresses. Apple III, 735 F.3d at 1375
n.10.
(iv) Degree of recognition. Contrary to Samsung’s argument, this factor
does not require that a mark be “more than famous.” Br. 55 (emphasis
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Samsung’s). It merely “assumes that fame is relative and that some marks are
more ‘famous’ than others.” 4 McCarthy § 24:119. Mr. Poret testified that
roughly two-thirds of consumers surveyed recognized the iPhone trade dresses
(A41588-A41589), which shows a high degree of recognition.
(v) Intent to create association. As explained below (pp. 69-72),
Samsung’s dilution was willful: its copying was undoubtedly intended to create an
association between its products and Apple’s trade dresses.
(vi) Actual association. Dr. Winer testified that Samsung successfully
copied Apple’s trade dresses, creating “a high degree of [actual] dilution.”
A41525. This was no “bare conclusion” (Br. 56); it was based on Dr. Winer’s
review of the products and numerous media reports showing that people actually
associated Samsung’s diluting products with Apple’s iPhone. A41514; A41525-
A41526; A24687-A24690 (diluting products were “reminiscent of,” “resembling,”
and “shockingly similar to” the iPhone).
Those media reports were properly considered, because they showed the
state of mind of industry commentators who perceived the devices as similar.
A62; see Conversive, Inc. v. Conversagent, Inc., 433 F. Supp. 2d 1079, 1091 (C.D.
Cal. 2006) (“majority of circuit courts” admit evidence of consumer confusion as
non-hearsay); Lyons P’ship, L.P. v. Morris Costumes, Inc., 243 F.3d 789, 804 (4th
Cir. 2001) (newspaper articles admissible not to show “persons wearing the Duffy
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costume were in fact Barney” but “to prove that … newspaper reporters expressed
their belief that those persons were Barney” (emphasis in original)).
Moreover, survey research expert Kent Van Liere conducted a survey
showing that 38% of consumers actually associated a diluting Samsung phone with
Apple or the iPhone. A41701. Contrary to Samsung’s argument (Br. 56), this
number accurately assesses association by “net[ing] out in the control condition”
any association between Apple and Samsung simply because they are well-known
competitors. A41724:20-24.19
D. Samsung’s Constitutional Argument Is Waived And Incorrect.
In its JMOL motion, Samsung’s constitutional argument consisted of a
single sentence asserting that dilution actions create “concerns” of “constitutional
dimension.” A7581. The district court did not pass on the issue, and this Court
should dismiss the argument as “not ‘properly raise[d]’ in the trial court[.]” In re
E.R. Fegert, Inc., 887 F.2d 955, 957 (9th Cir. 1989); see also Fuji Photo Film Co.
v. Jazz Photo Corp., 394 F.3d 1368, 1377 (Fed. Cir. 2005).
At any rate, Samsung identifies no case holding the statute unconstitutional.
Br. 56-57. Indeed, one of Samsung’s cases acknowledges that “[t]he possibility of 19 Samsung (Br. 56) cites dicta in Versa Products Co. v. Bi-Fold Co. (Mfg.), 50 F.3d 189 (3d Cir. 1995), stating only that lack of evidence of actual confusion may support a finding of no likely confusion in an infringement case. Id. at 205. In this dilution case, by contrast, the newspaper evidence, Dr. Winer’s expert opinion, and Dr. Van Liere’s survey show actual association and support the finding of likely dilution.
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obtaining a design patent is not dispositive of the availability of trade dress
protection: more than one form of intellectual property protection may
simultaneously protect particular product features.” I.P. Lund Trading ApS v.
Kohler Co., 163 F.3d 27, 48 (1st Cir. 1998). Samsung’s other case concerns
federal preemption of “state regulation of intellectual property.” Bonito Boats, Inc.
v. Thunder Craft Boats, Inc., 489 U.S. 141, 152 (1989). The statute plainly falls
within Congress’s power to regulate interstate commerce, see 15 U.S.C.
§ 1125(c)(1) (limiting action to “use of a mark or trade name in commerce”), and
Samsung points to nothing in the Patent Clause suggesting otherwise.
E. Substantial Evidence Supports The Damages Award.
The $382 million award that Samsung challenges as “trade-dress dilution
award” (Br. 41) includes all damages awarded for six Samsung products, which the
jury found not only diluted Apple’s trade dresses but also infringed Apple’s design
and utility patents. A646-A647; supra p. 20. If the Court were to reverse or
remand on any trade-dress issue (though it should not), then damages should still
be awarded for these six products for at least design-patent and utility-patent
infringement. But even focusing solely on trade-dress dilution, the $382 million
awarded for these six products is well-supported.
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1. Samsung’s jury instruction challenge is waived and meritless.
The Ninth Circuit “‘strictly enforce[s]’” the requirement of preserving
objections to jury instructions. Snake River Valley Elec. Ass’n v. PacifiCorp, 357
F.3d 1042, 1053 (9th Cir. 2004) (citation omitted). The “mere submission of
proposed instructions” does “not constitute a sufficient objection to the instructions
that were given.” Grosvenor Props. Ltd. v. Southmark Corp., 896 F.2d 1149, 1153
(9th Cir. 1990); see also Bollinger v. Oregon, 305 F. App’x 344, 345 (9th Cir.
2008) (defendant “waived his argument[] that the district court erred by not
including his proposed instruction … because he did not object at trial to the jury
instructions on those specific bases”).
When the district court instructed that awarding dilution damages required
finding that “Samsung’s acts of dilution were willful” (A1424), Samsung did not
object on the ground that the instruction inadequately defined willful dilution
(A7076-A7077; A7199; A7226-A7227). While Samsung initially proposed an
additional willful-dilution instruction (A7090), Samsung abandoned that proposal
by not objecting to the final jury instructions on that basis. A7199; A7226-A7227.
The issue Samsung now raises was therefore not sufficiently “focused before the
[district] court” and is waived. Grosvenor, 896 F.2d at 1152.
Even if considered, Samsung’s belated objection fails. The instructions
properly defined dilution by blurring as “a lessening of the capacity of a famous
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trade dress to identify and distinguish goods or services” (A1417) and allowed a
dilution damages award only if Apple proved that “Samsung’s acts of dilution
were willful” (A1424). See 15 U.S.C. § 1117(a) (authorizing dilution damages for
“a willful violation under section 1125(c)”). Samsung’s suggestion (Br. 58) that
the jury may have been confused by instructions governing willful patent
infringement is highly improbable speculation. The definition of “willful patent
infringement” appeared in a separate section entitled “Utility and Design Patents–
Willful Patent Infringement” and was surrounded by instructions referring to
“patents” and “infringement.” A1409. Reviewed in context, those instructions did
not mislead the jury into believing that an instruction regarding willful patent
infringement applied to trade-dress dilution damages. See Gracie v. Gracie, 217
F.3d 1060, 1067 (9th Cir. 2000) (instructions must be viewed “as a whole” and “in
the context of the entire trial” (emphasis omitted)).
2. Substantial evidence supports the jury’s willful-dilution finding.
The evidence strongly supports the jury’s finding, by a preponderance of the
evidence (A1424), that Samsung intended to associate itself with the iPhone trade
dresses. A41529-A41532. A December 2008 Samsung presentation touted the
iPhone as “a revolution,” praised it as a “unique product” with a “strong, screen-
centric design,” and suggested design improvements to Samsung’s phones to
achieve the iPhone’s “‘wow’ response.” A25143; A25162; A25173-A25174;
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A25197-A25198; A25201-A25203. The jury saw how Samsung redesigned its
products to mimic the iPhone’s physical design and graphical user interface,
including by copying Apple’s “‘instant[ly] recognizab[le]’” icons. A41483-
A41485; see A41409:13-A41410:5 (“[A]ll these similarities from phone to phone
w[ere] beyond coincidental.”); A41414-A41416; A25366; A25408; A25416;
A25487; A25492; A25496; supra pp. 12-15. And the jury learned that, after
copying Apple’s protected designs, Samsung sought to “directly go after …
potential iPhone purchasers.” A26384. This overwhelming evidence allowed the
jury to find that Samsung “willfully intended to trade on the recognition”
associated with Apple’s famous iPhone trade dresses. 15 U.S.C.
§ 1125(c)(5)(B)(i).20
Samsung’s attacks on the jury’s factual finding of willful dilution all fail.
First, Samsung’s contention that it only learned of Apple’s trade dresses when
Apple filed suit (Br. 58-59) is demonstrably false. As the district court concluded,
it was “undisputed that Samsung was aware of the iPhone design.” A62. Several
Samsung documents revealed that Samsung not only knew of, but admired and set
out to copy, Apple’s designs soon after the iPhone was announced. E.g., A24966-
A25109; A25143-A25319; see supra pp. 12-15. And in August 2010, Apple made
20 That one of Apple’s trade dresses was “registered for the duration of [Samsung’s] activities” further supports willfulness. Otter Prods., LLC v. Berrios, 2013 WL 5575070, at *8 (C.D. Cal. Oct. 10, 2013).
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a presentation to Samsung in which it accused Samsung of copying its iPhone
designs. A25818-A25840; A90061-A90062.
Second, Samsung’s assertion that copying can never show an “intent to trade
on that design for its recognition as a source identifier” (Br. 59 (emphasis
Samsung’s)) is likewise misplaced. The two cases Samsung cites do not suggest
that copying is irrelevant to willful dilution. Neither case even involved dilution;
both were trade-dress infringement cases and both involved different factual
records. See Highway Cruisers of Cal., Inc. v. Security Indus., Inc., 374 F.2d 875,
875-876 (9th Cir. 1967); Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1160
(7th Cir. 1994). Regardless, the evidence discussed above easily demonstrated that
Samsung’s copying campaign was intended to trade on the recognition associated
with Apple’s famous iPhone designs, which had “‘instant recognizability’”
(A41483-A41484) and “set the standard” in the industry (A25173). See supra pp.
12-15.
Third, Samsung’s suggestion (Br. 59-60) that it “might have reasonably
thought” that Apple’s trade dresses were not protectable or diluted (though it
points to no evidence that it actually held such a thought) misstates trade-dress
dilution law, which does not have a corollary to the legal “objective” prong
required to prove willful patent infringement. A74 n.6. Here, willfulness was a
purely factual question for the jury to decide. A62; see, e.g., B&H Mfg. Co. v.
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Bright, 2005 WL 1342815, at *9 (E.D. Cal. May 10, 2005). Samsung cites only
Blockbuster Videos, Inc. v. City of Tempe, 141 F.3d 1295 (9th Cir. 1998), but that
case did not involve willful dilution; it addressed attorney’s fees in a case
concerning preemption of zoning ordinances by the Lanham Act. Id. at 1296,
1300.
Fourth, Samsung’s assertion (Br. 60-61) regarding the purported “novelty”
of Apple’s dilution claim is off-point. Samsung’s willfulness arises from its intent
to trade unfairly on the recognition of Apple’s protected designs, regardless of its
status as a competitor or the form of Apple’s trade dresses. See 15 U.S.C.
§ 1125(c)(5)(B)(i). In any event, trade-dress protection against a competitor’s
copying is hardly novel. E.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763,
770-773 (1992).
Finally, contrary to Samsung’s argument (Br. 61), the record concerning
willful design-patent infringement in no way undermines the jury’s finding of
willful trade-dress dilution. The jury did find subjective willfulness for Samsung’s
infringement of Apple’s D’677 and D’305 patents (A640)—patents that, like
Apple’s trade dresses, relate to the iPhone’s front face and user interface. The
district court’s grant of JMOL rested on the “objective” prong of the patent inquiry
(A78-A79), which has no analog in the trade-dress dilution context. See supra pp.
71-72.
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3. Substantial evidence supports the damages amount.
Samsung’s supposition that the first jury awarded $291 million in infringer’s
profits and $91 million in lost profits for trade-dress dilution (Br. 57) is only one
possible explanation for the jury’s award of damages for the six diluting products,
which were also found to infringe Apple’s design and utility patents. See A632-
A647. But even accepting Samsung’s proposed division, Samsung cannot “show
that the award is, in view of all the evidence, … so outrageously high … as to be
unsupportable as an estimation” of damages. Energy Transp., 697 F.3d at 1356
(internal quotation marks omitted).
a. The evidence supports the award of Samsung’s profits.
Congress provided for an award of “defendant’s profits” upon a showing of
willful dilution. 15 U.S.C. § 1117(a). Apple’s damages expert Terry Musika
calculated Samsung’s profits on a product-by-product basis, attributing $726
million in profits to the six devices found to dilute Apple’s trade dresses. A42059-
A42062; A24948.
Contrary to Samsung’s contention (Br. 62-63), the jury was permitted to
award all of Samsung’s profits for those diluting products. It was undisputedly
Samsung’s burden to apportion any profits attributable to factors other than
dilution:
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Unless you find that the Samsung entities have proven that a portion of the profit from the sale of its products that infringed or diluted any Apple trade dress is attributable to factors other than use of the trade dress, you shall find that the total profit is attributable to the infringement or dilution.
A1426; see Lindy Pen Co. v. Bic Co., 982 F.2d 1400, 1408 (9th Cir. 1993).
Samsung did not tell the jury what amount to apportion and, even now, identifies
no evidence that it met its burden (see Br. 62-63).21
Moreover, Samsung’s own deconstruction of the award belies its contention
that the jury awarded “all” of Samsung’s profits: $291 million represents less than
half of Samsung’s profits on the diluting devices as calculated by Apple’s damages
expert. See A111-A112; A127; A24949; supra p. 20 (chart identifying diluting
products). Thus, the jury apparently awarded less than “all” of Samsung’s profits,
and the award is clearly “within the range encompassed by the record as a whole.”
Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1241 (Fed. Cir. 2011) (internal
quotation marks omitted).
21 Samsung cites only three pages on this point. Br. 63. One page (A31286) was not admitted or discussed during the first trial. The other two are excerpts from third-party surveys. One was discussed only in relation to Apple’s phones (A28645; see A40704-A40706); the other reports consumer satisfaction with phone design generally and is irrelevant to attributing Samsung’s profits to factors other than its use of Apple’s trade dress (A26444; see A26441).
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b. The evidence supports the award of Apple’s lost profits.
Samsung contends that Apple failed to prove that its lost profits were caused
by Samsung’s dilution (Br. 61-62), but the evidence shows otherwise. A plaintiff
seeking lost profits need only show the sales it likely would have made “but for”
the defendant’s conduct. Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 620-621
(9th Cir. 1993); Kaufman Co. v. Lantech, Inc., 926 F.2d 1136, 1141 (Fed. Cir.
1991). The evidence here demonstrated that consumers valued the protected trade
dresses (e.g., A24978; A25002-A25004; A40627; A42051; A42093; A42086-
A42090), and Mr. Musika took into account this demand, market share, and market
alternatives in calculating Apple’s lost profits. A42083; A42090-A42092.
Nothing more was required. See, e.g., Presidio Components, Inc. v. American
Tech. Ceramics Corp., 702 F.3d 1351, 1360-1362 (Fed. Cir. 2012) (lost-profits
award supported by similar evidence); B&H Mfg., 2005 WL 1342815, at *14
(“jury could determine a reasonable damage award for Defendants’ dilution” based
on evidence of sales, costs, and potential lost sales).
Samsung also challenges Mr. Musika’s assumption that all accused products,
even if not ultimately found to be diluting, would have been removed from the
market. Br. 63. But the jury determined that every product accused of dilution
either diluted Apple’s trade dresses or infringed Apple’s patents, or both. A632-
A639; A642; supra p. 20. The jury was thus entitled to accept a lost-profits
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calculation that assumed those products were not “‘acceptable non-infringing
substitute[s].’” Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1548 (Fed. Cir. 1995)
(en banc).
III. THE UTILITY-PATENT JUDGMENT SHOULD BE AFFIRMED.
Samsung does not challenge the district court’s claim constructions, the
jury’s infringement findings for Apple’s three utility patents, or the jury’s validity
finding for the ’381 patent. Its limited validity and damages arguments are
meritless.
A. Substantial Evidence Supports The Jury’s Finding That Claim 8 Of The ’915 Patent Is Not Inherently Anticipated.
Samsung provides little context—and even less record support—for its
argument that Nomura anticipates claim 8 of the ’915 patent, instead relying on its
expert’s conclusory testimony. Br. 64 (citing A42911-A42917). But even
Samsung’s expert could not deny that Nomura fails to expressly disclose claim 8’s
“event object” limitation. A42937-A42938. As Apple’s expert explained, there
were many alternatives to using an “event object” and Nomura suggests that it used
just such an alternative. A43636-A43637. The only way to determine whether
Nomura used an “event object” would have been to analyze Nomura’s source code,
as Apple did with Samsung’s code to demonstrate infringement. A41827-A41828.
But Samsung’s expert admitted that he “did not have access to the [Nomura]
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source code” and agreed that he “could not find an event object” in Nomura.
A42938:9-12. The jury was entitled to reject Samsung’s invalidity contentions.
Samsung argues that the district court erred “as a matter of law” because any
possible way of tracking “movement history” involves an “event object.” Br. 65.
But anticipation is a factual question, SynQor, 709 F.3d at 1373, and the parties
disputed whether every way of tracking “movement history” necessarily involves
an “event object,” which Samsung must show to prove inherency. See Continental
Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991). Samsung cannot
avoid that factual dispute by asserting—for the first time on appeal—a claim
construction argument that “event object” encompasses any conceivable technique
possibly employed by Nomura. See Abbott Labs. v. Syntron Bioresearch, Inc., 334
F.3d 1343, 1357 (Fed. Cir. 2003) (reviewing anticipation as a factual question
where it turned on a claim construction issue not presented below); Versata
Software, Inc. v. SAP Am., Inc., 717 F.3d 1255, 1262 (Fed. Cir. 2013) (argument
based on waived claim construction “becomes a pure factual issue”).
Nor is the ongoing reexamination of the ’915 patent relevant. Br. 64 n.13,
76. The procedures, standards of review, evidence, and arguments presented in
reexamination differ from litigation. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428-
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1429 (Fed. Cir. 1988). An ongoing reexamination thus is not relevant to a parallel
infringement case.22
B. Claim 50 Of The ’163 Patent Is Not Indefinite.
As the district court correctly concluded (A3-A9), terms of degree like
“substantially centered” are commonly used in patent claims and do not render
them indefinite. E.g., Verve, LLC v. Crane Cams, Inc., 311 F.3d 1116, 1120 (Fed.
Cir. 2002) (“[W]hen the term ‘substantially’ serves reasonably to describe the
subject matter so that its scope would be understood by persons in the field of the
invention, … it is not indefinite.”); Andrew Corp. v. Gabriel Elecs., Inc., 847 F.2d
819, 821-822 (Fed. Cir. 1988) (“substantially equal” not indefinite); Seattle Box
Co. v. Industrial Crating & Packing, Inc., 731 F.2d 818, 826 (Fed. Cir. 1984)
(same).23
“Substantially centered” as used here is no different. Contrary to Samsung’s
argument that “the specification describes only exact centering” (Br. 66), the ’163
patent provides examples of “substantially centered” content, including one (Block
22 The ’915 reexamination is particularly off-point, because the examiner did not find that Nomura teaches an “event object” and instead built an obviousness argument based on other references. A8725-A8726. Samsung’s trial evidence did not mention the supposedly anticipatory reference (Hillis) from the reexamination. 23 Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005), involved a term (“aesthetically pleasing”) that “d[id] not exactly compare to” terms of degree like “substantially equal to.” Id. at 1351.
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5 in Figure 5C) that is “centered” but spaced unevenly from the screen’s edge due
to “a predefined amount of padding along the sides of the display”:
A20255 (annotations added); see A20284(17:26-30). Based on that example and
the accompanying disclosure, Apple’s expert explained that a skilled artisan would
understand the meaning of “substantially centered.” A41907-A41909. Such
“reasonable certainty” to persons of ordinary skill, not “absolute precision,” is the
standard. Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2129 (2014).24
The district court did not “agree[]” that the ’163 patent provides no guidance
on the meaning of “substantially centered.” Br. 67. The court’s decision not to
24 Samsung argues that Apple’s evidence is insufficient (Br. 67), but it was Samsung’s burden to demonstrate indefiniteness by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2242 (2011).
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impose “greater precision” than the ordinary meaning requires (A6) does not
render the claim indefinite where, as the district court concluded, the evidence
shows that a skilled artisan would understand its meaning (A9).
Nor did named inventor Scott Forstall testify that the term is “entirely
subjective.” Br. 66-67. Mr. Forstall merely explained why it would not always be
appropriate to center the enlarged content exactly—for example, where exact
centering would result in empty space on the side of the screen. A40759-40760.
To the extent Mr. Forstall addressed the term’s meaning, he identified objective
criteria that a skilled artisan would apply (e.g., centering should not result in
showing space “beyond the edge of a document”). Id.
C. Substantial Evidence Supports The Second Jury’s Lost-Profits Award.
Although not indicated on the verdict form (A652-A653), Samsung
speculates that the second jury awarded $114 million in lost profits for ten phones
found to infringe the ’915 patent. Br. 68. Even if Samsung’s dissection of the
verdict is accepted, the $114 million award is well-supported by the evidence.
E.g., A29791-A29813; A50649-A50678; A50690-A50692.
1. Samsung’s non-infringing alternatives argument rests on an incorrect standard.
To receive lost profits, Apple was not required to prove the complete
absence of non-infringing alternatives. Br. 68. Rather, Apple simply had to
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“take[] into account any alternatives available to the infringer.” Grain Processing
Corp. v. American Maize-Prods. Co., 185 F.3d 1341, 1351 (Fed. Cir. 1999); see
also Rite-Hite, 56 F.3d at 1545 (“A patentee need not negate every possibility that
the purchaser might not have purchased a product other than its own, absent the
infringement.”). The unchallenged jury instructions reflected that principle.
A1473 (Apple must prove “there were no acceptable non-infringing substitutes for
each of the infringing products, or, if there were, the number of the sales of each
product made by Samsung that Apple would have made despite the availability of
other non-infringing substitutes”).
Apple’s damages expert at the retrial, Julie Davis, satisfied this requirement
by accounting for the fact that Samsung could redesign its products to remove the
infringing feature and by allocating market share to non-infringing smartphones—
including Samsung’s Intercept—when reconstructing the “but for” world.
A50662-A50673; A51105; A51188-A51191. But Samsung did not show that it
had any acceptable, available alternatives in any event, as the next section explains.
2. Substantial evidence showed that the Intercept and Galaxy Ace were not acceptable, available alternatives.
Samsung identifies only two non-infringing alternatives: its Intercept and
Galaxy Ace smartphones. Br. 68. There is substantial evidence that neither would
have been an acceptable, available alternative to Samsung’s infringing products.
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A non-infringing product is only a substitute if “it is acceptable to all
purchasers of the infringing product.” American Seating Co. v. USSC Grp., Inc.,
514 F.3d 1262, 1270 (Fed. Cir. 2008) (internal quotation marks omitted). The
Intercept was plainly not acceptable. As the district court explained, it was a ten-
month-old device at the beginning of the lost-profits period with a low-resolution
screen and slide-out physical keyboard. A122-A123; see A32212. It also ranked
near the bottom of customer satisfaction surveys, including with respect to its
touchscreen interface. A26485-A26486; A26509.
Samsung does not dispute the Intercept’s many faults, but dismisses them
because “the acceptable non-infringing alternatives analysis focuses on whether the
alternative provides ‘the advantages of the patented invention.’” Br. 69 (quoting
Presidio, 702 F.3d at 1361).25 The analysis is not so limited. This Court has
repeatedly considered factors unrelated to the patented features in assessing the
acceptability of substitutes. See, e.g., DSU Med., 471 F.3d at 1310 (substantial
evidence supported lost-profits award where proposed alternatives contained
design flaws and were poorly rated by industry groups); Kaufman, 926 F.2d at
25 Samsung mischaracterizes Presidio, which explains that “products lacking the advantages of the patented invention ‘can hardly be termed a substitute to the customer who wants those advantages.’” 702 F.3d at 1361 (citation omitted). Presidio does not support Samsung’s converse proposition that any product containing the patent’s advantages is necessarily acceptable, even if otherwise flawed.
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1142 (“To be deemed acceptable, the alleged acceptable noninfringing substitute
must not have a disparately higher price than or possess characteristics
significantly different from the patented product.”).
There is also substantial evidence that the Galaxy Ace would not have been
available, as “it was never sold by a U.S. carrier.” A51192:7-8. Moreover, the
second jury reasonably could have found the Galaxy Ace unavailable because it
infringes Apple’s ’381 and ’163 patents, as the first jury found. A633; A635;26
A50749; see Rite-Hite, 56 F.3d at 1548 (products covered by the plaintiff’s patents
are not “available”). Although Samsung claims that it would have designed around
those patents before the lost-profits period (Br. 69), the jury was not obligated to
accept Samsung’s speculation that it would have produced such a version of the
Galaxy Ace or that customers would have viewed a hypothetical redesign as an
acceptable substitute for the infringing products. Rather, the jury could reasonably
find that such hypothetical alternatives would not have been available.
3. Apple presented sufficient evidence of demand.
Samsung argues that evidence of demand for the patented features is a
“dispositive” requirement of lost profits (Br. 70), but this Court has squarely held
the contrary. See DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d
1314, 1330 (Fed. Cir. 2009) (rejecting argument that first Panduit factor requires 26 The first jury awarded no damages for that infringement (A647), reflecting the lack of U.S. sales of the Galaxy Ace. A51203.
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“demand for the specific feature (i.e. claim limitation) that distinguishes the
patented product from a non-infringing substitute, not simply demand for the
patented product”). At most, such proof is relevant to the acceptability of non-
infringing alternatives. Id. at 1331.27
At any rate, there was ample evidence of demand for the ’915 patent’s
claimed features. Samsung attempts to downplay that evidence as too generalized
(Br. 70), but its own pre-litigation documents include specific references to the
features enabled by the ’915 patent. A 2008 presentation based on extensive
consumer research praised the iPhone because “[g]estures like the two fingered
pinch and flick add a game-like quality to interactions.” A25178; see A50658-
A50659. Samsung’s own damages expert confirmed that such evidence is relevant
proof of demand. A51042.
Early press reports also specifically praised the features enabled by the ’915
patent as “a blast” and “wicked cool.” A27142-A27143; see A50819-A50820.
Apple highlighted those features in its advertising. A50823. Apple’s technical
expert confirmed the invention’s significant advantages (A50444-A50445), and
Samsung offered no contrary technical expert testimony. This Court has upheld
27 DePuy Spine explains that Slimfold Manufacturing Co. v. Kinkead Industries, Inc., 932 F.2d 1453 (Fed. Cir. 1991), turned on the acceptability of non-infringing alternatives, not any independent requirement of demand for the patented features. 567 F.3d at 1330-1331.
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findings of demand based on far more generalized proof. See, e.g., Funai Elec. Co.
v. Daewoo Elecs. Co., 616 F.3d 1357, 1375 (Fed. Cir. 2010) (affirming lost-profits
award based on “general industry demand for smaller, cheaper, faster, and more
reliable” product coupled with “evidence that the patented technology furthers
these goals”).28
Moreover, Apple’s marketing survey expert John Hauser performed a
conjoint analysis—a widely-accepted method that companies use to measure
demand for product features and guide business decisions (A50515)—and
determined that consumers would be willing to pay a significant premium for the
’915 patent’s features. A24962 ($39 premium in smartphone with $199 base price,
$45 premium in tablet with $499 base price); A50531:11-12 (“This survey reflects
that there’s a substantial demand for the features enabled by the patents in this
case.”). Samsung called no witness to challenge Dr. Hauser’s methods or offer an
alternative study.
Samsung’s sole criticism of Dr. Hauser’s study focuses on measuring
demand over non-infringing alternatives. Br. 71. But Dr. Hauser did include non-
28 Contrary to Samsung’s assertion, the record shows that “consumers preferred the ’915 patent’s technology over the non-infringing alternatives.” Br. 71. The Intercept ranked near the bottom of a consumer satisfaction survey and last on touchscreen ease-of-use among all Samsung products studied (A26485-A26486; A26509), whereas Apple’s iPhone 4—which practices the ’915 patent—held top rank and scored particularly high for its touchscreen’s ease-of-use (A26485-A26486; A26489).
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infringing alternatives in his analysis. A50589. Samsung’s argument, at most, is
that Dr. Hauser did not specifically test the Intercept or Galaxy Ace. But as
explained above (pp. 81-83), neither of those phones was an acceptable, available
alternative. In any event, Samsung placed this theory before the jury by cross-
examining Dr. Hauser (A50610); the jury was free to reject it.
D. Substantial Evidence Supports The Reasonable-Royalty Awards.
Samsung also speculates that the judgment includes $35 million in
reasonable-royalty damages for utility-patent infringement. Br. 72. That amount
is amply supported.
Ms. Davis explained the three different methods underlying her royalty rate
and applied a Georgia-Pacific analysis to calculate her final royalty. A50707-
A50709. She discussed demand for Apple’s patented features at length in her lost-
profits analysis, including Dr. Hauser’s survey and several Samsung documents.
A50652-A50661 (discussing A24978, A25003, A25162, A25173, A25178,
A25345-A25346, A25349). Samsung’s argument that Ms. Davis should have
addressed that evidence again in her reasonable-royalty discussion (Br. 72-73)
places form over substance. The evidence was before the jury, and Ms. Davis was
not required to retread old ground in a time-limited trial—particularly when she
emphasized that her demand analysis for lost profits was also “relevant to the
determination of the amount of reasonable royalties.” A50651:25-A50652:4; see,
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e.g., Powell, 663 F.3d at 1241 (royalty supported if “within the range encompassed
by the record as a whole” (internal quotation marks omitted)).
This case is therefore nothing like Whitserve LLC v. Computer Packages,
Inc., 694 F.3d 10 (Fed. Cir. 2012), where the damages expert started from “the
now discarded rule of thumb that assumes the patentee would get about 25% of the
infringer’s expected profit” and added only a “superficial recitation of the Georgia-
Pacific factors, followed by conclusory remarks.” Id. at 31. Ms. Davis
specifically addressed the factors most relevant to her analysis. A50651-A50652;
A50708-A50709.
Samsung criticizes the district court for citing Ms. Davis’s expert report (Br.
73), but the court did so in response to Samsung’s untimely challenge to Ms.
Davis’s methodology, recognizing that the report was “not itself admitted into
evidence” (A125). The court separately considered the trial evidence and found it
sufficient to defeat Samsung’s JMOL motion. Id.
Furthermore, Ms. Davis’s testimony is not the only evidence supporting the
jury’s reasonable-royalty award. Apple’s technical experts discussed additional
demand evidence, including documents illustrating Samsung’s copying of the
patented features. E.g., A50414-A50415; A50420-A50423 (discussing A25694,
A26011); A50449-A50454 (discussing A25343, A25423). Dr. Hauser confirmed
the significant demand for the patented features through his conjoint analysis.
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A24962; A50531. And Mr. Schiller discussed Apple’s unwillingness to permit
competitors like Samsung to use Apple’s patented inventions. A50851-A50852;
A50911-A50912. Taken together, the evidence is more than substantial.
Samsung is also incorrect that Mr. Musika “identified no evidence
supporting his royalty rates” to justify the $833,076 awarded for the Galaxy Tab
10.1 WiFi. Br. 73. Mr. Musika explained the three methods underlying his royalty
rate and the evidence for the relevant Georgia-Pacific factors (A42093-A42100)
and prepared an exhibit outlining his reasonable-royalty analysis for each patent
(A24960).
IV. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN DENYING A NEW TRIAL.
A. Samsung Shows No Instructional Error.
Samsung seeks a new trial by restating its arguments regarding alleged
errors in the jury instructions. Br. 73-74. But as explained above (pp. 27-32, 45-
53, 68-69), Samsung has shown no error, let alone prejudicial error warranting a
new trial. See, e.g., SynQor, 709 F.3d at 1379; Dang, 422 F.3d at 804-805.29
29 Samsung’s passing reference to alleged instructional errors concerning causation and apportionment for trade-dress damages (Br. 74) “in a single sentence of [its] opening brief” is “insufficient to raise the issue on appeal.” SynQor, 709 F.3d at 1385.
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B. The Damages Award Is Not Excessive Or Against The Weight Of The Evidence.
Samsung also argues that the judgment is “excessive and against the weight
of the evidence.” Br. 74. But as discussed above (pp. 33-44, 53, 54-66, 69-88),
the infringement, dilution, and validity findings and the damages award all rest on
substantial evidence. Additionally, the damages award is by no means excessive
given Samsung’s widespread infringement and dilution and the billions of dollars
that Samsung reaped as a result.
C. The District Court Permissibly Excluded Samsung’s Late-Disclosed Evidence.
The district court acted well within its discretion in precluding Samsung
from introducing its purported evidence of independent development. Samsung
neglects to mention that the court initially excluded the evidence under Federal
Rule of Civil Procedure 37 as a sanction for Samsung’s failure to timely disclose
its theories and evidence regarding the F700 during discovery. A6317-A6318;
A90054-A90058; see A90023-A90030; A90041-A90044; A90268-A90270,
A90287-A90288, A90310 (highlighted portions excluded). Samsung does not
challenge that ruling, which is reason enough to reject Samsung’s argument. See
Wong v. Regents of Univ. of Cal., 410 F.3d 1052, 1060 (9th Cir. 2005) (“[F]ailure
to comply strictly with scheduling and other orders … may properly support severe
sanctions and exclusions of evidence.”).
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Ultimately, the district court admitted the F700 for the limited purpose of
addressing “alternative design[s] and functionality,” but not as evidence of
independent development. A41186-A41188; see A6832-A6833; A90350-
A90351. The court did not allow Samsung to use the F700 to “rebut an allegation
of copying,” because doing so would have created “a real likelihood” that the jury
would consider the evidence for an excluded purpose. A6833. Moreover, as the
court found, F700 designer Hyong Shin Park’s testimony would have been “of
limited probative value” given that she “did not design any of the accused
[Samsung] devices” and was “unaware of any Samsung phone having been based
on the F700.” A6833.30 In the end, the court concluded, “Samsung’s inability to
use this information [wa]s a direct consequence of its failure to timely disclose its
invalidity theories leading up to the 2012 trial.” A90353. The court’s evidentiary
ruling was not “beyond the pale of reasonable justification” and certainly not an
abuse of discretion. Harman v. Apfel, 211 F.3d 1172, 1175 (9th Cir. 2000).
Regardless, Samsung has not shown that admitting the excluded evidence
would have “more probabl[y] than not” affected the outcome. ATD Corp. v.
30 Samsung’s suggestion (Br. 79-80) that Minhyuk Lee was precluded from testifying at trial is both misleading and incorrect. Samsung cites only deposition testimony from Mr. Lee, not a “proffer.” Br. 80 (citing A6821-A6824). And although Apple moved to preclude Mr. Lee’s testimony, the district court denied Apple’s motion without prejudice. A90337; A90343; A90347. Samsung ultimately chose not to call Mr. Lee as a witness. A90356-A90358.
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Lydall, Inc., 159 F.3d 534, 549 (Fed. Cir. 1998) (reciting Ninth Circuit standard);
see Phoenix Eng’g & Supply Inc. v. Universal Elec. Co., 104 F.3d 1137, 1142 (9th
Cir. 1997) (“The burden of showing that prejudice has resulted from the error is on
the party claiming injury from the erroneous ruling[.]” (alterations and internal
quotation marks omitted)).31 Samsung’s supposition based on the jury’s design-
patent and trade-dress verdicts as to the accused Galaxy tablets is of no
consequence, as the jury also found that those products infringed Apple’s utility
patents. A633-A635.
Finally, far from being “counter-factual” (Br. 81-82), Samsung’s copying of
Apple’s protected designs and features was abundantly demonstrated by
Samsung’s own documents. See supra pp. 12-17. Apple did not create a “false
impression” unsupported by the evidence. United States v. Sine, 493 F.3d 1021,
1037 (9th Cir. 2007).
CONCLUSION
The judgment should be affirmed.
31 Samsung does not even argue that it meets this standard. See Br. 81 (arguing that jury “might well have” found for Samsung on iPhone-related claims had evidence been admitted).
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Respectfully submitted,
/s/ William F. Lee RACHEL KREVANS RUTH N. BORENSTEIN NATHAN B. SABRI CHRISTOPHER L. ROBINSON MORRISON & FOERSTER LLP 425 Market Street San Francisco, CA 94105 (415) 268-7000 MARK D. SELWYN WILMER CUTLER PICKERING HALE AND DORR LLP 950 Page Mill Road Palo Alto, CA 94304 (650) 858-6000 July 28, 2014
WILLIAM F. LEE MARK C. FLEMING LAUREN B. FLETCHER WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 (617) 526-6000 JAMES L. QUARLES III WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Avenue, N.W. Washington, DC 20006 (202) 663-6000 Counsel for Plaintiff-Cross Appellant Apple Inc.
CERTIFICATE OF SERVICE
I hereby certify that I filed the foregoing Brief for Plaintiff-Cross Appellant Apple Inc. with the Clerk of the United States Court of Appeals for the Federal Circuit via the CM/ECF system and served a copy on counsel of record, this 28th day of July, 2014, by the CM/ECF system.
Dated: July 28, 2014 /s/ William F. Lee William F. Lee
CERTIFICATE OF COMPLIANCE
Counsel for Plaintiff-Cross Appellant hereby certifies that:
1. The brief complies with the type-volume limitation of Federal Rule of
Appellate Procedure 32(a)(7)(B)(i) because exclusive of the exempted portions it
contains 16,999 words as counted by the word processing program used to prepare
the brief;32 and
2. The brief complies with the typeface requirements of Federal Rule of
Appellate Procedure 32(a)(5) and the type-style requirements of Federal Rule of
Appellate Procedure 32(a)(6) because it has been prepared using Microsoft Office
Word 2010 in a proportionally spaced typeface: Times New Roman, font size 14.
Dated: July 28, 2014 /s/ William F. Lee William F. Lee
32 The Court granted Samsung’s unopposed motion for 3,000 additional words for its opening brief. ECF No. 32. Pursuant to Federal Circuit Rule 28(c), Apple’s brief “may contain the same number of additional pages or words.”