Comparison of Design Patent and Trade Dress Protection in Light of the Federal Circuit’s Decision in Apple v. Samsung

[co-author: Eddie Obissi]

In a decision authored by Chief Judge Sharon Prost, the Federal Circuit held that while design patents covering product configurations – that is, “a product feature or a combination or arrangement of features”^[1] – can protect functional aspects of a design, trade dresses cannot. The case, Apple v. Samsung,^[2] evaluated Samsung’s appeal of a jury verdict that awarded Apple nearly one billion dollars in lost profits associated with the iPhone®. While the Federal Circuit upheld the jury verdict in regards to infringement of two utility patents, more noteworthy is its discussion and holding regarding the design patents and trade dresses at issue. In its opinion, the Federal Circuit drew a distinct line between design patent and trade dress protection, finding that the former appropriately protected the product configurations at issue, while the latter did not.

Design patent and trade dress law do not serve the same purpose, nor do they offer the same kind of protection. Design patents are meant to serve the purpose of “promot[ing] the decorative arts,” and “improving the appearance of articles of manufacture.”^[3] Conversely, “the purpose of trade dress protection is to secure the owner of the trade dress the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.”^[4] Further, design patents only offer protection for a fifteen-year term, while trade dress protection is potentially indefinite. Requirements for a finding of infringement also differ subtly but importantly between the two areas of law.^[5] Under both design patent and trade dress law, consumer confusion between the protected and infringing product is considered during the infringement analysis. Design patents protect “non-functional aspects of an ornamental design,”^[6] however, only trade dress law explicitly excludes the protection of functional features. Thus, despite their seemingly disparate ends and means of enforcing those ends, design patents and trade dresses often cover similar material. In Apple v. Samsung, the Federal Circuit clarified the role of functionality in each scheme and which protection properly incorporates product configurations.

In the case at hand, the Federal Circuit evaluated trade dresses and design patents that generally related to features of the iPhone®, including the shape of the device, the screen, the borders, the bezel, and the icons found on the display. Applying Ninth Circuit precedent, the Federal Circuit found that the trade dresses in dispute protected functional aspects of the device, and thus the jury verdict of trade dress dilution was inappropriate. As an initial matter, the court emphasized that trademark law, which may grant perpetual protection, should not be used to monopolize the use of functional features of a design,^[7] and that product configuration trade dresses are rarely valid. In declaring the trade dresses functional, the court focused on the utilitarian benefits offered by their features. Significantly, the court implied that features that increase ease of use constitute a utilitarian advantage that weighs towards functionality.^[8] Further, Samsung presented undisputed evidence that suggested the “usability function” of every aspect of the alleged trade dresses, including the rounded corners, the rectangular shape, the flat clear screen, the bezel, and the icons. Though Apple attempted to argue that the trade dresses simply were directed to the beauty of its design, the court corrected, stating that “Apple pursued both ‘beauty’ and functionality in the design of the iPhone.”^[9] In summary, Apple was not able to produce substantial evidence to support a jury finding in its favor, and thus the Federal Circuit reversed the district court’s denial of Samsung’s motion for judgment as a matter of law that the trade dresses were functional and thus not protectable.

In disputing the jury verdict of design patent infringement, Samsung presented two main arguments. First, Samsung argued that its products and the asserted design patents were similar only insofar as the patents covered functional elements, and that such elements should have been removed from the infringement analysis. Second, Samsung asserted that Apple had not presented any evidence of actual deception of consumers, and that the district court had inappropriately treated its analysis of the prior art in determining that Samsung’s products infringed the asserted design patents.

The court rejected Samsung’s first argument that “the district court should have excluded elements that are dictated by their functional purpose, or cover the structural aspects of the article.”^[10] To make this point, Samsung relied on two Federal Circuit cases, Richardson v. Stanley Works,^[11] and Lee v. Dayton-Hudson.^[12] However, the court did not agree with Samsung’s characterization of those cases. Instead, the court noted that “the language ‘dictated by their functional purpose’ in Richardson was only a description of the facts there; it did not establish a rule to eliminate entire elements from the claim scope as Samsung argues.”^[13] Further, Lee “did not specify a rule, as Samsung represents, to eliminate [structural] elements from the claim scope of a valid patent in analyzing infringement.”^[14] In rejecting Samsung’s plea to exclude functional elements of Apple’s design from the claim scope, the court implied that the sole reason for distinguishing nonfunctional and functional aspects of a patented design is to consider only the “ornamental aspects” of those functional elements during the infringement analysis.^[15] Thus, while the court did not confirm or deny that Samsung’s products only included functional aspects of the asserted design patents, such an observation would have been moot. The court held that the design patents were valid and Samsung’s products included the elements of the asserted claims. Thus, the design patents were infringed and Samsung was liable for the associated damages.

The court dismissed Samsung’s second argument even more quickly. Samsung had argued that Gorham Co. v. White^[16] and Egyptian Goddess, Inc. v. Swisa, Inc.^[17] dictated that a design patent is infringed if an ordinary observer would have been deceived by the competing product and that copying features that are distinct from the prior art weighs in favor of a finding of actual deception. Samsung argued that the jury instructions should have reflected this precedent. According to Samsung, however, “portions in the infringement instruction . . . made the jury consider a lack of actual deception irrelevant and led the jury to disregard the prior art.”^[18] Again, the Federal Circuit disagreed. Judge Prost wrote, “[w]e conclude instead that the jury instruction simply clarified that actual deception was not required, which is an accurate reflection of the analysis in Gorham,”^[19] and “the jury instruction expressly required that each juror ‘must’ consider the prior art admitted at trial.”^[20] Accordingly, Samsung failed to meet its burden of proving that the jury instructions did not fairly and correctly cover the substance of the applicable law.

The Federal Circuit next upheld the lost profits damages awarded to Apple in the jury verdict. In rejecting Samsung’s arguments in favor of an “apportionment” requirement, the court invoked 35 U.S.C. § 289, which explicitly provides that one who infringes a design patent “shall be liable to the owner to the extent of his total profit.”^[21] Thus, the court found that there had been no legal error in the jury instruction on design patent damages.

The Federal Circuit’s decision displays the power that design patents possess and draws an important distinction between trade dress and design patent protection. Namely, trade dress protection is not applicable to product configurations where the elements are functional in any respect, even if they simply improve the usability of the product. Design patents, on the other hand, are more loosely bound by functional aspects. The Federal Circuit’s decision to exclude apportionment requirements from the damages calculation of design patent lost profits likewise makes them a powerful form of protection for product configuration designs. Thus, design patents offer superior protection of product configurations than do trade dresses.

It is still unclear how applicable this decision is to cases outside the scope of product configuration designs. The Federal Circuit was quick to point out the limited enforceability of trade dresses that purport to protect product configurations, and set a low bar for functionality in such cases. Meanwhile, valid design patents protecting product configurations are likely to enjoy enforceability, regardless of the inherent functionality provided by their various elements.