D.C. appeals court rules some iPhone trademarks invalid
A $930 million verdict against South Korean phone maker Samsung that claimed its Galaxy phone infringed patents held by Apple could be knocked down by as much as $382 million, under a May 18 decision issued by the U.S. Court of Appeals for the Federal Circuit.
A three-judge panel of the D.C.-based appellate court, the federal appeals court with jurisdiction over patent-related cases, upheld Apple’s claims that Samsung infringed three design patents and two utility patents registered for the company’s iPhone and iPad products, but ruled that the company could not prevail on two claims that its “trade dress” had been diluted.
In August 2012, a jury initially awarded Apple $1.049 billion in finding that Samsung had infringed Apple’s trade dress and a variety of both design and utility patents on the iPhone. Those included registered design patents for the phone’s rounded corners, tapered edges and home button:
And for its graphical display of on-screen icons:
The U.S. District Court for Northern California later upheld $639.4 million of the damages, but ordered a retrial on the balance, finding that Samsung had not been properly notified for part of the infringing period. A damages verdict of $929.9 million was finalized by the court in March 2014.
But the appellate court took issue with Apple’s claims that Samsung diluted both its registered trademark for the design of the iPhone’s 16 home screen icons, set against a black background within a rectangular screen with rounded silver edges, as well as an unregistered trade dress assertion made under the Lanham Act. Apple contended in its trade dress claim that its products were uniquely identifiable as those that include:
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 screen, and an unchanging bottom dock of colorful square icons with evenly rounded corners set off from the display’s other icons.
The appeals court found that Samsung could not be held liable for diluting either claim, largely on grounds that Apple had failed to demonstrate that the design features in question were purely ornamental and served no utilitarian purpose. On the registered trademark, the court ruled that it was “clear that individual elements claimed…are functional” and thus not protected.
For the unregistered trade dress claim, they found that Apple failed to show how alternative design schemes would have offered exactly the same features, that its advertising stressed how the phone’s design and user interface rendered it “easy to use” and that the company offered no evidence that the design elements were not chosen on grounds that they were relatively simple and inexpensive to manufacture.
Apple fails to rebut the evidence that the elements in the unregistered trade dress serve the functional purpose of improving usability/ Rather, Apple focuses on the ‘beauty’ of its design, even though Apple pursued both ‘beauty’ and functionality in the design of the iPhone. We therefore reverse the district court’s denial of Samsung’s motion for judgment as a matter of law that the unregistered trade dress is functional and therefore not protectable.
While the decision, which remands to a jury the decision on final damages, represents only a partial victory for Samsung, it is a significant victory for innovation policy. While utility patents expire 20 years after they are filed and design patents expire 14 or 15 years after they are issued, trademarks and trade dress protections last forever. If allowed to stand, Apple would have enjoyed a perpetual monopoly on features that have become key to both the design and function of smartphones.
