Source: https://de.scribd.com/document/358715211/17-09-08-Apple-Design-Patent-Damages-Brief
Timestamp: 2019-04-19 03:32:54+00:00

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.... 2016 WL 3194218 (S................ 29.... Apple Inc. 11-cv-01846-LHK v .................. July 28.. No................ Samsung Electronics Co. v.... 15-777...................... 15-777...10 4 5 Briefs 6 Apple Brief. Ct... June 1......... 2016) ............. 20 Apple Inc................................ 12............. 2016) ......23 8 Apple Statement in Support of Continued Panel Review......... 15-777.. 27....................................... v.......... 18 2016 WL 4073686 (S.. passim 12 Petitioner’s Reply Brief......... Samsung Electronics Co........................ Dec. 2014) ................ No.....7........... Cir. Samsung Electronics Co............ Aug............................. Ct.................. 7 2014 WL 3909249 (Fed. No.. 14-1335...................... Cir. Apple Inc.......... Apple Inc....12.......24 19 Samsung Statement in Support of Remand............... 2016) ............ 2017 WL 514460 (Fed...................................... Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 6 of 32 1 Manual of Patent Examining Procedure § 1503.... No........24 10 Brief for United States as Amicus Curiae Supporting Neither Party..... Samsung Electronics Co. No....01 . No.. Apple Inc...... Ct................................... 2005) ...7 2 Restatement (Third) of Restitution and Unjust Enrichment § 51 (2011) . v........... 2017) ...... June 8.................................... Ct................ 9 2016 WL 8222614 (Fed.......... July 29........................ v...... 15-777.. v........ 11 Samsung Electronics Co.... 14-1335............................. 21B Federal Practice & Procedure Evidence § 5122 (2d ed.. Cir............22 14 15 Petitioner’s Reply Brief. 2017 ORDER Case No. 2016 WL 6599922 (S..................... v.. Apple Inc. 2016) .. Jan.... No.. Samsung Electronics Co...24 21 22 23 24 25 26 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28.......... 13 3 Wright & Miller...... v....... 13 Samsung Electronics Co............... 24 17 Respondent’s Brief........................... 16 2016 WL 4524542 (S......... 2016) ............. 14-1335................................. Apple Inc..
the jury should determine—as the statute directs—the thing to which the 27 defendant applied the patented design for the purpose of sale. INTRODUCTION 2 35 U. This Court recognized these principles in its instructions regarding Samsung’s 17 effort to identify deductible costs. For the same reasons. when disputed. As the Solicitor General explained. § 289 provides that a patentee may recover an infringer’s “total profit” on the 3 article of manufacture to which the infringer has applied the patented design for the purpose of 4 sale. the defendant also has the burden of 23 proving the total profit on that smaller article of manufacture. 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. showing that certain costs should be deducted from the infringing product revenue or by 8 arguing that the patented design was applied not to the product as a whole. Samsung’s efforts to reduce the damages amount based on an 18 asserted smaller “article of manufacture” should be treated no differently. once the patentholder makes its 20 prima facie case that the defendant misappropriated the patented design in a sold product. 10 Whether an infringer can reduce the § 289 damages it owes—through offsetting costs or a 11 smaller “article of manufacture”—are factual issues that. but to an “article of 9 manufacture” that is only a component of that overall product. 11-cv-01846-LHK 1 . Thus. because it has superior access to relevant information and should shoulder the burden of 15 proving (if it so contends) that its ill-gotten gains are less than what it received from the 16 infringing sales.C. it has proven its prima facie case for infringer’s 6 profits under § 289. the 21 defendant has the burden of identifying evidence showing that the design was in fact applied to a 22 smaller article of manufacture. the defendant bears the burden of persuasion on its request to reduce 14 damages. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 7 of 32 1 I.S. 24 Where a defendant meaningfully disputes the patentee’s prima facie case by introducing 25 evidence that the patented design was applied to an “article of manufacture” smaller than the 26 product as sold. for 7 instance. The infringing defendant may then try to reduce the damages amount by. as the Solicitor 19 General of the United States explained before the Supreme Court. 2017 ORDER Case No. because 12 they are simply sub-questions within the jury’s overall damages decision. As is typical of a 13 disgorgement-like remedy. When a patentee has demonstrated that the infringer applied the patented design to a 5 product and profited from that product’s sale. are for the jury. Both issues are for the jury.
12 Although Samsung offered evidence of costs that it believed should offset the proven revenue. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 8 of 32 1 the article of manufacture is the thing “that most fairly may be said to embody the defendant’s 2 appropriation of the plaintiff’s innovation. 22 Accordingly. Apple overwhelmingly proved its prima facie case that Samsung applied 11 Apple’s patented designs to its entire phones and proved Samsung’s revenues on those phones. 9 These principles make plain that this Court did not err in not giving Samsung’s Proposed 10 Jury Instruction 42. for United States as Amicus Curiae Supporting 3 Neither Party 9. 2016) 4 (“U. Issue 1: The “Article Of Manufacture” Is The Thing To Which The Defendant Applied The Patented Design For The Purpose Of Sale. there was no error in declining to give Samsung’s Proposed Jury 21 Instruction 42. 2017 ORDER Case No.” Samsung also failed to 16 identify any evidence of an alternative “total profit” calculation on such an article.1 and Samsung has shown no cognizable prejudice in the Court’s instructions. While no bright-line rule will dictate the result in all cases.g. The record is 17 entirely one-sided on these points. Co. no new trial is warranted. 11-cv-01846-LHK 2 .1. the visual contribution of the patented design to the 7 product as a whole.” Br. 2016 WL 3194218 (June 8. 25 Section 289 provides: “Whoever during the term of a patent for a design. no 13 Samsung witness testified that the recoverable profits should be further reduced because Samsung 14 applied Apple’s patented designs to any “article” other than Samsung’s infringing phones. v. (1) applies the patented design.” let alone the “total 20 profit” on that article. 15-777. Apple Inc.”). RESPONSE TO THE COURT’S QUESTIONS 24 A. without license 26 of the owner. several factors may 5 inform the inquiry. No. or any colorable imitation thereof. 23 II. 15 Having identified no evidence of any alternative “article of manufacture. 6 separately or as part of a unitary product)..S. to any article of 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 18 Because no foundation in the evidence would have permitted a reasonable jury to find that 19 Samsung carried its burden of identifying any lesser “article of manufacture. including: how the defendant sells its asserted article of manufacture (e. Samsung Elecs.. and the defendant’s aim in appropriating the patented design. Br. the degree to which the asserted article is physically or conceptually distinct 8 from the product as a whole.
the article 8 of manufacture is the thing “that most fairly may be said to embody the defendant’s 9 appropriation of the plaintiff’s innovation. Plywood Corp. the defendant may seek to reduce the 17 amount of recoverable profits by identifying some component of the infringing product as sold 18 and asserting that the identified component is the article of manufacture on which profits are 19 owed. 429.” Samsung Elecs. The plaintiff meets 12 that burden by showing that the defendant applied the patented design to a product that was sold. the factors listed below should be adapted as each case requires. 11-cv-01846-LHK 3 . but Apple 20 proposes that the following four factors may be considered:2 21 1. the defendant will not challenge the point. must be adapted to the 27 particular circumstances of each case. 137 S. 2014). Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 9 of 32 1 manufacture for the purpose of sale. v.S. U. Inc. 2017 ORDER Case No. v. 9.. 23 This factor follows from the statutory language. D-Link Sys.3d 1201. Ct. In some cases. Apple Inc.. 773 F. 318 F. 1970). and the 16 prima facie case will end the inquiry. as the Solicitor General put it. see Ericsson..1 10 As the party seeking damages.” U. the plaintiff bears the initial burden of proving a prima 11 facie case identifying the article of manufacture for which it seeks profits. Co. as § 289 makes clear. 435 (2016).Y. 13 If the factfinder decides that the product as sold infringed the design patent (as happened here). Inc. Or. 1120 (S.N. Resolving such a dispute will turn on the specific evidence in each case. Supp. including whether the defendant typically sells its asserted 22 article of manufacture as part of a unified product or separately.S. the article of manufacture is the thing to which the defendant 7 applies the patented design for the purpose of sale. Br. 6 Accordingly. or (2) sells or exposes for sale any article of manufacture to 2 which such design or colorable imitation has been applied shall be liable to the owner to the 3 extent of his total profit[. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. v. and 28 the relevance of each factor may vary from case to case. 1116. 14 the product is then necessarily an “article of manufacture” to which the patented design has been 15 applied for the purpose of sale. 1230-1232 (Fed.D. How the defendant sells its infringing product and accounts for its profits on those sales. which states that the defendant “sells or 24 25 1 Emphases are added unless otherwise noted. Cir. In other cases. 2 Just as the factors that guide the reasonable royalty analysis set out in Georgia-Pacific 26 Corp..]” The Supreme Court stated that an article of manufacture “is simply a 4 thing made by hand or machine” and may be “a product sold to a consumer as well as a 5 component of that product.
Nike. § 289. If the defendant typically sells its asserted article of manufacture as part of a unitary 5 product. White. or separately tracks unit sales. 23 A patented design “gives a peculiar or distinctive appearance to the manufacture. such that the case “is sold separate and apart from the music-making 20 apparatus. 15 allows consumers to substitute different designs. and 7 profits on the products as a whole (as opposed to on the asserted article of manufacture). As the Solicitor General stated. the factfinder may reasonably infer that the defendant has applied the patented design to 6 the product as a whole. Cir. For example. 1915) (“Piano I”). “if the design is a significant 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. including whether the claimed design gives distinctive appearance to the 22 product as a whole or only to the asserted article of manufacture..3d 1437.g. v. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 10 of 32 1 exposes for sale” the article of manufacture or “applies the patented design” to the article of 2 manufacture “for the purpose of sale. 1998) (noting that the defendants stipulated to the “amount … generated from sales of 13 the infringing shoes” where the design patent covered only the “upper” portion of the shoe). v. 138 F.C. revenues. in the Piano Cases. The factfinder should consider what 3 physical items the defendant sells and how the defendant earns and accounts for its revenues and 4 profits. Inc. § 289. or article 24 to which it may be applied.” 35 U.C. that might suggest that the patented design was applied to an 17 article of manufacture smaller than the product as a whole. that 8 further indicates that the defendant recognizes profits from applying the patented design to the 9 whole product. if the defendant typically sells its asserted article of manufacture separately.” 35 U. 25 the factfinder should seek to identify the thing that derives its distinctive appearance from 26 application of the patented design. revenues. Inc. the 18 Second Circuit noted that purchasers could customize or select different piano cases for the same 19 piano mechanism. 2017 ORDER Case No. The visual contribution of the patented design to the product as a whole.. See.) 511.S.” Gorham Co.S. if the defendant normally tracks unit sales. Wal-Mart Stores. 11-cv-01846-LHK 4 . e.” Bush & Lane Piano Co. For example.. Becker Bros.S. 1447 12 (Fed. 222 F. Relatedly. v. or 16 profits from individual components. 525 (1872). Thus. 902. 904 (2d Cir. where a design patent covers only the “upper” portion of a shoe. keeping in mind that the design may be applied to “any article 27 of manufacture. (14 Wall. 14 However. 21 2. the 10 entire shoe may fairly be considered the article of manufacture if the defendant only sells the 11 infringing shoes as a whole. 81 U.
11-cv-01846-LHK 5 . 26. By contrast. that fact might 2 suggest that the ‘article’ should be the product. affecting the appearance of the product as a whole.S. where the patented design focused 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. at least at one time. “it [wa]s not seriously contended that all the 13 profits from the refrigerator belonged to [the patentee]”). 222 F.” U. for instance. 268 F.” Piano I. Br. the shape 6 of a Volkswagen Beetle). 22 Sometimes “the design is inseparable from the article to which it is attached. 15 Nearly every product will contain individual components that were. at 904. a reasonable factfinder would be unlikely to conclude.. 16 separate from the end product. 1920) 12 (where design patent covered refrigerator latch. See Young v. the factfinder should “consider whether the design is conceptually distinct from the 20 product as a whole” (U. where the design does 3 not significantly contribute to the product’s overall appearance. See Nike. A design for the body of a shoe. 14 3. that might suggest that the 4 relevant article of manufacture is a smaller component.g. Grand Rapids Refrigerator Co.S. 28) and “the extent to which various components can be physically 21 separated from the product as a whole” when it is sold (id. 9 for example. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 11 of 32 1 attribute of the entire product. whether an identified component is the article of 17 manufacture to which a patented design is applied cannot be answered simply by determining 18 whether that component is ever physically or conceptually distinct from the product as a whole. 5 For example. See U. may be 24 conceived of holistically as part of the entire shoe such that the shoe body cannot be separated 25 from the shoe. 9). because the body’s distinctive design contributes significantly to the car’s overall 8 appearance. 974 (6th Cir.3d at 1442 (“the article[s] 26 bearing the [patented] design” were the whole athletic shoes. either physically or conceptually. a factfinder may reasonably infer that the article of manufacture is the 7 entire car. 2017 ORDER Case No. The degree to which the asserted article of manufacture is physically and conceptually distinct from the product as sold. Br. Thus. Br. 966.S. 19 Rather. 28. Conversely. if a defendant applies a patented design for the body of a car (e. or of which it 23 is a part. 138 F.. that a patented cupholder design made a substantial visual contribution to the entire 10 car’s appearance. or that a patented refrigerator latch design entitled the patentee to all profits on 11 the refrigerator.
1973) (defendant 27 “appeared … deliberately to have copied [plaintiff’s] … successful product”). However. including whether the defendant did so in an effort to replicate a product as a whole. 2016 WL 4524542 (Aug. Samsung. 15. 6 4. 27- 23 24 3 E.. Rugg Co. Pet. the design for the body of a car) to make a product (e. Cir. the piano). On the other hand. including the 21 scope of the claimed design.. The defendant’s reasons for appropriating the patented design. the piano case) that is both physically and 3 conceptually distinct from the product as a whole (e. a latch on a refrigerator) for reasons other than imitating the patentee’s entire product. 94. U. Br.3 Accordingly. there are other instances where the 2 patented design is applied to a component (e. 105 U. 2017 ORDER Case No. For example.. While 10 inadvertent design patent infringement is theoretically possible..T. 1951) (“unabashed 28 attempts to copy” patented design). Glen Raven Knitting Mills. 15-777. profited from infringing sales of that entire 15 product—that would support a finding that the article is the entire product. at 903-904 4 (finding the case was the relevant article of manufacture. a cupholder 17 in a car.g. 20. Thom McAn Shoe Co. E. if 16 the defendant copied the design of only an insignificant component of a product (e. v.g. Holthaus. Inc. 474 F.. 19 * * * 20 Samsung and the Solicitor General have pointed to the design patent itself.g. 847 (4th Cir. Sanson Hosiery Mills. 834 (Jan. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. Parker Sweeper Co. L. See.g. v.2d 950. See Piano I. 22 e. a car) that 14 resembles the patentee’s product—and.2d 845. 988 F. where a consumer “may have [a] piano 5 placed in any one of several cases dealt in by the maker”).g. 11-cv-01846-LHK 6 . 950 (6th Cir.S. Rec..2d 1117. and so that makes it possible to realize any profit at all. 18 Cong. 1993) (accused shoes were “almost a direct copy” of patented design (internal quotation marks 26 omitted)). 96 (1881) (accused design was “servile copy 25 of” patented design).A. Lehnbeuter v. 824. 222 F. as a relevant factor in determining the article of manufacture. in fact. 1125 (Fed. most design patent infringement 11 involves deliberate appropriation. v. if the defendant intentionally copied the 13 patented design (e. Inc. Inc..”).g.S. No.. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 12 of 32 1 on the shoe “upper” and did not include the sole).g. 18 that may indicate that the article is only the copied component rather than the entire product. 29. 7 Congress understood that design drives sales in a competitive marketplace where many 8 products have similar functions and features. Reply Br. 189 F.. Gear. the factfinder may consider why the defendant 12 decided to appropriate the patented design. 2016). 1887) (“[I]t is the 9 design that sells the article..
Accordingly.01.C. 35 U.A.C.”). 9 Second. § 1. and that 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 11-cv-01846-LHK 7 .2d 391. § 171. They are not coextensive: the claimed design delineates the distinctive 6 features that make up the innovative design. 1959). and 13 profits may be recovered for. 209-210 (C.P. the patent 20 does not determine the article to which the infringer has applied the patented design. If the defendant comes 24 forward with sufficient evidence that the article of manufacture is something less than the entire 25 infringing product. while a design patent may claim only certain aspects of a product. 2017 ORDER Case No. “any article of manufacture. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 13 of 32 1 28.153. Br. 3 First. MPEP § 1503. while the factfinder might consult the patent to understand the claimed design. however. Rather.… [T]he inventive concept of a design is not limited to the exact 16 article which happens to be selected for illustration in [a] patent.S.C. § 289. see 37 C.” 35 U. whereas an article of manufacture is a thing (like a 7 phone) to which that design has been applied.2d 203.” Application of Rubinfield. 22 Identifying the article of manufacture to which the defendant has applied the patented 23 design is a question of fact that. § 289 makes clear that the defendant may apply the patented design to. U. 18 28 (“[T]he factfinder should not treat the patent’s designation of the article as conclusive. there is a 4 difference between the design claimed in the patent and the article of manufacture to which the 5 design has been applied. 21 B. See 35 U. 46 F. see In re Schnell.A.R.S. if materially disputed. 393 (C. then resolving the dispute requires—as enumerated in the factors discussed 26 above—considering “the relation to the business whole of the part embodying the patent. 19 Thus. Issue 2: Identifying The Article Of Manufacture Is A Question Of Fact To Be Decided By A Jury When Disputed. is for the jury. the article described or 11 illustrated in the patent does not limit the article to which the defendant may apply the patented 12 design.C. § 289 (distinguishing between an 8 “article of manufacture” and the “patented design” applied to it). 1931).P.S. “[i]t 14 is well settled that a design patent may be infringed by articles which are specifically different 15 from that shown in the patent .S. 270 17 F.F.C. Any consideration of the patent itself. while the patent must identify an article of manufacture to which the design may 10 be applied. should be carefully limited when inquiring 2 into the article to which the infringer applied the patented design for at least two reasons.
v.” U. not that the Court should have determined the article of manufacture in the first instance. Catalina Lighting. Becker Bros. Samsung urged on appeal that this Court gave incorrect jury instructions on the 20 issue. 5 Treating the article of manufacture issue as a jury question accords with the Supreme 6 Court’s recognition that it is the first “step” in “[a]rriving at a damages award under § 289. when the relevant question is how an ordinary person or community would make an assessment. Br. 1903 at 63 (jury instruction 25 based on Gorham). Samsung has already conceded that the jury should determine the article of 19 manufacture. See. 1916). 135 S. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 14 of 32 1 relation must be considered from all viewpoints. 18 Indeed. § 284.” Gorham.. The plaintiff might even present alternative damages 15 theories under § 284 and § 289 for the same acts of infringement. 21 4 Additionally. 907. inducing him to purchase one supposing it to be the other. Cir. 2017 ORDER Case No.. technical. Hana Bank. at 434.C.S. 1283-1284 (Fed. It has long been understood “across a variety of doctrinal contexts 27 that. the factors that guide the article of manufacture inquiry are context-specific and will often include judgments about how ordinary 26 persons conceive of products. To determine infringement. 10 v. 23 30. of Am. Inc. 81 U. if applicable. popular. Dynamics Corp. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28... Ct. 2002) (infringer’s profits for design patent infringement). Cir. 11-cv-01846-LHK 8 . Braun Inc.4 11 Besides. 234 F. v. Lamps Plus. mechanical.) at 528. e. As occurred here. These 3 “[c]ontext-specific judgments about the relationship of the design to the article as whole … are 4 quintessentially factual in nature..]” U. “[t]reating the identification of the relevant ‘article of manufacture’ as a jury 22 question is consistent with the jury’s role in determining design-patent infringement[. 975 F. It would be bizarre to carve out a small piece of one of these inquiries— 17 identifying the article of manufacture—while committing the rest to the jury. 81 (2d Cir. Br. 137 S. the jury determines (1) whether an accused product infringes. 79. 1992) (same). Ct. 911 (2015).3d 9 1277. 295 F. It is well-established that the jury is responsible for determining 8 damages in design patent cases.S. Inc. giving such attention as a purchaser usually gives. see also Dkt.g. the jury compares the patented and accused designs.” Hana Fin. it would be impractical to take a disputed part of the § 289 inquiry away from the 12 jury. (14 Wall. and (3) the amount of lost profits or a reasonable royalty 14 under 35 U. depending on the 16 circumstances. 29.S. As with that “ordinary observer” test.” 7 Samsung. (2) the 13 amount of the “total profit” under § 289. 818 (Fed. assessing whether “in the eye of an ordinary observer. … 24 the resemblance is such as to deceive such an observer. Inc.” Bush & Lane Piano Co. and 2 commercial.S. the jury is generally the decisionmaker that ought to provide the fact-intensive 28 answer. v.2d 815.
” Dkt. Apple actually 26 demonstrated Samsung’s total profit by presenting evidence of Samsung’s revenues on the 27 infringing phones minus the cost of goods sold. Samsung offered only a “general objection. a design patent plaintiff bears the initial burden of proving 11 that the defendant applied the patented design to a product that was sold and further proving 12 revenues from the sale—as Apple did here. DX753. if it so chooses. the plaintiff has made out a prima 13 facie case under § 289 by identifying both an “article of manufacture” to which the patented 14 design has been applied and the “total profit” on that article. PX25A1. Ct.6 At that point.” Id. at 434. The burden then shifts to the 15 defendant. That is precisely the burden-shifting framework this Court employed 17 at trial. The Burden Shifts To The Defendant To Prove An Article Of 8 Manufacture Less Than The Product As Sold And To Prove Its “Total Profit” On That Article. Dkt. 2784 at 39 (2013 Trial) (same). to prove that the damages should be reduced by. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 38-39. 2840 at 639.”). E. Samsung CAFC Reply Br. 3509 at 16.. identifying the “article of manufacture” and calculating the 24 “total profit” on that article are separate steps under § 289. 11-cv-01846-LHK 9 . Dkt. Issues 3 & 4: After The Plaintiff Makes Out A Prima Facie Case Under § 289. As the Solicitor 22 General explained. 6 Although Apple had the burden to prove only Samsung’s revenues.g. 2017 ORDER Case No. E. at 17. Dkt. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 15 of 32 1 See Samsung CAFC Br. 16-18. Samsung. PX25F. Samsung objected to the failure to give Proposed Jury Instruction 42. Samsung’s objection 5 to Final Jury Instruction 54 never suggested that the article of manufacture question should be 6 taken away from the jury—rather. 137 S. “once the plaintiff has shown that the defendant profited by exploiting a 23 5 As the Supreme Court noted. 2842 at 1014-1015. DX676. for example. Samsung has the 19 burden of proving the deductible expenses. 1839 at 2041-2045. 7 C. Samsung then sought to reduce the amount of that “total profit” by asserting 28 that additional costs should be deducted. Likewise.5 9 10 As the party seeking damages.. See Dkt. 20 The defendant may also try to reduce damages by showing that it applied the patented 21 design to an article of manufacture less than the infringing product as sold. 1694 at 151. 1903 at 72 (2012 Trial) (instructing jury that “Apple has the burden of proving 18 the infringing defendant’s gross revenue by a preponderance of the evidence…. 16 deducting allowable costs. Dkt. As this 2 Court noted.g. Apple addresses both steps together in this section because the reasons for placing the burden on the 25 defendant when it advocates for a smaller article of manufacture are the same for each step.1 “on the 3 grounds that the jury should be allowed to determine that the article of manufacture was less than 4 the entirety of each infringing Samsung phone. Dkt.
”). Prac. Cir. 14 United States. Cal. United States. 11 Such was the rule at common law. Lindahl v.g.S. E.”). v. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 16 of 32 1 product containing the plaintiff’s patented design. If so. courts often assign the burden of proof on an issue to the party with superior 8 knowledge of or access to the relevant facts. App’x 338. “courts look to see whether one party has superior access to the 27 evidence needed to prove the fact... that party has the burden of proving the issue.” U. 602... Concrete Pipe & Prod. does not place the burden upon a litigant of 13 establishing facts peculiarly within the knowledge of his adversary. Br. the component that the defendant asserts is the 3 article to which the design was applied. as the manufacturer or seller of the accused product. 280 (Fed.” Michery v. the defendant should be required to identify. Ford 23 Motor Co. or of which 16 he is supposed to be cognizant. Evid. & D. then that party must bear the burdens of proof. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. for S. 7 First. based on considerations of fairness. § 337 (7th ed. § 5122 (2d ed. 626 (1993) (“It is indeed entirely sensible to 10 burden the party more likely to have information relevant to the facts about [a disputed issue]. & Proc. 2017 ORDER Case No. 31.2d 276. Campbell v. Co. Inc. 365 U. 6 indeed. 341 (9th Cir.”). 560. 96 (1961) (“[T]he 12 ordinary rule. 2013) (“[W]here the facts with regard to an issue lie 28 peculiarly in the knowledge of a party.”). 2 McCormick on Evid.S. 508 U. 139 U. 17 1985) (“The party with the best knowledge normally sustains the burden. 9 Laborers Pension Tr.S. they mirror the reasons for requiring the defendant to prove deductible costs. 2016) (internal quotation marks omitted). Office of Pers.S..”).R. R. 11-cv-01846-LHK 10 . Mgmt. Br. Several reasons support requiring the 4 defendant to shoulder the burden of proving that the article of manufacture is something smaller 5 than the infringing product and of proving the amount of the “total profit” on that smaller article. the defendant—as the party who applied the patented design to an 19 infringing product—is better positioned to identify any component less than the product as sold to 20 which it believes the patented design has been applied. 85.”). Indeed. 650 F. 21B Fed. Selma. 2 through the introduction of admissible evidence. 776 F. manufacturers are often assigned 21 the burden of persuasion as to facts about product design “because the considerations which 22 influenced the design of [a] product are peculiarly within [their] knowledge. v. see also 24 U.S.7 18 In a design patent case. has superior 25 7 See also Wright & Miller. 2005) (In 26 allocating burdens of proof. Constr. 31 (“The defendant. 568 (1891) (“[T]he burden of proof lies on the person who wishes to 15 support his case by a particular fact which lies more peculiarly within his knowledge. of Cal.
31 (describing burden-shifting regime for § 289’s disgorgement remedy). Hudson-Sharp Mach. 138 F. 573 P. 9 Similarly. 203 17 F.” then “the burden should appropriately shift to the defendant 8 to prove” non-defectiveness after the plaintiff has made a prima facie showing of causation). 26 Disgorgement remedies typically require the defendant to shoulder the burden of 27 persuasion regarding any reduction of recovery below the plaintiff’s prima facie showing. Lull Eng’g Co. 45..2d 674. as well as of some of the factors relevant 2 to the ‘article’ determination[. In 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. Barker v. Br. such that the infringers retain no profit from their wrong”). not alone of the gross sales. which are presumptively within the knowledge or means of information 20 possessed by the infringing manufacturer. for Cert. the seller of an infringing product is also in a better position to prove the “total 10 profit” on any article of manufacture that is less than the product as sold.2d 443. and costs associated with its asserted article of 15 manufacture. see also Samsung 24 Pet. 11-cv-01846-LHK 11 . Neither the revenues 11 nor profits associated with a component of the infringing product are likely to be known to the 12 plaintiff. 455 (Cal.]”). 33 (arguing that § 289 is to be interpreted in accordance with disgorgement 25 principles). Erving Paper Mills v. shifting the burden to the defendant is consistent with § 289’s disgorgement-like 22 remedy. 2017 ORDER Case No.”). 10. 3 678 (7th Cir. 1913) (“[A]scertainment of the profits attributable to the infringement 18 requires such discovery. especially where the component is sold only as part of a unitary product. The defendant is better equipped to 14 provide information about the revenues.. U. 21 Second. 1964) (manufacturer has burden because it “ha[s] peculiar knowledge. the plaintiff 13 may not even know whether separate records are kept. but of all items of cost entering into the 19 production and sale. See In re Beckwith. 1978) 5 (where “most of the evidentiary matters which may be relevant to the determination of the 6 adequacy of a product’s design … and [the dispute] involve[s] technical matters peculiarly within 7 the knowledge of the manufacturer. unavailable 4 to [the plaintiff]” about the product). Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 17 of 32 1 knowledge of the identity of the product’s components. 332 F. profits.3d at 1448 (§ 289 “requires the disgorgement of the infringers’ profits 23 to the patent holder. 48-49 (7th Cir. Co.S. and thus should fairly be assigned the burden of demonstrating the “total profit” 16 associated with any component it contends is the article of manufacture. See Nike.
if left unrebutted. 137 S.3d 15 689. Bilzerian. 537 F. meets its 12 “ultimate burden of persuasion that its disgorgement figure reasonably approximates the amount 13 of unjust enrichment. at 834.2d 1215. 2010) (after the claimant has made a 17 “reasonable approximation of profits. 1635. aff’d. 744 F. 1994) (“[a]bsent proof of this sort. 2d 1. the plaintiff bears the initial “burden of producing evidence permitting at 9 least a reasonable approximation of the amount of the wrongful gain”). 890 F. 581 (5th 20 Cir. Whittemore. 3 Corp. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 18 of 32 1 securities cases. SEC v. 8 (D.C.” 18 Cong..3d 1072.g.D. SEC. it has proved a prima facie case that. 2010) (explaining that “[t]he amount of disgorgement should 5 include all gains flowing from the illegal activities” and therefore “need be only a reasonable 6 approximation of profits causally connected to the violation” (citations and internal quotation 7 marks omitted)).8 10 Once the plaintiff in a securities action proves a reasonable approximation of total profits 11 gained from the illegal activity. the framework is 28 applied by the judge in securities cases and by the jury in design patent cases. First City Fin. Restatement (Third) of Restitution and Unjust Enrichment § 51 (2011) (under 8 disgorgement scheme. Cir. App’x 576. The defendant then “bears the burden 14 of establishing” facts that reduce the plaintiff’s sum of disgorgement..C. for instance. Supp.2d at 1232. 697 (D. Thus. a plaintiff seeking disgorgement of profits need only prove a 2 “reasonable approximation of profits causally connected to the violation. Cir. 2013) (plaintiff “carries the initial burden to prove that the amount of disgorgement is a 21 reasonable approximation of profits connected to the violation … the burden then shifts to 22 defendant to prove that the amount is unreasonable”).C. Platforms Wireless Int’l Corp. 1096 (9th Cir. 2017 ORDER Case No.3d 1 (D. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 4 617 F.” the plaintiff’s prima facie case stands). This burden-shifting approach is 23 appropriate because “the risk of uncertainty in calculating disgorgement should fall upon the 24 25 8 The disgorgement remedy in securities cases is derived from the federal courts’ “inherent equity power to grant relief ancillary to an injunction. 890 F. 29 F. 2011).C. 11-cv-01846-LHK 12 . Ct. § 289 is a legal rule to provide “recovery for infringement of design 27 patents. see. 1989). Rec. while the burden-shifting approach in securities cases provides a useful framework for understanding the burden-shifting under § 289. Cir. 1640 26 (2017). Halek.” Kokesh v.” “the burden of proof shifts to the defendants to rebut the 18 presumption that all profits gained while the defendants were in violation of the law constituted 19 ill-gotten gains”)... 1231 (D. SEC v. SEC v. 16 see also SEC v.” First City Fin. e. 659 F.” SEC v. By contrast.
accord SEC v. where securities defendants 24 “fail to rebut” the SEC’s approximation of profits.9 6 These burden-shifting principles for disgorgement cases readily apply to § 289.C. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. Inc. Hughes.”). by proving: (1) that the 9 defendant sold a product incorporating the patented design. 2017 ORDER Case No. 124 F. SEC v. 19 Third.D. 11-cv-01846-LHK 13 . which 7 similarly aims to identify (and disgorge) the defendant’s ill-gotten gains. See 35 U. June 7. Hobart Corp.g. Wyly.3d 449. 3d 260. “[a]ll a plaintiff must establish is (1) that the defendant caused the breach and (2) that damages resulted from that beach.N. at *2 (9th Cir. 2017 WL 2465002. 56 F. “the breaching party (read: ‘wrongdoer’) … must shoulder the 28 burden of the uncertainty regarding the amount of damages. § 289. see supra p.3d 376.” SEC v. as Apple did here. Fujinaga. See Liriano v.3d 264. Group. (citation omitted). In an action for breach. Soundview Tech.10 Once the 13 plaintiff has made out a prima facie case. and (2) the defendant’s revenues on 10 the sales of those infringing products. 2 264-265 (S.S. The defendant may do so by 15 demonstrating deductible costs or by showing that the article of manufacture is something smaller 16 than the entire infringing product and proving the amount of the “total profit” on that smaller 17 article. 2017). the 23 plaintiff’s case stands. Accordingly. 392 (2d Cir. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 19 of 32 1 wrongdoer whose illegal conduct created that uncertainty. 464 F. “The plaintiff need only show 27 a ‘stable foundation for a reasonable estimate’ of damages to which he is entitled[. 1999) (“[S]ince the prima facie case was not rebutted.”). Restatement (Third) of Restitution 11 and Unjust Enrichment § 51 (2011) (“[T]he claimant’s burden of proof … is ordinarily met as 12 soon as the claimant presents a coherent theory of recovery in unjust enrichment.]” Id. the approximation stands as the measure of disgorgement. If the defendant fails to come forward with evidence identifying the smaller article of 18 manufacture and the “total profit” associated with it.” Id. if the defendant fails to meet its burden. it suffices. Supp. then the plaintiff’s calculation stands. 170 F. courts (including this Court. A design patent plaintiff 8 establishes a complete claim for relief under § 289... 1997) (“[i]mposing 3 the burden upon the defendant of proving the propriety [of the disgorgement amount] is 4 appropriate and reasonable” because the wrongdoer is in a superior position to identify relevant 5 facts about its ill-gotten gains). 455 (3d Cir. 9) have already followed this burden- 20 shifting approach by requiring defendants to prove any deductible costs they believe reduce their 21 22 9 As with any burden-shifting regime. 2014). 2006). the burden shifts to the defendant to prove that the 14 “total profit” under § 289 should be some lesser amount. See. 25 10 Similar rules exist in contract law. e. 272 (2d Cir.” Boyce 26 v.Y.. After that burden is met.
11 12 D.N. 16 and (3) to which Samsung applied Apple’s patented designs (demonstrated by the jury’s 17 infringement verdict). at no point during discovery did Samsung identify 22 23 11 24 At a minimum. 476.R.N. Sunbeam Prod. 21-22.Y. Although Samsung produced evidence of its claimed deductible costs. Apple proved its prima facie case by showing that each phone is: 15 (1) an article of manufacture (i. not any smaller components 21 thereof. 2017 ORDER Case No. 2004). Dkt.. That has been Apple’s position from the outset. The burden of lessening the damages recoverable under § 289 by identifying an 10 “article of manufacture” smaller than the entire product as sold and by calculating the “total 11 profit” on that smaller article of manufacture should be no different. “a thing made by hand or machine”).. 203 F. aff’d in relevant part sub nom. e. 3491 at 2) that Apple made clear in its trial brief and Rule 16 pretrial statement 20 that Apple was seeking Samsung’s profits on the entire phones.g... Inc. the 3 burden shifts to the infringer to demonstrate the nature and amount of the costs that should be 4 considered in calculating its ‘total profits..e. (2) that Samsung sold. Issue 5: Samsung’s Infringing Phones Are The Relevant Articles Of Manufacture For All Three Design Patents.D. 13 The relevant articles of manufacture for the D’677. Roebuck & Co.”).Y.g. Inc. S. Sears. Supp. 293 B.. 497 (D. Beckwith. See infra pp. 11-cv-01846-LHK 14 . Samsung 19 concedes (Dkt.’ as well as their relationship to the infringing 5 product. v. See. 1980) (observing that the purpose of § 289 is to prevent unjust enrichment and thus “[t]he 8 burden of establishing the nature and amount of [deductions from the sum of disgorgement] is on 9 the defendants”). 1384-27 at 4 (Apple 18 interrogatory response seeking Samsung’s profits on its infringing phones). 6 311 B. 618 2 (Bankr.. See. D’087. 586. and D’305 patents are 14 Samsung’s infringing phones.Y. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 20 of 32 1 “total profit” under § 289. the defendant must provide evidence permitting the factfinder to reach a lower disgorgement figure. at 48-49 (infringer must produce 25 discovery as to profits because “all items of cost entering into the production and sale … are presumptively within the knowledge or means of information possessed by the infringing 26 manufacturer”). In re AI Realty Mktg. Bergstrom v. 7 Minn. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. of N. 378 (S. 496 F. e. that by itself should preclude Samsung from asserting that the § 289 award should be some lower 28 profits figure based on an alternative article of manufacture.R. Wing Shing Prod.D. 2003) (“Once a patent owner establishes the amount of infringing sales.. Samsung 27 produced no competent evidence regarding its profits on any alternative articles of manufacture. (BVI) Ltd. And as the Court has acknowledged. Indeed.
3509 at 8. 3503 at 4 n. and not any 10 components thereof.”).g. As discussed below. Dkt. The case thus proceeded to trial on the 2 only theory it could have: that Apple sought and was entitled to recover Samsung’s “total profit” 3 on the phones to which Samsung applied Apple’s patented designs. Samsung never identified or 24 came forward with evidence of any smaller article of manufacture (let alone the “total profit” on a 25 smaller article) and thus cannot satisfy its burden of proving any article of manufacture other than 26 12 27 It is still unclear precisely what Samsung contends the “article of manufacture” is.12 6 E. id.]”). And the 20 jury’s infringement findings conclusively establish that Samsung “applied” Apple’s patented 21 designs to Samsung’s phones. 28 On appeal and remand. 2017 ORDER Case No. id. 9 The record is replete with evidence that Samsung’s infringing phones. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 21 of 32 1 any alternative article of manufacture. 11-cv-01846-LHK 15 . the 4 record fully supports that finding and is devoid of evidence supporting an alternative 5 conclusion.]”). 1931 at 6-7 (verdict form identifying each infringing phone). Dkt. Issue 6: The Record Only Supports A Finding That The Relevant Articles Of Manufacture For All Three Design Patents Are Samsung’s Infringing Phones. The evidence shows that the infringing phones were the articles to 8 which Samsung applied the patented designs for the purpose of sale. See Dkt. 1612 at 1376 (“This is another 17 Samsung phone called the Captivate where I found similarly that the overall visual impression 18 was substantially similar to the D’305[. id. Samsung’s asserted articles changed repeatedly. 1611 at 1049 (“[T]he design of this phone would be considered substantially 13 the same as the design of the ’087 and ’677 patents by an ordinary observer. 7 1. at 1057 14 (referring to “the design or appearance of these [infringing] phones”). 22 While Apple made out its prima facie case that the articles of manufacture are the 23 infringing phones (and calculated the “total profit” on those phones). are the relevant articles of manufacture. Apple’s design experts Peter 11 Bressler and Susan Kare testified that Samsung applied the patented designs to the infringing 12 phones. id. at 1150 (“[T]he ordinary observer should be getting an 16 overall impression of what the design of the phone is[. at 1377-1379 (same for other infringing phones). E.3. Samsung did not identify any components as the relevant articles during discovery or for the jury. at 1055 (referring to 15 “the design of the Galaxy S 4G”). APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. Dkt. 19 Samsung presented no contradictory testimony and no expert testimony on the point. Dkt..
All 8 financial records admitted at trial similarly show that Samsung sold phones and not any smaller 9 components. were prominent aspects of the 24 phones’ overall design and contributed to the ultimate “look and feel” of the infringing phones. to 16 anyone. 3-6) only confirms that. E. for 19 example. 2842 at 953. sales. which were sold as 5 unitary products. 25 The jury could observe this from the phones themselves.13 There is no evidence that Samsung ever 15 separately sold phone casings. Indeed. 1610 at 792 (agreeing STA “sells mobile devices”). the patented designs made a prominent visual contribution to the phones’ overall 22 appearance. front faces. 2017 ORDER Case No. id. see also Dkt.. which were in evidence. Dkt. 4 First. which claim features related to the shape. as a replacement part).g. rounded corners. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 22 of 32 1 the infringing phones. Dkt. 21 Second. bezels. front faces. Dkt. he said it “sells handsets. bezels. 23 end-to-end glass front face. The patented designs. 11-cv-01846-LHK 16 . the only articles Samsung sold were the infringing phones.g. and grid of colorful icons. Reviewing the record in 3 light of the relevant factors (see supra pp. Samsung does not and could not contend that those internal hardware components 28 alone are the “article[s] of manufacture” to which Samsung applied the patented designs. and costs for products”). bezel. at any time. See DX676 (Samsung financials). when STA’s Vice-President of Finance and Operations was asked what 6 his company did. the record contains no evidence that any component of Samsung’s 17 phones could be purchased separately by consumers (e. at 794 (similar). or graphical user interfaces in a 20 manner that might suggest that those components could be separate articles of manufacture. Dkt. or graphical user interfaces anywhere. 1842 at 11 3005 (DX676 generated by “extract[ing] the data model by model”). 1842 at 3009-3010 7 (similar). and as shown in 26 13 27 Evidence that Samsung sold processors to Apple and others is irrelevant. and that Samsung accounted for its revenues and profits from the sales of phones 10 and not from sales of any smaller components. 2842 at 968 (DX676 12 “shows revenue. 13 Samsung adduced no evidence that it separately sold any component that it may now 14 contend is the relevant article of manufacture. 2843 at 1141-1142. mixing and matching casings. Accordingly.. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. the record only supports the conclusion that the relevant 2 articles of manufacture for each design patent are the infringing phones. In fact. nor is there any 18 evidence that consumers could select or replace any individual phone components by.” Dkt.
1. 26 Third. the candybar shape. the evidence shows that Samsung’s infringing phones are unitary objects and that 27 the various components Samsung has belatedly suggested as articles of manufacture are neither 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 14 For example.] the chrome-colored metallic border” and the look of the “square icons” as notable 18 features in common.g. In fact when I first unboxed it at the office many walked by and asked if it was an 22 iPhone. Another article stated: “Samsung’s Galaxy S Vibrant is one sleek 21 looking phone. PX174.” PX6. 2017 ORDER Case No. shiny plastic body and minimal buttons 20 on the phone’s face.”. PX6. See. 11 focused on features of all three patented designs as indicators of the striking similarity between 12 the overall appearance of Samsung’s phones and the design of the iPhone. PX174. These articles and others demonstrate that the use of Apple’s patented designs 23 influenced the appearance of Samsung’s phones in their entirety. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 23 of 32 1 Apple’s Closing Slide 9: 2 3 4 5 6 7 8 9 10 The record also shows that members of the public. the glossy. PX6.3. A PCWorld article about a Samsung Galaxy S remarked that “[t]he 19 design is actually very iPhone 3GS-like with an all black. “If the 25 Samsung Galaxy S II looks familiar it’s because it resembles Apple’s popular iPhone 4.” PX6. a Wired article headlined “Samsung Vibrant Rips Off iPhone 3G Design” compared 15 those phones and concluded that “[t]he Vibrant’s industrial design is shockingly similar to the 16 iPhone 3G.”). 11-cv-01846-LHK 17 .” identifying “[t]he rounded curves at the corners.4 (“[The 24 Mesmerize’s] sleek and streamlined design feels very reminiscent of the iPhone 3GS. e. not similarity between 13 only some portion of Samsung’s phones and a portion of the design of the iPhone.. 17 black finish[. including consumers and the press.
16 PX174 (“The Vibrant’s industrial design is shockingly similar to the iPhone 3G[. Apple’s two design experts also regularly referred to the design of 10 Samsung phones as matching or infringing the patented designs. Dkt. Thus. 1610 at 842. 855.]”). Apple took the same view.”). the infringing designs of the phones are 18 synonymous with the devices themselves. When Apple first approached Samsung 20 to request that it stop copying. Samsung’s own witnesses 4 made clear that Samsung conceives of design at the entire-phone level. And the press reports cited above reflect that third parties 15 were struck by the similarity of the design of the infringing phones to Apple’s iPhone. id. it was the design of the Galaxy S II product as a whole (and its 21 close similarity to the iPhone) that Apple found offensive (PX52. 1612 at 1377 (Kare: “This is the Continuum. not intended to be separated into components by consumers. supra p. E.g. to 17 Samsung employees. 19 And as the jury heard. 11-cv-01846-LHK 18 . experts. which the jury had during deliberations. One Samsung executive testified that he used the term “industrial design” to mean “the 6 outer physical appearance of the device” and indicated that he “spoke to the actual designers who 7 were responsible for the design of those products that were at issue. 15. not at any component 5 level. showed that the phones were sold as unified 3 products. The infringing phones 2 themselves. 1611 at 950 (comparing designs of phones as a whole). Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 24 of 32 1 physically nor conceptually distinct from the phones as a whole. and lay observers. 2017 ORDER Case No. Dkt.17): 22 23 24 25 26 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. at 951 (referring to the “physical 9 design of the products”). This is another 13 one of the group of phones that I thought was substantially similar to the D’305. 1611 at 11 1008 (Bressler: “[T]here are a number of Samsung phones … that are substantially the same as 12 the designs in those patents..” Dkt. at 1377- 14 1379 (same for eight other phones).”). see 8 Dkt. id. PX6.
122. Understanding that “[t]he look and feel of a product matters most. see also 20 PX40. 14 Internal Samsung documents noted that the iPhone had “set the standard” for “[s]creen-centric 15 design.” Dkt. 27 1839 at 2044-2045. by applying Apple’s patented designs to its phones in order to 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28.5 (Samsung executives recognizing that Samsung faced a “crisis of design”). not to sell only components of phones. PX40. 21 .” and faced with 19 feedback to “make something like the iPhone. 23 Samsung’s strategy worked.” Samsung did precisely that.16 (capitalization 18 altered). Samsung’s market share 26 took an abrupt upward swing and … continued … to advance dramatically[. 2842 at 850.” see PX34.3. 1547 at 11 510 (Schiller: it was “plain to see” that Apple’s designs had been “ripped off” by Samsung).31. 2017 ORDER Case No. 12 Fourth. wow. see Dkt. Apple executive Phil Schiller testified that his “first 10 thought was. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 25 of 32 1 2 3 4 5 6 7 8 9 Upon seeing a Samsung Galaxy S phone.]” PDX34B.9. they’ve completely copied the i[P]hone. In short.” see PX36. screen-centric design ha[d] come to equal what’s on trend and 16 cool for many consumers. PX44.” that the iPhone’s “strong. A depiction of Samsung’s market share provided the jury 24 with “a rather dramatic demonstration” that “Samsung was losing market share during the period 25 prior to 2010” and that “[a]fter they introduced the first accused phone. . and that its “[e]asy and intuitive [user interface]” and 17 “[b]eautiful design” were “factors that could make iPhone a success.127 (comparing the iPhone and Samsung’s GT-i9000 side-by-side and including “[d]irections for 22 improvement” to make Samsung’s graphical user interface and icons more like Apple’s). 11-cv-01846-LHK 19 . the evidence shows that Samsung copied Apple’s patented designs in an effort to 13 replicate the competing iPhone and to sell more phones.2. Dkt.
and Apple’s prima facie case 11 demonstrating that the infringing phones are the relevant articles of manufacture should stand. JX1043. the scattered pieces of evidence identified by Samsung are insufficient to 13 support a finding of any article of manufacture less than the infringing phones. As the Court noted. Samsung profited from increased sales of those phones. 11-cv-01846-LHK 20 . 12 But even if considered. All that 22 shows is that the phones were made from multiple components. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. the design patents themselves do not suggest that the articles of manufacture for 15 § 289 purposes are only components of the infringing phones. And while it may be another attempt by Samsung to argue apportionment.” and “[a]t trial. The cited evidence in no way 25 suggests that Samsung sells only various components of the infringing phones. Samsung “never raised” “the issue of the proper article of manufacture … during 7 discovery. on the contrary. The jury could not have found any smaller article of manufacture. the scope of 16 the claimed design does not define the scope of the thing—the “article”—to which the design is 17 applied. Samsung points to testimony and evidence. it does 18 not limit the articles of manufacture to which the defendant may apply the infringing design for 19 the purpose of sale—which is the relevant inquiry under § 289. 7. Samsung pointed to three categories of evidence as supposedly showing 4 that the jury could have found the relevant articles of manufacture to be something less than the 5 entire phones. 30. See supra p. And a design patent need only describe an example of an article of manufacture.14 20 Second. 3509 at 29-30 (summarizing cited evidence). 3509 at 8.” Dkt. 3 In prior briefing. 2017 ORDER Case No. See Dkt. it says 24 nothing about the relevant article of manufacture under § 289. 21 purporting to show that Samsung’s phones could be separated into component parts. 6 however. As discussed above. which is true of virtually all 23 products. Samsung did not offer a damages theory based on an article of 8 manufacture that is less than the entirety of Samsung’s infringing phones. See JX1041. 9 Samsung therefore failed to satisfy its burden to identify and prove that the relevant articles of 10 manufacture are anything smaller than the infringing phones. as 26 27 14 The D’677 and D’087 patents describe an entire phone as the exemplary article of 28 manufacture to which the patented designs are applied. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 26 of 32 1 replicate its competitor’s product. such as a tear-down report. 14 First. 2 2.
1839 at 24 2040-2041. 20 The record plainly supports a calculation of Samsung’s profits from the infringing phones. as discussed above (pp. Samsung referred to “consumer survey” evidence discussing its phones’ outer 6 shape. 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. not just components thereof. Even that evidence (which is actually a summary of news articles) shows that consumers 7 viewed Apple’s patented designs as important to the overall visual appearance of Samsung’s 8 phones. in any event. all of the evidence showed that Samsung sells and consumers use 2 the infringing phones in their entirety. PX6 (citing patented design features as drivers of the 9 overall similarity between Samsung phones and Apple’s iPhone). 21 indeed. 10 15-18). See PX25A1 at 2-6 & PX25F at 2-6 (Apple experts’ summary of 23 profits on phones). the only dispute was over deductible costs. More importantly. For that reason. Samsung 16 never even identified for the jury what that alternative article might be. the parties’ experts “agree[d] completely on what total revenues are” 26 for the infringing phones (Dkt. Dkt. 11-cv-01846-LHK 21 . E. as neither side offered any other 22 measure of § 289 damages.. 5 Third. Issue 7: There Is No Record Evidence Supporting The “Total Profit” For Any Article Other Than Samsung’s Infringing Phones. Dkt. 1842 at 3021-3022. 2840 at 623-625. 2052-2053. 2841 25 at 1017-1018. the evidence could not 15 support a finding that the relevant articles of manufacture were anything else—indeed. 23-25). Indeed. 2017 ORDER Case No. caused Samsung no prejudice. 633-638. 15-19). Further. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 27 of 32 1 discussed above (pp. Dkt. that is the only award of profits the record supports. experts and lay observers overwhelmingly viewed the infringing designs as synonymous 11 with Samsung’s phones themselves. 12 * * * 13 The evidence compels the conclusion that Samsung intentionally applied Apple’s patented 14 designs to its infringing phones for the purpose of sale. the Court’s refusal to give Samsung’s Proposed Jury 18 Instruction 42. DX781 at 1-6 (Samsung expert’s summary of profits on phones). and as 17 explained further below (pp. In fact.g. which has nothing to do with identifying the article of 4 manufacture to which Samsung applied the patented designs for profit. 3031. much of the evidence cited by Samsung in this 3 category is actually about Apple’s iPhone. 2841 at 1014). 19 F. Dkt.1 was not erroneous and. 1024.
25 16 If the Court concludes that a new trial is required and that Apple had the burden to show Samsung’s total profit on something other than the infringing phones—even though Samsung 26 never gave notice that it would pursue such a theory or articulated what that “something” might 27 be—then the Court should reopen discovery on that issue.” Dkt. if Samsung had the burden to prove profits on a smaller article of manufacture. Samsung conceded before the Supreme Court that “the record contains no proof of 3 total profit from” the smartphone components it claims are the relevant articles of manufacture. and even if there 14 were evidence from which the jury could have concluded that the relevant articles of manufacture 15 were something other than the infringing phones. See 23 Dkt. 20 Samsung’s failure to give the jury any basis to calculate profits on a smaller article of 21 15 Samsung initially refused to produce any component-specific financial data and. JX1500. and profits for entire phones. costs. Br. the Court was still right not to give Samsung’s 16 Proposed Jury Instruction 42. 2016) (capitalization altered). 880 at 10-15. Samsung. 15-777. 54. expert or 9 otherwise. any error in rejecting Samsung’s proposed instruction was not prejudicial. 4 Pet. “a 18 lack of evidence of profits may have allowed the Court to exclude Proposed Jury Instruction 19 42. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. testified that total profit could or should be calculated for any article other than the 10 products as sold. All 7 the Samsung financial data in the record reports revenues. 1842 at 3005-3007. let alone informed the jury how to carry out those calculations. It would be manifestly unfair to punish Apple for not developing evidence on an issue that Samsung never raised until after discovery 28 closed.15 11 In sum. Even if it had. Dkt. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 28 of 32 1 By contrast. because it had no foundation in the evidence. after 22 being ordered by the Court to do so. produced only limited cost data for some components.1”). 2016 WL 6599922 (June 1. 11-cv-01846-LHK 22 . 3509 at 30. since Samsung did not identify any alternative article of manufacture and adduced no evidence of revenues associated with those components. PX180. 13 regardless of the correct test for determining the relevant article of manufacture. No. Moreover. 8 DX676. the evidence supports a determination of Samsung’s “total profit” from the 12 infringing phones. Dkt.1. 2017 ORDER Case No. And no witness. This 5 Court likewise recognized that “Samsung did not offer a damages theory based on an article of 6 manufacture that is less than the entirety of Samsung’s infringing phones. 3509 at 30 17 (noting that. Samsung never presented that evidence to the jury. but not of its profit from any other putative “article of manufacture. there is no record evidence of Samsung’s profits on any other article of 2 manufacture. PX28. the component-level cost data would not have allowed the jury to calculate profits on any 24 alternative articles of manufacture. See Dkt. DX753.”16 Thus. 673 at 15.
and the 9 record cannot support a finding either of an alternative article or of Samsung’s profit on such an 10 alternative. Co. 852 (Fed. and it clearly did not.1. Inc. 786 F. Inc. Cir. And the 18 Supreme Court has made clear that. as the Federal Circuit recognized.3d 983. 11-cv-01846-LHK 23 .”). Cir.3d 841. 999 (Fed. 556 U. which has been remanded in full to this Court with 17 no suggestion by the Federal Circuit or the Supreme Court that Apple waived the issue. See infra pp. v. See Dkt. Because Samsung failed to meet its burden to rebut Apple’s prima facie case. 2017 ORDER Case No. Samsung’s burden to show 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. in civil cases. and that the errors had prejudicial effect. v. Samsung’s new trial request depends 25 on Samsung showing prejudice. 2006) (“A party seeking to 22 alter a judgment based on erroneous jury instructions must establish that those instructions were 23 legally erroneous. and did not prejudice Samsung in any 6 event. See Apple Inc.1 was not error. the 11 Court did not err in excluding Proposed Jury Instruction 42. regardless of what Apple argued on appeal. 451 F. “the party that seeks to have a judgment set 19 aside because of an erroneous ruling carries the burden of showing that prejudice resulted. 409 (2009) (internal quotation marks omitted). Declining to give 5 Samsung’s Proposed Jury Instruction 42. 3 III. APPLYING THE ABOVE PRINCIPLES. 24 In other words.” 20 Shinseki v. NO NEW TRIAL IS WARRANTED. Hunter’s Specialties. 12 Even if the Court’s exclusion of that instruction was erroneous. 396. Sanders. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 29 of 32 1 manufacture makes it overwhelmingly likely that the jury would have reached the same result 2 even had it received Proposed Jury Instruction 42. see also 21 Primos. Apple did not waive—and could not have waived—its argument that Samsung was not 15 prejudiced by the alleged instructional error. Apple made its prima facie case overwhelmingly. 24-25.S. a new trial is not 13 warranted unless that alleged error prejudiced Samsung. As a threshold 14 matter.1.. 3509 at 30. putting forth ample evidence of 7 Samsung applying the patented designs to its phones and of Samsung’s total revenues (and profit) 8 from those phones. 4 The above principles make plain that no new trial is required. 3509 at 31. Showing prejudice is an 16 element of Samsung’s demand for a new trial. 2015) (“Samsung has failed to show prejudicial error in 27 the jury instructions as a whole that would warrant a new trial. See Dkt.” (internal quotation marks omitted)). however.. Samsung never identified any alternative article of manufacture. Samsung 26 Elecs.
the Federal Circuit’s order nowhere suggested that prejudice was off-limits on remand to 17 this Court. Cir. Br. Co. Apple Inc. Lomeli.. at 26 (“Jury instructions are reviewed de novo. by engaging with the merits of Apple’s evidentiary argument without 18 claiming waiver in its Supreme Court brief. even were the Court 22 to conclude that there was evidence such that a jury could have found alternative articles of 23 manufacture and calculated the profits therefrom. To the Supreme Court. Samsung. 14-1335.” Clem v. 10 instead. 20-22.3d 1177. 2016 WL 4073686 (July 29. Although Samsung then argued (for the first time) that Apple waived 15 the issue of prejudice. 88. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 30 of 32 1 prejudice has not changed simply because the matter has been remanded to this Court. Reply Br. see id. did not claim waiver. Apple again argued that “there was no evidence from which the 12 jury could have calculated infringer’s profits based on anything less than the entire infringing 13 phones. 2014). 2017 ORDER Case No. id. of Cont. but only 6 prejudicial error warrants a new trial. 15-777. 11 On remand to the Federal Circuit. No. No. 2016 WL 4524542 (Aug. Cir.” Resp. 566 F. The mere possibility that the excluded instruction could have 25 affected the verdict is not enough to warrant a new trial. Samsung has waived any belated claim of waiver. 2016 WL 8222614 14 (Fed. 11-cv-01846-LHK 24 . 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 2016).1 would still not be prejudicial. Dec. If anything. 2016). the merits of the prejudice analysis clearly favor Apple. Panel Review 15. Moreover. v. 2014 WL 5 3909249 (Fed. 2017 WL 514460 (Jan. Pet. 19 Finally. Samsung. and 26 thus does not warrant a new trial. 3 Apple argued that there was “no error. 12. Samsung Elecs. id. On Samsung’s initial appeal.1 was “not supported by the evidence” because “the jury could reasonably 8 conclude only that the articles of manufacture were the entire phones. the failure to give Proposed Jury Instruction 24 42. Apple has raised the issue at every stage. 16 2017).”). let alone prejudicial error” in the jury instructions 4 “warranting a new trial... 2016). There was no evidence 20 from which the jury could have determined that something other than the phones was the article 21 of manufacture and no evidence of profit on such an alternative. Apple argued that Proposed Jury 7 Instruction 42. 14-1335. 9 No.” Apple Br.” Apple Statement in Sup. of Remand 12. July 28. 29. 2 In any event. 44. it engaged on the merits. as long as “it is more probable than not that the jury would 27 have reached the same verdict had it been properly instructed. 27. in reply. Samsung Statement in Sup. Instructional error is not prejudicial.
18 19 20 21 22 23 24 25 17 To the extent Clem suggests that Apple bore the burden to show a lack of prejudice (see 26 Dkt. this Court may and should determine that Samsung has not proven that the 7 omission of Proposed Jury Instruction 42.1 had been given. 3509 at 31). 2017 WILMER CUTLER PICKERING HALE AND 13 DORR LLP 14 15 By: /s/ Mark D. it did not prejudice Samsung.940. it is far “more probable than not” that the jury would have reached the same verdict 4 even if Proposed Jury Instruction 42.3d 800. Cross. APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. In any event.17 Given the utter lack of 2 evidence supporting any determination of alternative articles of manufacture or Samsung’s profits 3 therefrom. 6 Accordingly. Apple did show harmlessness. 11-cv-01846-LHK 25 . 11 12 Dated: September 8.864 for eleven Samsung products found to infringe Apple’s design patents. CONCLUSION 9 For the foregoing reasons. 2017 ORDER Case No. 422 F.1—if error at all—was prejudicial error. SELWYN 16 Attorneys for Plaintiff 17 APPLE INC. Selwyn MARK D. even if the Court’s rejection of 5 Samsung’s Proposed Jury Instruction 42. as there was no evidence of Samsung’s “total profit” 28 on any article of manufacture smaller than the infringing phones. and the Court should confirm its 10 judgment of $398. Dang v. 2005). Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 31 of 32 1 1182 (9th Cir.1 was error. that proposition is directly contradicted by the Supreme Court’s statement in 27 Shinseki that the party seeking to set aside the judgment bears the burden of showing prejudice. a new trial is unwarranted. Thus. 8 IV. 2009). 811 (9th Cir.
2017 to all counsel of record who are deemed to have consented to 4 electronic service via the Court’s CM/ECF system per Civil Local Rule 5. 11-cv-01846-LHK 26 . Selwyn Mark D. Case 5:11-cv-01846-LHK Document 3522 Filed 09/08/17 Page 32 of 32 1 CERTIFICATE OF SERVICE 2 I hereby certify that a true and correct copy of the above and foregoing document has been 3 served on September 8. Selwyn 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 APPLE’S OPENING BRIEF IN RESPONSE TO THE COURT’S JULY 28. 5 6 /s/ Mark D. 2017 ORDER Case No.4.

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