The American Antitrust Institute (AAI) filed an amicus brief with other public interest groups urging the Supreme Court to reverse a decision of the Federal Circuit Court of Appeals that unreasonably expands the value of design patents. The ruling at issue requires that infringers of design patents pay damages in the amount of their total profits on an infringing article (here, smartphones), regardless of whether the design patent contributed to the value of the article, even if the infringement is innocent.
AAI joined Public Knowledge, the Electronic Frontier Foundation, the R Street Institute, and IP Justice to argue that the Federal Circuit ruling makes no sense because it vastly overcompensates design patent holders when a design patent covers only a small component of the overall design of an infringing article or the article is purchased primarily for its functional value. The brief contends that such overcompensation would likely lead to reduced innovation on products like smartphones because it means that less compensation is available to the innumerable other innovators and patents that contribute to such products’ value. And it likely will lead to a proliferation of trivial or minor design patents and abusive design-patent litigation by patent assertion entities.
The brief points out that the Federal Circuit’s interpretation of the design-patent damages provision of the Patent Act is not required by a plain reading of the Act and that the interpretation raises serious doubts as to the provision’s constitutionality.