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Federal Circuit Affirms No Apportionment Under Design Patent

The United States Court of Appeals for the Federal Circuit affirmed in its September 29, 2015, Nordock, Inc. v. Systems, Inc.decision that damage experts should not apportion “total profit” in design patent infringement cases under 35 U.S.C. §289. Unlike utility patents, design patent damages include an accounting of the infringer’s profit. The Court reiterated that apportioning infringing profit in the context of design patent infringement is not appropriate, and that Section 289 explicitly authorizes the award of “total profit” from the article of manufacture bearing the patented design. In a design patent infringement matter the patent owner is entitled to all profit earned by the defendant that is attributable to the infringement.

Damage experts determine profit by deducting certain expenses from gross revenue. Gross revenue is all of the defendant’s receipts from using the design in the sale of the infringing product. “Total profits” are based on the article of manufacture to which the patent is applied, not just a portion of that article of manufacture. The Federal Circuit confirmed in the celebratedApple v. Samsung case that apportioning profits of design patents is not appropriate, and that Section 289 clearly authorizes the award of “total profit.” In the Apple case, the Federal Circuit rejected Samsung’s attempt to limit the profits awarded to the portion of the product that incorporates or embodies the subject matter of the patent.