Imagine this scenario: you get a beautifully wrapped box, with a bright red ribbon around it. The box isn’t too big; it’s about the size of that Samsung Galaxy S7 you were hoping for. You carefully unwrap the box, not tearing the paper, because you remember that your mother taught you to save such nice wrapping paper.
Sure enough, it’s a box for a Galaxy S7! You open the box and pull out the phone inside. You try turning it on, but nothing happens. The phone feels strangely light; it’s like there’s nothing in the phone at all, no battery, no chips, nothing. And, in fact, that’s what you have: the outer shell of a smart phone.
Apple recently argued to the Supreme Court that you should be just as happy as if you’d gotten a working phone. A lower court had awarded Apple the entire profits that Samsung made on several smartphone models, based entirely on part of the shape of the outside of the phones. The award was about $399 million.
According to Apple, this was completely fair; after all, it’s the iconic design of the iPhone that drives sales. Apple was supported by friend-of-the-court briefs from the likes of Nike, Crocs, and Tiffany and Company, all of whom argued for the value of product design.
But of course, no one would be happy to open the present I described at the beginning of this article. We expect a smartphone to be able to do things, like, for example, make phone calls and send texts. The reality is that today’s devices combine design with functionality; while we don’t want the large brick-like cell phones of yesteryear, we do actually care about what a phone does and how easy it is to use.
The law of design was created over 150 years ago when products were much simpler. The rule awarding total profit was intended to protect designer rugs, not complicated devices. It’s simply absurd to think that an empty, although elegant, smartphone shell is nearly all of the value of the device. The law needs to be read in the light of today’s technology.
Fortunately, the Supreme Court did just that in its December ruling. As my group, the Computer & Communications Industry Association, and others argued, the Court recognized that you’re not automatically entitled to the entire value of a product just because of some outer similarities.
There are still details for the lower courts to work out in the New Year. We hope that they will continue to keep in mind the complexities of today’s technologies. Even so, removing this haunting risk of all the profits on a product for a design misstep creates a warmer climate for innovation that benefits tech companies, startups — and those who like tech products.
Matt Levy is Patent Counsel at the Computer and Communications Industry Association (CCIA), where he handles legal, policy advocacy, and regulatory matters related to patents and is lead blogger for CCIA’s Patent Progress. He is recognized as an expert on patent litigation reform and is cited and quoted widely on the issue. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
