SUPERBOWL CIPA SUNDAY: Does Samsung’s Website Chat Feature Violate CIPA?

Happy CIPA and Super Bowl Sunday TCPA World!

So, Samsung is under the spotlight with a new CIPA case brought by a self-proclaimed “tester.” You know like Rosa Parks?? Back to that in a bit.

The California Invasion of Privacy Act (“CIPA”) prohibits both wiretapping and eavesdropping of electronic communications without the consent of all parties to the communication. The Plaintiff’s bar is zoning in to CIPA with the Javier ruling.

If you recall, Javier found that “[T]hough written in terms of wiretapping, Section 631(a) applies to Internet communications. It makes liable anyone who ‘reads, or attempts to read, or to learn the contents’ of a communication ‘without the consent of all parties to the communication.’ Javier v. Assurance IQ, LLC, 2022 WL 1744107, at *1 (9th Cir. 2022).

Here, Plaintiff Garcia claims that Defendant both wiretaps the conversations of all website visitors and allows a third party to eavesdrop on the conversations in real time during transmission. Garcia v. Samsung Electronics America, Inc.

To enable the wiretapping, Plaintiff claims that Defendant has covertly embedded software code that functions as a device and contrivance into its website that automatically intercepts, records and creates transcripts of all conversations using the website chat feature.

To enable the eavesdropping, Defendant allows at least one independent third-party vendor to secretly intercept (during transmission and in real time), eavesdrop upon, and store transcripts of Defendant’s chat communications with unsuspecting website visitors – even when such conversations are private and deeply personal.

But Plaintiff currently proceeds in an individual action but if Samsung does not take appropriate steps to fully remedy the harm caused by its wrongful conduct, then Garcia will file an amended Complaint on behalf of a class of similarly aggrieved consumers.

Now back to Civil Rights.

According to this Complaint, Garcia is like Rosa Parks, you know, the civil rights activist. Why?

Well, because “Civil rights icon Rosa Parks was acting as a “tester” when she initiated the Montgomery Bus Boycott in 1955, as she voluntarily subjected herself to an illegal practice to obtain standing to challenge the practice in Court.”

Because Wiretapping and civil rights are similar right??

Disgusted.

The Plaintiff’s bar has no problem muddying the waters to appeal to the courts.

Do better.

CIPA is some dangerous stuff. Websites use chat features to engage with consumers all the time. It seems like it is easier to communicate via chat or text than to sit on a call waiting for an agent – assuming you get an agent. But maybe not?

Stay safe out there TCPA World!

Til next time Countess!! back to the game, GO EAGLES!!! #Phillyproud

© 2023 Troutman Firm

U.S Supreme Court Revisits Design Patent Damages

design patent appleOn December 6, 2016, the U.S. Supreme Court, in Samsung Electronics Co. Ltd., v. Apple Inc., 580 U.S. ____ (2016), unanimously ruled that in multicomponent products, the “article of manufacture” subject to an award of damages under 35 U.S.C. §289 is not required to be the end product sold to consumers but may only be a component of the product.

In 2007, when Apple launched the iPhone, it had secured several design patents in connection with the launch. When Samsung released a series of smartphones resembling the iPhone, Apple sued Samsung, alleging that the various Samsung smartphones infringed Apple’s design patents. A jury found that several Samsung smartphones did infringe those patents. Apple was awarded $399 million in damages for Samsung’s design patent infringement, the entire profit Samsung made from its sales of the infringing smartphones. The Federal Circuit affirmed the damages award, rejecting Samsung’s argument that damages should be limited because the relevant articles of manufacture were the front face or screen rather than the entire smartphone.

The Supreme Court reversed and remanded the case back to the Federal Circuit. In its unanimous opinion, the Court reasoned that for purposes of a multicomponent product, the relevant “article of manufacture” for arriving at a damages award (based on 35 U.S.C. §289) need not be the end/finished product sold to the consumer but may be only a component of that product. The Court determined that “The Federal Circuit’s narrower reading of the ‘article of manufacture,'” limiting it to the end product, “cannot be squared with the text of §289.” How to arrive at §289 damages? According to the Supreme Court, “Arriving at a damages award under §289 thus involves two steps. First, identify the ‘article of manufacture’ to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.”

This decision could have potential impact on future design patent infringement cases, especially when calculating infringement damages. It remains to be seen, what kind of guidance the Federal Circuit will provide in addressing the scope of the “article of manufacture” for multicomponent products.

ARTICLE BY Sudip K. Mitra of Vedder Price

© 2016 Vedder Price

The Smart Phone Patent Saga Continues: Apple Inc. v. Samsung Electronics Co., Ltd., et al.

In a case involving suits, countersuits and multiple appeals by the two giants of the mobile phone space, the US Court of Appeals for the Federal Circuit reversed a jury’s finding of infringement, voiding the accompanying award to Apple of more than $119 million. Apple Inc. v. Samsung Electronics Co., Ltd., et al., Case Nos. 015-1171, -1195, -1994 (Fed. Cir., Feb. 26, 2016) (Dyk, J).

In this case’s third appeal, the Federal Circuit was asked to deal with “the core infringement and invalidity issues with respect to the asserted patents.” At issue were five patents asserted by Apple against Samsung (four of which a jury found to be infringed) and two patents asserted by Samsung against Apple (one of which the same jury found to be infringed).

After the district court entered judgment on the jury verdict ($120 million to Apple and $160,000 to Samsung), both sides appealed.

The Apple Patents

With regard to the Apple “click structure” patent, the Federal Circuit found that no reasonable jury could have concluded that the accused Samsung devices included the claimed “analyzer server,” and reversed the judgment of infringement. Before trial, neither party sought construction of “analyzer server,” agreeing that it should be given its ordinary meaning. On the last scheduled day of the trial, the Federal Circuit construed this term (in the Motorola case) as “a server routine separate from a client that receives data having structures from the client.” The district court adopted this construction and permitted the parties to recall their expert witnesses to provide testimony under this construction. However, the Federal Circuit concluded that Apple failed to present sufficient testimony that the accused software library programs in the Samsung phones ran separately from the programs they served (i.e., the Browser and Messenger applications), as required by the Federal Circuit’s construction. Accordingly, the Federal Circuit reversed the district court’s denial of judgment as a matter of law (JMOL) of non-infringement.

Apple also asserted its “slide to unlock” patent, whereby a user can slide a moving image across the screen with a finger in order to unlock the phone, and its “auto correct” patent, whereby a phone automatically corrects typing errors. At the district court, Samsung sought JMOL that both of these patents were invalid as obvious. The Federal Circuit agreed.

For the “slide to unlock” patent, Apple did not dispute that the prior art combination disclosed all of the claimed features. Rather, Apple argued that the jury could have reasonably found that one of the references taught away from using the “slider toggle” feature, and that a skilled artisan would not have been motivated to combine these references, since the slide toggle reference describes a wall-mounted touch-screen device, not a mobile phone. The Federal Circuit  disagreed, concluding that “[t]he fact that [the prior art reference] notes that users did not prefer the particular design of the slider toggle is not evidence of teaching away.” The Federal Circuit reasoned that a motivation to use the teachings of a particular prior art reference need not be supported by a finding that the feature is the “preferred, or the most desirable” option.

The Federal Circuit also concluded that no reasonable jury could find that the reference is not analogous art since it concerned user interfaces for touch-screen devices, noting that the asserted patent and the reference both disclose essentially the same structure: a touch-screen device with software that allows the user to slide his or her finger across the screen to change interface states.

The Federal Circuit also dismissed Apple’s secondary considerations argument, noting that although Apple identified the unsolved problem as the lack of an “intuitive” method of unlocking a touch-screen portable device, it provided no evidence showing that the asserted need was recognized in the industry. With respect to industry praise, the Court noted that evidence of approval by Apple fans—who may or may not have been skilled in the art—is not legally sufficient.

With respect to copying, the Federal Circuit noted the only evidence of copying went to an unlock mechanism using a fixed starting and ending point for the slide—a feature disclosed in the prior art. Finally, with respect to commercial success, the Federal Circuit reasoned that Apple’s evidence was not sufficient to show a “nexus” between the patented feature and the commercial success of the iPhone. Accordingly, the evidence of secondary considerations was insufficient as a matter of law to overcome the prima facie obviousness case.

Apple also asserted its “universal search” patent that permits a user to search for results from both the phone and the internet based on a single search term. On appeal, the issue was whether the search feature on the Samsung phones “locates” information on the internet. The district court found that Samsung devices do not search the internet, but rather blend data previously retrieved from a Google server and a local database. Apple argued that the plain meaning of the claim covered search information previously downloaded from the internet, a construction the  district court denied. The Federal Circuit agreed with the district court’s denial.

The Samsung Patents

Samsung asserted a patent directed to capturing, compressing and transmitting videos. In its claim construction order, the district court construed “means for transmission”—a means-plus-function claim limitation—to require software in addition to hardware. Samsung argued that the district court erred in its construction because the specification did not “require any software for transmission, and including such software [in addition to hardware] as necessary structure was error.” The Federal Circuit agreed with the district court that the term “transmission” implies communication from one unit to another, and the specification explains that software is necessary to enable such communication. The Federal Circuit noted that software is necessary because hardware alone does nothing without software instructions telling it what to do, and affirmed the district court’s construction of the term and the judgment of non-infringement.

As for Samsung’s patent directed to a camera system for compressing, decompressing and organizing digital files, the jury found that Apple had infringed, and the district court denied Apple’s post-trial motion for JMOL of non-infringement. Apple argued that no reasonable jury could have found that the Apple products met the “compressor” and “decompressor” limitations of the claim because these limitations require components that compress or decompress both still images and videos, and its products use separate and distinct components to compress and decompress still images and videos. The Federal Circuit rejected this argument, finding that Samsung presented testimony that identified a single Apple design chip with circuitry that performs compressing/decompressing methods for both images and videos.

Practice Note: Assuming this decision resolves the utility patent fight, the only remaining battle shifts to the Supreme Court of the United States, which has now agreed to hear Samsung’s appeal on the issue of damages in connection with design patent infringement. See CertAlert in this issue of IP Update.

Article By

© 2016 McDermott Will & Emery

Supreme Court Agrees to Review the Appropriate Measure of Design Patent Damages

On March 21, 2016, the Supreme Court agreed to hear Samsung Electronics Co.’s appeal regarding what it must pay Apple Inc. for infringing the design of Apple’s iPhone. This will mark the first time in over a century that the Supreme Court will hear a case involving design patents.

In 2012, a jury found that Samsung infringed Apple utility and design patents and awarded Apple $1.05 billion in damages. On appeal, damages were nearly cut in half to $548 million, which Samsung later agreed to pay to settle the dispute, all the while reserving its right to appeal to the Supreme Court.

Samsung has challenged the Federal Circuit’s decision that the company must pay its entire profits from smartphones that infringed Apple’s design patents, which amounted to $399 million. In making the damages determination, the Federal Circuit relied on Section 289 of the Patent Act, which dates to the 19th century and provides in relevant part: “[w]hoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.” 35. U.S.C. § 289 (emphasis added).

A number of tech companies, including Google and Facebook, submitted a brief in support of Samsung’s petition. In the brief, those companies argued that Section 289 is outdated and when enacted, failed to contemplate “products with significant functional features at all.” Thus, Section 289 is obsolete and should not govern awards involving the complex products available today.

When the Court hears the case later this term, the specific question it will address is, “Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?”

Article by Kevin P. Moran & Joseph P. Serge of Michael Best & Friedrich LLP

Smartphone Wars – Supreme Court Awakens: Samsung Files Petition for Certiorari in New Hope to Harmonize Design Patent Law

On Monday, in the latest episode of the smartphone wars, Samsung filed a petition for certiorari with the Supreme Court.

Smartphone Wars

Samsung is appealing a Federal Circuit decision that upheld a $399 million judgment against Samsung for infringing three of Apple’s design patents. Samsung argues that the decision, if left unchecked by the Supreme Court, could dramatically increase the value of design patents. While the Supreme Court is the ultimate power in patent jurisprudence, it was a long time ago that it last considered a design patent case; more than 120 years ago according to Samsung. Samsung’s petition presents two fundamental questions concerning design patents:

1. Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope?

2. Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

With respect to the first question – whether a district court should be required to limit the protection of a design patent to only ornamental features – Samsung argues that the Federal Circuit’s decision conflicts with both Section 171 of the Patent Act and with the Supreme Court’s precedent requiring judicial construction of patent claims.

According to Samsung, the Federal Circuit refusal “to cabin design patents to their protected ornamental scope” conflicts with Section 171 and allows infringement to be “found based on the use of nonornamental attributes.” Thus, argues Samsung, the Federal Circuit broadened the protectable scope of design patents, which are limited to “any new, original and ornamental design for an article of manufacture,” under section 171. Samsung argues the Federal Circuit’s ruling also creates tension with other areas of intellectual property law that routinely enforce limitations to protectable scope, such as copyright doctrine of “filtration” and trademark law’s doctrine of functionality.

Samsung also maintains that the ruling is contrary to Supreme Court precedents in the analogous context of utility patents, which recognize that district courts have a duty to construe patent claims and eliminate unprotected features. In Samsung’s view, similar to a Markman hearing, a district court should instruct a jury to identify non-ornamental features of a design patent and exclude them from the infringement analysis.

Turning to the second question – whether damages should be limited to the profits attributable to the infringing component – Samsung argues that the Federal Circuit’s decision conflicts with Section 289 of the Patent Act and the basic principles of causation and equity.

Samsung urges that “the Federal Circuit’s holding as a matter of law that an infringer of a design patent is liable for all of the profits it made from its entire product, no matter how little the design contributed to the product’s value or sales” be corrected. Samsung argues that the Federal Circuit’s conclusion that the article of manufacture is the entire smartphone, and not specific subcomponents, is wrong based on a natural reading and purpose of Section 289 of the Patent Act, contemporary extrinsic evidence regarding the definition of “articles of manufacture,” and non-controlling case law (see note below).

According to Samsung, the Federal Circuit’s “interpretation of Section 289 also flies in the face of well-settled tort principles of causation” and “ignores that disgorgement of the defendant’s profits is a classic equitable remedy for which the accepted measure of recovery generally is ‘the net profit attributable to the underlying wrong.’” “The cardinal principle of damages in Anglo-American law is that of compensation for the injury caused to plaintiff by defendant’s breach of duty,” This is the backdrop in which Section 289 was adopted. “Where disgorgement is available in patent cases, it has [] been ‘given in accordance with the principles governing equity jurisdiction, not to inflict punishment but to prevent an unjust enrichment by allowing injured complainants to claim ‘that which … is theirs, and nothing beyond this.’”

Samsung claims that certiorari should be granted because the Federal Circuit’s decision dramatically increases the value of design patents relative to other forms of intellectual property. Without correction, design patents will have whatever scope juries choose to give them, and a design-patent holder will be entitled to the infringer’s profits on the entire product even if the patented design applies only to a part of the product, and contributes to only a minor faction of the overall value. The Federal Circuit’s decision allows design patent owners to obtain the infringer’s total profits – a remedy not available under utility-patent law. Samsung contends that such leverage “poses a real danger for companies everywhere,” that it will lead to an “explosion of design patent assertions and lawsuits.”

Will the Supreme Court agree with Samsung that the Federal Circuit has caused a great disturbance in design patent jurisprudence? Difficult to see. Always in motion is the future.

Bush & Lane Piano Co. v. Becker Bros., 222 F. 902, 904 (2d Cir. 1915), (allowed an award of infringer’s profits from the patented design of a piano case but not from the sale of the entire piano, holding that “recovery should be confined to the subject of the patent.”); Young v. Grand Rapids Refrigerator Co., 268 F. 966 (6th Cir. 1920), (Affirmed the denial of all profits from the sale of refrigerators where the infringed patent related only to the design of the refrigerator’s door latch, explaining that it was not even “seriously contended” that the patentee could recover all profits from sales of refrigerators containing that latch.)

©1994-2015 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc. v. E-Watch, Inc: Decision Denying Institution IPR2015-00612

Takeaway: The Board does not have the authority to determine whether an application was abandoned or improperly revived when determining whether a challenged claim is entitlted to claim priority to a an earlier-filed application.  

In its Decision, the Board denied institution and determined that Petitioner had not demonstrated a reasonable likelihood of prevailing in showing the unpatentability of any of the challenged claims (claims 1-15) of the ’871 Patent. The ’871 Patent relates to “image capture and transmission systems and is specifically directed to an image capture, compression, and transmission system for use in connection with land line and wireless telephone systems.”

The Board reviewed the only asserted ground of unpatentability – that claims 1-15 of the ’871 Patent are anticipated by Monroe. The Board discussed whether Monroe is prior art. Monroe was published on July 15, 1999. The ’871 Patent issued from an application filed on January 3, 2003, which is a divisional of an application filed on January 12, 1998. Petitioner argued that the claims of the ’871 Patent are not entitled to the filing date of the 1998 “parent” application because of a lack of co-dependency between the parent and the divisional/child application. The Board stated that if Petitioner had argued that the parent application does not support the subject matter of the challenged claims in the divisional patent, then Patent Owner would have had to show that the challenged claims are entitled to an earlier filing date. However, Petitioner instead challenged co-pendency, which the Board noted was an attack on a petition decision in 2003 by the PTO reviving the parent divisional application when the child application was filed. Petitioner argued that the parent application was “purposefully” abandoned and should not have been revived.

The Board noted that Petitioner has not identified proper jurisdiction of the Board to review the 2003 decision or to ignore that decision and make its own determination about whether the parent application should have been revived. The Board stated it has the power to determine whether a patent owner can antedate a reference but that the status of an application as abandoned or revived is procedural and the Board does not have the ability to review such an action. Therefore, the Board found that Petitioner had not shown that Monroe constitutes prior art.

Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc. v. E-Watch, Inc., IPR2015-00612
Paper 8: Decision Denying Institution
Dated: July 8, 2015
Before: Jameson Lee, Gregg I. Anderson, Matthew R. Clements
Written by: Clements
Related Proceedings: IR2015-00541; IPR2014-00439; IPR2014-00987; IPR2015-00402; IPR2015-00404; IPR2015-00406; IPR2015-00411; IPR2015-00412; IPR2015-00413; IPR2015-00610

©2015 Drinker Biddle & Reath LLP. All Rights Reserved

Apple-Samsung Trade Dress Case Demonstrates Potential Value of Design Patents

A jury awarded Apple more than $1 billion in damages after finding that smartphones sold by Samsung diluted Apple’s trade dress and infringed Apple’s design and utility patents. After a partial retrial limited to determining the appropriate amount of damages, Apple still arose victorious with a $930 million award. Samsung moved for judgment as a matter of law and for a new trial. The district court denied those motions, and Samsung appealed. On May 18, 2015, the Federal Circuit upheld the jury’s verdict of design and utility patent infringement, but reversed the finding of trade dress dilution.

Trade Dress Claims

At issue on appeal was whether Apple’s purported registered and unregistered trade dress associated with its iPhone 3G and 3GS products is functional. Because trademark law gives the trademark owner a “perpetual monopoly,” a design that is functional cannot serve as protectable trade dress. Apple Inc. v. Samsung Elecs. Co., Ltd., No. 14-1335, slip op. at 7 (Fed. Cir. May 18, 2015). The standard is even higher when the owner claims trade dress protection over the configuration of a product, as opposed to product packaging or other forms of trade dress. Slip op. at 8. In fact, the court noted that Apple had not cited a single Ninth Circuit case finding trade dress of a product configuration to be non-functional. Id.

Apple claimed the following elements as its unregistered trade dress:

  • 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.

Slip op. at 9. “In general terms, a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.” Id. (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982)). Because this case came to the Federal Circuit on appeal from a district court sitting in the Ninth Circuit, the Federal Circuit applied the Ninth Circuit’s Disc Golf test for determining whether a design is functional. Under that test, courts consider whether: (1) the design yields a utilitarian advantage; (2) alternative designs are available; (3) advertising touts the utilitarian advantages of the design; and (4) the particular design results from a comparatively simple or inexpensive method of manufacture. Slip op. at 10. Because this purported trade dress was not registered, Apple had the burden to prove its validity, which required Apple to show that the product features at issue “serve[] no purpose other than identification.” Id. (citing Disc Golf Assoc., Inc. v. Champion Discs, 158 F.3d 1002, 1007 (9th Cir. 1998)). The court of appeals applied those factors and found extensive evidence supporting Samsung’s claim that the alleged trade dress was functional. Slip op. at 12–14.

In addition to the unregistered product configuration discussed above, Apple also asserted a claim based on US Registration 3,470,983, which covered the design details in each of the 16 icons on the iPhone’s home screen framed by the iPhone’s rounded-rectangular shape with silver edges and a black background. Slip op. at 15. Although Apple enjoyed an evidentiary presumption of validity for its registered trade dress, the court again looked to the Disc Golffactors and found that Samsung met its burden of overcoming that presumption and proving the trade dress was functional and the registration invalid. Slip op. at 16. Because the court held Apple’s purported trade dress was functional, it vacated the jury’s verdict on Apple’s claims for trade dress dilution and remanded that portion of the case for further proceedings. Slip op. at 17.

Design Patent Claims

Apple fared better on its design patent claims. Here, Apple asserted three design patents directed to the “front face” (D’677 patent), “beveled front edge” (D’087 patent) and “graphical user interface (GUI)” (D’305 patent) of its iPhone products.

design patent claims - apple samsung

Samsung challenged the court’s claim construction and jury instructions for failing to “ignore[]” functional elements of the designs from the claim scope, such as rectangular form and rounded corners. Slip op. at 20. The court disagreed, finding that Samsung’s proposed rule to eliminate entire elements from the scope of design claims was unsupported by precedent. Id. Rather, the court found that both the claim construction and jury instructions properly focused the infringement analysis on the overall appearance of the claimed design. Id. at 21.

This victory was financially significant for Apple, as the court found they were entitled to Samsung’s entire profits on its infringing smartphones as damages. Like the district court, the court of appeals found that 35 U.S.C. § 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design, rather than an apportionment of damages based only on the infringing aspects of the device (i.e., external features and not internal hardware/software). The court of appeals interpreted Samsung’s argument as imposing an “apportionment” requirement on Apple—a requirement the Federal Circuit previously rejected in Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998). Thus, Apple maintains a claim to at least a significant portion of the $930 million damages award in the case.

Summary and Takeaways

Ultimately, after holding that Apple’s purported trade dress covering elements of the iPhone’s overall shape, black-bordered display screen, and matrix of colorful square icons was invalid, the district court upheld the jury’s verdict that Samsung’s devices infringed Apple’s design patents relating to the iPhone’s overall shape, display screen, and matrix of colorful square icons. The image depicted in Apple’s now-invalid trade dress registration is below on the left. Figures from two of its still-valid design patents are on the right. Although the overlap in what was claimed in these different forms of intellectual property is readily apparent, Apple lost on one set of claims and prevailed on the other.

design patent apple samsung iphone

It remains to be seen how damages associated with the design patent claims differ from damages associated with the now-invalid trade dress claims. But this much is clear: the Federal Circuit has given a reason for companies to reevaluate the role of design patents in their intellectual property portfolios. The time and expense associated with obtaining design patents will not suit all products, but for the right product, they can provide a valuable method of recovery in litigation involving similar product designs.