A Court's Chance To Limit Law Of Unintended Consequences

Law360, New York (September 22, 2015, 10:28 AM EDT) -- Sometimes, the cure proves worse than the problem. So it is with the law of damages for design patents. In the 19th century, Congress was unhappy with a series of U.S. Supreme Court rulings awarding carpet makers only $.06 in damages for infringement of a patent. So Congress passed a law that became 35 U.S.C. § 289, a law that makes defendants who infringe a design patent on any "article of manufacture … liable to the owner to the extent of his total profit." This provision creates a damages remedy for design patents that is different from the damages for more common utility patents. Infringers of utility patents generally must pay a "reasonable royalty," an amount that approximates what the infringer would have paid the patent holder to secure a license for the technology. Design patent holders, however, get a much greater reward if infringement is found. The language of Section 289 might have made sense when Congress adopted it, particularly for designs of simple products like the carpets that had been at issue in the Supreme Court. But as times have changed and products have become more complex, the rule permitting design patent holders to recover profits, instead of just a reasonable royalty, poses two significant problems....

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