When the Supreme Court decides in October whether Apple is entitled to the total profit of Samsung smartphones for infringing on Apple patents, the ruling could stretch from Silicon Valley into America’s heartland.
If the nation’s highest court upholds both federal district and appeals court decisions ordering Samsung to turn over its total profit from select Galaxy smartphones for infringing on three Apple design patents, the fallout in patent litigation will have an especially hard impact on the farming sector, an industry expert said Tuesday.
Leroy Watson of the agriculture non-profit National Grange said the subsequent wave of patent trolling predicted by numerous experts would have a severe impact on the next generation of telecommunications-equipped farming equipment.
The threat of a lawsuit for the total profit from the sale of such equipment, which commonly serves only a niche market of non-wealthy consumers, will deter innovators from developing those products, setting the agriculture industry technologically back by a generation, according to Watson.
“So we’ve got a market where the aesthetic value of the design is going to have almost no impact on the decision maker, i.e. the farmer, to purchase products,” Watson said. “We think the possibility — that entrepreneurs who are helping put together these products are going to have to take into account design function issues — is going to be an impediment on the opportunity for these products to hit the market and meet the needs of farmers.”
The 19th-century patent law at issue entitles Apple to the total profit of Samsung’s infringing line of Galaxy smartphones, initially over $1 billion, despite violating only three design patents — a penalty unique to design patents, which differ from utility patents.
That means a patent troll could potentially sue the manufacturer of a piece of farm equipment simply for incorporating a similar aesthetic feature from an existing design patent, like the carpet on the floor of a tractor, for example.
Watson added the potential effects will hurt the U.S. especially compared to its international trade competitors, since agriculture is a global industry.
“The most common job description on the planet is ‘farmer,'” Watson said. “So if we get this wrong and we create a system where there is the possibility of speculative litigation arising from the possibility of total profit disgorgement for design features, I can pretty much assure you that other nations are going to watch that.”
Many of those nations rely on their agricultural industries much more than the U.S., likely prompting them to correct any similar flaws in their own intellectual property laws and squeeze out the U.S. as a competitor.
“So we see not only discouragement of the possibility of innovation by entrepreneurs serving the rural and farming market,” he continued, “but almost no impact upon our competitors, and they’re going to be able to take advantage of these technologies without the overlying risk of design patent litigation.”
Watson, one of several panelists invited to discuss the case by the Internet Association — which filed a brief with the court in support of Samsung — wasn’t alone in his ominous predictions.
Charles Duan, director of the Patent Reform Project at the consumer technology non-profit Public Knowledge, pointed out even a manufacturer doing lengthy homework on existing design patents before marketing a product isn’t any safer, since design patents can be changed after they’re submitted to the U.S. Patent and Trademark Office — another feature unique to design patents.
“You might claim the entire cup in your original patent application, but then you see somebody who’s got maybe a different looking cup, but the bottom looks the same, so you say, ‘Just erase the top part, we’re only covering the bottom part,'” Duan explained. “Now you suddenly have a patent for somebody else’s cup.”
“You can’t avoid it, because the person who has the patent can always look at your product and after the fact say, ‘That little part is going to get me all your profits,'” he said.
Nike, though it claimed a neutral stance in its brief to the court, had attorney Howard Hogan on hand as the only panelist to defend Apple. Hogan maintained that design was a limitless field from which designers could pull original ideas, citing Nike’s thousands of throwout designs for every one product that goes to market — products that are often copied and counterfeited.
Hogan added that far from encouraging patent trolls, the law — unaltered by Congress since 1887, despite several overarching patent legislation overhauls — protects small designers.
“What about individual designers? People sitting in studios, garages, living rooms coming up with innovating designs,” Hogan said. “Somebody takes their design and rips them off, should the remedy be limited to a litigant who’s rich enough to afford a damages expert and a survey expert to survey consumers as to whether they are buying the accused product based on the design or some other functional aspect?”
“It’s going to make the remedy exponentially more expensive to enforce.”
