Page 16 - Intellectual Property Disputes

A variety of special damage issues arise if the patent in suit is a design patent. As with utility patents,
lost profits or a reasonable royalty are available in litigation concerning the infringement of a design
patent. The Patent Statute, however, also permits design patent owners to seek damages in an amount

equal to the infringer’s profit fn 19 as an alternative remedy. A design patent owner may not recover both
the infringer’s profit and a reasonable royalty (or both its own lost profits and the infringer’s profits on
the same sales); it must elect one or the other in order to prevent a duplicate recovery. Additionally, a
patent owner may not recover a reasonable royalty for infringement of a utility patent as well as profits
for infringement of a design patent on the sale of a single product.

The goal of assessing reasonable royalties in patent infringement cases is to place the infringed party in
the same position that it would have been had it hypothetically negotiated a license for the use of its
patent. "When actual damages cannot be proved, [the] patent owner is entitled to ‘reasonable royalty,’
which is an amount which a person desiring to manufacture and sell a patented article, as a business
proposition, would be willing to pay as a royalty and yet be able to make and sell the patented article in
the market at a reasonable profit." fn 20

Trademarks Overview

Trademark law governs the use of a word, phrase, symbol, product shape, logo, or device by a
manufacturer or merchant to identify the source of the goods or services and to distinguish them from
those made or sold by another.

Trademarks for goods (or service marks for services) act to (a) identify and distinguish the goods (or
services) of one party from the goods (or services) of another and (b) indicate the source of the goods (or
services), even if that source is unknown. Any of a number of symbols or designations can serve as a
trademark or service mark, such as words, logos, product configurations, and sounds. A color or smell
may also be entitled to trademark protection. A designation of TM (for trademarks), SM (for service
marks), or ® (for registered marks) evidences a claim of protection by the owner of the mark.

In contrast to patents and copyrights, trademarks may be afforded protection both under federal law
(regardless of whether federally registered) and state law. The federal statutes governing U.S. trademark
law are found in the Lanham Act (Commerce and Trade, USC 15, Section 1051). State statutes and
common law also provide trademark protection. Among other purposes, state trademark laws are
intended to prevent the deceptive and misleading use of marks in commerce and to protect persons
engaged in such commerce against unfair competition. Additionally, certain state trademark laws can be
used to exclude others from lessening the capacity of a famous mark to identify and distinguish goods or
services, regardless of whether there is an absence of competition or a likelihood of confusion.

The Lanham Act treats trademarks as personal property. As a result, trademark rights can be sold, along
with the goodwill of the business associated with the trademark. Trademark rights can also be licensed,

fn 19 Design patent damages may also include the infringer's total profit under 35 USC 289. In the 2015 Samsung v. Apple case, the
Supreme Court ruled to limit the infringer's total profit to the "article of manufacture," which could be less than the entire product of
which the design patent was a part. Prior to that ruling, design patent damages were often awarded on the entire product, regardless of
non-patented components of the product. (Samsung Electronics Co., Ltd., et al. v. Apple Inc., 15-777).

fn 20 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978).

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