Systems, Inc. Petition for Writ of Certiorari

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Systems filed a petition for writ of certiorari to the U.S. Supreme Court seeking review of the Federal Circuit's standard for awarding damages for design patent infringement under Section 289 of the Patent Act.

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No. 15In the

Supreme Court of the United States
SYSTEMS, INC.,
Petitioner,
v.
NORDOCK INC.,
Respondent.
On Petition for a Writ of Certiorari to the United
States Court of A ppeals for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI
John Whitaker
Whitaker Law Group
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-8500
[email protected]
David A. A ffeldt
A ffeldt Law Offices, S.C.
8741 W. National Avenue
West Allis, WI 53227
414-321-4560
[email protected]

Philip P. Mann
Counsel of Record
Timothy J. Billick
Mann Law Group
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-0900
[email protected]
[email protected]

Counsel for Petitioner
January 28, 2016
263910

A
(800) 274-3321 • (800) 359-6859

i
QUESTIONS PRESENTED
In the case below, the Federal Circuit, relying on its
recent decision in Apple v. Samsung (petition for writ of
certiorari pending), set aside a jury verdict in Petitioner’s
favor and held that, under 35 U.S.C. § 289, design patent
damages should be based on profits attributable to an
entire apparatus rather than the actual portion of that
apparatus to which the design is applied.
The questions presented are:
1. Where a patented design 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?
2. Is the Federal Circuit’s interpretation and
application of 35 U.S.C. § 289 inconsistent with this Court’s
prior precedent?

ii
PARTIES TO THE PROCEEDING
Petitioner is Systems, Inc., which was the defendant in
the District Court and was the Appellee/Cross-Appellant
in the Court of Appeals.1
Respondent is Nordock, Inc., which was plaintiff in
the District Court and was the Appellant/Cross-Appellee
in the Court of Appeals.

1.  The Federal Circuit caption also lists aliases for Systems,
Inc. including Poweramp, DLM, Inc., and McGuire. Those aliases
refer only to Systems, Inc. and do not identify any other party.

iii
RULE 29.6 DISCLOSURE
Pursuant to Supreme Court Rule 29.6, Petitioner
Systems, Inc. states that it does not have a parent
corporation and that no publicly held corporation owns
10% or more of its stock.

iv
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i
PARTIES TO THE PROCEEDING . . . . . . . . . . . . . . . . ii
RULE 29.6 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . iii
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . iv
TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . . vi
TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . vii
PETITION FOR A WRIT OF CERTIORARI . . . . . . . 1
OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
BASIS FOR JURISDICTION . . . . . . . . . . . . . . . . . . . . . 2
CONST I T U T IONA L A N D STAT U T ORY
PROVISIONS INVOLVED . . . . . . . . . . . . . . . . . . . . . 2
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . 3
A. DISCUSSION OF THE DESIGN PATENT

DAMAGES STATUTE . . . . . . . . . . . . . . . . . . . . . 3
B. THE PA RTIES A ND THE “DOCK

LEVELER” INDUSTRY . . . . . . . . . . . . . . . . . . . 5
C. NORDOCK’S DESIGN PATENT . . . . . . . . . . . . 6
D. PROCEDURAL HISTORY . . . . . . . . . . . . . . . . . 7

v
Table of Contents
Page
REASONS FOR GRANTING THE PETITION . . . . . 9
A. T H E F E D E R A L C I R C U I T ’ S
INTERPRETATION OF SECTION 289
ELIMINATES ANY MEANINGFUL

CAUSATION REQUIREMENT . . . . . . . . . . . . .9
B. T H E F E D E R A L C I R C U I T ’ S
INTERPRETATION OF SECTION
2 8 9 T R A NSFOR M S I T I N T O A
PUNITIVE STATUTE DEVOID OF

ANY STANDARD OF CULPABILITY . . . . . 10
C. T H E F E D E R A L C I R C U I T ’ S
INTERPRETATION OF SECTION
2 8 9 I M P R O P E R LY AWA R D S
D E S I G N PA T E N T O W N E R S
DA M AGES ON A RT ICLES T H AT

WERE DISCLAIMED . . . . . . . . . . . . . . . . . . . . 13
D. T H E F E D E R A L C I R C U I T ’ S
ERROR IS HAVING A VERY REAL
A N D AC C EL ER A T I NG I M PAC T

ON DESIGN PATENT LITIGATION . . . . . . . 15
E. T H E P E T I T I O N S H O U L D B E
GRANTED TO PROVIDE GUIDANCE
REGA RDING THE PROPER

“ARTICLE OF MANUFACTURE” . . . . . . . . . 18
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

vi
TABLE OF APPENDICES
Page
A P P E N DI X A — O P I N ION O F T H E
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
SEPTEMBER 29, 2015 . . . . . . . . . . . . . . . . . . . . . . . . 1a
APPENDIX B — DECISION AND ORDER
OF THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT
OF WISCONSIN, FILED JULY 31, 2014 . . . . . . 37a
APPENDIX C — STATUTORY PROVISIONS . . . . 56a

vii
TABLE OF CITED AUTHORITIES
Page
CASES
Apple, Inc. v. Samsung Electronics Co.,
786 F.3d 983 (Fed. Cir. 2015) . . . . . . . . . . . . . . . passim
Aro Mfg. Co. v. Convertible Top Replacement Co.,
377 U.S. 476 (1964) . . . . . . . . . . . . . . . . . . . . . . . . . 10-11
Bush & Lane Piano Co. v. Becker Bros.,
222 F. 902 (2d Cir. 1915) . . . . . . . . . . . . . . . . . . . . . . . 19
Bush & Lane Piano Co. v. Becker Bros.,
234 F. 79 (2d Cir. 1916) . . . . . . . . . . . . . . . . . . . . . . . . . 9
Crawford v. Heysinger,
123 U.S. 589, 8 S. Ct. 399, 31 L. Ed. 269 (1887) . . . . 14
Dowling v. United States,
473 U.S. 207 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fla. Prepaid Postsecondary Educ. Expense Bd.
v. Coll. Sav. Bank,
527 U.S. 627 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
General Motors Corp. v. Devex Corp.,
461 U.S. 648 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Goodyear Dental Vulcanite Co. v. Davis,
102 U.S. 222 (1880) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

viii
Cited Authorities
Page
In re Blum,
374 F.2d 904 (CCPA 1967) . . . . . . . . . . . . . . . . . . . . . . 7
Microsoft Corporation v. Corel Corporation,
Case 5:15-cv-05836 (CAND) . . . . . . . . . . . . . . . . . . . 16
Nike, Inc. v. Wal-Mart Stores, Inc.,
138 F.3d 1437 (Fed. Cir. 1998) . . . . . . . . . . . . . 4, 11, 12
Pacific Coast Marine Windshields, Ltd. v.
Malibu Boats, LLC et al.,
6:12-cv-00033 (FLMD) . . . . . . . . . . . . . . . . . . . . . . . . 15
Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,
575 F.2d 1152 (6th Cir. 1978) . . . . . . . . . . . . . . . . . . . . 3
Read Corp. v. Portec, Inc.,
970 F.2d 816 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . 11
ResQNet.com, Inc. v. Lansa, Inc.,
594 F.3d 860 (Fed. Cir. 2010) . . . . . . . . . . . . . . . . . . . . 9
Rite-Hite Corp. v. Kelley Co.,
56 F.3d 1538 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . 9
Seymour v. McCormick,
57 U.S. (16 How.) 480 (1854) . . . . . . . . . . . . . . . . . . . . 10
Stearns v. Tinker & Rasor,
252 F.2d 589 (9th Cir. 1957) . . . . . . . . . . . . . . . . . . . . 13

ix
Cited Authorities
Page
VirnetX, Inc. v. Cisco Sys., Inc.,
767 F.3d 1308 (Fed. Cir. 2014) . . . . . . . . . . . . . . . 19, 20
STATUTES AND OTHER AUTHORITIES
U.S. Constitution art. I, § 8, cl. 8 . . . . . . . . . . . . . . . . . . . 2
28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
35 U.S.C. § 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
35 U.S.C. § 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
35 U.S.C. § 284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
35 U.S.C. § 289 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Act of Aug. 1, 1946, ch. 726, Pub. L. No. 79-587,
60 Stat. 778 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Act of 1887, 24 Stat. 387 . . . . . . . . . . . . . . . . . . . . . . . 11, 12

1
PETITION FOR A WRIT OF CERTIORARI
Systems, Inc. (“Systems”) petitions this Court for a
writ of certiorari to the Federal Circuit Court of Appeals
correcting the Federal Circuit’s erroneous interpretation
of 35 U.S.C. § 289 (“Section 289”). The instant matter
raises a nearly identical issue as that presented in Apple,
Inc. v. Samsung Electronics Co., 786 F.3d 983 (Fed. Cir.
2015), for which Samsung Electronics recently filed its own
petition for writ of certiorari. See Samsung Electronics
Co. v. Apple, Inc., Petition for Writ of Certiorari No. 15777 (currently pending).
The Federal Circuit has created an erroneous legal
standard for determining the damages that can be
awarded for infringement of a design patent. Under that
standard, damages are defined as the total profit of an
entire accused product even though the patented design
is only applied to a small, insignificant portion of that
product. The Federal Circuit’s interpretation of Section
289 should be reviewed to correct an error of law that
is resulting in exorbitant and unjust damage awards in
design patent cases.
OPINIONS BELOW
The opinion of the U.S. Court Of Appeals for the
Federal Circuit is reproduced at App. 1a – App. 36a.
The U.S. District Court’s order denying Respondent’s
post-trial motion regarding design patent damages is
reproduced at App. 37a – App. 55a.

2
BASIS FOR JURISDICTION
The judgment of the Court of Appeals was entered
on September 29, 2015. On December 16, 2015, the Chief
Justice extended the time within which to file a petition
for a writ of certiorari to and including Thursday, January
28, 2016. This Court’s jurisdiction is invoked under 28
U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
U.S. Constitution art. I, § 8, cl. 8 provides in pertinent
part that:
The Congress shall have Power ... To promote
the Progress of Science and useful Arts, by
securing for limited Times to Authors and
Inventors the exclusive Right to their respective
Writings and Discoveries.
The additional remedy for infringement of design
patent statute is 35 U.S.C. § 289, set out below in its
entirety:
Whoever 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, but not less than $250, recoverable in any

3
United States district court having jurisdiction
of the parties.
Nothing in this section shall prevent, lessen, or
impeach any other remedy which an owner of
an infringed patent has under the provisions
of this title, but he shall not twice recover the
profit made from the infringement.
STATEMENT OF THE CASE
The underlying action is a design patent dispute
between two competitors in the “dock leveler” industry.
A. DIS CUS SION OF T H E DE SIGN PAT EN T
DAMAGES STATUTE
This Court is undoubtedly familiar with “utility
patents,” which are available for “any new and useful
process, machine, manufacture, or composition of matter,
or any new and useful improvement thereof.” 35 U.S.C.
§ 101 (emphasis added). In contrast, design patents are
available for “any new, original and ornamental design
for an article of manufacture.” 35 U.S.C. § 171 (emphasis
added).
All patent owners – for utility and design patents
alike – may recover “damages adequate to compensate for
the infringement” under 35 U.S.C. § 284 (“Section 284”).
Damage awards under Section 284 today are generally
either lost profits of the patent owner or a reasonable
royalty. See Panduit Corp. v. Stahlin Bros. Fibre Works,
Inc., 575 F.2d 1152, 1157 (6th Cir. 1978) (“When actual
damages, e.g., lost profits, cannot be proved, the patent

4
owner is entitled to a reasonable royalty.”). Historically,
damage awards of “infringer’s profits” were equally
available to both design patent owners as well as utility
patent owners. See Nike, Inc. v. Wal-Mart Stores, Inc.,
138 F.3d 1437, 1441 (Fed. Cir. 1998)(recounting the history
of infringer’s profits in the patent context). Congress
eliminated infringer’s profits as a remedy under the
precursor to Section 284 (the sole damages remedy for
utility patents) in 1946. See Act of Aug. 1, 1946, ch. 726,
Pub. L. No. 79-587, 60 Stat. 778. However, Congress
maintained infringer’s profits as an additional remedy
for design patent infringement, which exists today as 35
U.S.C. § 289. Section 289 today provides:
Whoever during the term of a patent for
a design, without license of the owner …
applies the patented design ... to any article of
manufacture ... shall be liable to the owner to
the extent of his total profit, but not less than
$250 .…
Nothing in this section shall prevent, lessen, or
impeach any other remedy which an owner of
an infringed patent has under the provisions
of this title, but he shall not twice recover the
profit made from the infringement.
The statute does not define what constitutes “an
article of manufacture.”
Accordingly, infringer’s profits had been a component
of damages for infringement of both utility patents as well
as design patents from inception until about 1946. Today,
however, infringer’s profits are available only for design
patents, and only under Section 289.

5
B. THE PARTIES AND THE “DOCK LEVELER”
INDUSTRY
Petitioner Systems, Inc. is a Wisconsin corporation
engaged in the business of building and selling so-called
“dock levelers.” Respondent Nordock, Inc. (“Nordock”)
is a Canadian company competing in the same industry.
A dock leveler is a large mechanical component used
to bridge the gap between a delivery truck and a loading
dock of a building. Set forth below is a representation of a
dock leveler as it would be sold or viewed in a showroom.
The device is typically installed into a sunken cavity
formed in a loading dock of a building. After a delivery
truck backs up to the loading dock, the dock leveler is
raised slightly (as illustrated above) and the lip portion
is extended. Then the entire device lowers gradually
until the lip portion engages the truck and creates a
relatively flat bridge from the loading dock into the back
of the delivery truck, thereby facilitating the loading and
unloading of the truck.

6
It should be appreciated that the entire dock leveler
is a large and complex device that is almost exclusively
functional in every respect. In addition, the lip portion
that extends from the front constitutes a relatively minor
component of the overall dock leveler.
C. NORDOCK’S DESIGN PATENT
Nordock, Respondent in the instant matter, has
secured several patents for its line of dock levelers. Most
of Nordock’s patents are utility patents. However, Nordock
also obtained one design patent on what Nordock referred
to as its “Lip and Hinge Plate for a Dock Leveler” – U.S.
Design Patent D579,754 (“the ‘D754” patent). Set out
below is a reproduction of Figure 1 of the ‘D754 patent
showing a perspective view of Nordock’s claimed design.

7
Only one embodiment is shown in the several figures
of the ‘D754 patent. Indeed, in all the figures, everything
except the “lip and hinge plate” is shown in broken line,
which generally means it forms no part of the claimed
invention. See, e.g., In re Blum, 374 F.2d 904, 907 (CCPA
1967). In fact, Nordock expressly stated that “The
deck and deck frame shown in broken lines in FIGS. 1
and 3—7, the drive brackets shown in FIGS. 1—5, the
drive bar opening shown in FIGS. 1—3, and the assist
spring mounting bracket shown in FIG. 1 represent
environmental structure in order to show the claim in a
condition of use and form no part of the claimed design.”
See ‘D754 at page 1 (emphasis added). Accordingly, by
Nordock’s own admission, nothing except the “lip and
hinge plate” is a part of the design, and Nordock expressly
disclaimed everything else.
D. PROCEDURAL HISTORY
In 2011, Nordock sued Systems for infringement of
its ‘D754 patent in the Eastern District of Wisconsin.
See Nordock, Inc. v. Systems, Inc., Case No. 2:11-cv-118
(WIED). Nordock accused six models of Systems’ dock
levelers: three “hydraulic” models and three “mechanical”
models in various sizes and configurations. After two
years of litigation, the parties conducted a jury trial in
March of 2013. At the conclusion of the trial, the jury found
that Systems’ “mechanical” dock levelers did not infringe
Nordock’s design patent, but that certain “hydraulic” dock
levelers did infringe.
During the trial, Systems’ damages expert testified
that Systems’ profits on the “front end” (the “lip and hinge
plate”) of the infringing dock levelers would be no greater

8
than $46,825. Systems’ expert testified that he calculated
profits on only the “front end” of the dock leveler because,
as shown supra, only the “front end” of the dock leveler
was claimed and Nordock itself had disclaimed everything
else.
The jury awarded $46,825 as the total amount of
money Nordock was to receive for the infringement. In
post-trial motions, Nordock asked the District Court to
enhance the jury’s award to more than $600,000 because
that amount more closely represented Systems’ total profit
on the entire dock leveler. The District Court denied that
motion and concluded that the evidence supported the
jury’s findings. See App. 37a – App. 55a. Nordock appealed
to the Federal Circuit.
While Nordock’s appeal of this matter was pending,
the Federal Circuit decided Apple, Inc. v. Samsung
Electronics Co., 786 F.3d 983 (Fed. Cir. 2015) which
involved a similar design patent damages issue. In that
decision, the Federal Circuit held that the “total profits”
of the entire accused product – regardless of how much
or little of the product embodied the claimed design – is
the appropriate measure of damages. Apple v. Samsung,
786 F.3d at 1002.
Relying on its recent Apple v. Samsung decision,
the Federal Circuit vacated the jury’s findings in the
instant action and remanded the matter for a new trial
on damages. In particular, the Federal Circuit found that
the jury should have awarded Systems’ total profits on the
entire dock leveler rather than only the profit attributable
to the infringement, i.e., the profits on the claimed “front
end” design. In so doing, the Federal Circuit applied

9
the same erroneous interpretation of Section 289 it had
applied in the Apple v. Samsung case. App. 20a – App. 21a.
REASONS FOR GRANTING THE PETITION
This petition should be granted so that this Court can
review the Federal Circuit’s erroneous interpretation of
Section 289 set out in Apple v. Samsung. The Federal
Circuit’s erroneous interpretation opens the door for
exorbitant, unjust damages to be awarded for design patent
infringement, and appears to contradict over a century
of established jurisprudence. In doing so, the Federal
Circuit has created a damages model completely devoid
of the safeguards developed for damages recoverable
under Section 284, and the safeguards Congress added
to Section 289 in 1952. The Federal Circuit’s erroneous
interpretation has resulted in a foot race to the courthouse
with design patent holders seeking exorbitant windfalls
that in some cases offend all notions of substantial justice.
A. THE FEDERAL CIRCUIT’S INTERPRETATION
OF SECTION 2 8 9 ELI MI NAT ES A N Y
MEANINGFUL CAUSATION REQUIREMENT
The law of patent infringement – as with tort law
in general – has always required some causal nexus
between patent infringement and damages recoverable
for that infringement. See Rite-Hite Corp. v. Kelley Co.,
56 F.3d 1538, 1545 (Fed. Cir. 1995) (en banc) (lost profits);
ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed.
Cir. 2010) (per curiam) (reasonable royalty); c.f., Bush &
Lane Piano Co. v. Becker Bros., 234 F. 79, 81-82 (2d Cir.
1916).

10
Although Section 289 today is undeniably directed
at recovering infringer’s profits, nothing about that
statute suggests the measure of damages can be totally
unrelated to the injury actually suffered as a result of
the infringement. Rather, the language of Section 289
entitles the patent owner to “the profit made from the
infringement,” which at least implies that some nexus
exists between the infringement and the profits as a
measure of damages.
Systems will not belabor the discussion of the law
regarding causation which has been more than adequately
set out in the co-pending petition for writ of certiorari to
this Court filed by Samsung Electronics. See, Samsung
Brief at pp. 32-35, Samsung v. Apple, Petition No. 15-777.
The Federal Circuit’s misinterpretation of Section 289
eliminates the causal connection that should be present
to establish any manner of compensatory damages.
B. THE FEDERAL CIRCUIT’S INTERPRETATION
OF SECTION 289 TRA NSFORMS IT INTO
A PUNITIVE STATUTE DEVOID OF A NY
STANDARD OF CULPABILITY
The Patent Act and relevant jurisprudence limit
recovery for patent infringement under 35 U.S.C. § 284 to
compensatory damages, namely those actually incurred
due to the infringement. See General Motors Corp. v.
Devex Corp., 461 U.S. 648 (1983). Congress and the courts
have consistently agreed that in order to recover more
than compensatory damages for patent infringement,
some measure of willfulness on the part of the infringer
must be present. See Seymour v. McCormick, 57 U.S.
(16 How.) 480 (1854); Aro Mfg. Co. v. Convertible Top

11
Replacement Co., 377 U.S. 476, 508 (1964); Dowling v.
United States, 473 U.S. 207, 227 n.19 (1985); Fla. Prepaid
Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527
U.S. 627, 663 n.15 (1999) (Stevens, J., dissenting) (quoting
Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir.
1992)). In short, damages for patent infringement are
limited to compensatory or “actual” damages unless the
infringer acted with the requisite level of willful intent.
And even if the infringement is willful, the patent owner
may only recover at most three times actual damages.
See 35 U.S.C. § 284.
There is no rational basis for declining to apply the
same standard for enhanced damages to Section 289 that
undeniably applies to Section 284. Indeed, the history
of Section 289 suggests exactly the opposite. More
specifically, the history of Section 289 was discussed at
length by the Federal Circuit in Nike, Inc. v. Wal-Mart
Stores, Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998). In that
case, the Federal Circuit noted that the predecessor
to Section 289 was enacted by the Act of 1887, 24 Stat.
387. Section 1 of the Act of 1887 did indeed establish
that infringer’s profits were a measure of damages for
design patent infringement. Nike v. Wal-Mart, 138 F.3d
at 1441. However, as enacted in 1887, infringer’s profits
were only available from an infringer “knowing that the
[design] has been so applied” to an article of manufacture.
Nike v. Wal-Mart, 138 F.3d at 1441 (quoting Section 1 of
the Act of 1887)(emphasis added). In other words, the
remedy available under what is now Section 289 was only
available for willful infringement. Under that standard,
the possibility of any damages being available under the
precursor to Section 289 aligns with the requirement
that the infringement be “knowing,” exactly as it does

12
today under Section 284. In other words, to the extent
the precursor to Section 289 was intended to eliminate
apportionment from the damages calculation for design
patent infringement, it was only intended to do so in the
context of willful infringement.
The design patent damages statute was not amended
again until the Patent Act was codified under Title 35 in
1952. Nike v. Wal-Mart, 138 F.3d at 1442. When amended
in 1952, the words “knowing that the same has been so
applied” were omitted, thus transforming the damages
statute from one requiring willful conduct into an innocent
infringement scenario. In Nike, the Federal Circuit
acknowledged that there is no apparent explanation for
the deletion of the “knowing” phrase. Nike v. Wal-Mart,
138 F.3d at 1442. Nonetheless, the language was omitted
thereby eliminating any intent element from the additional
remedy for design patent damages.
Common sense suggests that to the extent the 1887
precursor to Section 289 authorized some heightened level
of damages, it was tempered by the requirement that the
infringement be “knowing” or willful. The elimination of
any intent element from the statute in 1952 compels the
conclusion that enhanced or exemplary damages should
not be available under Section 289 today.
In addition, the 1952 amendments to Section 289 also
added new language that the patent holder “shall not twice
recover the profit made from the infringement.” Compare
Act of 1887, 24 Stat. 387 with 35 U.S.C. § 289. This new
language would be meaningless if it were not intended as
some form of cap on the damages that could be awarded
under Section 289.

13
Taken in tandem, the two substantive amendments
made to the language of Section 289 – that the “knowing”
requirement was eliminated and that the “shall not twice
recover the profit” limitation was added – indicate the
intent of Congress that damage awards under Section 289
must bear a rational relationship to the actual damages
attributable to the infringement.
In short, the evolution of Section 289 leads to only one
proper conclusion: To the extent an additional remedy for
infringement of a design patent is available, care should
be taken that such a remedy is compensatory in nature
and not punitive. However, and as demonstrated below,
in the instant case and many others, damage awards
using the Federal Circuit’s interpretation of Section 289
are undeniably punitive. In most cases, damages awards
drastically exceed any actual damage resulting from the
infringement. The Federal Circuit’s interpretation of
Section 289 results in a mechanical award of defendant’s
“total profits” regardless of whether those profits bear any
relation to the actual injury suffered by the patent holder.
C. THE FEDERAL CIRCUIT’S INTERPRETATION
OF SECTION 289 IMPROPERLY AWARDS
DESIGN PATENT OWNERS DAMAGES ON
ARTICLES THAT WERE DISCLAIMED
“It is axiomatic that only a claim of a patent can
be infringed.” Stearns v. Tinker & Rasor, 252 F.2d
589, 596 (9th Cir. 1957). It is also long established that
a clear disclaimer of claim scope takes the disclaimed
subject matter outside the scope of the patent. See, e.g.,
Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222,
227 (1880)(“[W]hen a patent bears on its face a particular

14
construction, inasmuch as the specification and claim are
in the words of the patentee, it is reasonable to hold that
such a construction may be confirmed by what the patentee
said when he was making his application.”); c.f., Crawford
v. Heysinger, 123 U.S. 589, 602-04, 8 S.Ct. 399, 31 L.Ed.
269 (1887). Accordingly, under established law, disclaimed
subject matter cannot contribute to patent infringement.
In the instant case – as in many other design patent
cases – the Federal Circuit’s interpretation of Section
289, would entitle Nordock to Systems’ total profits on
its entire dock leveler even though Nordock expressly
disclaimed everything except the “front end.” But by
illustrating everything in dashed lines except the lip and
hinge plate, Nordock expressly dedicated to the public
everything except the “lip and hinge plate.” See, supra,
Statement of the Case, Section B. And as shown below,
the contributions of a “lip and hinge plate” to an entire
dock leveler are minimal. Below is a side-by-side view of
an entire dock leveler next to Nordock’s claimed “lip and
hinge plate.”

15
Again, in the instant action, the testimony at trial
was that the total profits of the claimed “lip and hinge
plate” was only about $46,825 while the total profits on
the entire dock leveler were between $630,000 and about
$900,000. In other words, the “profit made from the
infringement” was about $46,825; yet under the Federal
Circuit’s interpretation of Section 289, Systems stands
to be punished to the extent of at least thirteen times
that amount. 35 U.S.C. § 289 (emphasis added). There is
no evidence that Congress intended this result when it
enacted Section 289.
The injustice of such a result is especially disturbing in
view of the safeguards that were introduced into Section
289 by Congress in 1952 as discussed above.
D. THE FEDERAL CIRCUIT’S ERROR IS HAVING
A VERY REAL AND ACCELERATING IMPACT
ON DESIGN PATENT LITIGATION
The Federal Circuit’s interpretation of Section 289
damage awards has created an environment where design
patent owners are hurrying to cash in on the exorbitant
damages now made available. Neither the Apple v.
Samsung case nor the instant case are unique. Several
other recent design patent defendants are suffering from
the same injustice as both Systems and Samsung.
For example, the Pacific Coast Marine Windshields
v. Malibu Boats case illustrates how district courts have
applied the Federal Circuit’s draconian interpretation
of Section 289 to reach unjust results. See, Pacific Coast
Marine Windshields, Ltd. v. Malibu Boats, LLC et al.,
6:12-cv-00033 (FLMD). In Pacific Coast, plaintiff owned

16
a design patent covering only a windshield design for a
boat, yet defendant sold only entire boats. Shown below
is a comparison of the patented design on the right with
Malibu’s boat on the left:

Despite the obvious disparity, the district court ruled
that Pacific Coast could recover Malibu Boats’ total profits
on the entire boat even though the design patent only
claims the windshield and even though Pacific Coast does
not make or sell boats.
Equally as compelling is the recently-filed case of
Microsoft Corporation v. Corel Corporation, Case 5:15cv-05836 (CAND). In that case, Microsoft sued Corel
for infringement of a number of patents, including five
utility patents and four design patents. Using the Federal
Circuit’s interpretation of Section 289, infringement of any
one design patent would lead to an award of all of Corel’s
profits for the entire accused product.

17
Below is a reproduction of one of Microsoft’s claimed
designs, which is a graphical element used to scale the
visible size of an electronic document.

And below is a reproduction of the Corel accused
product purportedly using the claimed invention of
Microsoft’s design patent.1 The portion circled in red is
the accused element.

1.  The particular patent-in-suit was awarded the Electronic
Frontier Foundations’ “Stupidest Patent of the Month” award for
December of 2015. See https://www.eff.org/deeplinks/2015/12/stupidpatent-month-microsofts-design-patent-slider

18
Under the Federal Circuit’s interpretation of Section
289, the damages available for infringement of the single
graphical element circled in red will be the total profits on
the entire accused product, i.e., the whole word processing
program.
The Federal Circuit’s rigid analysis achieves what
can only be considered unjust results. Using the Federal
Circuit’s analysis, regardless of how small or insignificant
an infringing component is, if it is attached to a larger
product, then the total profits for the entire product
must be awarded as design patent damages. Absurd
results become immediately apparent. For instance, if
a patented design is applied to a carpet, does the patent
holder recover the total profits for the building in which
the carpet is installed? As Samsung points out in its brief,
if a cup holder is attached to an eighteen-wheeled truck,
is the profit for the entire truck available to one who holds
a patent for the cup holder? These questions have never
been addressed by this Court. It is time they are.
E. THE PETITION SHOULD BE GRANTED TO
PROVIDE GUIDA NCE REGA RDING THE
PROPER “ARTICLE OF MANUFACTURE”
The foregoing cases, and many others, highlight
the lack of any guidance regarding what constitutes the
infringing “article of manufacture” for the purpose of
Section 289. More specifically, Section 289 authorizes
infringer’s profits for any “article of manufacture” to
which the claimed design is “applied.” 35 U.S.C. § 289.
“Article of manufacture” is not defined in Section 289.

19
In the Apple v. Samsung case, Samsung argued that
early design patent cases, such as Bush & Lane Piano
Co. v. Becker Bros., 222 F. 902, 903 (2d Cir. 1915), compel
a narrow interpretation for “article of manufacture” as
being only the portion of the product to which the design
is actually applied. See Apple Inc. v. Samsung Elecs. Co.,
786 F.3d 983, 1002 (Fed. Cir. 2015). The Federal Circuit
addressed Samsung’s argument and rejected it without
any meaningful analysis. In essence, the Federal Circuit
distinguished the cases cited by Samsung on the grounds
that they were factually different. The Federal Circuit
concluded that the “innards of Samsung’s smartphones
were not sold separately from their shells as distinct
articles of manufacture to ordinary purchasers.” Id.
The Federal Circuit’s discussion of what constitutes
the accused “article of manufacture” appears to implicate
the “smallest salable unit” analysis that the Federal
Circuit has held applies in the computation of a reasonable
royalty. See, e.g., VirnetX, Inc. v. Cisco Sys., Inc., 767
F.3d 1308, 1326 (Fed. Cir. 2014). In VirnetX v. Cisco,
the Federal Circuit noted that “the smallest salable unit
approach was intended to produce a royalty base much
more closely tied to the claimed invention than the entire
market value of the accused products.” VirnetX, 767 F.3d
at 1327. However, the Federal Circuit then concluded that
the analysis did not stop there. The Federal Circuit ruled
that when performing the reasonable royalty analysis,
the patent holder must first identify the “smallest salable
unit” to establish the royalty base, and then perform the
apportionment analysis. Id.
By analogy, a proper determination of damages under
Section 289 should follow a similar framework. First,

20
using the Federal Circuit’s reasoning in VirnetX, the
patent owner should be required to identify exactly what
the “article of manufacture” is for infringement under
Section 289, and that “article of manufacture” should
bear a “close relation to the claimed invention.” VirnetX,
767 F.3d at 1327. As noted by the Federal Circuit, that
analysis is independent of any apportionment that may
or may not be done.
As demonstrated above, the Federal Circuit’s
interpretation of Section 289 is devoid of any analysis or
even recognition that the “article of manufacture” must
be identified before a profits analysis can be performed.
Only after that is done should a patent owner’s entitlement
to an infringer’s profits be considered.

21
CONCLUSION
Systems’ petition for a writ of certiorari should be
granted. The Federal Circuit’s erroneous interpretation
of Section 289 is having a significant detrimental impact
on patent litigation today, and the problem appears to
be worsening rapidly. Such an unjust result cannot have
been envisioned, or even contemplated, by Congress when
it drafted the language of Section 289. It is time for this
Court to review the Federal Circuit’s rulings and correct
the error.
Dated: January 28, 2016. Respectfully submitted,
John Whitaker
Whitaker Law Group
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-8500
[email protected]
David A. A ffeldt
A ffeldt Law Offices, S.C.
8741 W. National Avenue
West Allis, WI 53227
414-321-4560
[email protected]

Philip P. Mann
Counsel of Record
Timothy J. Billick
Mann Law Group
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-0900
[email protected]
[email protected]

Counsel for Petitioner

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