R. Lee Strasburger, Jr. Morris, Manning & Martin, LLP
The U.S. Supreme Court’s upcoming review of patent damages in Samsung Electronics Co., Ltd. v. Apple Inc. shouldn’t be dreaded by the startup community. Within the last decade, the Supreme Court has weighed in on more patent-related cases than it has in the previous four decades combined. These rulings have impacted the tech community in various ways, mainly that it’s now more difficult to receive utility patent protection for certain technologies (e.g., fintech, etc.). That being said, many of the Supreme Court’s recent decisions have transformed patent trolls into mere paper tigers by reducing the profitability of patent litigation.
Whatever the Supreme Court decides during its next term, keep in mind that the ruling will cut both ways. While total profits awards for design patents could spur troll-litigation, design patents could equally become more valuable to the startup community.
Traditionally, design patents have been overlooked and/or undervalued by potential investors and the business community as a whole, because among other reasons, these types of patents protect design elements and not the actual science behind the technology (as do utility patents). Design patents, however, are generally cheaper to obtain than utility patents, making them more affordable to startups. Similarly, for those technologies that do not easily yield themselves to utility patents but are a common focus of startups (e.g., mobile apps, SaaS platforms, etc.), design patents provide a way to protect novel design features that represent functionally that otherwise cannot be effectively protected. So, if the Supreme Court upholds total profits awards for design patents, then startups will have a new way to increase valuations by creating barriers to entry to prevent others from copying their innovative designs.
1For reference, an example of a design patent can be found here, which is one of Apple’s design patents at issue in the Supreme Court case.