Design Patent Remedies - Nordock v. Systems, Inc. (Fed. Cir. 2015)

Recently, the Federal Circuit addressed the dichotomy between standard patent damages under  35 U.S.C. 284 and design patent specific remedies under 35 U.S.C. 289. In Nordock v. Systems Inc., No. 14-1762 (Fed. Cir. Sept. 29, 2015), the Federal Circuit articulated, "[i]n the case of design patent infringement, a patentee can recover damages under 284 or under 35 U.S.C. 289 . . . ", but not both. (Emphasis added). While prior to Nordock this was already understood to be the correct law, we now have a case that confirms that a design patent holder may elect to receive an award under section 284, or section 289, whichever is larger. For the particulars of Nordock v. Systems follow the jump.

D579,754

Nordock and Systems are competitors in the loading dock device industry. Both companies design, manufacture, and sell devices for creating a bridge between a loading dock and a truck bed. Nordock's design patent (D579,754) claims the ornamental design of a lip and hinge plate for one such dock leveler (FIG. 1 shown above). A jury found that System's hydraulically operated dock levelers infringe the Nordock D'754 design patent and that the patent was not invalid. The jury entered a judgment awarding Nordock $46,825 in damages as a reasonable royalty, indicating on the verdict form that Systems' profits from the infringing products were $0.

On appeal, the Federal Circuit vacated the jury's damages award, remanding the case for a new trial on damages. Despite Systems' urging that the jury's award of a reasonable royalty was supported by substantial evidence and should not be disturbed, the court determined that a new trial was necessary to address damages under 35 U.S.C 289. The Court enunciated that in a case of design patent infringement a patentee can recover damages under section 284 or under 289. In reaching the determination that a new trial was necessary, the court agreed that there was no credible evidence that Systems' total profits for sale of the infringing levelers was $0. In fact, the court noted that taken together, Systems' expert testimony and expert report revealed that total profits on the infringing hydraulic levelers were at least $630,881, a far cry from $0.

Section 284, which is not limited to design patent infringement, provides two alternative categories of compensatory damages: "the patentee's lost profits and the reasonable royalty he would have received through arms-length bargaining." In contrast, section 284, which provides additional remedies for infringement of a design patent, permits design patentees to claim either $250 or "the infringer's 'total profit' on sales of 'any article of manufacture' to which the patented design was applied." While unfortunate for patentees, double-dipping is not allowed, as recovery under both section 289 and section 284 is not permitted.

Summed up, a design patentee has three mutually exclusive options: 1) total profits from the infringer's sales under section 289; 2) standard patent damages under section 284; or 3) $250 under section 289 (if greater than the infringer's total profits or damages).  Based on Nordock, it is now even clearer that design patent plaintiffs are entitled to whichever remedy yields the maximum award.