Guest Post by Paul Morgan
This is an increasing important and not fully resolved legal issue which should logically be addressed in the pending Fed. Cir. appeal of the nearly $1 billion infringement damages award in Apple v. Samsung, re the Apple design patents held infringed. That award seems to have inspired increased design patent assertions and design application filings. In that case Judge Koh had even called the application of the Supreme Courts controlling KSR decision on §103 an “open question” as to design patents! Apple, Inc. v. Samsung Electronics Co., Ltd., Case No.: II-CV-01846-LHK, Slip Op. at 19 (N.D. Cal. Dec. 2, 2011). These issues could also arise soon in PTO IPR PTAB decision appeals to the Fed. Cir. The PTAB has already issued a final written decision in the first IPR against a design patent. Munchkin, Inc. and Toys “R” US, Inc. v. Luv N’ Care, Ltd, IPR 2013-00072 (Paper No. 28) (April 21, 2014).
In contrast to utility patent litigation, in design patent litigation summary judgments for non-infringement are relatively rare, while summary judgments for §103 obviousness are more common. This is so even though they have the very same §103. Yet the Supreme Court’s controlling §103 guidelines in KSR Int’l Co. v. Teleflex Inc, 550 U. S. 398 (2007) have been strangely totally ignored or not applied in many subsequent design cases. Instead, unique old Fed. Cir. case law is still being applied in making §103 design prior art comparisons and combinations, as discussed below. Perhaps this reportedly high rate of design patent §103 summary judgments logically correlates with the prior study and report on this blog at: http://www.patentlyo.com/patent/2010/01/design-patent-rejections.html showing that design patent applications are issued with only rare §103 rejections by PTO design patent application examiners? That is, prior art is rarely being applied at the examination stage. Again, this is opposite from PTO utility patent application examination, even though under the very same §103 standard. A recent example of a Fed. Cir. sustained §103 summary judgment of two design patents in suit isMRC Innovations v. Hunter Mfg. (Fed. Cir. 2014).
Is another reason for relatively less non-infringement than §103 summary judgments in design patent cases due in part to the usual absence of any verbal claim distinctions, plus the Egyptian Goddess “ordinary observer” test? The “ordinary observer” test for designpatent infringement must also be contrasted with the traditional judicial view of design patent “claims scope” as narrow – see, e.g., cases cited in the article “Functionality and Design Patent Validity and Infringement”, 91 Journal of the Patent and Trademark Office Society (JPTOS) 313, May, 2009, by Perry J. Saidman of the DesignLaw Group. But is the scope of design patents now being treated consistently with the black-letter case law that claims in litigation must have the same scope for infringement and validity? Is there a problem with lack of legal guidance of how prior art is to be treated in defining a design patent’s claim scope for, or before, an “ordinary observer” infringement test? [It has been argued that this was a jury instruction defect in the above Apple decision.]
In what seems like a remarkably begrudging semi-admission [which may be due to its particular panel members], the panel in Titan Tire Corp. v. Case New Holland, Inc. 566 F.3d 1372, (Fed. Cir. 2009) said that “it is not obvious that the Supreme Court necessarily intended to exclude design patents from the reach of KSR.” However even this Fed. Cir. panel held that: “Our precedents teach that ‘the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.’ Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996) (citing In re Rosen, 673 F.2d 388, 390 (CCPA 1982)).”
Yet the patent statute at §171 is perfectly clear that design patents have the very same §103 as other patents. §103 requires “..that the claimed invention as a whole would have been obvious .. to a person having ordinary skill in the art to which the claimed invention pertains” [emphasis supplied]. For design patents that has to be a person having ordinary skill in the art of industrial product design, not the non-skill level of any lay person, such as a jury member. [This §103 requirement should, of course, not be confused with a §102 novelty test.]
The prior en banc Federal Circuit “Egyptian Goddess” decision on design patent infringement, Egyptian Goddess, Inc. v. Swisa, Inc. 543 F.3d 665 (Fed. Cir. 2008), notes, just after referring to “the hypothetical ordinary observer who is conversant with the prior art” test fordesign patent infringement, that: “We emphasize that although the approach we adopt will frequently involve comparisons between the claimed design and the prior art, it is not a test for determining validity, but is designed solely as a test of infringement.” Unfortunately this en banc Egyptian Goddess decision did not clarify that statement further.
In High Point Design LLC v. Buyers Direct, Inc., (Fed. Cir. 2013) a Fed. Cir. panel had to face up to the District Court below having been mislead by one of the Court’s own prior design patent decisions, and had to re-clarify its §103 “obvious to whom” case law. Key text in this High Point Design decision includes:
The use of an “ordinary observer” standard to assess the potential obviousness of a design patent runs contrary to the precedent of this court and our predecessor court, under which the obviousness of a design patent must, instead, be assessed from the viewpoint of an ordinary designer. See Apple, 678 F.3d at 1329 (“In addressing a claim of obviousness in a design patent, ‘the ultimate inquiry . is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.’”) (quoting Durling, 101 F.3d at 103); Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1380–81 (Fed. Cir. 2009) (same); In re Borden, 90 F.3d 1570, 1574 (Fed. Cir. 1996) (“The central inquiry in analyzing an ornamental design for obviousness is whether the design would have been obvious to ‘a designer of ordinary skill who designs articles of the type involved.’”) ..
Although High Point Design cites prior Fed. Cir. decisions which note §103, its does not base the decision directly on this controlling statute, as it could and should have! Instead, this High Point Design footnote 2 below unsuccessfully attempts to explain-away a priorconflicting, erroneous “ordinary observer” invalidity test decision, but ends up by noting that it cannot, in any event, overrule even earlier Fed. Cir. decisions:
2 We do not believe our decision in International Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240 (Fed. Cir. 2009), cited by the district court, compelsa contrary conclusion. The International Seaway court may in fact have had the “designer of ordinary skill” standard in mind when it used the term “ordinary observer.” In any event, the court could not rewrite precedent setting forth the designer of ordinary skill standard. See Vas Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991); Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.3d 757, 765 (Fed. Cir. 1998).
This High Point Design decision should, finally, end part of the debate over the proper “obvious to whom” test for design patent obviousness. [Prior §103 design patent decisions include In re Nalbandian, 661 F.2d 1214, 1215-16 (CCPA 1981) and In re Carter, 673 F.2d 1378 (CCPA 1982), both cited in MPEP Section 1504.03, and the above Walter E. Durling v. Spectrum Furniture Company, Inc., 101 F.3d 100, 103 (Fed. Cir. 1996).]
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However, High Point Design still leaves another important unresolved §103 issue for design patents, one serious enough that it may end up in another Supreme Court challenge if the Fed. Cir. does not address it. I have labeled this the “as compared to what”? question. Because High Point Design does not even mention KSR and instead continues to apply an additional and unique “obviousness” analysis requirement for design patents from old pre-KSR case law. An additional requirement that is not in §103 and does not seem consistent with KSR or even some other §103 combination of references case law. Specifically, High Point Design states:
When assessing the potential obviousness of a design patent, a finder of fact employs two distinct steps: first, “one must find a single reference, a something in existence, the design characteristics of which are basically the same as the claimed design”; second, “[o]nce this primary reference is found, other references may be used to modify it to create a design that has the same overall visual appearance as the claimed design.” Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996) (internal quotations omitted); see also Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1329 (Fed. Cir. 2012). Under the first step, a court must both “(1) discern the correct visual impression created by the patented design as a whole; and (2) determine whether there is a single reference that creates ‘basically the same’ visual impression.” Durling, 101 F.3d at 103.”
Another way in which this above unique old special §103 test for design patents is sometimes expressed is a requirement to “first find a Rosen reference” (In re Leon Rosen, 673 F.2d 388, 391 (CCPA 1982)). [That may be quite difficult in some cases.] Note particularly the above High Point requirements for first finding a single reference that has “basically the same” design characteristics and visual impression, and only modifying it with other references to create “the same overall visual appearance.” Does that seem appropriate for a normal §103 analysis? Does this old judicially created §103 analysis for design patents not significantly reduce §103-usable or combinable prior art? How is that consistent with the controlling Sup. Ct. KSR §103 guidance for combining references, completely ignored in High Point Design? Has anyone suggested any reason why KSR does not apply to design patent §103 analysis?
In this respect, here are some specific §103-KSR issues to consider. Is not the designing of costly consumer products intended to be sold by the millions [like smart phones] an “art” in which the §103 “ordinary skill” level of product designers would be expected to be especially high? Furthermore, do not professional product designers normally work on many different products and use product appearance design ideas from many different fields and products, far more than for utililty patents? To express that another way, should not “non-analogous art” arguments against combining art for a 103 rejection be even less effective for design patents after KSR than for utility patents?
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I have no stake in any of these interesting legal issues. I simply think members and professional organizations of the patent bar as well as legal academics should be doing more pro bono thinking about them. Hopefully the Federal Circuit will provide clearer guidance in future decisions.