Ten years ago - 2014 - the Supreme Court decided Alice Corp v. CLS Bank, holding that - yes indeed - the expansive language of Mayo v. Prometheus (2012) applies equally to software and technology patents. A few weeks later, the USPTO began a dramatic transformation - pulling back notices of allowance and issuing thousands of supplemental office actions. The Federal Circuit's May 2024 en banc decision in LKQ v. GM is perhaps as dramatic a change for the design patent arena as Alice was for utility patents. The old Rosen-Durling test made it almost impossible to reject a design patent as obvious except for extreme cases involving either direct copying or extremely broad claims. The key difficulty was that precedent required the obviousness inquiry to begin with a single prior art reference that is "basically the same" as the claimed design - a roughly 1-to-1 relationship. Further, any secondary references had to be ‘so related’ to the primary reference that features in one would suggest application of those features to the other." In LKQ, the court found those requirements "improperly rigid” under principles of KSR which require a flexible obviousness inquiry. The overall effect is to make it easier to find a design patent obvious.
On May 22, 2024, the day after the Federal Circuit's en banc LKQ v. GM decision, the USPTO issued a memorandum to its examiners providing updated guidance and examination instructions in light of the court's overturning of the long-standing Rosen-Durling test for determining obviousness of design patents. The memo, signed by USPTO Director Kathi Vidal, aims to immediately align USPTO practices with the more flexible approach outlined by the Federal Circuit, which eliminated the rigid requirements that: (1) a primary reference be "basically the same" as the claimed design, and (2) secondary references be "so related" to the primary reference that features in one would suggest application to the other. This is a major shift in examination practice for design patents so it will be important to watch the developments to see whether the office ramps up design examination.
In a highly anticipated en banc decision, the Federal Circuit has overruled the longstanding Rosen-Durling test for assessing obviousness of design patents. LKQ Corp. v. GM Global Tech. Operations LLC, No. 21-2348, slip op. at 15 (Fed. Cir. May 21, 2024) (en banc). The court held that the two-part test's requirements that 1) the primary reference must be "basically the same" as the claimed design, and 2) any secondary references must be "so related" to the primary reference that features from one would suggest application to the other, "impose[] limitations absent from § 103's broad and flexible standard" and are "inconsistent with Supreme Court precedent" of both KSR (2007) and Whitman Saddle (1893). Rejecting the argument that KSR did not implicate design patent obviousness, the court reasoned that 35 U.S.C. § 103 "applies to all types of patents" and the text does not "differentiate" between design and utility patents. Therefore, the same obviousness principles should govern. This decision will generally make design patents harder
Seirus has petitioned for writ of certiorari in its long-running design patent dispute with Columbia Sportswear. The petition asks two questions related to the comparison process for design patent infringement -- in particular, the questions focus on what can qualify as "comparison prior art" used to provide context for the infringement analysis.
The Schedule A litigation phenomenon continues apace in the Northern District of Illinois, a court that has become, in the words of Judge Seeger, “an assembly line for TROs.” But Schedule A litigation is not confined to Chicago. It has spread, perhaps most notably to the Southern District of Florida and the Southern District of New York.
One recent decision out of New York merits closer attention. In this case, as in most Schedule A cases, the plaintiff was able to obtain an ex parte TRO that included an order instructing Amazon to freeze the defendants’ seller accounts. The order also required the plaintiff to post a bond of $20,000 “for the payment of any damages any person may be entitled to recover as a result of an improper or wrongful restraint ordered.”
The plaintiff sued 163 defendants, alleging that each was liable for infringing a utility patent directed towards “a rectangular-shaped buckle-and-belt mechanism” for “an outdoor exercise product.”
At the TRO stage, the plaintiff’s “infringement evidence chart” consisted of a series of screenshots (many of them low-resolution screenshots) of the accused products. Here’s an example of all of the evidence submitted in that chart with respect to one of the defendants:
As per usual in a Schedule A case, the defendants did not find out about the case until after their accounts were frozen. When the plaintiff moved to extend the TRO, multiple defendants appeared to object. Judge Rochon refused to extend the TRO and the plaintiff voluntarily dismissed the case.
Two of the defendants, Hyponix and NinjaSafe, moved for bond damages, sanctions, and fees. They argued that the plaintiff had filed to conduct a sufficient pre-suit investigation and had committed various acts of litigation misconduct. They further argued that they each suffered damages from being wrongfully enjoined.
Judge Rochon granted the defendants’ motions for bond damages but denied their motions for sanctions and fees. She agreed that the moving defendants had been wrongfully enjoined because “Hyponix has pointed to at least four elements of claim 1 of the ’673 patent that are not present in its product” and “Ninja Safe has also shown that its products may not infringe claim 1 and has raised questions of invalidity.” Accordingly, Judge Rochon granted each moving defendant bond damages, though less than they asked for: $3,682.28 for Hyponix and $14,641.51 for NinjaSafe.
But she refused to grant sanctions or fees, despite being “troubled by Plaintiff’s conduct in this case.” In particular, Judge Rochon noted the “‘clear discrepancies’ between the protected elements of the ’673 Patent and the products of many of the parties against which Plaintiff secured a TRO.” She also noted other instances of “possible misconduct,” including:
“Plaintiff represented that most of the 163 parties were difficult to find and contact. In practice, however, contact information for many of the parties was readily available. . . . Plaintiff does not indicate that it tried with any diligence to locate these parties before seeking a TRO.”
“The pace and prevalence of Plaintiff’s dismissals suggest to the Court that Plaintiff used Rule 41 as part of a broader strategy to freeze the accounts of its competitors, then withdraw its claim against any party that happened to object.”
“Plaintiff failed to provide Hyponix with documents necessary for its defense. . . . . Plaintiff claims, falsely, that Hyponix did not request these documents.”
(Emphasis added.) Despite all of this, Judge Rochon refused to sanction the plaintiff:
Despite these concerns, the Court does not lightly award sanctions and will not do so in this case. Plaintiff holds a valid patent for its Hanging Exercise Product, its claim was colorable against at least some of the parties, and it dismissed its lawsuit voluntarily at a very early stage in the litigation (presumably in light of the issues raised by the Court at the order to show cause hearing), before any of the defendants responded to the Amended Complaint. Defendants here were made whole for their losses under the bond. Although a close question, the Court exercises its discretion to deny Defendants’ request for sanctions under its inherent powers and 28 U.S.C. § 1927. . . . To the extent that Plaintiff and its counsel engage in similar misconduct in the future, however, the Court will not hesitate to impose sanctions.
As Professor Eric Goldman noted in this blog post, “it would not be lightly awarding sanction when a plaintiff has committed so many violations.” Two additional points stand out as well.
First, the fact that some of the infringement claims might be colorable does not change the fact that the plaintiff brought numerous claims that were not—including the claims brought against the moving defendants. If the plaintiff had sued Hyponix and NinjaSafe separately, would that have changed the court’s analysis? If so, why should the fact of mass joinder insulate the plaintiff from sanctions? Especially in light of the fact that it’s far from clear that any—let alone all—of the defendants were properly joined, as they sell different products and do not seem to be actually connected in any way. See 35 U.S.C. § 299. In any case, the fact remains that this plaintiff brought many claims that were not colorable and used the machinery of the federal judiciary to wrongfully enjoin competitors. That is what should matter in the sanctions calculus, not the fact that some of the other claims (against apparently unrelated defendants) might have potentially had merit.
Second, it is true that the plaintiff dismissed the case at what would be, in a regular case, “a very early stage in the litigation.” But in a Schedule A case, the TRO seems to be the whole game. The plaintiff gets a TRO with an asset freeze, then starts making settlement demands. At that point, the defendants generally either settle or default. It appears that these cases aren’t meant to proceed any further. And as the defendants’ submissions show, significant damage can be done in these cases, even in a short period of time. (One also wonders how much money the plaintiff may have been able to extract in settlements before dismissing the case.)
In the end, the decision to sanction and to award fees is left to the discretion of the judge. And while it is encouraging to see Judge Rochon recognize the damage caused by acts that have become common in Schedule A cases (e.g., using FRCP 41 to dismiss defendants who fight back), it is discouraging to see a result that will only serve to further disincentivize Schedule A defendants from fighting back.
Once a judge grants a TRO with an asset freeze, the deck is heavily stacked against the Schedule A defendants. Defendants have strong incentives to settle, even when the cases against them lack merit. In many cases, it’s just too expensive to fight back, especially when your assets have been frozen.
If judges were willing to sanction plaintiffs—or at least shift fees—when Schedule A defendants were wrongfully restrained, that would do a lot to help level the playing field and incentivize the plaintiffs to bring better claims.
Without fee shifting or sanctions, the cost of bringing a nonmeritorious claim in a Schedule A case is virtually zero, while the harms to defendants who are wrongfully restrained—even for a short time—can be devastating. As Judge Hunt has noted, “the extraordinary remedy of freezing all [the defendants’] assets without notice” can “potentially ruin[] a legitimate business.”
Plus, as Casey Hewitt noted on Mastodon, Schedule A “defendants have no choice but to litigate, have no option to meet and confer and avoid a lawsuit . . . They did not ignore demand letters or refuse to negotiate or discuss alleged infringement.” But once they find out that their assets have been frozen, they have to “hire expensive IP litigators or they will lose their businesses.” In these circumstances, it seems like fee shifting for wrongfully enjoined Schedule A defendants should be the norm, not the exception.
Yes, it’s true that a presumption in favor of fee shifting would be a departure from normal federal court practice. But courts routinely use their discretion to grant procedural departures to Schedule A plaintiffs—e.g., email service, ex parte asset freezes, mass joinder upon conclusory (and in many cases, dubious) allegations. Perhaps it is time for judges to start using their discretion to make routine departures for Schedule A defendants, too.
Additional observations:
This case is a good example of why patent litigation is a poor fit for the Schedule A litigation model. I’ve written here before about how design patent infringement is ill-suited to ex parte adjudication; so too is utility patent adjudication. If judges are going to keep allowing the Schedule A model in patent cases (and they don’t have to do so, in these cases or in any others), they should consider making it a regular practice to special masters to help analyze the infringement evidence at the TRO stage. And they should, at a minimum, require an individualized claim chart for each and every defendant.
It is far from clear that Judge Rochon actually had the power to freeze these defendants’ assets in the first place. As Judge Kendall noted in a recent order, 35 U.S.C. § 284 “does not provide for the equitable relief of accounting and profits,” which is seems to be the standard basis for asset freezes in other types of IP cases. Furthermore, as Judge Seeger has noted, “Schedule A plaintiffs typically don’t request and receive equitable monetary relief” at the end of their cases, even when equitable relief is available. Other judges might be well-advised to start questioning whether they should use their discretion to keep granting these types of asset freezes, even in cases where a remedy of equitable disgorgement is actually available.
As Professor Crouch has noted, the Federal Circuit has granted rehearing en banc in the design patent case of LKQ v. GM. The main question raised in the petition for rehearing—and in the court’s order granting that petition—is the continuing viability of the Rosen primary reference requirement for evaluating whether a design is obvious under § 103.
The court has ordered briefing on the issue of whether Rosen and Durling (the Federal Circuit case that expanded upon the Rosen approach) were overruled, abrogated, or otherwise affected by the Supreme Court’s decision in KSR and, if so, what the test should look like going forward. For my own thoughts on those issues, see this article and this post. (Tl;dr: The primary reference requirement is good but the Federal Circuit has applied it too strictly.)
In this post, however, I wanted to discuss another issue raised by the court. In granting LKQ’s petition for rehearing, the court asked:
To the extent not addressed in the responses to the questions above, what differences, if any, between design patents and utility patents are relevant to the obviousness inquiry, and what role should these differences play in the test for obviousness of design patents?
These are good questions and well worth discussing. They also stood out to me in light of some of the arguments that were made at the petition stage.
In support of LKQ’s petition for rehearing, some of my friends and colleagues submitted an amicus brief wherein they argued against what they called “design patent doctrinal exceptionalism.” According to these amici, “except where Congress has explicitly specified otherwise, there should be no ‘exceptional’ approach to design patent law doctrines that render them different from utility patent law doctrines. Congress, not the Supreme Court, has imposed this requirement of consistency.” I respectfully disagree.
Section § 171(b) provides: “The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.” But the statute says nothing about legal “doctrines.” It refers only to the statutory “provisions.” Saying that a statutory provision applies to design patents is very different than saying that judicial decisions about how to apply that provision to utility patents also apply to design patents.
Indeed, due to the differences between utility patent and design patent claims, neither courts nor the USPTO could directly import those rules anyway. Design patents cover different things (ornamental designs as opposed to useful inventions). They are claimed differently (using central as opposed to peripheral claiming). They are fundamentally different types of patents. General principles may be transferrable but the actual tests are generally not.
Consider novelty. Section 102 says a patentable invention must be novel. Section 171(b) says that this requirement of novelty applies to designs. But that doesn’t mean that the judicially-created tests for determining when a useful invention is novel also must be used to determine when a design is novel.
A useful invention is deemed not to be novel if all of its elements can be found in a single prior art reference. But design patent claims don’t have elements in the same way that utility patent claims have elements. (A design patent claim consists of a pro forma verbal portion that incorporates by reference drawings that show the claimed design.) So courts can’t simply apply the “all elements” rule to design patents. Instead, courts have, quite rationally and fully consistent with § 171, developed a different anticipation test for design patents (for more on that test, see this short piece). That’s not “design patent exceptionalism,” it’s a thoughtful and appropriate application of a generally-applicable statutory requirement to a fundamentally different type of patent.
A similar problem occurs with § 103. Because design patent claims don’t have “elements” in the way utility patent claims do, we can’t just apply the utility patent mix-and-match approach to design patents.
Some might argue that we could just let litigants chop up design patent claims into “elements” in litigation and let them fight it out utility-patent style. But that would be inconsistent with longstanding case law emphasizing that the thing protected by a design patent is the design as a whole. It would also be inconsistent with design theory. Not to mention the significant litigation and uncertainty costs such an approach would entail.
A visual design isn’t simply a collection of visual pieces. It is, as a group of amici explained during Apple v. Samsung, a “cohesive and integrated whole.” While it might be technically obvious to take existing visual pieces and recombine them into new shapes or surface designs, that doesn’t mean that doing so always (or even often) creates a visually obvious result.
It’s true that actual designers don’t (often and definitely not always) start designing by taking a primary reference and modifying it. But the question of what we should deem obvious is ultimately a policy question, not a factual question about the actual processes of invention. Cf. The “Winslow tableau.” There’s nothing irrational about saying that, as a policy matter, we don’t think a design should be deemed visually obvious when there’s nothing that looks “basically the same” in the prior art.
This, of course, means that we need a concept of what looks “basically the same.” In particular, there needs to be a meaningful difference between what is deemed “basically the same” (i.e., similar enough to be a primary reference) and “the same” (i.e., similar enough to anticipate/infringe). The way the Federal Circuit has been applying Rosen doesn’t seem to leave much blue sky between those two concepts. But that is a problem with the application of Rosen, not a problem with Rosen itself.
One more thing: It’s true that it’s difficult to invalidate design patents. (If you’re tempted to ask about those old studies, read this.) It’s also true that the Rosen approach leaves some plainly uncreative designs immune from § 103 attacks—or at least, from successful ones. But maybe § 103 isn’t the best way to address that issue. Maybe, as I argue in this forthcoming article, courts should start taking the originality requirement of § 171(a) seriously.
By Sarah Burstein, Professor of Law at Suffolk University Law School.
Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc., 21-2299 (submitted but not decided) (oral argument recording available here)
The Federal Circuit heard oral arguments yesterday in the second round of Columbia v. Seirus. (Prior Patently-O coverage of this appeal is available here.) My 2015 article, The Patented Design, was mentioned several times during the argument.
In that article, I argued that a design patent’s scope should be limited to the design as applied to a specific type of product. In making that argument, I acknowledged that this approach could create some line-drawing problems, including the type that have arisen in Columbia v. Seirus. I suggested that, with respect to infringement:
[O]ne solution would be to put the burden of proof on the patent owner to show that the accused device should be considered the same type of product. Courts have been tasked with determining which products are and are not the same “type” of product in the trademark context; there is no obvious reason why they should not be able to do the same in the design patent context.
If, however, the line-drawing problem proves to be intractable, an alternative would be to determine product “types” according to the Locarno Agreement Establishing an International Classification for Industrial Designs. Specifically, “type of product” could be defined to map onto Locarno sub-classes. For example, Locarno Class 10 includes subclasses for “Clocks and Alarm Clocks,” “Watches and Wrist Watches,” and “Other Time-Measuring Instruments.” The Locarno classification system is not perfect for this use but it may provide a second-best solution if judicial common law development proves unworkable.
Sarah Burstein, The Patented Design, 83 Tenn. L. Rev. 161, 219–20 (2015) (footnotes omitted). So my argument was not that design patent scope (and in this case, the scope of comparison prior art) must be limited to the exact, specific type of article named expressly in the verbal portion of the design patent claim.
Instead, I argued that courts should look to whether the accused product (or reference) is the same general type of article.
I also suggested that the product type could be determined with reference to Locarno sub-classes. How might that work in practice?
Looking at the dispute in Columbia v. Seirus, the most relevant class would seem to be Class 5, “Textile piece goods, artificial and natural sheet material.” Here are the relevant class subheadings:
So which subclass(es) would apply here? This case is an example of how the “substantial latitude” that design patent applicants are given in describing the relevant article in their claim language, see MPEP § § 1503.01(I), might sometimes complicate later attempts at classification.
The asserted design patent, U.S. Patent No. D657,093, claims “the ornamental design of a heat reflective material.” The only Class 5 subclass heading that uses the word “material” is 05-06, “Artificial or Natural Sheet Material.” But the patented design seems to be directed more to something like the examples mentioned in subclass 05-05, “Textile Fabric.” (Indeed, if you look closer at the full Locarno Classification, subclass 05-05 specifically includes ID No. 100480, “Insulating fabrics.”)
So which bucket would the D’093 fit in best? Where classification is disputed, the burden of persuasion should be on whichever party wants to prove something is the same type of product.
For infringement, then, the patent owner should have to prove the accused product is the same type as what is claimed. For comparison prior art, the accused infringer should have to prove the reference is the proper type. (This is because the use of the prior art in evaluating infringement is a one-way ratchet; it can only be used to narrow the presumptive scope of a claim, not to enlarge it. See Sarah Burstein, Is Design Patent Examination Too Lax?, 33 Berkeley Tech. L.J. 607, 612 (2018).)
Evidence relevant to this inquiry could include information about any commercial embodiments, including information the patent owner has provided to regulators about their product or market. And if a patent owner has registered their design internationally, the design may already have a Locarno sub-class.
Who should decide? Judges would be well-suited to make these types of determinations. Indeed, these issues are likely to arise at the Markman stage or, as in Columbia v. Seirus, in motions in limine. This is not the kind of credibility or historical-facts determination that we normally leave to juries. Indeed, it’s difficult to imagine a way to effectively instruct juries on this issue without injecting undue confusion into the infringement analysis.
By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law
In December 2020, the USPTO put out a request for comments on “The Article of Manufacture Requirement.” (For prior PatentlyO coverage, see here.) Last week, at Design Day 2022, the USPTO announced that it had completed its summary of those comments. That summary is available here.
In the request for comments, the USPTO floated the idea of issuing design patents for what they are now calling “designs for projections, holograms, and virtual and augmented reality (PHVAR).” Presumably, this acronym is meant to suggest that these are new types of designs, uncontemplated by Congress when it passed statutes that—according to some—are in need of “modernization.”
But projected designs aren’t new.
As we explained in our law professor comments, designs for “magic lantern” projections go back at least as far as the 17th century. So the concept of projected designs was well-established by the time Congress passed the first design patent act in 1842—not to mention when it codified the Patent Act in 1952. Projected designs are simply not some new, unforeseen concept.
There may be new types of projection machines today, but this type of design is not new.
The USPTO suggests that the scope of design patentable subject matter “should be reevaluated in order to incentivize and protect innovation in new and emerging technologies.”
But it is not—and should not—be the role of the design patent system to incentivize or protect new machines. We have utility patents for that.
Furthermore, projected designs are not as the USPTO seems to suggest, unprotected today. Projected images qualify as pictorial, graphic, or audiovisual works that are already protected—costlessly and immediately upon fixation—by copyright. It can’t be seriously suggested that Congress was unaware of projected designs when it passed the broad definitions of protectable subject matter in the Copyright Act of 1976. It’s clear from the definitions that one form of projected creativity, cinema, was very much on Congress’ mind. See, e.g., 17 U.S.C. § 102(a)(6) (providing protection for “motion pictures and other audiovisual works.”).
Again, the type of projector may be new, but the type of work is not.
So why push for design patents when copyright is already available? There may be some who just want to accrue as many belts and suspenders as their IP budgets will allow. But that alone is not a good enough reason to expand design patentable subject matter.
It may be that, for at least some potential applicants, the goal is to avoid the requirements of copyright law. In Feist v. Rural, the Supreme Court held that a work must have “minimal creativity” to be protected. Thus, to gain copyright protection, a work must “possess some creative spark, ‘no matter how crude, humble or obvious’ it might be.” This is, according to the Supreme Court, a requirement of the Progress Clause.
Minimal creativity is a low bar. Yet the USPTO has granted numerous design patents for designs that fall below it—especially in the context of computer-generated designs. In theory, novelty and nonobviousness could be a higher bar but, in practice, that is not the case.
So let’s all be clear:
These are not new types of designs.
They’re not unprotected—unless they fail to meet the low constitutional threshold set in Feist.
