IPO PTO Day: design patents

Design Patent Content

Joseph Kirincich, Avaya

Overview of scope: Design patent recently issued to Apple for page turning on a mobile device. 

Use of surveys—Jury awarded Lucent $358 million; Fed. Cir. affirmed liability but remanded on damages—need to attribute customer demand to the patent related feature in order to get the entire market value of the product. Lucent’s survey expert attempted to quantify the value of a date-picker; court awarded 26.3 million because it wasn’t convinced of the apportionment.  Apple v. Motorola—Judge Posner sitting by designation excluded both parties’ expert testimony on multiple Apple patents relating to cellphones.  Testimony excluded because it failed to focus on the patented features; survey evidence tried to get at customers’ reasons for buying expensive phones.  A proper survey could have worked, but expert testimony was excluded for not having surveys and for not focusing on the patented features.  Without damages, there was no reason that liability mattered; case dismissed.  Surveys will continue to be important to prove damages, especially when there’s no other evidence that the patented feature creates the consumer demand.  Among other things, controls/comparisons will continue to be vital components.

Alternative remedy for design patents is §289—patent holder can recover infringer’s profits. But can’t recover damages and profits together.  Infringer’s burden to reduce damages/show costs after pretax profits are shown.  Apportionment isn’t available. The design itself is credited with driving sales; overcomes the apportionment problem.  Samsung is an example of the importance of design patents.

Ornamental design of iPad: edge to edge glass, highly reflective, thin, etc.  Ornamental design of iPhone: front-face speaker slot, edge to edge glass, etc.  Litigation involved survey evidence: Apple presented likely confusion surveys as well as surveys on secondary meaning and to measure the value of the patented product features such as scrolling and multitouch/consumer preferences for purchase.  Samsung challenged the surveys because post-purchase and pre-purchase are different and because consumers often change their minds about the features they want when confronted with options, but that didn’t help.  Jury instruction for infringement: does the resemblance deceive the ordinary observer, familiar with the prior art?  The placement of a logo has to be discounted here.

The jury and the judges disagreed about which patents were infringed; preliminary injunction on Galaxy Tab 10.1 lifted because Apple lost at trial.  Apple argued loss of market share—injury to its “ecosystem” and forever-lost Apple customers.  Samsung is seeking a new trial on multiple issues, including juror misconduct and lack of evidence of damages.  

Litigation in other countries, including the UK (found no design patent infringement—extreme simplicity of Apple design is cool, and Samsung’s less simple design is less cool and noninfringing).  Apple also ordered to publish a notice stating that Samsung didn’t copy.  In Germany, Apple sought an ex parte injunction on the same design patent; Samsung was found to infringe there; UK ruling overruled the German ruling (UK decision was final decision on trial which trumped the interim German decision) and the EU-wide interim injunction was lifted.  South Korea—split decision; both parties infringed each others’ utility patents but Samsung didn’t copy Apple’s design patent.  Much smaller damages in SK than in US.  Court found no possibility of confusion.  Japan: no infringement of utility patents.  Dutch court banned the sale of certain Samsung smartphones and tablets.  (My comment: Really makes you think we need a better international scheme.)

Design patents have taken center stage; shorter prosecution period and higher damages.  Can try to time design patent to product launch, 15-month period.  Applications are on the rise and allowance rates are increasing.  Apple obtained 123 registrations in 2011.  Design and utility patents can be used in tandem.

Damian Porcari, Ford Global Technologies

Building an enforceable portfolio: Enablement—need accurate drawings.  Anticipation—prior art search, going beyond traditional sources: market research, spy photos.  Obviousness: detailed drawings give greater ability to recover from obviousness attach but make infringement harder to establish.  You have to figure out your primary goal: if aiming at copyists, then put lots of details; if competitors, put different level of detail.  (The latter sounds like a bad idea policywise.)  PTO doesn’t allow multiple claims but does allow multiple applications, which allows you to vary scope. 

Very few anticipation cases are decided on a single reference.  Int’l Seaway Trading Corp. v. Walgreen’s (Fed. Cir. 2009) did invalidate a patent based on a single reference using the ordinary observer test.  The test is an infringement test: does the patent cover the accused article?  Repurposed to: did the patent cover the prior art?  Elements are considered as those features visible during normal use; hidden features aren’t considered.

Int’l Seaway involved “Crocs” type shoes.  Crocs cited as prior art in Wolf patent, which was P’s patent.  D’s shoes didn’t have the same number of holes as either P’s or Crocs (the number was in the middle).  This is relevant because Crocs may want to change its designs and will patent each year’s new crop of shoe designs, all looking like a Croc but all slightly different. If Crocs can’t patent a new design with a different number of holes, you’ve just destroyed this business model.  Thought D didn’t infringe, but wouldn’t have invalidated the patent (though Wolf is not a sympathetic character, since it wasn’t Crocs).  How could Wolf enhance validity?  Be Crocs; better search—only cited 7 references, none with large holes; focus on ornamental differences from prior art—add detail (claim 18 holes as part of the description) though that decreases ability to win infringement case.  Should Crocs be able to protect slight variations through iterative design patents?  Does the Gorham “deceive an observer” test allow different infringement/validity standards for a family of patents?

Obviousness and commercial success as a secondary consideration—commercial success presents special difficulty in a design patent case, says the Federal Circuit. The evidence has to be really strong associating the success with the design.

Functionality: hates Richardson v. Stanley Works.  Thinks the two hammers are clearly different even though they have the same features.  Court says that it wouldn’t consider the functional elements, and there was nothing but functional elements.  He thinks this is wrong because if you eliminated the functional components of the Coke bottle there would have been nothing left to patent.  (I think this is a mistake, though admittedly it can be hard to distinguish in the abstract between a combination of de facto functional features and a combination of de jure functional features; still, the latter was all that seems to have been at issue in Richardson, unlike the Coke bottle where the shape of the bottle itself isn’t de jure functional.)

His advice: file 10 different applications on 10 different designs, and then do market research and pick one. This creates built in evidence that your design was not selected primarily for functionality.  Use designers, not engineers.  Disclaim functional elements explicitly through dashed lines.

Enhancing infringement: use less detail through outline drawings rather than CAD.  Used dashed lines for unclaimed subject matter.

Global considerations: think of secondary filing requirements. Attaching a set of drawings specifically intended for secondary filings as an exhibit; they are part of the file wrapper but not public; they now can be used by Chinese counsel, etc.

Peeve: bill pending that encourages the copying of car parts. Part of a successful global trend to eliminate patent protection for replacement parts—seeing it in Europe, South America, and India.  Finds it bizarre.  China isn’t pursuing this type of bill; has no interest in eliminating protection.  Says that you can’t make/offer to sell/import a part until 30 months after a component is on sale.  30 months is not as good as 14 years.

Dana Colarulli, USPTO Director of Governmental Affairs

Implementation of Geneva Act of Hague Agreement on Industrial Designs: allow multinational design protection while maintaining examination-based system. Additional tool for owners of design rights—minimal substantive changes to US design patent law.  To accommodate 5-year renewal term of Hague, total term goes to 15 years.  Allows PTO to use published int’l design registration as basis for rejecting a subseqently filed US application.

Advantages for users: obtaining protection throughout the world with minimum of formalities/less expense. Wouldn’t replace a more robust right; some protection for a short time.  Helps small filers.

Legislation has been introduced in both houses, passed by Senate and passed on House Suspension Calendar.  Signing soon.  One-year implementation timeline.

Implementation: beginning to draft required rulemaking; learn from experience implementing the Madrid Protocol.  Will allow us to drive int’l discussions on whether there should be additional int’l norms on design protection.  (Yay?)

Dennis Crouch, U. Missouri Law

Has marked up and commented on the implementation of the patent law treaty/Hague agreement.  One extra year added to the design patent the term; int’l application will be published as soon as procedural requirements met, which will count as a publication allowing for provisional rights.  If an infringer has actual notice of the pending design right, then once the patent issues you can collect back damages. Almost never used with utility patents, most likely because in most cases applicants change their claims during prosecution, which is rarely true in design patent cases.  Whatever’s published is likely to be what’s issued. Also most folks are filing a design patent on an actual product, not a utility patent’s concept/idea, making copycats more likely.  In addition, companies are increasingly thinking of design patent as an element of TM strategy. TM lawyers are good at seeking out potential infringers and sending notices, creating system in place for notification/providing knowledge.

Int’l registration: design patents are cheap compared to utility patents, but at the int’l level it’s really cheap—another $500 for an int’l application, and a couple of hundred more to specify all the countries you want.  Most of the rest of the world is a registration system, so that’s basically the whole cost.  Local counsel—US att’ys—get to prosecute these foreign cases as part of the treaty, instead of hiring foreign counsel to do the work. That means you need the expertise before we start.

Upward trend of design applications.  Allowance rate is very high: hovering around 90% over the past decade.  He believes that most of that 10% are folks who are independent inventors who file design applications of no value, though we can’t know since they’re not published.  Timeline: time from filing to allowance is also going down—just over a year on average.

For 81%, there’s no rejection; 14% involve §112 rejection, Patent Office says the dashed lines are fuzzy or other small issues; 3.7% double patenting; 1.2% prior art; 0.6% nonstatutory subject matter.  We basically have a registration system. 

More owners are thinking of design patent as quasi-trade dress or additional to trade dress.  Useful because it’s hard to register trade dress early on or prove secondary meaning.  Convinces investors that you have something in which you have rights; most courts have said you don’t have to choose. You can use design patents to bootstrap: get design patent, then create secondary meaning through 14 (now 15) years of exclusivity.  Courts even use design patent coverage as evidence of nonfunctionality, despite slight doctrinal differences.  He suspects this trend will continue. 

There’s no hard deadline for trade dress protection, but there is for design patent; cautious attys will have a bias towards filing for design patent rights.

Maybe we should be rational and let TM attys prosecute/handle these.  Less of an artificial line in the PTO: registered trade dress and design patent should be connected in a family of applications so we can rely on search strategies usable by both sides.

Revision Military v. Balboa (Fed. Cir. 2012): glasses for use in shooting.  Vacated denial of preliminary injunction.  Ordinary observer test is the sole test for design patent infringement; the district court improperly focused on individual elements that “stand out as dissimilar” rather than focusing on what an ordinary observer would think when comparing the designs as a whole—squared edges at the temples rather than curves.  You can talk about those distinctions but when we judge infringement it’s as a whole so you have to link features up to how the ordinary observer would see the design as a whole.

K-Tec v. Vita-Mix (Fed. Cir. 2012): analogous arts test for obviousness.  Only obviousness-type prior art if it’s in the same field of endeavor or reasonably pertinent to the particular problem.  KSR is binding, but a subsequent decision (Klein) says that KSR didn’t say anything directly about analogous arts; Crouch thinks that there should be a common-sense element about what counts as prior art.  Here, the shape of a bucket in another field didn’t apply to this field.  Takeaway: the scope of analogous is narrow.  He thinks there’s a statutory construction argument that the AIA did away from the analogous test—refers to prior art, and defines it clearly.  With that definition, it may supplant the analogous arts test, but he suspects the Fed. Cir. will stick with the old ways.

Biggest strategy today is to focus on part of design, with a lot of dashed lines, and then maybe a continuation that focuses on another part.  PTO is now saying that we are going to be reluctant to let you move from dashed line to straight line as part of written description requirement; now on appeal to Fed. Cir. and he suspects that the PTO will lose.