FEDERAL CIRCUIT PUTS OVER 400,000 DESIGN PATENTS AT RISK OF BEING INVALIDATED BASED ON OBVIOUSNESS

On June 30, 2023, in LKQ Corp. et al v. GM Global Technology, the U.S. Court of Appeals for the Federal Circuit granted LKQ’s petition for rehearing en banc, setting in motion the distinct possibility that the test for design patent obviousness could drastically change. 

During the past 40 years, over 700,000 design patents have issued.  Of those, the number of unexpired design patents today exceeds 400,000. 

And for the past 40 years (40 years!), the seminal In re Rosen case defined the requirement for a proper primary reference to support a design patent obviousness rejection/defense:

“[T]here must be a reference, a something in existence, the design characteristics of which are basically the same as the claimed design in order to support a holding of obviousness. Such a reference is necessary whether the holding is based on the basic reference alone or on the basic reference in view of modifications suggested by secondary references.”

The Rosen test has been used exclusively by USPTO examiners and courts to evaluate the question of design patent obviousness since it was handed down in 1982. In 1996, the Durling v. Spectrum Furniture case defined the requirement for proper secondary references:  

“Once [a] 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. These secondary references may only be used to modify the primary reference if they are "so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other."  

The LKQ case presents a question of first impression:  does the Supreme Court’s 2007 decision in KSR v Teleflex – a case that involved only utility patent obviousness - also apply to design patent obviousness?  In KSR, the Court made it easier to prove a utility patent claim was obvious when it jettisoned the Federal Circuit’s TSM (teaching, suggestion, motivation) requirement under which a patent claim is only proved obvious if “some motivation or suggestion to combine the prior art teachings” can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art.  

In the Federal Circuit’s original panel decision of January 20, 2023 it held that the 3-judge panel (Judges Lourie, Clevenger and Stark) cannot overrule its prior Rosen and Durling decisions without a “clear directive from the Supreme Court” since panels “are bound by prior panel decisions until they are overruled by the court en banc or the Supreme Court.”  While the majority sidestepped the issue which they have now decided to consider, the original panel decision, with 3 separate concurring opinions, gives a good glimpse of the considerations now facing the court in the en banc rehearing, and I commend you to read it.

In terms of the potential impact on design patent law, this case ranks up there in importance with the court’s 2008 en banc decision of Egyptian Goddess v. Swisa. 

Over 400,000 unexpired design patents have claimed a design that had been determined to be nonobvious over the prior art.  If the test now changes, the validity of those patents can be challenged under new rules that were not in existence when those patents were examined and litigated.  It could be disastrous to design rights holders, who might very well be pushed even farther away from obtaining design patents if their existing portfolios are drastically devalued.

For a detailed discussion of the factual background of this case, and the positions taken by several judges in concurring opinions, I refer you to my prior blog posts of December 18, 2022 and January 23, 2023.

LKQ is led by a notorious band of anti-design patent professors who also managed several years ago to get SCOTUS to weaken a 100-year-old rule that had allowed a successful design patent owner to obtain an infringer’s total profit attributable to sales of the accused design.  They now have managed to get the court to consider the obviousness issue en banc, i.e., by the entire court of 11 judges, i.e., not just a panel of 3 judges.   

The court’s en banc Order pretty clearly spells out the issues the court is concerned with, as it directs the parties in their brief to address the following questions:

A. Does KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), overrule or abrogate In re Rosen, 673 F.2d 388 (CCPA 1982), and Durling v. Spectrum Furniture Co., Inc., 101 F.3d 100 (Fed. Cir. 1996)?

B. Assuming that KSR neither overrules nor abrogates Rosen and Durling, does KSR nonetheless apply to design patents and suggest the court should eliminate or modify the Rosen-Durling test? In particular, please address whether KSR’s statements faulting “a rigid rule that limits the obviousness inquiry,” 550 U.S. at 419, and adopting “an expansive and flexible approach,” id. at 415, should cause us to eliminate or modify: (a) Durling’s requirement that “[b]efore one can begin to combine prior art designs . . . one must find a single reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design,’” 101 F.3d at 103 (quoting Rosen, 673 F.2d at 391); and/or (b) Durling’s requirement that secondary references “may only be used to modify the primary reference if they are ‘so related to the primary reference that the appearance of certain ornamental features in one would suggest the application of those features to the other,’” id. at 103 (quoting In re Borden, 90 F.3d 1570, 1575 (Fed. Cir. 1996)) (internal alterations omitted).

C. If the court were to eliminate or modify the Rosen-Durling test, what should the test be for evaluating design patent obviousness challenges?

D. Has any precedent from this court already taken steps to clarify the Rosen-Durling test? If so, please identify whether those cases resolve any relevant issues.

E. Given the length of time in which the Rosen-Durling test has been applied, would eliminating or modifying the design patent obviousness test cause uncertainty in an otherwise settled area of law?

F. 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?

The court noted that LKQ’s opening brief is due in 45 days (August 14, 2023), and GM’s response is due within 45 days of service of LKQ’s opening brief (e.g., if LKQ files its opening brief on August 14, 2023, then GM’s response will be due September 28, 2023).  LKQ may file a reply brief within 30 days of GM’s response.

The court also invited the United States (through the Department of Justice) to file an amicus curiae brief.  Other amicus briefs may be filed without consent and leave of the court. 

An amicus brief supporting LKQ’s position, or supporting neither position, must be filed within 14 days of service of LKQ’s opening brief, and an amicus brief supporting GM’s position must be filed within 14 days after service of GM’s response brief. 

This Order will no doubt set off a flurry of activity by the professional IP associations such as the IPO, AIPLA, and ABA, as well as other interested companies and individuals.  I anticipate that a record number of amicus briefs will be filed by design patent rights holders.