WHERE IS DESIGN PATENT OBVIOUSNESS HEADING? VEGAS, BABY!

The U.S. Court of Appeals for the Federal Circuit handed down its long-awaited en banc decision in LKQ v. GM, the case that decided whether the Supreme Court’s KSR’s utility patent obviousness test applies to design patents.

Sadly, for some, the Court answered in the affirmative, concluding that KSR’s requirement of “flexibility” in obviousness analysis required the Court to abandon the venerable Rosen and Durling cases, essentially overruling them.

I said “for some” since the decision will be a boon for challengers (alleged infringers) to contest the validity of design patents. The PTAB will also see a rise in business. And, of course, lawyers will be much busier trying to figure out what the LKQ case means.

For others, like patentees and design rights holders, the decision calls into question not only the validity of their 400,000 unexpired design patents, but whether design patents are still worth the not-inconsiderable cost of obtaining them. And the USPTO’s design patent examining group 2900 will have their knickers in a twist trying to figure out new rules/regulations for how obviousness will be determined by design patent examiners. Note: one can expect a long wait for such rules/regulations, since it took the USPTO quite a long time to provide guidance to examiners regarding less significant, but important recent cases, such as In re: Surgisil.

Perhaps, on the bright side, serious consideration might now be given to creating a US design registration system (the subject of an earlier blog) where a rights-holder can quickly and cheaply obtain a design registration without having to undergo what will now become an even more expensive and problematic examination. Under such a system, registrations will be relatively easily obtained. But only those that are important, e.g., are being infringed, would likely be challenged by an infringer in a validity proceeding, to be presided over by the PTAB. I imagine that perhaps 98% of design patents are never violated or enforced, so the huge investment in obtaining them would, under a registration system, be avoided. Those 98% can quietly sit in an owner’s stable, and if and when an infringement problem arises, the registration can be upgraded to a design patent after full examination. I’ve proposed this in an earlier blog, and, in view of the LKQ case, will elaborate in a coming post.

The particular facts about LKQ v. GM are beyond the scope of this post, but the lead-up to the current decision has been extensively discussed in numerous prior posts here here here and here

Those are my opening thoughts about LKQ. My other observations follow, in no particular order:

1. SMITH v. WHITMAN SADDLE

The Court relied heavily upon the Supreme Court’s 1893 design patent decision of Smith v. Whitman Saddle, involving a design patent on a saddle where the patentee essentially (but not completely) combined half of the prior art Granger saddle and half of the prior art Jenifer saddle. Below are illustrations of the patented design, the Granger, the Jenifer, and the accused design.

Even after combining the two halves, a significant feature of the patented design – a drop in the pommel – was absent from the accused design, so the Court concluded that there was no infringement. But it did not hold the patented design devoid of novelty, i.e., in the parlance of the day it did not lack inventiveness. In essence, this was an infringement case, not a validity case. So whatever the Court had to say about the patentability of the design was dicta. Nevertheless, the Federal Circuit relied heavily on it in LKQ.

Two sentences of the Court’s LKQ opinion really grabbed me. First, in discussing Rosen, it said: “[In Whitman Saddle], the Court did not ask whether the design of the prior art Granger saddle was “basically the same” as the claimed saddle design.” Later, in discussing Durling, it said: ““[T]he Supreme Court did not ask [in Whitman Saddle] whether the Granger and Jenifer references were “so related” that the use of certain ornamental features in one would suggest the application of those features to the other.”

It almost goes without saying that Whitman Saddle was decided almost 60 years before Sec. 103 was enacted by Congress in 1952, long before Rosen was decided in 1982, long before Durling was decided in 1996, and obviously (pardon the pun) long before 2024 when LKQ came before the Court.

Suggesting that the Rosen and Durling requirements were not the tests used by the Supreme Court in Whitman Saddle is like saying Gorham v. White (1871) didn’t mention that one had to evaluate the similarity between the patented and accused designs “in the context of the prior art” as required in the 2008 Egyptian Goddess case, or that the Litton “point of novelty” test is flawed because it was not quoted in Gorham.

Whitman Saddle’s precedential value to LKQ is thus highly questionable.

Therefore it's interesting to me that Whitman Saddle formed the backbone of the Court’s opinion in LKQ. In considering first the Rosen test requiring a primary reference to be “basically the same” as the claimed design, the Court said that the Rosen test “does not adequately align with…Whitman Saddle”, and that “The Rosen “basically the same” requirement is … inconsistent with the Supreme Court’s analysis in Whitman Saddle”. It seems like the Court’s real objection to Rosen was that in the absence of a primary reference that is “basically the same” as the claimed design, the analysis “abruptly” ends, which is not a broad and flexible test as required by KSR.

The Court also said that “[N]either the Granger nor Jenifer would qualify as a Rosen reference.” I respectfully disagree. After looking at the drawings, I think either Granger or Jenifer would have qualified as a Rosen reference.

The Court also said that Durling’s “so related” requirement was inflexible because it “denied factfinders recourse to common sense.” However, there are many examples where the same Court resorted to common sense in deciding obviousness of a design patent, such as in the Campbell Soup case where the Court imputed the existence of a claimed can in a purportedly primary reference, Linz, even though no can was there (see my previous blog). In the MRC v. Hunter case, the absence of surge stitching in a secondary reference was not fatal to an obviousness holding, the court finding the surge stitching to be de minimus.

2. ANALOGOUS ART

The second major issue that the Court tackled, having done away with Rosen’s “basically the same” requirement for a primary reference and Durling’s “so related” requirement for a secondary reference, was the threshold for determining the appropriateness of a prior art reference in design patent obviousness analysis. This threshold turned out to be whether the prior art was “analogous” to the claimed design.

In order to get there, the Court first cited the 3 part inquiry for obviousness analysis set forth in the Supreme Court’s seminal Graham v. John Deere decision of 1966 (which was based on obviousness of a utility patent claim).

This is not altogether inappropriate, since Graham has been cited in a number of design patent cases as the framework for Sec. 103 analysis, even before the court decided Rosen and Durling. And Graham is deeply ensconced in patent law, including being cited in Chapter 1500 (Design Patents) of the MPEP. Although being frequently cited, it hasn’t been regularly applied – just cited. In other words, most courts have just given lip service to Graham, before going on to a Rosen/Durling analysis.

Nevertheless, the Federal Circuit in LKQ has essentially re-established (one might say reincarnated) the Graham framework for design patent obviousness analysis. For those of you unfamiliar with Graham, it comprises a 3 step inquiry:

First, determine the scope and content of the prior art.

Second, determine the differences between the prior art and the claims at issue.

Third, determine the level of ordinary skill in the art.

Then, secondary considerations, e.g., commercial success, copying, long felt but unsolved needs, etc., can be considered.

Here’s where analogous art comes in. In the first step of Graham, the Federal Circuit “reaffirmed” that “an analogous art requirement applies for obviousness of design patents.”, and that “we limit the scope of the prior art to analogous arts.”

In limiting the scope of prior art usable in obviousness analysis of design patents, the Court had to implicitly overrule the seminal In re Glavas case of 1956 (upon which Durling had been based). In Glavas, the CCPA said that “the principle of nonanalogous arts … cannot be applied to design cases in exactly the same manner as to mechanical cases because design patent combinations rely on appearance rather than use.” Even though the CCPA’s logic in Glavas is IMHO still valid, it has clearly bitten the dust.

The Court cited the two-part utility patent test to determine the scope of analogous art: (1) whether the art is from the same field of endeavor as the claimed invention; and if not then (2) is the reference still “reasonably pertinent” to the particular problem with which the inventor is involved. (emphasis added). It is immediately apparent to any design patent practitioner that rarely, very rarely, is a designer concerned with solving a particular problem, as opposed to utility patent inventors. Industrial designers are normally tasked with designing a new product, one that is distinctive, and not a simple follow-on to a competitor’s product. The designer’s goal, in many cases, is to get as far away as possible from competitors’ designs to create an appearance of its own, which in many cases can result in a brand of the owner. There are no “particular problem[s]” to be solved. So, how do you apply the analogous art test to designs? The LKQ court said the first step is easy: appropriate prior art will almost always be in the same field of endeavor as the designer’s article of manufacture. As to how to apply the second step? The Court essentially said “we don’t know” and let future cases figure it out.

Let the games begin!

One particularly vexatious sentence of the Court’s analogous art discussion was this: “The primary reference will typically be in the same field of endeavor as the claimed ornamental design’s article of manufacture, but it need not be, so long as it is analogous art.” But the Court had just said it could not give guidance on the second test for analogous art.

Let the games begin!

What about the In re Surgisil case where the court said that a prior art reference in an anticipation rejection had to be the same article of manufacture as that of the claimed design?

What about the recent holding in Columbia v. Serius where the Court held that in infringement determinations comparison prior art had to be the same article of manufacture as the claimed design?

But now the Court is saying that prior art in an obviousness case – whether a primary or secondary reference - need not be the same article of manufacture as the claimed design. It only has to be “analogous”, but you go figure out what that means.

The outcome? Prior art available for obviousness rejections/defenses will enlarge. Obviousness rejections in the USPTO will undoubtedly increase (with a concomitant decrease in anticipation rejections), as will obviousness defenses in litigation, and obviousness challenges in the PTAB.

At least the Court said, with respect to Graham factor (1), that a primary reference must be identified. But it need not be “basically the same” as the claimed design (the Rosen test). Thankfully the Court tried to put to rest the “Frankenart” problem in approving the In re Jennings warning that “the primary reference [cannot be] something that might be brought into existence by selecting individual features from prior art and combining them, particularly where combining them would require modification of every individual feature.”

3. MOTIVATION TO COMBINE

In a short portion of the opinion, the Court reiterated that the Graham factors must first be considered, and then the obviousness inquiry is “whether an ordinary designer in the field to which the claimed design pertains would have been motivated to modify the prior art design to create the same overall visual appearance as the claimed design” citing Campbell Soup (emphasis added).

The Court, while dispensing with the need for a primary and secondary reference to be “so related”, again stated that they both must be analogous to the claimed design (while leaving how to determine that to future case law). Then it said that the “motivation to combine” those references “need not come from the references themselves”…. “but there must be some record-supported reason (without hindsight) that an ordinary designer in the field of the article of manufacture would have modified the primary reference with the feature(s) from the secondary reference(s) to create the same overall appearance as the claimed design.” (employment opportunities for designers to be expert witnesses just skyrocketed). This presents a conundrum for the USPTO since it does not have any mechanism or resources to create a “record-supporting reason” for showing a motivation to combine. The Federal Circuit was warned about this shortcoming in the PTO’s amicus brief.

The Court was quick to point out the obvious (pun intended): “Just as with the analogous art inquiry, in the area of motivation to combine, the problem to be solved may have less relevance in the design patent context than in the utility patent context.”

Let the games begin!

4. THE EFFECT UPON THE DESIGN PATENT SYSTEM

Finally, the Court addressed the concerns of several amici who quite properly pointed out how doing away with the Rosen/Durling tests would essentially create havoc in the design patent system, including “exposing up to 400,000 U.S. design patents to substantial uncertainty and upsetting settled expectations for applicants before the USPTO…” (from the AIPLA amicus brief). The response of the Court: “We do not agree.” It said that Graham has been the law for a long time and there is considerable precedent from which the PTO and courts can draw when assessing obviousness in the design patent context.”

It is hard to imagine how precedent in utility patent obviousness determinations would be helpful, or even analogous (pun intended), in the design patent context, given how wholly different these two forms of patents are, i.e., utility patents protect a product’s functions without regards to how it looks, and design patents protect a product’s appearance without regards to how it works.

5. JUDGE LOURIE’S OPINION

Judge Lourie filed a concurring opinion in which he agreed with the result to vacate and remand the current case, but disagreed with the need to jettison the Rosen and Durling tests. His main argument was that rather than overruling them, they could be modified to be more flexible, because “Overruling is destabilizing. Courts should, if possible, rule in modest steps, not abrupt acts of overruling.”

Judge Lourie pointed to amicus briefs filed not by allies to LKQ or GM, but by broad-based organizations “with a primary interest in the stability and clarity of the law”, including the IPO, AIPLA, INTA, the Institute for Design Science and Public Policy (full disclosure: I co-authored the latter brief) and the IDSA.

He said: [W]e did not need to “overrule” a case with language that a reference’s ‘design characteriscs’ must be “basically the same” to substitute “most visually similar”. Those two phrases, he said, are basically the same or similar, pointing out that maybe the word “must” used in Rosen was excessive, and maybe the word “only” in Durling is excessive, but both Rosen and Durling could have been tinkered with, or fine-tuned, rather than overruled.”

He concluded that “Rosen and Durling … expressed the same concepts now adopted by the majority, albeit with a couple of unnecessarily strong words…. And should have been allowed to stand, as modified, rather than decisively overruled.

Kudos to Judge Lourie. But one must ask why his common sense did not get the support of any of the other judges? Perhaps the rest of the judges were wary of having its decision appealed to the Supreme Court which has not exactly been hospitable to some previous Federal Circuit decisions. Perhaps it felt that it had to go all the way and overrule Rosen and Durling lest there be a repeat of the KSR case where the Supremes rejected the Federal Circuit’s TSM test.

Unfortunately, Judge Newman – who has over the decades demonstrated a deep understanding of design patent law - was not allowed to participate in the case.

Let the games (sigh) begin.