By: Alex Tranquill

What is a famous design that really catches your eye? The Ugg boot, the Coke bottle, the iPhone shape? Well, as it turns out, the companies behind these products also recognized the economic value of these aesthetic features, leading each company to file for design patent protection to prevent copying by their competitors. Historically, design patents, such as the examples above, have been relatively easy to obtain and enforce against providers of similar products. But now, after a recent Federal Circuit decision altered the obviousness standard for design patents, your favorite design may face a greater risk of being copied by infringers.

Obtaining a Design Patent

While the more-popular utility patent protects a product’s functional features, design patents protect what a product looks like. Similar to the examples of a boot, bottle, or phone, this can include a product’s shape, configuration, ornamentation, or specific coloration. Ultimately, to receive design patent protections, an inventor must apply at the United States Patent and Trademark Office (USPTO). There, the inventor must show the design satisfies each of the statutory requirements for a patent outlined in 35 U.S.C. §101-103; these provisions mandate the design to appear on a product and be new, non-obvious, and non-functional.

However, with only about 2% of applications being rejected for obviousness at the USPTO, the novelty standard for design patents has always been perceived as a relatively low bar to patentability. Still, this low bar for novelty has tangible benefits for businesses, with the average design patent costing around $2,000 compared to $20,000 for utility patents. As a result, companies have come to view design patents as a relatively inexpensive option for protecting their designs from wholesale copying.

The Changing Landscape of Design Patent Protections

While the USPTO may provide little resistance in granting design patents, this low bar for novelty inverts itself during litigation, where it has proven notoriously difficult to invalidate an opposing party’s design patent. Under the traditional Rosen-Durling test, a design patent can only be invalidated during litigation if the challenging party presents a first design that is “basically the same” as the patented design, and, further, provides a secondary design that, if necessary, fills in the differences between the first design and the patented design. 

But now, after nearly fifty years of case law built around this framework, the Federal Circuit has thrown out this test as “improperly rigid.” Earlier this year, the Court in LKQ Corporation v. General Motors concluded that the obviousness standard outlined in 35 U.S.C. §103 does not differentiate between utility and design patents. Therefore, design patents must be examined under the Graham factors––the standard test used to evaluate obviousness for utility patents. Under Graham, courts must now consider the following factors when evaluating obviousness: (1) the scope and content of prior designs, (2) the differences between the prior designs and the claimed design, (3) the level of skill required in creating the patented design, and (4) the motivation to combine the previous designs to create the same overall visual appearance. 

With this analytical change, many companies are now worried about the future value of design patents. Under Graham, courts may now apply broader criteria without first requiring a design to be “basically the same” as the patented one; this more-flexible standard could have two significant effects: (1) the USPTO may issue more obviousness rejections during the application process, and (2) previously-granted patents could be invalidated if re-examined during litigation. For businesses, this impact arguably undermines the perceived benefits of design patents since an increase in obviousness rejections is likely to balloon the costs of patent examination, while the increased risk of invalidation during litigation curtails patent strength. In fact, this risk of invalidation may give companies more leeway to create knock-off products, as enforcing these patents will become more laborious and costly if they are constantly challenged on obviousness grounds. 

Estimating the Full Impact

Ultimately, the full effect of the Federal Circuit’s LKQ decision will only become evident with time. While the Graham factors must now be applied when analyzing the novelty of design patents, courts can apply these factors in ways that either comport or greatly contrast with the previous standard under the Rosen-Durling test. One case to watch in determining the impact of LKQ is Columbia Sportswear v. Seirus. 

In this eight-year legal saga, Columbia sued their performance-clothing competitor Seirus for patent infringement over a wave-like pattern appearing on Seirus’s “Heatwave” products. While Seirus initially argued that Columbia’s ‘093 patent on a similar wave-like pattern should be invalidated, they were unable to prove that Columbia’s patent was obvious under the Rosen-Durling standard––but then, LKQ was decided. In the aftermath, Seirus immediately moved for relief, arguing that they should be able to dispute the validity of Columbia’s ‘093 patent under the less-rigid Graham factors. The District Court agreed with Seirus, acknowledging the “extraordinary circumstance[s].” Seirus is now expected to make invalidity arguments in the coming months.  

But, even after applying Graham to the prior art references shown below, it appears unlikely that the court will overturn its decision and invalidate Columbia’s patent for obviousness. Under Graham, we must first analyze the scope and content of the prior art. Here, each prior art reference includes alternating wave-like stripes of light and dark colors, thus rendering the uniformly-striped waves in Columbia’s design obvious. Next, under the second Graham factor, the relevant differences must be considered. While the “unwoven fabric for tires” reference includes shading between its wave-like patterns, this design fails to teach the wave-like gradient shown in Columbia’s patent, which moves sinusoidally across a multitude of wave-like stripes and provides a second, larger wave-like pattern. 

Under the third Graham factor, the design is evaluated from the perspective of a person of ordinary skill in the art, presumed to know all relevant prior art references. Although “unwoven fabric for tires” includes shading, there is no larger sinusoidal pattern formed across multiple wave-like stripes; therefore, knowledge of the prior art would not necessarily render Columbia’s design obvious. Finally, the fourth Graham factor is irrelevant as none of the cited references teach the larger sinusoidal pattern, thus no combination of the references would predict Columbia’s design. Ultimately, when the Graham factors are applied as they would be to a utility patent, Columbia’s patent is likely to be found valid, and, even in this close case, Graham will likely yield the same results as Rosen-Durling.

Predicting LKQ’s Effect on the Obviousness Inquiry This prediction for Columbia Sportswear is further bolstered by the USPTO’s recent decision in      Deckers Outdoor. Here, the court applied the Graham factors for the very first time, considering competing boot designs holistically. They concluded that ordinary observers would take notice of simple disparities in the height, proportions, and angles of various features on the boots, thus rendering Deckers’s design non-obvious. In this way, the court ultimately relied on the consumers’ gut reaction when evaluating differences between designs. Essentially, the court considered whether the difference was minor or whether it created a new overall impression for consumers. As demonstrated in Deckers, future applications of the Graham framework could evolve to focus on whether reasonable consumers can distinguish between designs when viewed holistically. As a result, the critical inquiry may return to whether a prior art reference is “basically the same” as the claimed design. If so, LKQ may have little practical impact on the outcome of obviousness challenges in design patent cases.

#patentlaw, #designpatent, #intellectualproperty