Federal Circuit Ruling Opens the Door to "Offensive" Design Patents

This week, the en banc Federal Circuit issued an opinion in In re Tam, No. 14-1203 (Fed. Cir. Dec. 22, 2015), holding that the relevant portion of Section 2(a) of the Trademark Act barring the patent office from registering scandalous, immoral or disparaging marks was an unconstitutional infringement of the First Amendment.  The Federal Circuit's decision has significant implications for another trademark case pending in the Court of Appeals for the Fourth Circuit, wherein the Washington Redskins seek to overturn the Patent and Trademark Office's cancellation of the "Redskins" trademark on the same grounds.   Pro-Football, Inc. v. Blackhorse,  No. 15-1874 (4th Cir. filed Aug. 6, 2015).  But what does this decision mean for design patent law, which retains the authority to refuse to issue patents covering ornamental designs deemed "offensive to any race, religion, sex, ethnic group or nationality?"  Find out after the jump. 

Samsung Appeals to the Supreme Court! ... (but probably won't get there)

It's not every day that the New York Times reports on design patent news.  But when it does, it usually has something to do with smartphones.  

The big news in design patent law today is Samsung's inevitable appeal to the Supreme Court from its August loss (mostly) at the Federal Circuit.  Just last week, Apple and Samsung appeared to finally be putting this lawsuit behind them, when it was announced that Samsung had agreed to pay Apple $548,176,477 to satisfy the judgment entered by Judge Koh and affirmed by the Federal Circuit.  However, in the agreement, Samsung had reserved its right to "reimbursement" if the judgment is reversed.  

In its petition for writ of certiorari, Samsung points out two alleged errors by the Federal Circuit - 1) whether the Federal Circuit should have "factored out" the allegedly functional aspects of Apple's design patents, and 2) whether the Federal Circuit erred by not apportioning Samsung's profits between the profits attributable to the infringing design and the profits resulting from other aspects of the infringing products. 

Of course, Samsung worded the questions presented somewhat differently:

The questions presented are:

1. Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope?

2. Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

Regardless of how Samsung chooses to articulate the issues, however, a Supreme Court hearing seems unlikely, in the opinion of this author.  

With respect to the first issue, the Federal Circuit did an excellent job of clarifying its own, somewhat confusing precedent from cases like Richardson v. Stanley Works.  In Apple v. Samsung, the court explained that that the functional aspect of a claim may be conceptually factored out as part of claim construction without literally "exclud[ing] those components in their entirety."  See our earlier post on this topic here.  This pronouncement of the law will help simplify design patent claim construction, while emphasizing to juries and judges that designs do not protect functional concepts, only the appearance of an article of manufacture. 

With respect to the third issue, it is highly unlikely that the Supreme Court would attempt to blatantly overrule the clear, expressed wishes of Congress.  Samsung seems to argue that § 289 is just "really old."  But it's unclear why the Supreme Court's analysis of this argument would be any different from the Federal Circuit's:

In reciting that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design. Several other courts also concluded that Section 289 authorizes such award of total profit. ... The clear statutory language prevents us from adopting a “causation” rule as Samsung urges.

So while its exciting to see design patents in the news, don't hold your breath for the first Supreme Court design patent case in 100+ years.  Of course, we could be wrong and, if we are, we will be the first to celebrate. 

A Cautionary Tale: How Not Marking a Product Can Cost a Design Patent Owner

A recent grant of summary judgment to defendants proved just how important it is to clearly mark products and communicate design patent rights to the public. On November 4, Judge Paul Barbadoro of the District of New Hampshire granted the defendants’ motion for summary judgment as to the plaintiffs' claims of patent infringement in a two-year case regarding funeral equipment. See Gallagher et al. v. Funeral Source One Supply and Equipment Co., Inc., et al., 14-cv-115-PB (D.N.H 2015). The case stands as a reminder of what can happen when design patent owners fail to properly mark their products with the patent number. 

Design Patent Remedies - Nordock v. Systems, Inc. (Fed. Cir. 2015)

Recently, the Federal Circuit addressed the dichotomy between standard patent damages under  35 U.S.C. 284 and design patent specific remedies under 35 U.S.C. 289. In Nordock v. Systems Inc., No. 14-1762 (Fed. Cir. Sept. 29, 2015), the Federal Circuit articulated, "[i]n the case of design patent infringement, a patentee can recover damages under 284 or under 35 U.S.C. 289 . . . ", but not both. (Emphasis added). While prior to Nordock this was already understood to be the correct law, we now have a case that confirms that a design patent holder may elect to receive an award under section 284, or section 289, whichever is larger. For the particulars of Nordock v. Systems follow the jump.

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Who is a Design Patent Inventor, and Who is Merely Assisting

Under U.S. patent law, a design patent must identify the true inventor of the subject design.  However, it is not always abundantly clear who should be named as an inventor, and who is merely assisting an inventor.  Design patents may be obtained by [w]hoever invents any new, original and ornamental design for an article of manufacture.” 35 U.S.C. § 171 (1994).  While inventorship is a question of law, it is based on underlying facts.  When determining inventorship, it is imperative to ask: which individual or individuals “conceived” of the claimed invention?  That is, who conceived the arrangement of elements of the ornamental subject matter represented in the figures of the design patent.  Safco Products Co. v. Welcom Products, Inc., 799 F. Supp. 2d 967 (2011).  As there are often many people working to bring the subject matter of a design patent to fruition, this determination is not always so simple.  Read on to learn how to identify an inventor, and those merely assisting.

In Hunter's Edge v. Primos, The Ordinary Observer is Clearly No Turkey...

Perhaps we should have waited until Thanksgiving to share this case, but some things just can't wait. On Tuesday, Judge Myron Thompson of the Middle District of Alabama granted Primos' motion for summary judgment of no infringement in the case of Hunter's Edge v. Primos.  The case represents strong precedent that two-dimensional design patents cannot be infringed by three-dimensional articles of manufacture.  However, the case may be just as interesting for the issues that were left undecided, such as whether Hunter's Edge's design patent represents an unpatentable "design of nature."  You be the judge, after the jump.  

High Point Designs Part II - "Overall Appearance" Does Not Mean "Abstract Design Concept"

In round two of High Point Design v. Buyer's Direct, (i.e. the fuzzy slipper case), the Federal Circuit held that a design patent for the ornamental appearance of a fuzzy slipper held by Buyer’s Direct, Inc. (“BDI”) was not anticipated by an alleged prior art slipper.  On the other hand, the Federal Circuit also held that meaningful differences in the overall visual effect of the design patent and an alleged infringing product supported a summary judgment determination of non-infringement.  See High Point Design LLC v. Buyer’s Direct, Inc., No. 14-1464 (Fed. Cir. July 30, 2015).

Alternative Designs -- An Indicator of Ornamentality

Last week, a district court judge construed an exhaust manifold claim as covering the overall ornamental appearance of the manifold in U.S. Design Patent No. D636,316 (the "'316 Patent).  Group-A Autosports, Inc. v. DNA Motor Inc., EDCV 14-01834-JGB (C.D. Cal. 2015). 

Direct Infringement - "Sold" or "Offered to Sell"

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In an interesting decision from the Western District of Washington last week, Judge Ricardo S. Martinez granted an order denying Amazon's Motion for Summary Judgement that it did not directly infringe Milo & Gabby's animal-shaped pillow case design patents in Milo & Gabby, LLC et al v. Amazon.com, Inc., No. C13-1932RSM (W.D. Wash. 2014). The Court agreed with Plaintiff Milo & Gabby that questions of fact preclude summary judgment as to whether Amazon "offered to sell" allegedly infringing merchandise actually sold by third-party vendors, but listed on the Amazon.com website. 

Is Design Patent Functionality a Proper Jury Question?

Last week, Judge Sheri Polster Chappell of the Middle District of Florida entered an interesting order regarding design patent functionality in Chico's FAS, Inc. v. Wink Intimates et al., No. 2-13-cv-00792  (M.D. Fla.).  In this case, Chico’s sued Wink for declaratory judgment of design patent invalidity and Wink counter-sued Chico’s, claiming infringement of U.S. Patent No. 622,478 which relates to a design for a camisole.  Chico's argument for functionalty (and Judge Chappell's decision) demonstrate some common misconceptions about design patent functionality.  Continue reading after the jump to see what Judge Chappell got right and also what she got wrong...

After Apple v. Samsung, What is left of Richardson v. Stanley Works?

At long last, the Federal Circuit has handed down its decision in Samsung's appeal from the district court's $930 Million judgment in favor of Apple in the Apple v. Samsung case.  While the decision focuses on both trade dress and design patent issues, this post will focus on the design patent aspects of the decision. With respect to design patents, the Federal Circuit addressed two very important questions: 1) whether Judge Koh improperly failed to instruct the jury to disregard functional aspects of Apple's design patents, and 2) whether Judge Koh erred by allowing the jury to award Apple, Samsung's "total profits" from the accused smart phones.  We summarize these two aspects of the decision, below.

I.  Whether Judge Koh Improperly Failed to Instruct the Jury to Disregard Functional Aspects of Apple's Design Patents

On appeal, Samsung argued that the district court either incorrectly construed the design patent or failed to properly instruct the jury.  Specifically, Samsung argued that in either the claim construction or the jury instructions, the district court should have informed the jury as to which design elements of Apple's phones were functional, and instruct the jury to disregard them.  Samsung pointed to the rounded corners and rectangular screen of the Iphone as being allegedly functional.  

Samsung based its argument on the Federal Circuit's prior decision in Richardson v. Stanley Works, where the Federal Circuit endorsed the idea of "filtering out" the functional limitations from a design patent through claim construction:

The district court here properly factored out the functional aspects of Richardson's design as part of its claim construction. By definition, the patented design is for a multi-function tool that has several functional components, and we have made clear that a design patent, unlike a utility patent, limits protection to the ornamental design of the article. ... If the patented design is primarily functional rather than ornamental, the patent is invalid. ... However, when the design also contains ornamental aspects, it is entitled to a design patent whose scope is limited to those aspects alone and does not extend to any functional elements of the claimed article. 

Richardson v. Stanley Works, Inc., 597 F. 3d 1288, 1293-94 (Fed. Cir. 2010) (citations omitted).

It seems like the Federal Circuit could have simply distinguished Apple's design patents as not including functional design elements.  But, instead, the Federal Circuit attempted to distinguish Richardson in a way that leaves one wondering when Richardson applies, if ever:

Our case law does not support Samsung’s position. In Richardson, the design patent at issue depicted a multifunction tool with numerous components that were “dictated by their functional purpose.” ... But the claim construction in Richardson did not exclude those components in their entirety. Rather, the claim construction included the ornamental aspects of those components: “the standard shape of the hammer-head, the diamond-shaped flare of the crow-bar and the top of the jaw, the rounded neck, the orientation of the crow-bar relative to the head of the tool, and the plain, undecorated handle.” ... As such, the language “dictated by their functional purpose” in Richardson was only a description of the facts there; it did not establish a rule to eliminate entire elements from the claim scope as Samsung argues.

Apple v. Samsung, Slip Op. at 20 (emphasis added).  Based on the Federal Circuit's decision, it is very unclear when, if ever, Richardson now applies.  If the words "factored out the functional aspects of Richardson's design" do not mean "exclude those components in their entirety," then what do they mean?  Furthermore, if the claim construction in Richardson was intended to allow the design patent claim to "include[] the ornamental aspects of those components," then what is the point of "factor[ing] out" functional limitations at all?  

This portion of the court's decision probably creates more questions than answers, and doesn't seem to be necessary, based on the nature of Apple's design patents.  Given the confusing nature of the court's decision, and the apparent conflict with Richardson, Samsung likely has strong grounds for an en banc appeal on this point. 

II.  Whether Judge Koh Erred by Allowing the Jury to Award Apple, Samsung's "Total Profits" from the Accused Smart Phones

Many commentators predicted that the Federal Circuit would take this opportunity to revise the law regarding apportionment of an infringer's profits.  Several law school professors even filed an amicus brief, arguing that § 289 of the Patent Act should be interpreted to require some form of apportionment.  However, the Federal Circuit's analysis on this point was short and sweet:

In reciting that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” Section 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design. Several other courts also concluded that Section 289 authorizes such award of total profit. ... The clear statutory language prevents us from adopting a “causation” rule as Samsung urges.

Apple v. Samsung, Slip Op. at 26-27.  With regard to the law professors' amicus arguments, the court dismissed them in a footnote as "policy arguments that should be directed to Congress. We are bound by what the statute says, irrespective of policy arguments that may be made against it."  Id. n. 1.

Inter Partes Review for Design Patents - Part 2

Recently, we looked into the use of inter partes review, an administrative method for challenging the validity of a patent, as it has been used for challenging design patents.  Our examination showed that the practice was still in its infancy.  Moreover, only one patent had been successfully invalidated in IPR.  Munchkin, Inc. v. Luv N' Care, Ltd., No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014).  We reported on that decision last April.  Today, we can report on a decision on the merits by the Patent Trial and Appeal Board invalidating three more design patents.  We are also taking a look at two additional pending petitions for IPR that may tell us more about the usefulness of this process in future design patent cases.

Hague Agreement Implementation for Design Patents

This morning marks a major development in design patent practice which may change the way U.S. applicants pursue foreign design patents, beginning in May.  This morning, the United States formally became a participating member of the Hague Agreement Concerning the International Registration of Industrial Designs (“the Hague Agreement”).  Under the Hague Agreement, U.S. applicants will be able to file a single international design application with the USPTO to obtain protection for up to 100 designs in over 62 territories.  The Hague Agreement will drastically simplify international design patent applications.  Currently, U.S. applicants wishing to pursue protection for designs in multiple jurisdictions must file individual applications in each of the respective jurisdictions.  The Hague Agreement also extends the term for issued design patents from 14 to 15 years..   

The ability to file a single design patent application covering the United States and 61 other territories should reduce the costs and administrative burden for U.S. Applicants to seek foreign design patent protection.  The USPTO will be issuing final rules implementing the Hague Agreement in the coming weeks and the rules are slated to go into effect on May 13, 2015.  As we previously reported, the USPTO published its proposed rules for implementing the Hague Agreement on November 29th, 2013.  On February 4th, the period for submitting comments ended. 

One question now on applicants minds is whether it makes sense to delay applying for U.S. patent protection until May, when international applications can be filed at the U.S. Patent Office.  The design patent term extension, will not be retroactive, so filing your design patent application today may seem like voluntarily relinquishing 9 extra months of design patent protection.  However, in making the decision to delay filing for design patent protection, applicants and practitioners should be mindful of any potential bars to foreign design patent protection.  While U.S. design patent protection may be sought up to a year after publication of the relevant design, foreign rights are extinguished upon publication.  Thus, if May 13 falls after a planned publication date, applicants may want to reconsider waiting. 

As always, we will keep you informed as the USPTO issues its final rules regarding international design patent prosecution and let you know about any material deviations from standard U.S. design patent prosecution.  Here is a link to the USPTO's press release on Hague implementation. 

Looking at Inter Partes Review for Design Patents

It has been nearly one year since the Patent Trial and Appeals Board first invalidated a design patent in inter partes review. Munchkin, Inc. v. Luv N' Care, Ltd. decision, No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014).  The Ordinary Observer reported on that decision last April.  The time seems right to check in on the PTAB to see how design patents have fared since that decision made waves in the patent community.

Despite the impact made by the PTAB in Munchkin, IPR remains a rarely used tool for defendants in design patent litigation.  In addition to Munchkin, we have found 7 petitions for review on 7 design patents from 3 petitioners since the practice began in September 2012.  To date, only Munchkin has reached a final decision on the merits.  While this subset is still limited, it may give us some insight into how the Board is interpreting these petitions, and where the practice may be headed.

We begin by looking at the petitions filed by each of the three petitioners.