Premiere Gem Corp. v. Wing Yee Gems – Petitioner Turned Down in Diamond Jewelry Design IPR

In July, the Patent Trials and Appeals Board (PTAB) declined to institute Inter Partes Review of a design patent for an ornamental design of diamond jewelry.  Then, just last week, the Board denied a petition to rehear that earlier decision.  These decisions in Premier Gem Corp. et al. v. Wing Yee Gems & Jewelry Ltd. (IPR2016-00434) demonstrate how failing to introduce into evidence the details of the prior art can be fatal to a claim of anticipation or obviousness. They also offer a reminder that challenged designs and the prior art are to be compared on the basis of “overall visual appearance,” not mere “design concepts.”

Petitioners Premier Gem Corp. and Jay Gems Inc. (collectively, “Petitioner”) petitioned the Board to invalidate U.S. Design Patent No. D618,132 (the “’132 patent”).  The patent claims a jewelry design in which a large “full cut” central diamond is surrounded by nine smaller “single cut” diamonds.  (As the decision explains, “[f]ull-cut diamonds have more facets than single-cut diamonds, and typically produce a greater sparking effect.”)  The two figures of the patent are reproduced below:

U.S. Design Patent. D618,132

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.

Doorman v. Paccar - For Design Patents, Inter Partes Review is Non-Functional

Sometimes lawyers learn more from their failures than their successes, and this has proven to be true in the context of inter partes review of design patents.  Since the Patent Trial and Appeal Board launched the IPR program in 2012, there have been only a handful of design patent decisions, but with each new decision, we learn a bit more about how the PTAB will approach design patents. 

Last Friday, the PTAB handed down a decision in Doorman Prods., Inc. v. Paccar, Inc., IPR2014-00542, 2014 WL 4444041 (Patent Tr. & App. Bd. Sept. 5, 2014).  In its decision, the Board denied Doorman's Petition to institute an inter partes review, but it is the Board's reasoning that was noteworthy.  Below is an image from Paccar's U.S. Patent No. 525,731, which was the subject of the petition. 

First, the Board categorically rejected Doorman's request to filter out functional elements within the design in the context of claim construction.  The Board curiously found that the "Petitioner conflates invalidity based on functionality under 35 U.S.C. § 171 with invalidity based on obviousness under 35 U.S.C. § 103" and held that the it had no authority to entertain a functionality challenge to the design patent:

Further, a challenge based on functionality under 35 U.S.C. § 171 is not permitted in an inter partes review because it is not based on 35 U.S.C. § 103 nor is it based on prior art that consists of a patent or printed publication. 35 U.S.C. § 311(b); 37 C.F.R. § 42.105(b)(2). Therefore, we agree with Patent Owner that the allegedly functional elements identified by Petitioner (Pet. 12) must be considered in an obviousness analysis of the visual impression created by the patented design as a whole (Prelim. Resp. 26). 

Id. at  *3.

The Board appears to have badly misconstrued the Petitioner's claim construction argument with an invalidity challenge under § 171.  The Board's decision to construe the Petitioner's claim construction argument as a validity argument seems to be out of step with the Board's requirement to apply the "broadest reasonable construction."  Furthermore, it directly contradicts the Federal Circuit's guidance on design patent claim construction.  See OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997) (if "a design contains both functional and non-functional elements, the scope of the claim must be construed in order to identify the non-functional aspects of the design.").  Whatever the "broadest reasonable construction" means in design patent cases before the PTAB, it must at least be as broad as the construction that would be provided in the context of a district court litigation.  

The Patent Office's failure to appreciate how design patents are being construed in the district courts has led to a strange double standard wherein design patents are construed much more narrowly at the Patent Office then they are in litigation.  IPR may be an interesting venue for bringing this issue to a head and encouraging the Patent Office and the Board to consider modernizing its view of the broadest reasonable construction for designs, in light of how they are being construed, in practice. 

In Doorman, the Board's failure to consider functionality in the context of claim construction led to disastrous results for the Petitioner.  The Board ultimately concluded that the Petitioner's primary reference, Kobayashi, "does not include a side Lamp D, striations, and a checkered surface pattern as shown in the patented design," id. at *5, and therefore could not serve as a primary reference.    But these were the same features that Doorman argued were functional in claim construction.  Whatever the merits of the Petitioner's functionality argument were, they appeared to be central to its Petition, and the Board's refusal to even consider filtering out functional elements would appear to be a clear error of law.  

Nevertheless, while Doorman remains the law of the PTAB, design patent practitioners would be wise not to rely on PTAB claim construction to filter out functional elements of design patent in IPR Petitions.  

For those who are curious, below is an image of Paccar's '731 Patent alongside the proposed primary reference, U.S. Design Patent No. 498,859 to Kobayashi.  Basically the same?

Design Patent Links - May 19, 2014

It has been a while since our last design patent links post, so there's lots to share.  We begin with a design patent issue of first impression in the Eastern District of Arkansas and wrap up with a check-in on Apple v. Samsung:

Law360 has published an article about a fascinating design patent decision from the Eastern District of Arkansas.  In P.S. Prods. Inc. et al. v. Activision Blizzard Inc. et al., Case No. 4:13-cv-00342-KGB (E.D.Ark. filed June 5, 2013), P.S. Products sued Activision for infringing U.S. Design Patent No. 561,294 for a "Stun Gun," shown below.  The problem is that Activision is in the video game business, not the stun gun business.  P.S. Products was accusing Activision of infringement through its Call of Duty line of video games, which includes a video game stun gun that P.S. Prods claimed infringed its design patent.  On a motion to dismiss, the court found that the video game and the real-life stun gun were not “analogous article[s] of manufacture."  The Law360 article was authored by in-house counsel for Activision, Omer Salik and Neil Yang. 

In an interesting post on The Ordinary Observer (link), we recommended filing "virtual" design patents with any physical design, which may have avoided this very issue.

 
We usually try to stay away from the "interesting design patent" posts here at The Ordinary Observer, but this new Samsung design patent caught our eye for obvious reasons.  Can you tell which of the below designs belongs to Apple and which belongs to Samsung?  Both of these icon design have been granted by the USPTO:

ANSWER: The icon on the left is Samsung's U.S. Design Patent No.  704,217, which was granted back on May 6.  The icon on the right is Apple's U.S. Design Patent No. 671,558.  Several commentators have already picked up on the similarity between these two design patents, including MacRage, PatentlyApple, and Cult of Mac.  We have previously observed that the scope of design patents before the PTO appears to be far narrower than in a court of law, which is the opposite of what was intended.  However, this principle could be used as a shield in a design patent infringement suit.  Potential defendants may seek design patents of their own and, in effect, get an advisory opinion of non-infringement from the PTO in the form of a design patent listing the relevant prior art on its face.  In this sense, design patents, unlike utility patents, may be used as a shield as well as a sword.  Samsung appears to be applying this principle while it restarts settlement negotiations in their ongoing patent war with Apple, according to DailyTech.  

Finally, in addition to our own commentary, several others have posted on the first-ever successful Inter Partes Review process for Luv N' Care's sippy cup design patent, including Law360, Rstreet, National Law Review, and Virtual Press.  As noted by Digital Journal, Luv N' Care has issued a "clarification" of its pending lawsuit against Munchkin, stating its loss in the PTAB was based on a "technicality."  Apparently, Luv N' Care considers the Patent Act a technicality...

Inter Partes Review Invalidates First Design Patent

On Monday, April 21, the Patent Trial and Appeal Board handed down a milestone final decision, for the first time invalidating a design patent challenged in inter partes Review.  Munchkin, Inc. v. Luv N' Care, Ltd., No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014) (Paper No. 28).

Design Patent Links - Jan. 27, 2014

Most of the exciting news in the design patent space in the last few weeks has been coming from the Federal Circuit.  But there have beet some smaller items in the news lateley,

Tracy-Gene Durkin and David K.S. Cornwell authored a summary of the Patent Trial and Appeal Board's decision to deny inter partes review in ATAS Int'l, Inc. v. Centria.  This decision is the first IPR decision regarding a design patent, and the denial seems to suggest that design patent defendants should seek to assert only a few solid references when seeking IPR.

PC World authored an article last Thursday about the preliminary injunction that Blackberry is seeking against Typo in the Northern District of California.  It will be interesting to see how the court handles the issue of contributory design patent infringement, which is not a common issue in design patent cases.

Kenyon and Kenyon issued a design patent notice about a finding of non-infringement in Cohen Harel v. KK Int’l Trading Co. in the Eastern District of New York.  The case involved refillable lighters and the court found on summary judgment that no reasonable trier of fact could find the designs of the two lighters substantially similar.

Finally, for those who may have missed it, Professors Andrew Torrance and Mark Janis participated in an "Evil Twin" debate regarding the scope, purpose, and value of design patents back in November at the University of Richmond School of Law.  The debate was unofficially titled  "Design Patents - Great Idea or Greatest Idea?"

Finally, it's not every day that a local design patent case makes the 5:00 news, but the latest design patent case by Alex & Ani against North Attleboro's Northeast Jewelers sounds like it is gearing up to be an interesting case!