Federal Circuit Alert - In re Owens

On Tuesday, the Federal Circuit issued a precedential design patent decision with major implications for the written description requirement for design patents in the case of In re Owens, No. 2012-1261, --- F.3d --- (Fed. Cir. March 26, 2013).  In re Owens was an appeal from a final rejection for a design application on what appears to be a mouthwash bottle designed by Procter & Gamble (“P&G”).  On Dec. 21, 2004, P&G filed design patent application No. 29/219,709 (“the ’709 application”), which claimed the bottle as shown on the left, below.   On Nov. 7, 2006, the ’709 application issued as U.S. Design Patent No. 531,515.  On February 2, 2006, P&G also filed U.S. design patent Application No. 29/253,172 (“the ’172 application”).  The ‘172 application claimed priority to the ‘709 application, and claimed the bottle as shown in the center, below.

P&G conceded to the PTO that the design of the ‘172 application had been on sale for more than a year before the application date and that without a valid priority claim to the ‘709 application, the ’172 would be obviated by prior sales.  Unfortunately for P&G, the Examiner rejected the ‘172 application, finding that the new, dashed horizontal line in the ‘172 application defined an entirely new trapezoidal shape which he considered new matter, not within the disclosure of the ‘709 application, as shown on the right, below.  “As such, the examiner rejected the ’172 application for lack of written description under 35 U.S.C. § 112, ¶ 1, and furthermore rejected the application as unpatentably obvious in view of the earlier-sold bottles under 35 U.S.C. § 103(a).”  The Board affirmed the rejection, finding that P&G “had claimed previously undisclosed ‘trapezoidal sections occupying  part, but not all, of the surface area of the front and back panels.’”

On appeal, the Federal Circuit panel, which included judges Prost, Moore, and Wallach, stated that “[t]he test for sufficiency of the written description, which is the same for either a design or a utility patent, has been expressed as ‘whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date. … Thus, when an issue of priority arises under § 120 in the context of design patent prosecution, one looks to the drawings of the earlier application for disclosure of the subject matter claimed in the later application.” (internal citations omitted). 

Both the P&G and the PTO agreed on appeal that “a design patentee  may, under certain circumstances, introduce via amendment a straight  broken line without adding new matter, even ‘[w]here no [corresponding] boundary line is shown in a design application as originally filed.’” (citing MPEP § 1503.02) (alterations in original).  P&G argued that the unclaimed, horizontal line it introduced in the ‘172 application did not introduce a new trapezoidal shape, but merely claimed only the upper portion of the design of the ‘709 application, citing In re Daniels, 144 F.3d 1452, (Fed. Cir.1998).  The patentee of Daniels removed  an entire floral design element from a prior design application for a container (a “leecher”), as shown below.  

 

There, the Federal Circuit held that “Mr. Daniels is entitled to the parent application's filing date for the subject matter of the continuation, thus obviating the rejection based on the intervening publication.”  The court reasoned:

The leecher as an article of manufacture is clearly visible in the earlier design application, demonstrating to the artisan viewing that application that Mr. Daniels had possession at that time of the later claimed design of that article. The leaf ornamentation did not obscure the design of the leecher, all details of which are visible in the drawings of the earlier application. The leaf design is a mere indicium that does not override the underlying design. The subject matter of the later application is common to that of the earlier application. In the context of 35 U.S.C. § 171 (“design for an article of manufacture” is the subject matter of a design patent), it is apparent that the earlier application contains a description of what is claimed in the later application.

In re Daniels at 1456-1457 (internal citations omitted)

But the Federal Circuit panel distinguished Daniels, reasoning that there, the original application disclosed a bottle that one of skill would recognize as patentable, even if the floral design was removed.  The panel further reasoned that “the question for written description purposes is whether a skilled artisan would recognize upon reading the parent’s disclosure that the trapezoidal top portion of the front panel  might be claimed separately from the remainder  of that area.”  (citing Ariad, 598 F.3d at 1351.).  Thus, for purposes of design applications, it appears as though the written description requirement would now include an element of foreseeability.

The difficulty with In re Owens is that the ’709 application appears to disclose at least one embodiment of the ‘172 application.  For instance, if the ‘172 application were allowed, the design of the ‘709 application would appear to be within its scope.  Intuitively, practitioners seem to expect that the disclosure of one embodiment of an invention should be sufficient to support a broader claim.  However, the Federal Circuit’s citation of Ariad, although not discussed, appears to be apt.  There, the Federal Circuit held that the disclosure of a single embodiment was insufficient to support the written description of a claim with “far broader” scope:

Whatever thin thread of support a jury might find in the decoy-molecule hypothetical simply cannot bear the weight of the vast scope of these generic claims. See LizardTech, Inc. v. Earth Res. Mapping, Inc., 424 F.3d 1336, 1345 (Fed.Cir.2005) (holding that "[a]fter reading the patent, a person of skill in the art would not understand" the patentee to have invented a generic method where the patent only disclosed one embodiment of it); Reiffin, 214 F.3d at 1345-46 (noting that the "scope of the right to exclude" must not "overreach the scope of the inventor's contribution to the field of art as described in the patent specification"); … Here, the specification at best describes decoy molecule structures and hypothesizes with no accompanying description that they could be used to reduce NF-kB activity. Yet the asserted claims are far broader. We therefore conclude that the jury lacked substantial evidence for its verdict that the asserted claims were supported by adequate written description, and thus hold the asserted claims invalid.

Ariad Pharm., Inc. v. Eli Lilly and Co., 598 F. 3d 1336, 1337 (Fed. Cir .2010) (en banc).

Thus, after In re Owens, if a designer of skill in the art would not reasonably have foreseen the subject matter claimed by a continuation application, the claims may not be supported by the written description of the parent.  Based on this interpretation of the law, it is likely that the written description requirement will become a more robust doctrine in design patent law, and a major weapon to design patent defendants.   It will be interesting to see whether the Federal Circuit reviews this decision en banc.

Design Patent Links

The last few weeks have seen a flurry of design patent activity, ranging from academia, Computer-Generated Icons, and even the fashion industry.  It’s far too much to post about separately, so, without further ado, we give you this week’s Design Patent Links!

“The Fashion Law” blog is reporting on Stella McCartney’s design patent for a bestselling Lucia mesh polka dot dress from her Fall 2012 collection.  The London based company’s design patent arrived just in time for fashion week.  According to New York Law School’s “Legal As She is Spoke” blog suggested that McCartney’s design patent was just for publicity, “but could prove not to be all that helpful.”

Real Housewifes of New York star and owner/inventor of Yummie Tummie Heather, Thomson, might beg to differ with Legal As She Spoke. Yummie Tummie was sued by shapewear heavy hitter Spanx on March 5, seeking a declaratory judgment of noninfringement of several of Ms. Thomson’s design patents after Yummie sent Spanx cease and desist letters concerning Spanx’s design patents.  The National Law Review provided a nice summary of this shapewear design patent case. Many other outfits are also covering the story, including IPWatchdog, Womens Wear Daily, New York Magazine, and the Huffington Post.  But what several commentators failed to mention is that this is not Yummie Tummie’s first design patent rodeo.  As we have mentioned before on this blog, Yummie Tummie settled a declaratory judgment action brought by Maidenform after Maidenform paid Yummie Tummie 6.75 Million.  In 2011, Yummie Tummie also filed a design patent infringement action against LF USA, a subsidiary of the Hong Kong-based apparel manufacturer Li & Fung, Ltd.  Yummie Tummie has aggressively defended its design patents in the past, and we suspect this case will be no different.  Spanx may be surprised by how not “Yummie” this case might become for them.

As design patents continue to gain credibility with practitioners, academia is also beginning to take note. On April 5-6, 2013, Stanford Law School will host “a major conference on design patents,” titled “Design Patents in the Modern World.” The conference is sponsored by the Stanford Program in Law, Science, & Technology, Samsung Electronics, Nike, and Google and will include public conference on April 5 and a one-day academic symposium with papers on design patents from the leading scholars in the world on design patent issues. Included among the articles slated for discussion is an article co-authored by yours truly and University of Kansas School of Law professor Andrew Torrance. The article is titled “(R)evolution in Design Patent Subject Matter: The Shifting Meaning of ‘Article of Manufacture,” and provides an historical review of the “article of manufacture” requirement in design patent law. Stanford’s design patent conference will be open to the public.

Samsung Strikes Back

After a month long bar exam-related hiatus, we are back with big news from Apple v. Samsung.  On Friday, Judge Koh issued a decision on Apple and Samsung’s cross JMOL’s.  See Apple, Inc. v. Samsung Elec. Co., Ltd., ---- F.Supp.2d ----, 2013 WL 772525 (N.D.Cal. 2013), roughly halving the jury’s damages award to Apple.  The decision raises two important points on design patent damages, which are discussed below.

In its JMOL, Samsung argued that for Apple to be entitled to Samsung’s profits, Apple was required to prove which portions of Samsung’s profits were actually earned by the patented design features. Samsung reasoned that Apple’s expert presented a damages calculation based on all of Samsung’s profits for the relevant products, but Apple never proved that Samsung’s alleged acts of design patent infringement were responsible for all of Samsung’s profits. Thus, Samsung argued that each damage award should have been set aside as unconnected to the profits made by Samsung.

However, Judge Koh rejected this argument and held that plaintiff’s are not required to show causation in order to disgorge the infringer’s profits in design patent cases.  Judge Koh reasoned that, although causation was a requirement in historical case law, this argument was “clearly foreclosed by Federal Circuit precedent. As explained in Nike Inc. v. Wal–Mart Stores, Inc., 138 F.3d 1437, 1442–43(Fed. Cir. 1998), Congress specifically drafted the design patent remedy provisions to remove an apportionment requirement that the Supreme Court had imposed. Thus, there is simply no apportionment requirement for infringer’s profits in design patent infringement under § 289.” 

Next, Samsung argued that Apple failed to submit sufficient evidence to show that Samsung had notice of the design patents-in-suit prior to the filing of the April 15, 2011 original complaint.  Yet, the jury awarded Apple a portion of Samsung’s profits prior to this date.  Samsung further argued that under 35 U.S.C. § 287(a), there can be no damages award where a defendant did not have actual or constructive notice of the patent at issue.   With this argument, the Court agreed, holding that Samsung was entitled to judgment as a matter of law that the earliest notice dates supported by the evidence are: August 4, 2010 for the ‘381 patent; April 15, 2011 for the ‘915 and D’677 Patents; and June 16, 2011 for the ‘163, D305, D’889, and D’087 Patents.  The court therefore remitted the disgorgement award prior to April 14, 2011 and set a new trial to determine damages prior to that date for the ‘381 patent only.

Although the court’s reasoning appears to be correct under the current pronouncement of the law, it exposes an apparent inconsistency in the Federal Circuit’s treatment of the disgorgement remedy in design patent cases.  The Federal Circuit has previously stated that the disgorgement remedy in design patent cases is not considered “damages,” but rather an equitable remedy.  See Braun, Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 824 (Fed. Cir. 1992) (holding that the treble damages provision of § 284 does not apply to recovery of profits under § 289 because disgorged profits do not represent damages).  For this reason, disgorged profits cannot be trebled under 35 U.S.C. §284, which applies only to “damages.”  At the same time though, the Federal Circuit holds that the limitation on damages in § 287(a) does apply to the disgorgement remedy.  See Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1440 (Fed. Cir. 1998) (holding that § 284’s limitation on damages applies equally to the disgorgement remedy for design patent infringement.).  It is difficult to understand why disgorged profits would be considered damages with respect to § 287(a) but strictly construed as an equitable remedy for purposes of § 284.  Perhaps Apple should add this to the growing list of issues for the Federal Circuit to sort out on appeal.