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.

Upcoming ABA Roundtable - Design Patent and Trade Dress Litigation: More than Meets the Eye

As 2014 comes to a close, we wanted to make design patent practitioners and enthusiasts aware of an important upcoming ABA webinar regarding design patent litigation.  The webinar, titled Design Patent and Trade Dress Litigation: More than Meets the Eye, will take place on January 21, 2015 from 1:00 E.T. - 2:00 E.T.  The webinar is free and is being presented by the ABA Intellectual Property Litigation Committee.  The speaker will be Christopher V. Carani, a recent guest blogger for the Ordinary Observer.  Participants may register using the above hyperlink. 

This promises to be an important and valuable webinar for any practitioner who is currently or may ever be involved in a design patent litigation.  In my experience, attorneys tend to underestimate the nuanced style of litigation that is required in a design patent case.  Applying the techniques and themes learned from utility patent litigation will often lead to undesirable results.  Many attorneys have learned, through trial and error (literally), that design patent litigation is a very different animal.  Even seasoned utility patent litigators will benefit from a overview of the tactical distinctions between utility patent litigation and design patent litigation, which is becoming a more important tool in the intellectual property arsenal of many of our clients.  

Here is the program description from the ABA website:

Design Patent and Trade Dress Litigation: More than Meets the Eye:

From the design houses of New York City, to the storied industrial design firms of 

Chicago, to the cutting-edge think tanks of Silicon Valley, the desire for effective and enforceable design protection is at an all-time high. Simply put, looks matter. Recently released statistics show that applicants are securing U.S. design patents at record rates. With more design patents issued, there also has been a marked uptick in design patent litigation filings. While design patents share much in common with utility patents and trade dress, they have significant and distinct differences from those rights, which if not understood, can present unique traps for the unwary when it comes to litigation. In this CLE, leading Design IP attorney Christopher V. Carani will discuss design patent-specific litigation issues, including best practices for asserting, and defending against, claims of design patent infringement, the design patent infringement standard, design patent claim construction, the ins and outs of design patent drawings, design patent defenses of prosecution history estoppel, anticipation, obviousness, indefiniteness. Along the way, Mr. Carani also will offer insights and strategies for cases involving both trade dress and design patent infringement claims. 

Speaker: Christopher V. Carani is a partner at the Chicago-based intellectual property law firm of McAndrews, Held & Malloy, Ltd. For over 15 years, Chris has been a leading voice in the field of Design IP, which regards the intersection of design rights, trade dress and copyright law.  Chris counsels clients on strategic design enforcement and protection issues; he is often called upon to render infringement, validity and design-around opinions and serve as a legal consultant/expert in Design IP cases.  Carani has extensive experience litigating Design IP cases.

Apple v. Samsung Oral Arguments, Part I - Functionality and Markman

If you haven't had time to listen to the Federal Circuit arguments in the Apple v. Samsung case last week, don't worry.  The Ordinary Observer has you covered.  We will be examining the arguments in two parts.  Part I will take a look at the functionality discussion that dominated the hearing.  Part II will examine the arguments relating to apportionment.

Samsung began its presentation last Thursday by focusing on functionality, in the context of design patent infringement, and whether the district court was justified in providing the following jury instruction:

If you find by a preponderance of the evidence that the overall appearance of an accused Samsung design is substantially the same as the overall appearance of the claimed Apple design patent, and that the accused design was made, used, sold, offered for sale, or imported within the United States, you must find that the accused design infringed the claimed design.

Samsung complains that Judge Koh failed to "filter out" the allegedly functional elements of Apple's design patents for the jury and failed to offer a jury instruction directing the jury's attention to the "ornamental" aspects of the claim as opposed to the "overall appearance of the claimed Apple design patent":

Kathleen Sullivan (counsel for Samsung): ... As given, the infringement instruction ... instructs the jury to compare the overall appearance of the Samsung and Apple Designs.  Your Honor, crucially, what's missing there is the word "ornamental." You're right that earlier in the invalidity instructions she refers to the term "ornamental."  But the invalidity instructions can't cure the problem with the infringement innstruction.  ... Your honor, we're not saying that there should have been exact, magic words.  We gave her multiple choices, we said "please define the difference between functional and ornamental."  We said "please district court, take out these few things that Apple has admitted are functional..."  As Egyptian Goddess says, the district court has discretion how to distinguish functional from ornamental, but it does not have discretion whether to distinguish functional from ornamental... 

The Court:  What do we do about about the case law that says that your'e supposed to look at the overall design and you're not supposed to just take ornamental features in isolation? 

Sullivan: Your Honor, what you do is say "overall ornamental appearance."  The crucial problem here is that the jury was not instructed to, nor was there any claim construction limiting it to comparing the overall ornamental appearance. 

The problem with Samsung's argument is that it urges the court to turn the question of functionality, for purposes of infringement (i.e. claim construction), over to the jury.  Obviously, that approach would conflict with the Supreme Court's Markman decision, holding that claim construction is exclusively the province of the court and cannot be handed over to the jury.  

As a reminder, functionality can come up in design patent litigation in two contexts: invalidity and infringement.  In the invalidity context, the question for the jury is whether the design is functional as opposed to ornamental.  If the design is dictated solely by function, as opposed to ornamentation, it is invalid for failing to meet the ornamental requirement of § 171.  In the infringement context, courts sometimes seek to "filter out" functional aspects of the claim as a matter of claim construction.  See, e.g., Richardson v. Stanley Works, Inc., 597 F.3d 1288 (Fed. Cir. 2010).  While some have questioned the wisdom of this approach as improperly dissecting the claim, it remains a contentious issue in design patent law. 

Samsung argues that Judge Koh's instructions were improper because they failed to instruct the jury to consider only the ornamental aspects of the claim and failed to "define the difference between functional and ornamental" in the infringement context.  But such an instruction would have been tantamount to charging the jury with claim construction - here, selecting which design elements were functional and filtering them out of the claim.  In the utility patent context this would be like reading the Phillips case to a jury and then instructing them to evaluate infringement "applying the proper claim scope."  That would be reversible error.

If there was any error in the jury charge, it would have been in Judge Koh's decision not to construe the functional limitations of the claim, at all.  To the extent functionality was really at issue in the infringement context, it was Judge Koh's job to construe the patent, not he jury's.

The Federal Circuit has given conflicting guidance on a trial court's "discretion" in construing "functional and non-functional elements."  In Egyptian Goddess, a case we have addressed several times, the court stated that "where 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 as shown in the patent."  Yet, in the next paragraph, the court also said "[w]e therefore leave the question of verbal characterization of the claimed designs to the discretion of trial judges..."  It is curious that Judge Koh would send the question of design patent functionality (in the validity context) to the jury but simultaneously decline to construe any functional elements of the claim.  If there was a question of material fact as to whether any of the design patents were functional, as a whole, isn't there necessarily a question of fact as to whether individual design elements are functional?

The answer may come down to the extent of Judge Koh's discretion in construing the design patent (or not). Trial judges may have discretion to determine whether the functional limitations, if present, would improperly impact the jury's consideration of the overall ornamental design.  For example, with utility patents, judges are not obliged to construe every conceivably disputed claim term and always have some level of discretion. See U.S. Surgical Corp. v. Ethicon, Inc., 103 F. 3d 1554 (Fed. Cir. 1997) ("Claim construction is ... to clarify and when necessary to explain what the patentee covered by the claims, for use in the determination of infringement. It is not an obligatory exercise in redundancy.").  Judge Koh likely used her discretion to decline to spell out what was ornamental vs. what was functional for the jury if she believed that the allegedly functional elements of the design would not meaningfully impact the jury's determination of infringement.

The Federal Circuit has an opportunity to clarify a district court's discretion in construing a design patent to "filter out" functional limitations.  As with any claim construction issue, district courts ought to be allowed some independence in determining when design patent claim construction is "necessary" or would otherwise be more helpful than harmful for the trier of fact.  This should include the discretion to decline to construe the design at all, even when functionality is at issue in the validity context.