Court Ruling on Design Patents Could Have Huge Impact | Harris Beach PLLC
[co-author: Tatyana Voloshchuk*]
A recent Federal Circuit decision overturning the long-standing obviousness test for design patents could have wide-ranging implications for design patent owners.
The en banc decision in LKQ Corp. et al v. GM Global Technology Operations LLC found that the obviousness test used in design patent law is too rigid and should be similar to a more flexible test used for utility patents to align with recent U.S. Supreme Court decisions and federal lawmakers’ intent. This would be a significant shift in assessing patentability of design patents, where the bar of proving obviousness is high and obviousness rejections are relatively rare.
LKQ, once a licensed repair part vendor for GM whose contract was not renewed, challenged GM’s auto fender design patent after GM informed LKQ it was selling parts that infringed GM’s patent. LKQ argued the design was unpatentable in view of prior art references. LKQ’s claim was rejected by both the U.S. Patent and Trademark Office (“USPTO”) Patent Trials and Appeals Board and a Federal Circuit panel, with both determining LKQ had not proved obviousness. The Federal Circuit granted rehearing en banc to reevaluate the obviousness and applicability of the Rosen-Durling test.
Former Obviousness Test
The former test for obviousness was known as the Rosen-Durling test and required two parts. First, there must be a primary feature in the design that is “basically the same” as the challenged design. This “basically the same” requirement was a relatively difficult standard to meet. If that standard is reached, the challenger then must identify secondary features that modify the primary reference to create a design with the same overall visual appearance and those secondary references must be so related to the primary reference that “features in one would suggest application of those features to the other.”
The Federal Circuit found this test to be overly rigid and inconsistent with the Supreme Court’s guidance in KSR International v. Teleflex Inc., which requires a flexible approach to obviousness.
New Obviousness Test
The new test is similar to that used with utility patents and is based on factual inquiries instead of the interpretation of “basically the same.” LKQ had argued the test should be more like that noted in the U.S. Supreme Court’s decision in KSR International Co. v. Teleflex Inc., in which the court opted for a more expansive and flexible approach that said references could come from fields beyond those of the problem being solved by the invention.
The Federal Circuit ruled that courts should apply the test articulated by the Supreme Court in Graham v. John Deere Co. of Kansas City. In that test, fact finders must determine:
- Whether the prior art being compared to the invention is in the same field of endeavor; if the art is not in the same field of endeavor, is it still reasonably pertinent to the particular problem targeted by the inventor;
- The differences between the design of the invention and the prior art based on a visual interpretation of the whole design rather than individual features;
- What level of skill an ordinary designer in the field would need to design such a product; and
- The motivation in modifying the prior design to create a new invention with the same overall visual appearance, taking into account any secondary references.
The Court also recognized that secondary considerations, such as commercial success, industry praise and copying, can be considered in the obviousness analysis.
Impact of New Test
The Federal Circuit acknowledged some vagueness and uncertainty about whether the new test fully applies to design patents, but said change is necessary to align with U.S. Supreme Court cases and federal legislation. It was comfortable leaving future courts to interpret and decide on a case-by-case basis.
It is still unclear how the USPTO and courts will apply this new standard, which is open to interpretation because some determinations used in utility patents do not directly translate to design patents. But, it could lead to more obviousness rejections of design patent applications, fresh opportunity for competitors to challenge design patents, and undermine the ability of companies to prevent counterfeit products and knockoffs.
From 2001 to 2022, design patent filings increased from 20,000 to more than 50,000 as companies seek to protect unique design innovations. According to the USPTO, design patent allowance is over 81% this year. Less than 5% of design patent applications currently receive obviousness rejections. The new, more flexible obviousness test is likely to result in many more obviousness rejections for design patents at the USPTO, making design patents harder to obtain. Issued design patents may also be more easily invalidated on the basis of obviousness both in litigation and at the USPTO post-issuance proceedings, likely leading to more challenges on obviousness grounds.
*Tatyana Voloshschuk of Murtha Cullina co-authored this alert.
The Intellectual Property teams at Harris Beach and Murtha Cullina, two law firms that will combine and become Harris Beach Murtha on Jan. 1, 2025, are monitoring USPTO actions and court decisions in the wake of this change to assess strategic implications to design patent portfolio development and enforcement.
