New Design Patent Test Creates Uncertainty Over What’s Obvious

The Federal Circuit’s more relaxed framework for invalidating obvious design patents will require years of legal work to iron out nuances in district courts and at the US Patent and Trademark Office.

The Tuesday opinion unwound a test for design patents dating back 42 years, bringing the approach more in line with how obviousness is determined for utility patents. The previous test was applied so rigidly, detractors have said, it had become nearly impossible to invalidate as obvious a design patent. But the new ruling leaves key questions unanswered.

“We’re left with this kind of amorphous analogous art test” courts must use when deciding if a patented design is obvious, said Nathan Kelley, a former PTO solicitor.

The PTO’s Patent Trial and Appeal Board will get first crack at developing and applying the necessary analysis because the US Court of Appeals for the Federal Circuit, as part of its Tuesday opinion, directed the tribunal to once again review LKQ’s validity challenge to a General Motors Co. patented front fender design. Kelley, a partner at Perkins Coie, predicted the resulting decision at the PTAB would likely be appealed right back to the Federal Circuit.

“It’s a whole new world,” Kelley said, and the agency “doesn’t have time to wait for things to percolate.”

‘Short-Term Havoc’

Not everyone is pleased with the uncertainty injected into the design patent space.

“It creates short-term havoc,” Banner Witcoff partner Rob Katz said. There will be inconsistent application of the opinion over a number of years from different district courts, the US International Trade Commission, and the PTO, “until this new test and different fact patterns are solidified,” he predicted.

The court anticipated criticism that the ruling would create a “rudderless free-for-all,” but in its en banc opinion rejected the notion that it would “increase confusion, disrupt settled expectations, and leave lower courts and factfinders without the necessary guidelines to properly conduct the obviousness analysis.”

The opinion, authored by Judge Kara F. Stoll, points courts and factfinders to a 1966 US Supreme Court case‘s four-part obviousness test, expounded in a case over a patented shock-absorbing device for tractors. Stoll said the test has “proven workable” for utility patents, and should be similarly appropriate for designs patents.

There may be “some degree of uncertainty for at least a brief period,” she acknowledged. But she said that wasn’t a reason to keep a test in place that contradicted the Patent Act and Supreme Court precedent.

A better solution would be for Congress to rewrite the law governing design patents, Katz said.

But some amount of uncertainty is a worthwhile tradeoff for a more balanced approach to design patent obviousness, said Sarah Burstein, a law professor at Suffolk Law School.

“It’s going to disrupt things, but that’s what decisions do,” said Burstein, who has written extensively about design patents. Being “disruptive for the sake of disruption is a problem,” she said, adding that it was the appropriate time to adjust the rigid test for design patents.

That doesn’t mean, however, it’ll be a sea change when it comes to outcomes.

“I’m not sure how different it’s going to be,” Burstein said. Defendants in design patent cases “are going to have a lot more room to make arguments” about obviousness.

“It’s a gift to the billable hour, for sure,” she added.

A Boon But For Whom

The opinion also sparked disagreement over who will benefit most directly from the opinion.

By adopting a standard developed for utility patents, which cover useful inventions rather than aesthetics, the Federal Circuit has “devalued designs and the design system,” Katz argued.

“This is a big win for knock offs and counterfeit and the companies who make and sell them and a loss for industrial designers and companies who invest in cutting-edge designs,” he said.

Joshua Sarnoff, a law professor at DePaul College of Law who signed an amicus brief filed in the case, said the decision was pro consumer because “trivial modifications” to product designs under the prior test routinely got patent protection, which has translated to higher prices.

“Some value clearly has been lost for designers, which over time will be gained by the public, but whether it affects innovation or investment in any meaningful degree, I doubt,” Sarnoff said.

The ruling may make inter partes review challenges of previously granted design patents at the PTAB a more attractive path for companies accused of infringement, multiple lawyers said. Kelley predicted there could be “an unexpected influx” of filings beyond the LKQ-GM case now on remand.

“I assume there’s going to be people teeing up PTAB filings if they haven’t done so already,” said James Perkins, a patent litigator at Cole Schotz.

LKQ Corp. v. GM Global Tech. Ops. LLC, Fed. Cir., 21-2348, aff’d in part, vac’d in part 5/21/24