Rare Federal Circuit En Banc Patent Case Threatens Design Test

For the first time in more than 15 years the Federal Circuit will assemble as a group on Feb. 5, to hear argument in a case that could reshape how design patents are litigated.

LKQ Corp., a leading manufacturer of replacement car parts, is challenging a General Motors Co. subsidiary’s 2017 patent on an “ornamental design for a vehicle front fender.” LKQ argues the design is obvious in light of a patent granted a year earlier viewed in combination with a fender pictured in a 2010 brochure for a Hyundai Tucson.

But more than a front fender is riding on the case.

If LKQ succeeds, the US Court of Appeals for the Federal Circuit would drop the rigid design patent test, expounded four decades ago in a case over a coffee table, for something more flexible. That would make design patents easier to cancel and could fundamentally change how design patent trials, where alleged infringers hardly ever argue invalidity, are conducted, according to intellectual property attorneys.

Defendants “will put all their time, effort, and funds to trying to prove invalidity, and you’ll see a massive shift in litigation strategy,” said Charles Mauro, an industrial designer who has worked extensively as an expert witness in design patent cases and joined an amicus brief in the case.

The test from the 1982 In re Rosen decision and a later Federal Circuit ruling, Durling v. Spectrum Furniture, has two parts. First, a party challenging a patent must point to a previous design—either in an earlier patent or from a real-world product—that is “basically the same” as the patent design considered as a whole. Second, the challenger must overcome any differences between the so-called Rosen reference and the patented design by pointing to some additional piece or pieces of prior art “so related” to the Rosen reference that they account for any disparities.

Patent challengers are limited in their prior art search to objects that resemble the patented design as a whole. Unlike in the utility patent space, where challengers can combine features of prior inventions from different types of products to prove obviousness, the Rosen test is more patent-owner friendly.

Sarah Burstein, a professor at Suffolk University Law School, supports keeping but tweaking the Rosen-Durling test. A full scale departure could lead to the use of “Franken-art” where courts or tribunals would look to designs across a wide range of products to invalidate innovative designs, she said.

“Every design is made of old parts but just because the building blocks are old doesn’t mean combining them is obvious,” said Burstein, who has published numerous articles on the topic of design patent law.

Unlike past en banc cases, however, this argument will not feature the full complement of judges, as Judge Pauline Newman—the nation’s oldest federal judge—will be absent because of an ongoing suspension.

A chart from the United States’ amicus brief comparing GM’s patented fender design to previous designs that LKQ has argued render the patent obvious.

Amicus Brief of the United States

Competing Approaches

LKQ initially sought to show that GM’s fender patent was obvious under Rosen-Durling but those efforts failed at the US Patent and Trademark Office’s Patent Trial and Appeal Board in August 2021. A three-judge Federal Circuit panel in January 2023 affirmed the tribunal’s ruling.

LKQ sought a full court review of the test, arguing that it clashes with a US Supreme Court’s directive in KSR v. Teleflex that the Patent Act’s test for invalidating obvious patents requires a “flexible approach.” The Federal Circuit agreed in June to review the case en banc. The case has drawn a flurry of amicus interest from automakers, tech companies, and other intellectual property groups, underscoring the potentially massive shift it could herald.

The company said in its en banc appeal that design patent applications are rejected based on prior designs around 2.1% of the time, which stands in stark comparison to the grant rate for utility patents. The likely explanation, LKQ asserted, “is that the USPTO is issuing design patents for routine and ordinary designs because it is virtually impossible to sustain an obviousness rejection under current law.”

GM—which has amicus support from other automakers, Apple Inc., and the Intellectual Property Owners Association—defended both the “distinctive sculpting” in its patented fender design and the Rosen-Durling test. GM described the test as a “guardrail against this temptation” of invalidating designs based on “FrankenArt,” and called the test a “balanced solution for assessing design patent obviousness.” GM called LKQ’s proposed replacement test a “free-for-all approach” that “would create uncertainty.”

Other carmakers were more blunt. Hyundai in an amicus brief called the case “part of a larger, deliberate campaign by an aftermarket parts industry that is openly hostile to auto manufacturers’ design patent rights.”

LKQ is also not without its own backers.

Stanford University’s IP law clinic filed an amicus brief for six patent law professors, US Public Interest Group, and a trio of groups that advocate for consumers’ right to repair products. The brief points to the costs that come from an “overly permissive” standard for granting patent protection to designs: “Subsequent designers are forced to transact around commonplace designs that have secured a patent and consumers face higher prices.”

The Stanford brief urges the Federal Circuit to adopt an approach that treats design patents more like utility patents that cover new inventions. The parties said “whether or not it was a sensible” choice from a policy perspective, it’s the approach Congress has taken every time it has revised US design patent law.

Two insurance company associations also joined a large auto parts manufacturer group in a brief assailing the Rosen-Durling test. They argued the patenting of obvious designs “substantially increase repair costs, imposing an unfair and unnecessary burden on Amici, to be sure, but more importantly on the millions of automobile owners who are their customers.”

The PTO staked out something of a middle ground in the case, arguing the Rosen-Durling test needs modification but should not be abandoned.

The agency’s amicus brief said abandoning the test would be unworkable for the examiners who have to decide in the first instance whether a design is patent-worthy. Instead, it argued that the “overly restrictive” test should be fixed by tweaking its first step so a judge or patent examiner starts the obviousness analysis by asking whether a previous design broadly has “a similar overall visual effect as the claimed design” rather than being “basically the same.”

Rarity of En Banc Review

The Federal Circuit has not decided an appeal collectively, or en banc, in a patent case since 2018. The last en banc opinion in a design patent case was in 2008 in Egyptian Goddess, where the court overhauled its test for design patent infringement.

When the court meets, however, it will be one judge short of a full bench.

In September, the Federal Circuit Judicial Council suspended Newman, its most tenured member, for a year, barring her from hearing “any cases, at the panel or en banc level.”

Greg Dolin, a former Newman clerk who’s representing her in a lawsuit challenging the suspension, has said that Newman’s voice will be especially missed on en banc decisions like the LKQ-GM case. “She truly believes, and I agree with her, that the nation needs her voice so long as she can articulate her positions clearly,” Dolin said in September.

Ryan Vacca, a professor at University of New Hampshire’s Franklin Pierce School of Law, has studied the frequency, or infrequency, of such review. He said from the “late 2000s through 2018—and especially around 2015 and ’16"—the Federal Circuit had been very active with en banc review of patent cases “but then it just stopped.”

That meant the Federal Circuit started looking more like the regional circuit courts, and especially the judges on the US Court of Appeals for the Second Circuit who “almost never hear cases en banc and somewhat pride themselves on it.”

Vacca said there are a number of theories for the shift away from full-court review of patent cases: the extra work such reviews entail; individual personalities of the newer judges on the Federal Circuit; other time constraints due to an increase in appeals of decisions by the PTAB; recognition of or deference to either the Supreme Court or Congress on matters of patent law; or even Covid restrictions that discouraged group gatherings for a period of time during the en banc drought.

Vacca said the full court taking up the design patent test case was a positive development.

“They should be more active in doing en banc review because there are a lot of questions stakeholders have about the patent law system where they need answers,” he said.

Lex Lumina PLLC and Irwin IP LLP represent LKQ and Keystone. GM Global is represented by Fish & Richardson PC.

The case is LKQ Corp. v. GM Global Tech. Ops. LLC, Fed. Cir., 21-2348, oral argument.