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Rethinking the Law: The Separate and Distinct “Point of Novelty” Test for Design Patent Infringement Is Vanquished

September 22, 2008

Decision icon Decision, en banc

Last Month at the Federal Circuit - October 2008

Judges: Michel, Newman, Archer, Mayer, Lourie, Rader, Schall, Bryson (author), Gajarsa, Linn, Dyk, Prost, Moore

[Appealed from: N.D. Tex., Judge Godbey]

In Egyptian Goddess, Inc. v. Swisa, Inc., No. 06-1562 (Fed. Cir. Sept. 22, 2008) (en banc), the Federal Circuit swept aside the two-part test for infringement of a design patent and abandoned the “point of novelty” prong of the infringement test. The Supreme Court first articulated the test governing design patent infringement in Gorham Co. v. White, 81 U.S. 511, 526-27 (1871). Later decisions, particularly those of the Federal Circuit, built on that test with what is now called the point of novelty test to prevent capture of prior art designs within the protected claim scope. But, in a unanimous en banc decision, the Court held that the appropriate legal standard to be used in assessing claims of design patent infringement did not include a separate point of novelty inquiry.

Previously, the Federal Circuit developed a two-part test for determining whether a design patent is infringed. Under this test, the patentee must prove (1) that the accused design is substantially similar to the claimed design under the “ordinary observer test,” and (2) that the accused design contains substantially the same points of novelty that distinguish the patented design from the prior art. Courts, including the Federal Circuit, have used variants of this standard to attempt to determine what a patented design rightfully covers without appropriating designs that reside in the body of prior art. Whether the accused design appropriates that patented design is determined through the lens of a nonexpert observer of both the patented and accused designs.

Egyptian Goddess, Inc. (“EGI”), the assignee of Design Patent No. 467,389 (“the ’389 patent”), sued Swisa, Inc. and Dror Swisa (collectively “Swisa”) for patent infringement in the Northern District of Texas. The ’389 patent claimed a design for a nail buffer consisting of a rectangular hollow tube having a generally square cross-section and buffer surfaces on three of its four sides. Swisa’s accused product is a rectangular, hollow tube with a square cross-section and buffer surfaces on all four sides. The district court construed the claim of the ’389 patent and held the patent was not invalid as a design dictated by its utilitarian purpose. It then considered the infringement issue.

The parties argued different points of novelty in the ’389 patent. EGI asserted that there were four elements of its design and that the point of novelty is the combination of these four elements. In support of this argument, it identified at least one prior art reference that failed to embody an element of the patented design. But the district court found that one prior art reference, Design Patent No. 416,648 (“the Nailco patent”), contained all but one of the elements. The district court then granted Swisa’s motion for SJ of noninfringement after determining that the accused Swisa buffer did not incorporate the point of novelty of the ’389 patent that distinguishes it over the Nailco patent—the fourth bare side of the buffer.

On appeal, a panel of the Court affirmed the district court’s noninfringement holding. The Federal Circuit agreed that there was no issue of material fact as to whether the accused product appropriates the point of novelty of the ’389 patent design. The panel stated that in order for a combination of individually known design elements to constitute a point of novelty, the combination must be a “non-trivial advance” over the prior art. Egyptian Goddess, Inc. v. Swisa, Inc., 498 F.3d 1354, 1357 (Fed. Cir. 2007). The panel observed that the prior art disclosed each element of the claimed design, but the accused Swisa buffers have raised abrasive pads on all four sides of the buffer, not just three like the claimed design. The panel majority thus concluded that when considering the prior art in the nail buffer field, this difference between the accused and patented design “cannot be considered minor.” Id. at 1358. The dissenting judge, however, asserted that the new “non-trivial advance” test was at odds with precedent, conflated the infringement and obviousness legal standards, and applied only to designs that involved combinations of design elements. Id. at 1359-60 (Dyk, J., dissenting). The dissenter also asserted that the new nontrivial advance test improperly focused on the obviousness of each point of novelty, rather than the obviousness of the overall design.

On en banc review, the Federal Circuit began its analysis with the Supreme Court’s decision in Gorham. The Court concluded that Gorham teaches that the test of identity of design is “sameness of appearance,” but slight variations in configuration will not destroy the substantial identity. Slip op. at 6. It also noted that the test articulated by the Supreme Court in Gorham is evaluated through the eye of an ordinary observer giving the attention that a purchaser usually gives. The test is whether the two designs are substantially the same so as to deceive the ordinary observer and induce him to purchase one, supposing it to be the other. If the two designs are the same in general appearance and effect as to deceive purchasers, regardless of the perceived design differences, Gorham teaches that an infringement finding is appropriate.

The Court also considered a series of Federal Circuit cases that have held that proof of similarity under the ordinary observer test is not enough to establish design patent infringement. These cases require that the accused design also appropriate the novelty of the claimed design in order to be deemed infringing. See, e.g., Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423, 1444 (Fed. Cir. 1984) (originating the point of novelty test). But the Court noted that the separate point of novelty test has proven difficult to apply when the claimed design has numerous features that can be considered points of novelty, where multiple prior art references must be considered, and the claimed design incorporates a combination of features found in one or more of the prior art designs. It also noted that there has been disagreement in Federal Circuit law regarding whether the combination of all features, or the overall appearance of the design, can constitute the point of novelty of the design.

The Federal Circuit then analyzed Smith v. Whitman Saddle Co., 148 U.S. 674, 682 (1893), and other cases since Gorham, which Swisa contended adopted the point of novelty test as a second and distinct test for design patent infringement. The Federal Circuit rejected Swisa’s argument, concluding that the point of novelty test, when used as a second and free-standing inquiry for proof of design patent infringement, is inconsistent with the ordinary observer test of Gorham, not mandated by Whitman Saddle or other courts’ subsequent precedent, and is not needed to protect against unduly broad assertions of design patent rights.

The Court stated that the Supreme Court did not adopt a separate point of novelty test for design patent infringement cases in Whitman Saddle. The Supreme Court was making the point that, viewed in light of the similarities between the prior art and the patented design, the accused design did not contain the single feature that would have made it appear distinctively similar to the patented design rather than like the prior art designs.

The Court also read subsequent cases as applying the principle that the ordinary observer should be informed by a comparison of the patented design and the accused design in light of the prior art to determine whether the accused design had appropriated the inventiveness of the patented design. When the differences between the claimed and accused design are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to the aspects of the patented design that differ from the prior art. And, where the claimed design is close to the prior art, small differences between the designs are likely to be important to the observer. Thus, the art provides a frame of reference for comparing the accused design with the patented one, and the Court noted that it avoids some of the problems created by the separate point of novelty test. Based on this analysis, the Court held “that the ‘point of novelty’ test should no longer be used in the analysis of a claim of design patent infringement.” Slip op. at 21. While examining the novel features of the claimed design can be an important component of the infringement analysis, the comparison must be conducted as part of the ordinary observer test in accordance with Gorham and subsequent decisions.

The Federal Circuit emphasized, however, that the ordinary observer analysis will frequently involve comparison of the claimed design to the prior art, but it is not a test for determining validity—only infringement. And the burden remains on the patentee to prove infringement. But if the accused infringer relies on the comparison of prior art in its infringement defense, it carries the burden of production of that art.

Regarding claim construction, while trial courts have a duty to construe design patent claims, the Court stated that “the preferable course ordinarily will be for a district court not to attempt to ‘construe’ a design patent claim by providing a detailed verbal description of the claimed design.” Id. at 24. The Court also cautioned against a detailed design description by highlighting the risk that it would place undue emphasis on particular features of the design and focus the fact-finder on those features rather than the design as a whole. The Court left the question of verbal characterization of the claimed designs to the discretion of trial judges, with the proviso that as a general matter, those courts should not treat the process of claim construction as requiring a detailed verbal description of the claimed design.

The Court then turned to the infringement issue in this case. The Court stated that the general shape of the patented design and accused buffer are the same, but the accused Swisa buffer has raised buffing pads on four sides, while the patented design has raised pads on three sides. The Court also considered the closest prior art buffer designs, the Falley and Nailco patent designs, and the testimony of the parties’ experts. The Court noted several problems with EGI’s expert declaration, including that she failed to address the fact that the Nailco patent design is identical to the accused buffer except that Nailco has three sides rather than four. In light of this evidence, the Federal Circuit concluded that no reasonable fact-finder could find that EGI met its burden of showing, by a preponderance of the evidence, that an ordinary observer familiar with the Nailco patent and other prior art would find that the accused design is the same as the patented design, given the similarity of the prior art buffers to the accused buffers.