June 12, 2013
China IP News
By Robert Burns; Elizabeth D. Ferrill
Authored by Robert L. Burns, Weiguo (Will) Chen, and Elizabeth D. Ferrill
Many companies, including Chinese companies, are applying for U.S. Design patents to protect their important product designs for products that they sell in the U.S. marketplace. As we explained in last month’s article, companies like Apple Inc. have successfully enforced their rights against their competitors in U.S. courts, to the tune of hundreds of millions of dollars. This month’s article will delve deeper into the rules applied by the U.S. courts to determine infringement and to calculate damages. This article will also discuss some strategic issues for companies considering design patenting.
In the United States, an owner of a design patent can enforce its rights in the federal district court, and in some cases in the U.S. International Trade Commission. The primary inquiry for design patent infringement is on a comparison between the “overall impression” of the design patent and the accused product. As opposed to utility patents, the court is not to compare individual elements of the design patent and the accused product.
Prior to making this comparison of “overall impressions,” the court will determine the scope of the claimed design. As opposed to the practice in China, in the United States, design patents are permitted to have both solid lines, representing the claimed portions of the design, and broken lines, typically representing boundaries of the claimed design or the environment surrounding the claimed design. For instance, a design patent for a truck fender would likely show the fender in solid lines, but the rest of the truck in broken lines. As a result, at the start of litigation, the court must determine the scope of the claimed design, usually by noting that only the solid lines represent the claimed design. Second, the courts are required to discount the purely functional elements of a design, such as those dictated by a standard. Finally, the court considers the scope of the design in light of statements made by the applicant during the prosecution of the patent. Once the court has completed its claim construction, it then turns to the question of infringement.
The test for design patent infringement in the United States has been largely unchanged since 1871. In the Gorham v. White case, involving silverware, the United States Supreme Court declared that a design patent was infringement if “in the eye of the ordinary observer, giving such attention as a purchaser usually gives” the design patent and the accused design are “substantially the same.” In 2008, the law was modified to require the hypothetical “ordinary observer” to be familiar with the relevant prior designs. In court, the question of design patent infringement often turns on whether the design patent more closely resembles the accused product, leading to a finding of infringement, or the prior designs, usually leading to a finding of no infringement.
Successfully design patent plaintiffs have found that the best way to persuade the American jury is with pictures, not words, by showing many pictures illustrating side-by-side the prior designs, the design patent, and the accused product. Some commentators suggest that an infringement case that asserts both design patents and utility patents may be easier and more accessible to the average juror, than a traditional utility patent case alone.
But how can a design patent that appears “substantially similar” to an accused product, lead to a jury verdict of more than $1 billion in damages? The answer is in large part because the United States law that provides for disgorgement of total profits in design patent infringement cases. The law further states that this award must be without “apportionment” meaning taking into account what percentage of the profits might be attributable to the parts covered by the design patent. As a result, successful products in industries that have large profit margins, such as smartphones, can lead to large jury awards.
In the end, understanding the larger picture can lead successful procurement and enforcement of design patent rights in the United States. In general, successful design patent owners have acquired patents that are limited to key elements of their design. In addition, these companies have adopted strategies of prosecuting multiple related patent applications protecting various elements of their design. Having a variety of design patents in a company’s arsenal means it has more options when it comes to enforcement, depending on exactly what part of the company’s product design is used by a competitor. Another tip from successful design patent owners is to file your design patents as close to product launch as possible, when the design has solidified, but before the publicly displaying any design concepts or prototypes. Under a new U.S. law, the America Invents Act, effective in mid-March 2013, the United States has limited the grace period which patent applicants formerly enjoyed.
In conclusion, if a company invests in product design and relies on this design to differentiate itself in the United States marketplace, then it may be appropriate to protect that work product with design patents and related IP tools, and, if necessary, enforce those rights through litigation.
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm’s clients.
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