Federal Circuit Requires Prior Art Be Analogous for Anticipation of Design Patents

Design patents offer valuable protection in a patent portfolio, including conferring different strategic advantages compared to those of utility patents. For example, design patents allow for recovery of “total profits” — not just lost profits or reasonable royalties as provided for infringed utility patents.[1] Likewise, design patents are not subject to attacks under 35 U.S.C. § 101, which can lead to a significant portion of utility patent invalidations that occur.[2] Further, while utility patents are frequently attacked in post-grant challenges before the PTAB, design patents are rarely challenged in that forum, and they face significantly lower rates of institution.[3] Finally, finding infringement of a design patent is relatively simple and straightforward under the applicable “ordinary observer” test. Specifically, if an ordinary observer would find the accused product to be “substantially the same” as the claimed design, there is infringement.[4]

On top of these benefits, the Federal Circuit recently provided another benefit to design patent applicants. In a unanimous precedential opinion, the panel decision of In re: Surgisil, LLP significantly narrowed the field of prior art that can be used to invalidate a design patent as anticipated.[5]

At issue in the case was a claim directed to an “ornamental design for a lip implant as shown and described”:

The PTO had rejected the design patent application, citing minor differences between the above lip implant and a Dick Blick art catalog that contained an image and description of an art tool called a stump:

The stump was described as being made of “tightly spiral-wound, soft gray paper” and used “for smoothing and blending large areas of pastel or charcoal.”[6]

The Federal Circuit found that the PTO had erred as a matter of law by finding that the lip implant design would be anticipated by the stump art tool. The court explained that “[a] design claim is limited to the article of manufacture identified in the claim; it does not broadly cover a design in the abstract.”[7] Therefore, prior art directed to the different field of art tools did not anticipate a lip implant design.

This ruling is significant in the realm of design patent law because it changes course from decades of prior practice at the PTO. Namely, examiners traditionally have been able to rely on prior art from any field to establish anticipation,[8] relying on a 1956 Court of Claims case, In re Glavas. The In re Surgisil opinion squarely rejects this 60-year-old rule.

The takeaway for patent owners is that it should be easier to obtain design patents because the realm of art for anticipation grounds significantly shrank due to the In re: Surgisil, LLP opinion.

[1] 35 U.S.C. § 289.

[2] In re Finch, 535 F.2d 70, 71-72 (C.C.P.A. 1976).

[3] Of the 1,513 AIA petitions filed in fiscal year 2020, just 20 were directed to design patents, and only 14% of such petitions were instituted. AIA Trial Statistics FY 2020 Roundup, at 6, 11 (Oct. 1, 2019, to Sept. 30, 2020), available at https://www.uspto.gov/patents/ptab/statistics.

[4] Egyptian Goddess Inc. v. Swisa Inc. 543 F.3d 665, 671 (Fed. Cir. 2008) (en banc). Notably, the claim scope is limited to the same article of manufacture enumerated in the claim. Curver Luxembourg, SARL v. Home Expressions, Inc., 938 F.3d 1334 (Fed. Cir. 2019).

[5] 2021 WL 4515275, at *2 (Fed. Cir. Oct. 4, 2021).

[6] Id. at *1.

[7] Id.

[8] MPEP § 1504.02, Novelty, available at https://www.uspto.gov/web/offices/pac/mpep/s1504.html#d0e153408.

Federal Circuit Hints at Easier Service of Process on Foreign Defendants

In a recent decision, In re: OnePlus Technology (Shenzhen) Co., Ltd., Case. No. 21-165, Dkt. 20, the Federal Circuit denied China-based smartphone maker OnePlus’ petition for mandamus seeking to direct a Western District of Texas court (Judge Alan Albright) to dismiss the five underlying patent infringement actions for insufficient service of process. The Federal Circuit instead upheld the district court’s decision allowing plaintiff Brazos Licensing and Development to serve process on OnePlus’ attorneys (who had represented OnePlus in the past) and on OnePlus’ authorized agent in California instead of effecting traditional service on OnePlus through the Hague Convention.

Under the Hague Convention, each member state provides a “central authority” that is responsible for receiving and effecting service from abroad consistent with the member state’s domestic policies. However, as litigants against foreign IP infringers know all too well, service through the Hague Convention is notoriously slow and often expensive, especially in countries such as China, where it can sometimes take up to two years with countless bureaucratic red tape to effectuate service. Citing these roadblocks to serving OnePlus in China, plaintiff Brazos successfully argued to the district court that alternative means of service under Fed. R. Civ. P. 4(f)(3), permitting “other means [of service] not prohibited by international agreement, as the court orders,” were proper here.

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Courts Rule That AI Inventorship Can Rust in Peace

On Sept. 2, 2021, the U.S. District Court for the Eastern District of Virginia addressed what it called a “core issue”—whether an artificial intelligence (AI) machine can be an “inventor” under the Patent Act. It ruled that the “clear answer” is no.

The Patent Applications

Plaintiff Stephen Thaler, Ph.D., is the owner of a Device for the Autonomous Bootstrapping of Unified Sentience (DABUS), which he claims is an artificial intelligence machine. Thaler listed DABUS as the inventor on two patent applications, one for a light beacon and one for a beverage container, which he filed with the United States Patent and Trademark Office (USPTO). The applications included a document through which DABUS had allegedly assigned all intellectual property rights in the claimed inventions to Thaler.

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Circuit Courts Continue To Limit Preclusive Effect of TTAB Decisions

On Sept. 17, 2021, the Third Circuit Court of Appeals became the latest Circuit Court to limit the preclusive effect of Trademark Trial & Appeal Board (“TTAB”) decisions. In 2015, the Supreme Court, in B&B Hardware,[1] decided in a 7-2 vote that issues decided in TTAB proceedings may have preclusive effect if the elements of issue preclusion are met. Since then, several Circuits have addressed the preclusive effects of TTAB decisions. Here, the Third Circuit, in Beasley v. Howard,[2] considered both claim and issue preclusion with respect to two separate TTAB decisions and a district court action. The Court held that the prior TTAB decisions did not preclude the appellant’s trademark infringement claim but would have precluded a relitigation of the fraud issue decided by the TTAB.

In Beasley v. Howard, two former bandmates each tried to claim prior rights in their group name, THE EBONYS. According to Beasley, he founded a band called The Ebonys in 1969, which performed off and on for decades. Howard joined the group in the 1990s. In 1997, Beasley obtained a New Jersey state trademark registration for THE EBONYS. Beasley and some of his original bandmates performed with Howard until eventually parting ways years later. Despite the breakup, Howard sought and obtained federal registration of THE EBONYS in 2012, listing himself as the sole owner of the mark.[3]

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No Wrong Notes: Federal Circuit’s Piano Factory Decision Holds TTAB in Tune with Arthrex

This blog previously reported[1] that on June 21, 2021, the Supreme Court issued its landmark decision in United States v. Arthrex, Inc., holding – in Chief Justice Roberts’ 5-4 opinion – that “the unreviewable authority wielded by [administrative patent judges, or APJs] during inter partes review [IPR] is incompatible with their appointment by the Secretary [of Commerce] to an inferior office.”[2] To resolve this constitutional defect in the IPR process, the Arthrex decision instructed that the director of the United States Patent and Trademark Office (USPTO) “may review final [Patent Trial and Appeal Board, or PTAB] decisions and, upon review, may issue decisions himself on behalf of the Board.”[3] The Court explained that this change in the director’s ability to supervise APJs (in adjudicating IPR petitions at the PTAB) was consistent with the rule that “the exercise of executive power by inferior officers must at some level be subject to the direction and supervision of an officer nominated by the President and confirmed by the Senate.”[4]

But what about the PTAB’s older sibling, the Trademark Trial and Appeal Board (TTAB)? Created through a Lanham Act amendment in 1958,[5] the TTAB is an administrative body at the USPTO that hears and decides various proceedings involving trademarks, such as oppositions and cancellations. Like the PTAB, which is composed of APJs, the TTAB is composed of administrative trademark judges, or ATJs. Like PTAB proceedings, TTAB proceedings are typically conducted before a panel of three ATJs, who preside over discovery, review briefing, hold hearings and issue final decisions. So, after Arthrex, are ATJs unconstitutionally appointed principal officers like their APJ cousins?

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Federal Circuit Takes Judicial Notice of Wayback Machine Evidence of Prior Art

In its Aug. 17 decision in Valve Corporation v. Ironburg Inventions Ltd., the Federal Circuit appears to have cleared the way for district courts to take judicial notice of Wayback Machine captures as evidence of prior-art printed publications.

As many readers of this blog will know, the Wayback Machine is an online digital archive of webpages. The archive is maintained by a nonprofit library called the Internet Archive. For patent challengers, the Wayback Machine is a useful tool for finding prior-art printed publications that potentially invalidate asserted patents. It is especially useful because the Wayback Machine maintains archival versions of websites and webpages that may no longer be functioning today. Continue Reading

SY Custom, Inc. v. The Tailory, LLC: How To Fail Proving a Genericness Case Before the TTAB

Recently, the Trademark Trial and Appeal Board (TTAB) decided against a petitioner seeking to cancel a registration on the Supplemental Register in SY Custom, Inc. v. The Tailory, LLC, Cancellation No. 92070568 (TTAB Aug. 12, 2021) (not precedential). The mark involved was THE TAILORY for “custom tailoring or dressmaking.” The case is noteworthy about how one can fail to prove a genericness case before the TTAB.

The petitioner, SY Custom, had the burden of proving that THE TAILORY was generic, by a preponderance of the evidence, with the ultimate test of genericness being its “primary significance to the relevant public.” Id. at 7. The TTAB had a “two-step inquiry” before it, namely, determining: a) “the genus (category or class) of the services at issue”; and b) whether THE TAILORY is “understood by the relevant public primarily to refer to that genus of services.” Id. at 8. Continue Reading

Lost Profits or Disgorgement?

In trademark infringement cases involving competitors, the plaintiff typically seeks damages in the form of lost profits once infringement has been proven. The purpose of “lost profits” is to compensate the plaintiff for its losses. In contrast, disgorgement requires a defendant to give up all profits it has made as a result of illegal or wrongful acts, regardless of the actual loss incurred by the plaintiff. Disgorgement is an equitable remedy issued by the court, not the jury. Accordingly, a plaintiff seeking disgorgement in lieu of actual damages is not entitled to a jury trial in the remedies phase.

The case America Can! Cars for Kids v. Kars 4 Kids Inc., Case No. 3:16-cv-4232 (D.N.J.), demonstrates how courts may view a damages theory framed as lost profits as a de facto claim for disgorgement. The parties, America Can! and Kars 4 Kids, are both charities that sell donated vehicles to fund children’s programs. In seeking lost profits, America Can! alleged that any donation to Kars 4 Kids was a donation that America Can! should have received but for the alleged infringement, due to the parties’ relationship as direct competitors. Based on this allegation alone, the district court determined that America Can!’s claim to Kars 4 Kids’ profits as a “rough proxy measure” of America Can!’s own damages was in fact a claim of disgorgement, and ordered the parties to present evidence relating to remedies outside the presence of a jury.

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“Teaching Away” – A Change To This Historically Inconsistent Doctrine

Teaching away is an important concept when considering the obviousness of a patent claim. The Federal Circuit’s recent decision in Chemours v. Daikin[1] makes it easier to find that a reference teaches away from an invention, potentially increasing the difficulty of invalidating a patent claim for being obvious. There, the Circuit reversed the Patent Trial and Appeal Board’s obviousness ruling, holding that it failed to adequately explain why a skilled artisan would modify a reference when doing so involved changing its inventive concept.

The patents in Chemours related to polymers used in insulating communication cables by pulling wires through melted polymer to coat and insulate wires – a process known as “extrusion.” Reference Kaulbach disclosed a melt flow rate of 24 g/10 min, while the claimed rate was 30 ±3 g/10 min. Notably, Kaulbach suggested having a “narrow” rather than a “broad” molecular weight distribution polymer, in contrast to the prior art. The Board found that a skilled artisan would have been motivated to increase the melt flow rate to be within the claimed range in order to coat wires faster. Continue Reading

Website Advertisements and Copyright Fair Use

For attorneys frequently engaged in copyright infringement litigation, drilling down into the specifics of the four fair use defense factors set forth in 17 U.S.C. § 107 is common practice. While the details of any particular case will imbue certain factors with more importance than others, more often than not, copyright plaintiffs are quick to note (and criticize) when defendants are for-profit entities and when the contested material is posted on a website that contains advertising – e.g., online news sites and social media. Indeed, part of 17 U.S.C. § 107(1) asks whether the contested use “is of a commercial nature.” But the existence of commercialism and website advertisements is not, and should not be, a death knell for a successful fair use defense. Continue Reading