Design patent owners have reason to celebrate the Federal Circuit Court of Appeals’ recent decision in Egyptian Goddess, Inc. v. Swisa et al.  543 F.3d 665 (September 22, 2008).  The Federal Circuit streamlined design patent infringement analysis by disposing of the long-standing "point of novelty" test, which required the patentee to point out exactly how its patented design differed from the prior art.  Patentees now only have to demonstrate that, to an ordinary customer familiar with the prior art, an infringer’s accused design “embodies the patented design or any colorable imitation thereof."  This is a wake up call for manufacturers, designers, and other entities interested in capitalizing on popular design trends – design patents have sharper claws now, and thus merit careful consideration.

This important decision begs the question of what is a design patent, and why is it important?  Most practitioners are familiar with utility patents, which are issued for inventions that are new, useful, and non-obvious.  The functionality of an invention is the key to obtaining a utility patent – the invention must have some purpose.  Design patents, which are often faster and easier to obtain than utility patents, are the other side of the same coin – they provide protection for the aesthetics of an item, not its function.  35 U.S.C. §§ 171 et seq. (providing protection for "any new, original, and ornamental design for an article of manufacture") (emphasis added).  A savvy company can ensure complete protection for its products by obtaining both utility and design patents that cover those products.  In this way, the patentee can seek relief even if a competitor adopts the design but not the function of the product.

When a patentee files suit for infringement of a design patent, the court must first construe, or interpret, the claimed design.  Then the court must compare the construed design with the accused design to determine if an alleged infringer has, in fact, infringed upon the patent owner’s protected design.  There is more to this analysis, however, than simply comparing the claimed design with the design accused of infringement.  Until the Egyptian Goddess holding, owners of design patents were required to satisfy two separate tests to hold accused infringers accountable for their alleged design misdeeds: the "ordinary observer" test and the "point of novelty test."

Formulated by the Supreme Court of the United States in 1871, the ordinary observer test states that "if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."  Gorham Co. v. White, 81 U.S. 511, 528 (1871).  In other words, if the accused product appears to be the same as the patented design to an ordinary consumer (not an expert), that product infringes.  Id. at 526-527.

Though the ordinary observer test is intuitive and appears to be the most straightforward way to determine infringement, it led to concern amongst the courts that defendants might be held liable for infringement by using prior art designs that looked substantially similar to the patented design.  To address this problem, the United States Court of Appeals for the Federal Circuit formulated the point of novelty test.  This test states that, "for a design patent to be infringed . . . no matter how similar two items look, the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art.  That is, even though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art."  Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423, 1444 (Fed. Cir. 1984) (emphasis added).

The Litton decision gave the patent owner the burden of "pointing out the point of novelty in the claimed design that has been appropriated by the accused design."  Egyptian Goddess, Inc. v. Swisa, Inc.  543 F.3d 665, 671, 676 (Fed. Cir. 2008).  In theory, it is relatively simple to apply to a design with only one feature distinguishing it from a single prior art reference.  Unfortunately, the "point of novelty" test created confusion in situations where a design patent had numerous features that could be considered points of novelty, and even more so in situations where a design sported a combination of features that were disclosed in multiple prior art references.  In such a circumstance, would the overall appearance be considered a point of novelty, or would the patent be subject to invalidation?  The confusion engendered by the point of novelty test, and the underlying question of whether the point of novelty test is even necessary, were some of the many issues the Federal Circuit attempted to resolve in its September 22, 2008, ruling in the Egyptian Goddess case.  543 F.3d 665.

Egyptian Goddess is a Texas-based company that sells nail, body, and skin care products.  On December 17, 2002, the United States Patent and Trademark Office granted Egyptian Goddess patent number D467,389, which claims "the ornamental design for a nail buffer."  The patented nail buffer is rectangular and has nail buffing surfaces on three of its four sides.  Shortly after receiving its patent, Egyptian Goddess sued Swisa Inc. and Dror Swisa, also purveyors of beauty care products, in the Northern District of Texas for infringement by Swisa’s own four sided rectangular nail buffer.  After construing the patent’s claim, and then comparing the construed claim to the defendants’ product, the U.S. District Court for the Northern District of Texas granted summary judgment for Swisa.  The District Court found that the defendants’ buffer did not incorporate the one point of novelty that Egyptian Goddess’ design had over the prior art: Swisa’s nail buffer had buffer pads on all four sides of its product instead of just three.  Egyptian Goddess, Inc. v. Swisa, Inc., 2005 WL 5873510 (N.D.Tex.).

Egyptian Goddess appealed and a panel of the Federal Circuit affirmed, issuing an opinion that, according to some commentators, confused the state of design patent infringement law even further.  In view of the many unresolved questions surrounding design patent infringement, and Egyptian Goddess’ insistence that the point of novelty test be abandoned, the Federal Circuit granted rehearing of this case en banc.  In doing so, it asked for briefing on the following questions:

"whether the ‘point of novelty test should continue to be used as a test for infringement of a design patent; whether the court should adopt the ‘non-trivial advance test’ as a means of determining whether a particular design feature qualifies as a point of novelty; how the point of novelty test should be administered, particularly when numerous features of the design differ from certain prior art designs; and whether the district courts should perform formal claim construction in design patent cases."  Egyptian Goddess, Inc., 543 F.3d at 670.

In its en banc decision, the Court disposed of the claim construction element of design patent infringement analysis relatively quickly, holding that it was within the court’s discretion whether to issue a detailed verbal description of the claimed design.  Id. at 679.   The Federal Circuit noted that the “preferable course” would be for a court not to construe a claim via detailed verbal description, but, absent evidence of prejudice, doing so is not reversible error.  Neither Egyptian Goddess nor Swisa proffered evidence that they were prejudiced by the District Court’s detailed claim construction, so the Federal Circuit found it to be acceptable.

The significance of this decision is the Federal Circuit’s decision to jettison the point of novelty test, thus obviating the need to address nearly all of the remaining questions listed above.  Egyptian Goddess, Inc., 543 F.3d at 672.  Instead, it held that "the ordinary observer test should be the sole test for determining whether a design patent has been infringed."  Id. at 678.  The Court modified the ordinary observer test, however, by holding that the hypothetical "ordinary observer" is considered to be familiar with the prior art.  In other words, this knowledgeable, yet ordinary, observer takes prior art into account when comparing a design patent with an infringing design and determining whether the accused design “embodies the patented design or any colorable imitation thereof."  Id.

The Federal Circuit thus turned the ordinary observer into a facsimile of “a person having ordinary skill in the art,” the standard by which patents are determined to be obvious under 35 U.S.C. § 103.  Though not an expert, the ordinary observer is essentially an experienced shopper who has an appropriate frame of reference in which to compare a patented item with an accused product.

The court noted that the benefit of the new ordinary observer test was that it "does not present the risk of assigning exaggerated importance to small differences between the claimed and accused designs relating to an insignificant feature simply because that feature can be characterized as a point of novelty."  Id. at 677.  When the patented and accused designs are similar, however, and there are prior art designs that are close to the patented design, as there were in Egyptian Goddess, the ordinary observer may focus on smaller differences between the patented design and accused product, "which might not be noticeable in the abstract," to determine infringement.  Id. at 678.

This language makes clear that the Federal Court has not discarded the point of novelty test entirely, but instead has softened its sting and rolled it into the ordinary observer test.  The prior art, and its similarity to the designs in dispute, still can (and will) play an important role in design patent infringement suits.  This is evident from the Court’s analysis of the parties’ products.  Both parties argued extensively regarding the differences between the patented design and the closest prior art.  The Court then analyzed the nail buffers at issue and asked whether an ordinary observer would regard the accused design as being closer to the claimed design than to the prior art.  Id. at 682.  When the answer was no, the Court affirmed the trial court’s decision in favor of the defendant.  This was a Pyrrhic victory for Egyptian Goddess which, though it succeeded in doing away with the point of novelty test, at least as it had been applied for the last two decades, failed to prevail on infringement.

Despite the fact that prior art, and its similarity to the accused designs, will still impact a court’s infringement analysis, the Egyptian Goddess case makes it easier for plaintiffs to assert their design patents because the stringent requirements of the point of novelty test are gone.  The Egyptian Goddess decision further eases the burden on the patentee because the Federal Circuit gave the accused infringer the burden of comparing the patented design to prior art – reliance on comparison prior art is now treated as being part of the accused infringer’s defense.  Id. at 678-679.  Though this makes it even easier for patent owners to enforce their design patent rights (they no longer have to conduct their own analysis of the prior art), they should keep in mind that infringers may attempt to rely on similar prior art designs to narrow the focus of the ordinary observer test to distinctions between the designs in dispute that would otherwise escape notice.

The Egyptian Goddess decision was much anticipated and has, unsurprisingly, met with approval by patent practitioners.  The interesting question now is how this law will be interpreted by litigants applied by the lower courts.  In the weeks since the Egyptian Goddess decision, the following design patent infringement cases have been filed.  Practitioners interested in tracking how this law evolves should follow these cases closely.

In Nike, Inc.  v. Wal-Mart Stores, Inc., 08-cv-05840, filed on October 13, 2008, in the Northern District of Illinois, Nike seeks relief for alleged infringement of design patents D498,914 and D499,248, which cover designs for shoe soles.  Nike is represented by Banner & Witcoff Ltd. in this case.

Reprinted with permission from the December 2008 edition of The National law Journal.

Authored by:

Rebecca L. Hanovice

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