The America Invents Act (AIA) Affects Design Patents, Too

by Ballard Spahr LLP
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Over the last few years, companies have increasingly recognized the value of design patents, which are directed to the ornamental (non-functional) appearance of a product. During this time, design patent application filings have increased dramatically, and a number of high-profile design patent infringement cases (most notably, the Apple-Samsung smartphone fight) have received attention in the news.

The increased interest in design patents should not be surprising. Design patent applications are relatively inexpensive, and they often issue within a year of filing. Further, recent developments in the law have made it easier for companies to assert their design patents against infringers. In 2008, the U.S. Court of Appeals for the Federal Circuit’s en banc decision in Egyptian Goddess, Inc. v. Swisa, Inc., made clear that the test for design patent infringement consists of a single inquiry: whether an ordinary observer, familiar with the prior art, would be deceived into thinking that the accused design was the same as the patented design.

Two years later, in Crocs, Inc. v. Int’l Trade Comm’n, the Federal Circuit reaffirmed the “ordinary observer” test articulated in the Egyptian Goddess decision. The court in Crocs focused on the patented design as a whole and found that it was improper to concentrate on minor differences between the patented design and the accused products to prevent a finding of infringement. By strengthening the rights of design patent holders, the courts have encouraged companies to invest in this cost-effective tool to protect the ornamental appearance of their products.

Later this year, when the Patent Law Treaties Implementation Act goes into effect, the term of design patents will be increased to 15 years (from 14 years), and a cost-effective international design patent application filing system will become available. These changes will provide even more incentive for pursuing design patents.

Although there is increased interest in design patents, companies remain more focused—and, in some cases, exclusively focused—on utility patents. Consequently, since the enactment of the Leahy-Smith America Invents Act (AIA), most companies have evaluated the impact of the AIA on utility patents, but few have recognized or given specific consideration to the impact of the AIA on design patents.

For the most part, the provisions of the AIA apply equally to utility patents and design patents. Under the AIA, design patent applications are now evaluated under a “first-inventor-to-file” system, and the scope of prior art has been expanded. Derivation proceedings can be instituted by an applicant to determine if its design was stolen by an earlier design patent applicant.

In addition to these design patent prosecution changes, the AIA also subjects issued design patents to several new post-grant proceedings, including Inter Partes Review (IPR) and Post-Grant Review (PGR). Each of these proceedings can now be used to challenge the validity of a design patent and serves as a lower-cost alternative to litigation. PGR proceedings permit challenges on all grounds of patentability, but they can only be instituted against design patents that issued on or after March 16, 2013. IPR proceedings permit challenges on only some grounds of patentability, but they can generally be instituted against any design patent.

It is unclear how the U. S. Patent and Trademark Office (USPTO) will implement the AIA’s “first-inventor-to-file” and expanded prior art framework in practice. However, because design patents are examined more quickly than utility patents, it is likely that design patent applications will be the first patent applications examined under this framework. Similarly, design patents are likely to be the first patents eligible to be challenged under the new PGR proceedings.

Within the last few months, multiple petitions to institute IPR of design patents have been filed, sending a strong message that design patent applicants must quickly get acquainted with the impact the AIA will have on the design patent process.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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