Design patents: a growing trend in the hardware space

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Design patents–why now?

We are in 2019. Aesthetics matter. Products that look good sell better. Hardware companies are investing increasing amounts of resources into design teams that create sleek and modern products that allow customers to feel like they own the technology of the future. A portfolio of design patents adds both a sword and a shield to a company's arsenal, allowing greater protection for investment into product design than other traditional options, such as copyright and trademark, could afford alone. At the same time, the legal landscape surrounding design patents is in flux since Apple v. Samsung, 137 S. Ct. 429 (2016). The US Supreme Court's decision did not merely push design patents to the forefront of academics' attention—it sparked a legal regime shift, with tangible, significant and developing implications for how companies can and should protect their technologies and designs. 

The intensifying focus on design patents can be seen at the US Patent and Trademark Office, where design patent applications are being filed at increasingly larger rates. Figure 1 demonstrates that, at a glance, the quantity of both design and utility patent applications has steadily increased over the last decade as the economy recovered from the 2008 financial crisis. When the data are evaluated through a more granular lens, an interesting trend emerges. Over the same time period, design patent applications constituted a greater proportion of the total patent applications. In particular, 2016 saw a sharp uptick in that ratio, likely due to the publicity from Apple v. Samsung, as detailed below. 


Figure 1. Design patent application data at the USPTO from 2008 to 2018. The quantity of both design patent applications (orange region) and utility patent applications (blue region) increased over the time period, as did the ratio of design patent applications to total patent applications (grey line).2 Note the sharp uptick in the ratio beginning 2016 (when the US Supreme Court decided Apple v. Samsung).

Why do design patents matter

The reason hardware companies in particular should care about design patents is, at the end of the day, no different from the reason any company should—to protect the bottom line. But the critical significance of product design to a hardware company lends design patents special importance, especially as a company considers either alternate proposed designs for a product in the pipeline or minor design alterations for the next generation of a product on the market. Before discussing strategy broadly, it is useful to review the three aspects of a design patent's lifetime that are uniquely significant in the hardware context: patentability, determining infringement and measuring damages.

Patentability for hardware design patents

Design patents are, at the end of the day, still patents, thus applicants must meet the same novelty and non-obviousness requirements as the familiar utility patent, but with slightly different standards. First, the standard for novelty in the design patent context is the "ordinary observer test." A proposed design is not anticipated by a prior art design (i.e., is novel) if an ordinary observer would take the new design as different, rather than a modified version of an already existing design. Int'l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233 (Fed. Cir. 2009). Second, the standard for non-obviousness in the design patent context is similar to the Graham factors used for utility patents, but measured by what an ordinary designer of the type of product at issue would think (rather than the person of ordinary skill in the art used for utility patents). If an ordinary designer in the field would not have thought to combine existing designs, or features of existing designs, the proposed design is non-obvious (High Point Design LLC v. Buyers Direct, Inc., 730 F.3d 1301, 1313-14 (Fed. Cir. 2013)).

For hardware companies facing one of the two previously described problems (protecting alternate potential designs or minor design alterations to existing products), deciding whether or not to seek a new design patent requires first deciding if the new design satisfies the novelty and non-obviousness requirements for patentability. If the incremental design change is sufficiently small that the "new" design is non-novel or obvious in light of prior design patents, the "new" design is non-patentable. On the other hand, if the incremental design change is significant enough that it satisfies both patentability requirements, a new design patent is merited. Not only could you obtain a new design patent on the patentable subject matter, you likely should; if you have existing design patents that do not render your new design unpatentable, then it is very likely the existing design patents do not provide any protection for the new design. Also at play is a hardware company's risk tolerance, compounded by its ability and willingness to absorb the patent prosecution costs (including filing fees, diligence fees, attorneys' fees and the opportunity costs of those expenditures). Whether a design is legitimately patentable subject matter may not be decided until years later when a court reviews the application file in the course of litigation, which companies must consider when deciding whether additional design patents are necessary or worthwhile to enhance their portfolio over time.

Determining infringement of hardware design patents

From a baseline perspective, determining design patent infringement is a simple matter of following the old patent law axiom: "That which infringes, if later, would anticipate, if earlier" (Peters v. Active Mfg. Co., 129 U.S. 530, 537 (1889)). A product design infringes a design patent if, under the "ordinary observer test" (the same test used to evaluate novelty), an ordinary observer would think that the product design is identical to the patented design or is a slightly modified version of the patented design. To be clear, infringement occurs even when there are slight differences between a patented design and an infringing one; the "test for design patent infringement is not identity, but rather sufficient similarity" (Pac. Coast Marine Windshields Ltd. v. Malibu Boats, LLC, 739 F.3d 694, 701 (Fed. Cir. 2014)). The more interesting question for hardware, however, is what exactly infringes a design patent.

According to the operative design patent statute, whenever a design patent is infringed by an "article of manufacture" (AOM) the patent owner is entitled to damages, as noted in35 U.S.C. § 289 (2019). It was assumed for a long time that an AOM is an entire product in which any individual part of the product infringes a design patent. In fact, this issue was the crux of Apple v. Samsung. Apple asserted design patents covering, among other things, the shape of the front of the phone and the grid of 16 colorful icons on a black screen, and then claimed that because Samsung's phones employed those design aspects, the entire Samsung phones were infringing AOMs. Samsung countered because only parts of its phone infringed on Apple's design patents, only the infringing portions were the AOMs. The US Supreme Court sided with Samsung, but included a critical caveat. Although the US Supreme Court determined the AOM under § 289 could be an individual component from a product rather than the entire product, it declined to conclude whether Samsung's entire phone or individual parts constituted the AOMs, and also declined to establish a test for that question (Apple v. Samsung, 137 S. Ct. 429, 436 (2016)).

On remand, the Northern District of California adopted the four-factor AOM test that the Solicitor General proposed to the US Supreme Court during oral arguments, based on whether the infringing design is an inherent, integral part of the entire, finished infringing product or only a portion of it. Specifically, the relevant AOM is 
based on:

  • The scope of the design claimed in the patent (i.e., the drawing and written description)
  • The prominence of the design within the product as a whole
  • Whether the design is conceptually distinct from the product as a whole
  • The physical relationship between the patented design and the rest of the product (including whether the design is applied to a discrete component that is easily separated from the product as a whole) (Apple v. Samsung, Case No. 11-CV-01846-LHK, 2017 U.S. Dist. LEXIS 177199, at *82-83 (N.D. Cal. Oct. 22, 2017)

Although it could be some time before the US Supreme Court weighs in to officially accept or reject this test, it has started to meet some approval in other district courts (see, e.g., Nordock, Inc. v. Sys., Inc., Case No. 11-CV-118, 2017 U.S. Dist. LEXIS 192413, at *15 (E.D. Wis. Nov. 21, 2017)). For hardware companies, the most pressing lesson about determining infringement is realizing, whether as a hardware designer or potential infringer, the possibility that an infringing AOM may be a component of a product, rather than an entire product.

Measuring damages for hardware design patents

Those familiar with traditional utility patent infringement damages are aware the lost profits of the patent owner and reasonable royalties are the two standard theories of recovery. But design patents are different, as § 289 authorizes a third, alternative, simpler-to-prove metric for damages—the total profits the infringing party earned from the AOM. If a patent owner opts to use total profits as the damages metric, it is critical the AOM be the entire product, or as close to it as possible. Demonstrating to a jury the infringer's total profits from the sale of a product is far easier (and will allow for much higher damages) if the AOM is a finished product, rather than one individual component of a product.

The dispute in Apple v. Samsung offers a clear example of why the AOM matters. If the AOM infringing Apple's design patents was entire Samsung phones, Apple could recover all of Samsung's profits from the sale of the infringing phones. However, if the AOM was only components of the Samsung phones (e.g., only the shape of the front of the phone and the grid of colorful icons), then Apple could only recover Samsung's total profits derived directly from the infringing components, a damages amount that is presumably much less than the total profits from the entire phones. Although the jury verdict did not specifically identify the AOM, the US$533 million damages award (greater than the US$399 million from the original jury trial prior to US Supreme Court review) suggests that the jury likely found entire Samsung phones constituted the infringing AOMs.

Design patent strategy for hardware companies: dollars determine decisions

The special patentability, infringement and damages considerations for hardware design patents are useful when planning a broad design patent portfolio to protect new inventions. In light of those issues, two primary questions must be analyzed to determine the optimal business strategy to protect design-first hardware products. First, regarding the breadth of coverage per patent—where a product has multiple components or design aspects—should they be covered through one omnibus design patent that covers the entire finished product or a number of different design patents covering individual design components? Second, regarding the patent robustness, for each design patent, should it claim with particularity the specifics of one exact design, or should it be drawn more generally to cover various potential products or design iterations?3

An optimal design patent strategy for a hardware company balances patent breadth and robustness interests, taking into consideration patent prosecution costs, patentability, the ease of protecting a range of designs and products, the ease of proving infringement and the recoverable damages in the case of infringement. Consider a hypothetical automobile that has three components for which the design will be a critical part of the overall value of the car, including the body of the car, the spoiler and the headlights. Figure 2 presents the primary choices for both breadth and robustness issues, along with the benefits and disadvantages of each choice within this illustrative example. 


Figure 2. Chart demonstrating the design patent strategy considerations for a hypothetical automobile in which the body (BO), spoiler (SP) and headlights (HL) each possess unique design characteristics that affect the value of the overall car. The primary choices for breadth of coverage per patent and patent robustness are included, considering a hypothetical infringing car (IC) containing at least one infringing design component.

Where to go from here

Understanding which designs are patentable, the ease of proving infringement and the amount of damages that could be recovered is a critical first step for any design-first hardware company. As more design patents are tested in the trial courts and reviewed by the appellate courts, the legitimacy and contours of the four-part AOM test will be clarified, and should be taken into consideration. At the end of the day, the unique needs of each company, coupled with the depth of the IP budget and tolerance for risk, will define the optimal portfolio strategy to lock in a hardware company's position within its market.

1 Bijal Vakil – White & Case, Partner, Silicon Valley.
2 US Patent and Trademark Office, FY 2018 Performance and Accountability Report (2018). Note that only utility and design (but not plant or reissue) patent applications are reflected in Figure 1.
3 Design patent claims must include drawings to demonstrate the claimed design. In those drawings, solid lines indicate design aspects claimed by the patentee, whereas dashed lines indicate parts of the product depicted for context but not claimed by the patent. Patent robustness therefore refers to how much of a product is claimed in solid lines vs. dashed lines.
4 Samuel R. Schraer (White & Case, Summer Associate, New York) contributed to the development of this publication.

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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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