This document summarizes recent Supreme Court precedent that has impacted design patent law and infringement analysis. It discusses the Egyptian Goddess case, which eliminated the "point of novelty" test for design patent infringement and returned the analysis to the "ordinary observer" test. The document also briefly discusses the impacts of other Supreme Court patent law decisions such as KSR, eBay, and others that have made it more difficult for patent holders to enforce their rights.

1. Design on a Dime?
New Life for Design Patents and
a Quick Look at the Real Impact
of Recent Supreme Court
Precedent in Patent Cases
Mike Annis
October 24, 2008

2. Design Patents
• Directed to protecting any “new,
original and ornamental design for an
article of manufacture”
• Protects the ornamental and
decorative look of a product, not its
utilitarian features
• Can protect any type of product –
shoes, clothing, furniture, household
goods, toys, machinery, and even
business forms

3. Egyptian Goddess
• Alters the standard for design patent
infringement
– Eliminates the “point of novelty” infringement
test created by CAFC nearly 25 years ago
– Infringement analysis arguably goes back to
USSCT precedent of 135+ years ago – Gorham v.
White
• No need to “verbalize” claim construction
for a design patent

4. Pre-Egyptian Goddess:
Infringement Standard
• Infringement judged from application
of two tests
- Ordinary Observer test of Gorham:
•accused devise is “substantially similar” to the
claimed design
– Point of Novelty test:
•accused design “must appropriate the novelty
that distinguishes the patented design from
the prior art”

5. Gorham Ordinary Observer Test
• “If, in the eye of the 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.”

6. Pre-Egyptian Goddess:
Infringement Analysis
• First, court looks to determine if the accused device
was so similar to the patented design that an
ordinary observer would purchase one supposing it
to be the other
• If so, court then articulates the point of novelty of
the patented design and compares to the accused
design
• Infringement found only if accused device includes
the point(s) of novelty

7. Impacts of “Point of Novelty”
Test
• Required patentee to identify “in words” the
new and novel aspects of the patented
design and show accused design
appropriated those aspects
• Arguably placed the issue of validity
squarely in the infringement analysis
• Picked apart patented designs – de-focused
the finder of fact from the overall claimed
design
• Eliminated the concept of equivalents from
design patent infringement

8. Egyptian Goddess :
The Patented Design
• A nail buffer
• Four sided, square
cross-section, pads
on 3 of the 4 sides
and rounded
corners without
pads

9. Egyptian Goddess:
The line-up -- the usual
suspects?
• Falley Buffer Block – non-patent prior art
• Nailco Patent – closest piece of prior art
• Swisa Buffer – the accused infringing
device
• ‘389 Patent’s point of novelty – “addition
of a fourth side without a pad”

10. Egyptian Goddess:
At the Trial Court
• Arguably applied the Gorham
“ordinary observer” test – passed the
test
• Identified “point of novelty” in
patented design
• Found the “point of novelty” was not
present in the accused buffer --
granted summary judgment for Swisa

11. Egyptian Goddess:
CAFC Panel Decision
• Added a new element to the then-existing
“point of novelty” test
– The alleged point of novelty for a combination of
prior-art elements MUST represent something
more than a non-trivial advancement over the
prior art
– Arguably incorporates the concept of
obviousness into the infringement analysis
• Affirmed trial court’s summary judgment
• CAFC agreed to rehear case en banc

12. Egyptian Goddess:
CAFC’s en banc decision
• Eliminates “point of novelty” test
– Point of Novelty “as a second and free-
standing requirement for … infringement,
is inconsistent with the ordinary observer
test laid down in Gorham, is not
mandated by [precedent] and is not
needed to protect against unduly broad
assertions of design patent rights”

13. Egyptian Goddess:
A “New” Ordinary Observer Test?
• “Whether an ordinary observer, familiar with the
prior art, would be deceived into believing the
accused design is the same as the patented design”
• Hypothetical ordinary observer conversant with the
prior art
• Somewhat of a three-way visual comparison – the
patented design, in light of the prior art, compared
to the accused design

14. Egyptian Goddess:
Does “Novelty” Really Go Away?
• Nothing in the Gorham test suggests that
the ordinary observer is “versed in” or
“familiar with” the prior art
– Now viewing the patent “in light of the prior art”
– Is point of novelty hidden in this analysis?
• Emphasizes the presumption of validity
– Plaintiff does not have to prove validity in
making its prima facie case of infringement
– Accused infringer can still challenge validity of
the design patent

15. Egyptian Goddess:
Different Approach, Same Outcome
• CAFC affirmed trial court but on completely
different grounds
– Trial Court – accused design did not appropriate
the patent’s point of novelty
• Arguably passed the old Gorham “ordinary observer”
test
– CAFC – summary judgment appropriate because
no reasonable fact-finder could find the
patented and accused designs substantially
similar if familiar with the prior art

16. Egyptian Goddess v. Gorham
• In Gorham, the
patented design
was found to be
infringed by BOTH
of the accused
designs

17. Egyptian Goddess v. Gorham
• In Egyptian Goddess, designs were found
to be not similar as a matter of law

18. Egyptian Goddess:
CAFC’s en banc decision
• Further addressed the issue of claim
construction in design patent cases
– Found that the “preferable course
ordinarily will be for trial court not to
attempt to ‘construe’ a design patent
claim by providing a detailed verbal
description of the claimed design”

19. Effects of Egyptian Goddess
• Presumption of validity – places all of the burden
relating to prior art on the accused infringer
– Eases burden of proof for infringement
• Makes cases more economical to prosecute
– No need to define point(s) of novelty or conduct drawn-
out claim construction procedures
• Who is the ordinary observer “conversant with the
prior art”?
– Will likely see experts becoming a bigger part of design
patent infringement analysis

20. Recent Supreme Court Patent
Law Decisions in Review
• In the past four years, the Supreme Court
has heard seven significant patent law cases
• Reversed all seven
• Ruled against the patent holder in 6 of the 7
cases – clearly cutting back on the power of
patent owners to enforce patents
• Egyptian Goddess decision could be a self-
correcting measure by the CAFC in light of
these decisions
• No IP cases this term

21. • KSR Int’l v. Teleflex –
– obviousness test revamped
– Implications: makes it easier for accused infringer to challenge validity, possibly forces licenses
• eBay v. MercExchange –
– Addressed to standard for permanent injunctions in patent infringement matters
– Implications: force licenses
• MedImmune v. Genentech –
– Addressed to declaratory judgment jurisdiction/standing of licensees to challenge licensed patent
– Implications: limits forum selection ability of patent holder
• Ill. Tool Works v. Indep. Ink –
– Addressed to presumption of economic power for patentee – tying arrangements
– Implications: harmonizes patent and antitrust laws
• Merck v. Integra Lifescience I –
– Addressed to safe-harbor provisions of 35 USC § 271(e)
– Implications: pre-clinical activities immunity for drug development
• Microsoft v. AT&T –
– Addressed to extraterritorial reach of US patents
– Implications: limits patentee’s ability to recover damages for overseas infringement
• Quant v. LG Electronics –
– Addressed to principals of patent exhaustion or “first sale” doctrine
– Implications: limits “down stream” recovery for patentees

22. KSR v. Teleflex
– Obviousness Standard
• Supreme Court loosens legal standard for showing
obviousness under §103
• Arguably raises the bar to patentability by
eliminating the “rigid application” of the so-called
“teaching-suggestion-motivation” or TSM test
• In response, PTO has issued new guidelines for
evaluating “obviousness” in pending applications
• Key: “predictability”

23. KSR: Measurable Impacts One Year
Later
• Statistics do not show paradigm shift
• KSR addressed by the Federal Circuit just over 20 times
• Overall success rate for plaintiff’s in utility patent cases is
about the same for the 12 months before KSR compared to
the 12 months after KSR – within tenths of a percentage point
• Summary judgment grants have increased but by less than 10
% -- possibly more defendants taking a run at “obviousness”
summary judgment motions
• Dispositions at trial – finding of “obviousness” about 1/3 of
the time

24. eBay v. MercExchange:
Post-Judgment Injunctive Remedy
• Tightened equitable standard for
injunctions in patent cases
– Old rule
• Presumption of irreparable harm -- if there is
infringement, there will be an injunction absent
compelling reasons to the contrary
– New rule
• Same four-part test used to determine whether
injunction should issue

25. eBay v. MercExchange:
Post-Judgment Injunctive Remedy
• Measurable impacts?
– There have been a few denials of permanent
injunctions following infringment findings
• Patentee is not a market participant for the patented
technology, particularly where there has been a
willingness to license the
– Exceptions:
• Patentee is a research entity/university
• Wide-spread use of technology