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Despite continued Congressional gridlock, a handful of leaders are committed to reforming the patent industry. The two most pivotal pieces of legislation — the recently passed Innovation Act in the House and the Patent Transparency and Improvements Act in the Senate — deal broadly with “patent trolls,” entities that enforce patent rights against accused infringers in an effort to collect licensing fees. Both bills are broadly supported by the technology industry.
While the path forward in the Senate is still unknown, the advancement of legislation and the abundance of high-profile patent dispute cases are important because they have facilitated a renewed interest in patent reform in the U.S. But for lawyers like me, it also provides a chance to delve deeper into specific issues — like design patents — which, due to a lack of transparency in the application process and the continued issuance of vague and overly broad patents, require reform just as much as the more mainstream topic of patent trolling.
A common misconception about various patents, in the way they are characterized, applied for and awarded to owners, is that they are largely subject to the same statutory restrictions. It is the contrary, particularly among different patent types, like design and utility patents (the two most common types of patents), and in how infringement is measured.
Design patents, once overlooked due to their perceived narrow protection, are becoming recognized as important corporate assets. Ironically easy to obtain but difficult to invalidate, they cover visual, nonfunctional characteristics embodied in, or applied to, an article of manufacture — like the shape of a computer icon. They may relate to the configuration or shape of an article, the surface ornamentation applied to an article, or to a combination of the two. Ultimately, a design patent protects only the appearance of the article and not its structure or functionality.
Design patents can have a broad impact on a variety of popular consumer goods. For example: Though perhaps overshadowed by the Lululemon Athletica CEO’s controversial statements blaming body type for the perceived “sheerness” of its popular yoga pants, and his subsequent resignation following the backlash, the company previously garnered attention for a design patent infringement case against Calvin Klein. Lululemon claimed that Calvin Klein infringed on design patents related to the waistband of its “Astro Pant.” The case has since been settled, though few details of the settlement have been released to date.
In contrast, utility patents protect the way the article is used and how it functions, such as a newly developed technology to manufacture parts.
The test for determining if an article infringes a design patent is the “ordinary observer test.” Infringement exists if in the eye of the ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same. The designs are looked at as a whole to determine infringement, not by conducting a minute analysis of details. In contrast, the test for literal infringement of a utility patent is the “all elements test” — a comparison of the alleged infringing product to every element of the patent claim.
In further contrast, design patent applications are kept confidential by the U.S. Patent and Trademark Office during the prosecution process, while utility patent applications are not — they are made public by the PTO after 18 months of the earliest filing date (with a few exceptions). This transparency spurs greater public participation, prevents duplicative research, provides knowledge that leads to improvements, and allows competitors to design around discovered technologies. But under current law, these benefits of transparency do not confer to design innovators, shutting out public participation and stifling growth.
All the while, extremely broad design patents — such as those covering simple shapes or colors — continue to be awarded, despite their susceptibility to invalidity challenges and questions that they may ultimately not be enforceable. As a result, thoughtful innovation suffers.
The Hague Agreement Concerning International Registration of Industrial Designs took effect in the U.S. in December 2013, enabling applicants around the world, including the U.S., to obtain international protection for design patents in multiple countries by filing one application at considerable cost savings. Key provisions include provisional rights to damages, which allows patent owners to collect royalties for infringement that occurs after publication of the design patent application, but before the patent issues.
Additionally, patent applications filed under the Hague Agreement are published during the pendency of prosecution. The Hague filing system operates alongside the U.S. design patent filing system, and does not preempt it. Therefore, applicants can elect to file for U.S. design protection using either system, or both.
It will be interesting to see what, if any, effect the Hague process will have on the U.S. design patent application process, specifically if it will influence lawmakers to mirror the process in regard to publication and provisional protection. The term of U.S. design patents has been extended from 14 years to 15 years from issuance of the patent to match the Hague term — another difference from utility patents, which have a term of 20 years from the date of application.
Regardless, it is becoming increasingly clear that the design patent application process is in need of reform. As legislators — along with the Federal Trade Commission and the Obama Administration — look at the issue of patent reform, they must keep in mind this issue of design patents.
At a minimum, adding transparency into the design patent process, similar to that granted to utility patents, should be addressed, to prevent companies from being awarded patents for an obscure purpose. But should legislators get serious on the topic, they must also look at the vastly different infringement standards and overly broad patents being issued.
Julie Hopkins is a partner and chair of the IP Practice Group at Tydings & Rosenberg LLP. Reach her @JulieAHopkins.
This article originally appeared on Recode.net.
