LKQ v. GM: A Design Patent Nonobviousness Bombshell
A Federal Circuit case throws design patent precedent into disarray
How similar does a design need to be to be obvious? Until recently, for design patents, the answer was, “basically identical,” and it has been that way since the 1980s. A recent Federal Circuit case, LKQ Corp. v. GM Global Tech., 21-2348 (Fed. Cir. 2024) (en banc), turns that on its head. GM attempted to assert certain design patents it held for certain car parts, but the alleged infringer tried to argue that they were anticipated by existing car designs already on the market, utilizing a primary and secondary reference. While under the old standard GM would have won, the Federal Circuit turned that on its head. Design patents are now in a new world.
LKQ overturned the Rosen-Durling1 standard for design patents, which required that the primary reference be “basically the same” while the secondary reference must be “so related” that the related features practically suggest application. If this sounds a little like “obvious to try” to you, you’re right—the Federal Circuit explicitly said that it was trying to bring design patent nonobviousness in line with KSR (and, in a retro twist, an older case, Smith v. Whitman Saddle Co., 148 U.S. 674 (1893)). This week in Nonobvious, we’ll go over what this might mean for design patents.
Designs On You(r Patents)
Design patents are not a large enterprise. According to USPTO statistics through 2020, there were 47,838 design patent applications in 2020, representing a mere 7.2% of all applications. However, they are growing in popularity. Design patents grew at an annualized rate of 5.1% over the past decade, which was much higher than the 1.6% annualized growth rate of patent applications overall. They are also much easier to get. Design patents have a 3 year grant rate of 97%—yes, you read that right—compared to 75% for all patents. USPTO statistics also show that nonobviousness rejections are extremely low for design patents, a mere 7% of all office action rejections.
That said, design patents may be used for a variety of purposes and are important for those who use them. For unique products, they can protect shapes, textures, and more. It can even cover the shape of cereal. In addition to covering designs for their uniqueness, design patents can also be used to protect razor/razorblade business models. For example, Keurig used to have a design patent for its coffee pods, effectively blocking anyone from making unlicensed pods by controlling the compatible shape with their device.2 They are often used in categories where trade dress and copyright are inapplicable, so protection for unique design elements may be otherwise totally unavailable.
The Federal Circuit did not give a great amount of guidance, unfortunately, for how to apply this ruling. It did say that the “primary reference will likely be the closest prior art” by visual similarity and that the “primary reference will typically be in the same field of endeavor” as the claimed ornamental art unless it is analogous art. This is not much to go by. Professor Dennis Crouch at PatentlyO points out that the Federal Circuit cites In re Jennings, 182 F.2d 207, 208 (CCPA 1950), which says that the prior art must be considered at a whole, which is at least something to work with. Yet, much was left unanswered. For example, the Federal Circuit declined to determine whether the two-pronged analogous art test for utility patents from In re Bigio, 381 F.3d 1320 (Fed. Cir. 2004)—where the art must be (1) from the same field of endeavor as the claimed invention or (2) reasonably pertinent to the particular problem addressed by the inventor, regardless of the field—applies to design patents.
Due to that lack of guidance, USPTO has not been able to give much direction, either. After all, the Federal Circuit called the old approach “too rigid” and for now called for a “case-by-case approach.” USPTO released a memo the next day, but by and large it emphasized that examiners should be looking for some documented reason why an ordinary designer would add features from a secondary reference to a primary reference. In other words, until there is more clarity from the courts, it seems like USPTO will not be making too many changes to how it grants design patents (yet).
But of course, there is still much subjectivity with designs. And the court went out of its way to say that it was deriving from KSR because the language of 103 does not distinguish between utility and design patents. So while practitioners for a long time thought KSR did not even apply to design patents, there may be more holdings in the near future that unsettle design patents even further, especially given how many questions were explicitly left for later.
Prior Art
Last edition, we covered the blow-up with OpenAI and Scarlett Johansson. As we observed, there are inconvenient facts for Johansson, but overall it is a strong case, and if it is as she describes it is nearly a slam dunk.
Since then, Johansson has turned into an unlikely avatar for issues surrounding AI. In addition to becoming the symbol of a proposed federal right of publicity, her case has also become the example a lobbying group used to push for a federal law outlawing deepfakes. She also might be asked to testify in front of Congress.
Despite all this, she has not yet filed suit.
Weekly Novelties
This week, the FTC notched a rare win in its fight against drug patents. A judge ruled that five Teva inhaler drugs were improperly listed in the Orange Book (Fierce Pharma)
As the US negotiates a renewal of science and technology pact with China, lawmakers are asking for Chinese patent data to understand if US federal funding fueled Chinese patents, especially as concerns over IP theft reached a boiling point (Reuters)
A survey of IP lawyers found that they are seeing increased adoption of AI, but some concerns about accuracy remain (FT)
Guardant sued Tempus over several DNA diagnostic patents. The liquid biopsy market remains hot and patent fights abound (Bloomberg Law)
Samsung sued Oura preemptively to avoid potential issues over its patents. Oura aggressively asserts its rights and even filed for an ITC investigation against competitors like Ultrahuman (VOI)
Dolby acquired GM Licensing and over 5000 patents for $429 million (IAM)
Adobe updated its terms of service, saying it would no longer train on customer data for its models. Once again, non-fair use considerations, like angry customers, remain more important for determining the bounds of AI training rights (Bloomberg Law)
A patent fight is brewing between ARM and Qualcomm, and it could upend the fight for AI by holding up some of the chips used to build those systems (CNBC)
Rosen-Durling is so named because it is derived from two case: In re Rosen, 673 F.2d 388 (CCPA 1982) and Durling v. Spectrum Furniture Co., 101 F.3d 100 (Fed. Cir 1996).
This particular patent is quite contentious. Keurig has been locked in a legal battle with a small coffee company called JBR. That small patent infringement case has turned into an antitrust investigation.