In En Banc Ruling, Federal Circuit Clarifies Test for Design Patent Infringement

In Egyptian Goddess, Inc. et al., v. Swisa, Inc. and Dror Swisa, 543 F3d 665, 88 USPQ2d 1658 (Fed. Cir. 2008) en banc, the Federal Circuit unanimously redefined the test for infringement with regard to design patents to remove the “point of novelty” prong of the analysis.  Egyptian Goddess, Inc. (EGI) brought suit in the District Court for the Northern District of Texas alleging that Swisa, Inc. and Dror Swisa (Swisa) had infringed EGI’s U.S. Design Patent No. 467,389 (the ‘389 patent).  The ‘389 patent claimed a design for a nail buffer, “consisting of a rectangular, hollow tube having a generally square cross-section and featuring buffer surfaces on three of its four sides.”  The accused Swisa product had a rectangular, hollow tube having a square cross-section and featuring buffer surfaces on all four of its sides.

Swisa filed a motion for summary judgment of noninfringement, which the District Court granted Swisa stating that a “plaintiff in a design case must prove both (1) that the accused device is ‘substantially similar’ to the claimed design under what is referred to as the ‘ordinary observer’ test, and (2) that the accused device contains ‘substantially the same points of novelty that distinguished the patented design from the prior art.’”  The District Court held that the Swisa product did not incorporate the “point of novelty” of the ‘389 patent.  In determining that the “fourth, bare side to the buffer” was the point of novelty, the District Court looked to Nailco’s U.S. Design Patent No. 416,648 (the Nailco patent) and the Falley Buffer Block as the closest prior art.  The Nailco patent discloses a nail buffer with an open and hollow body, raised rectangular pads, and open corners having a triangular cross-section.  The Falley Buffer Block has a solid, rectangular cross-section with slightly raised buffers on all sides.  Because the accused Swisa product did not include the fourth side without a buffer surface, the District Court concluded that the Swisa product did not incorporate the point of novelty of the ‘389 patent; thus, the Swisa product did not infringe.  The four buffer blocks are illustrated as follows:

The Federal Circuit traced the roots of the interpretation of the two prong test for infringement to two cases: Gorham  Co. v. White and Litton Systems v. Whirlpool Corp.  In Gorham, the Supreme Court stated, “[I]f in the eye of an 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.”  81 U.S. 511, 528 (1871).  However, in Litton Systems, the Federal Circuit held that proof of similarity under the ordinary observer test was insufficient to find infringement.  There, the Court required that the accused design “must also appropriate the novelty of the claimed design in order to be deemed infringing.” 728 F.2d 1423 (Fed. Cir. 1984).  Later courts interpreted such precedent as requiring proof of both the ordinary observer test and the point of novelty test to find infringement.  The Federal Circuit noted that application of the point of novelty test is relatively simple when the patented design departs from the prior art in a single respect but that the point of novelty test becomes increasingly difficult when the patented design includes multiple features that depart from multiple prior references.

EGI argued that the ordinary observer test is able to accomplish the purposes for which the point of novelty test was designed but less confusingly.  Swisa disagreed and argued that the Federal Circuit may not and should not abandon the point of novelty test as such test was adopted and required by the Supreme Court in Smith v. Whitman Saddle Co., 148 U.S. 674 (1893).  Swisa argued that Whitman Saddle dictates that the point of novelty is a second and distinct test for design patent infringement. The Federal Circuit, however, disagreed with Swisa and determined that the point of novelty test was actually developed relatively recently.

Upon a review of the case law, the Federal Circuit concluded that “the point of novelty test, as a second and free-standing requirement for proof of design patent infringement, is inconsistent with the ordinary observer test…, is not mandated by Whitman Saddle…, and is not needed to protect against unduly broad assertions of design patent rights.”  The Federal Circuit interpreted Whitman Saddle to mean “that, viewed in light of the similarities between the prior art and the patented design, the accused design did not contain the single feature that would have made it appear distinctively similar to the patented design rather than like the numerous prior art designs,” and as such, did not infringe. Slip at page 13.  More importantly, Whitman Saddle indicated that the ordinary observer test should be applied in light of the prior art.  The Court analyzed several cases illustrating the development of the ordinary observer test in light of the prior art.  See Bevin Brothers Manufacturing Co. V. Starr Brothers Bell Co., 114 F. 362 (C.C.D. Conn. 1902) (for the proposition that no point of novelty test was applied but that the “ordinary observer test in which the observer was comparing the patented and accused designs in the context of similar designs found in the prior art.”); see Zidell v. Dexter, 262 F. 145 (9th Cir. 1920) (emphasizing the importance of similar prior art designs to the determination of infringement under the ordinary observer test); and see Applied Arts Corp. v. Grand Rapids Metalcraft Corp., 67 F.2d 428 (6th Cir. 1933) (in which the ordinary observer test was applied in light of similar objects found in the prior art).

The Court then noted the precedent developed to be applied in Sears, Roebuck & Co. v. Talge, 140 F.2d 395 (8th Cir. 1944), in which the Eight Circuit stated that the test for infringement involves two elements: (1) the sameness of effect as a whole upon the eye of an ordinary purchaser must be such as to deceive him, inducing her to purchase one, supposing it for the other, and (2) the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art.  The Federal Circuit saw that Sears, Roebuck & Co. and Applied Arts became the principal precedents relied upon in Litton Systems.  Despite the Federal Circuit applying Litton Systems for the proposition that “the point of novelty test is separate from the ordinary observer test and requires the patentee to point out the point of novelty in the claimed design that has been appropriated by the accused design,” the Federal Circuit now interprets such cases as being more properly read as “applying a version of the ordinary observer test in which the ordinary observer is deemed to view the differences between the patented design and the accused product in the context of the prior art.”

“[W]e hold that the “ordinary observer” test should be the sole test for determining whether a design paten has been infringed.  Under that test, as this court has sometimes described it, infringement will not be found unless the accused article embodies the patented design or any colorable imitation thereof.” Slip opinion at page 21 (internal quotes and citations omitted).

However, the ordinary observer is to be applied in light of the prior art.  See slip at pages 17-21.  Further, the accused infringer will retain the burden of production as to comparison prior art, and the patentee retains the burden of proof to demonstrate infringement by a preponderance of the evidence. Slip opinion at pages 22-23.

In applying the ordinary observer test, the Federal Circuit demonstrated that the application of the ordinary observer test is in light of multiple features of multiple prior art references.  “Where the frame of reference consists of numerous similar prior art designs, those designs can highlight the distinctions between the claimed design and the accused design as viewed by the ordinary observer.”  Slip at page 19.  The distinction as indicated by the Court is that the ordinary observer informed of the prior art may focus her attention on the proper inquiry, “whether the accused design has appropriated the claimed design as a whole,” as opposed to the inquiry of the point of novelty test, whether the accused design has appropriated a single specified feature of the claimed design.  Id.

As an example, the Court indicated that when more points of novelty are identified in the patented design, the accused infringer has more room to argue that the accused product does not infringe because the accused design does not copy all of the points of novelty, even though the accused design may copy most of the points of novelty and even though the accused design may give the overall appearance of being identical to the patented design.  In such case, the test that asks how the ordinary observer having knowledge of the prior art would view the differences between the two designs will produce results congruent with the purposes of design patent protection.

The Federal Circuit also noted that it has held that trial courts have a duty to conduct claim construction in design patents.  However, the Federal Circuit clarified that the Court has not prescribed any particular form that the construction must take place.  Given that the illustration in the drawing views is its own best description and the perceived difficulties of attempting to describe such with words, “the preferable course ordinarily will be for a District Court not to attempt to “construe” a design patent claim by providing a detailed verbal description of the claimed design.”  Slip at page 24.  Thus, it is within the trial court’s discretion as to whether to provide a verbal elaboration of the claimed design, and such court’s decision will not be reversible error without a showing of prejudice.  Id.

The Court turned to the analysis of the facts of the case given the newly-minted standard and determined the question to be: “whether an ordinary observer, familiar with the prior art Falley and Nailco designs, would be deceived into believing the Swisa buffer is the same as the patented buffer.”  Slip at page 27.  As shown above, the Falley nail buffer has a solid, rectangular cross-section with slightly raised buffers on all sides, and the Nailco patent has a hollow, triangular cross-section with raised buffers on all sides.  Further, the ‘389 patent has a hollow, square cross-section with raised buffers on three of four sides, while the Swisa buffer has a hollow, square cross-section with raised buffers on all four sides, one on each side.

EGI argued that the ordinary observer would not find the addition of the fourth buffer to greatly alter the ornamental effect and appearance of the whole design of the accused design from the whole patented design.  However, Swisa argued that, in light of the close prior art buffers, including a number having square cross-sections, an ordinary observer would notice the differences between the two products.  Swisa emphasized that the number of sides having abrasive surfaces thereon would be important to purchasers, i.e., a “three way buffer” versus a “four way buffer.”

The Court took exception with EGI’s argument in that it did not address that the only difference between the accused design and the Nailco prior art design was that the accused design had four sides instead of three.  The Court stated that nothing “explains why an ordinary observer would regard the accused design as being closer to the [patented] design than to the Nailco prior art patent.”  Slip at page 29.  As such, the Court concluded that no reasonable fact-finder could find that EGI met its burden of showing that an ordinary observer, taking into account the prior art, would believe that the accused design was the same as the patented design.

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