Design Patent Suits Becoming Less Prevalent in U.S. Courts

Patent lawsuits that focus on design patents had become increasingly popular in multiple jurisdictions and multiple industries in recent years. But the number of design patents suits filed in 2012 appears to have dropped precipitously in popular court venues, according to a new analysis.

An examination of data by Robert Walters, a partner at McDermott Will & Emery, shows that the number of design patent cases filed in 2012 in several popular jurisdictions—the Eastern District of Texas, the Northern District of California, the District of Delaware, and the International Trade Commission—fell significantly.

In the Eastern District of Texas, for example, the number dropped 82.6 percent from 2010, when 23 design patent cases were filed. In 2011, the Eastern District of Texas saw 17 new design patent cases; in 2012, it saw only four.

In the Northern District of California, home to many top tech firms, the number of design patent cases filed in 2012 declined almost 78 percent from the 2010 level, when 18 cases were filed. In 2011, that district court saw 11 new design patent cases filed; in 2012 the number there also fell to four.

But design patents have not lost their luster. They have, in fact, received a lot more attention in the past year—especially in light of Apple Inc.’s $1 billion win over Samsung Electronics Inc. in a highly publicized lawsuit that included infringement allegations that centered on some of Apple’s design patents.

“I wouldn’t conclude from this data that we won’t see more design patents suits,” Walters said. “These things tend to go in cycles, and I expect we’ll be seeing levels at least return to [those of] the 2010 and 2011 years.”

The District of Delaware had only three design patent cases in 2012, and the International Trade Commission had one. While the ITC has become a popular venue for utility patent lawsuits—in part because it is fast, it offers a remedy to ban infringing products from the U.S. market, and it allows a case to be heard by an administrative law judge knowledgeable about patent law—it has not become a favored jurisdiction for design patent cases.

Design patent cases generally move faster in district courts than utility patent cases, Walters explained. “The ITC is not as much of an advantage for these cases when it comes to speed,” he said.

In addition, the test for a design patent is whether “an ordinary observer, familiar with the prior art designs, would be deceived into believing the accused product is the same as the patented design,” Walters said. This diminishes the importance of having a patent-knowledgeable judge hearing the case.

In fact, it is the “ordinary observer” test that has made design patent cases more popular. In 2008, the Federal Circuit ruled in Egyptian Goddess, Inc. v. Swisa, Inc., that the “novelty” test no longer needed to be applied to design patents and the “ordinary observer” test would be sufficient. This made it easier to prove infringement. Shortly after this decision, Nike Inc. filed a complaint against Wal-Mart Stores Inc. for infringing the designs of its footwear. Other companies quickly started to recognize the importance of design patents.

“We’ve seen peaks and valleys with design patent litigation, but since the Apple–Samsung case, there’s been a lot of buzz about design patents and I think we’ll be seeing more suits as a result,” Walters said.

Indeed, former Apple chief patent counsel Chip Lutton, who is now vice president and general counsel of the thermostat company Nest Labs, gave a talk at the University of California’s Berkeley Law School last fall in which he said the importance of design patents is on the rise after the Apple-Samsung decision. Apple’s aggressive enforcement of design patents could be repeated by other companies, he noted.

Consumers have taken more of an interest in design as well—both in electronics goods and other consumer products. So companies have come to realize that in addition to features and price, design is another way to distinguish their product. Companies are now seeking design patents to go with their utility patents to create more protection for their products, Walters said.

A recently passed law that will take effect at the end of 2013 will make some changes to the laws governing design patents. In December, Congress passed the Patent Law Treaties Implementation Act, which will extend the term of design patents to 15 years from the current 14 years. It also will allow U.S. applicants to file an international design application with the U.S. Patent and Trademark Office, which will serve as the basis for an application in the U.S. and in foreign countries that are signatories to the treaty, including the European Union.