Changes in U.S. Design Patent Law Will Have Significant Impact

Michael J. Leonard and Mark T. Vogelbacker

The Legal Intelligencer

12-28-2012

On December 18, President Obama signed a bill (U.S. Bill S.3486, referred to as the Patent Law Treaties Implementation Act of 2012) that will allow U.S. citizens and residents to participate in an existing international filing system for design patent applications known as the Hague Agreement. The system is similar to the well-known international filing system (the Patent Cooperation Treaty, often referred to as PCT) for utility patent applications. The new law will not be effective until December 2013.

Design patents tend to be overlooked or imprudently disregarded when options are considered for obtaining intellectual property protection. Under current U.S. law, design patents secure the invention of the ornamental design for an article of manufacture, referred to in most countries as an "industrial design." The impending changes in U.S. law will likely increase the value of design patent protection, and inventors and companies would be wise to reconsider their strategies for obtaining intellectual property protection.

The Hague Agreement is a system of registering an industrial design in numerous countries via the filing of a single international application. The application need only be filed in one language (English, French or Spanish), and only one set of filing fees is required. More than 75 countries currently participate in the system, including the 27 European Union member states and the 16 member countries of the African Intellectual Property Organization.

Currently, a U.S. inventor or company generally must file a design application in each individual country (or in certain cases, geographic region) for which it seeks protection. Under the implemented Hague Agreement, a single application could be filed in the United States on one or more patentable designs and receive protection in each of the participating countries. As a result, costs could be significantly reduced without sacrificing geographic scope of protection.

The provision of the new bill that may have the most significant impact on U.S. inventors and companies is that directed to "provisional rights." Currently, U.S. design patent applications are held in secrecy at the U.S. Patent Office unless and until a patent issues. In contrast, utility patent applications are typically published separately 18 months after first filing, which is usually long prior to any patent issuing. The public benefits from the first publication by gaining quicker knowledge of new technology. In exchange, U.S. law provides that an owner of a utility patent may be entitled to monetary compensation for any infringement that occurred prior to the grant of the utility patent, which is known as "provisional rights."

The current U.S. law does not provide an owner of a design patent access to compensation for infringement that occurs prior to the issuance of the design patent. The bill signed by the president provides for the publication of design patent applications filed under the Hague Agreement and the availability of provisional rights. It is expected that publication will occur relatively quickly after filing, thereby providing a relatively long time period for which provisional rights may eventually be obtained.

The bill also provides the same provisional rights to the owner of a design patent application as available to the owner of a utility patent application. Thus, if a U.S. design patent issues with drawings that are "substantially identical" to the drawings in the published patent application, and the infringer had actual notice of the published patent application, as a result of the Hague Agreement and its implementing legislation, the owner of the design patent can obtain a reasonable royalty from the infringer. The reasonable royalty is calculated for the period from the date of actual notice to the date of issuance of the patent. While the "substantially identical" standard can be difficult to meet with utility patents, where claims are often amended after filing, the same standard will likely be much easier to satisfy for design patents, where the design is typically not changed after filing.

In light of the approaching changes in U.S. patent law, pending design patent applications will soon provide additional strategic benefits that are currently unavailable. For example, even if an invention does not rise to the standards of obtaining a utility patent, a pending design patent application may soon give competitors another reason to refrain from copying a proprietary design. A simple notice letter to a competitor citing to the published design patent application may help keep others out of the market, even if a design patent has not yet been granted. This new tool should make savvy U.S. inventors and companies more inclined to pursue protection of their proprietary designs on a global basis. •

Michael J. Leonard is head of the trademark and copyright group for Panitch Schwarze Belisario & Nadel. He focuses his practice on advising clients with regard to the availability and adoption of trademarks and the development, management and enforcement of domestic and international trademark portfolios. He can be contacted at mleonard@panitchlaw.com.

Mark T. Vogelbacker is an associate at the firm and his practice focuses on all matters relating to patent prosecution and patent litigation. His practice is focused on the mechanical arts, and he has litigated multiple cases in industries that include medical devices, electronic commerce, commercial materials and various types of industrial designs.