Part One: Ramifications of the Federal Circuit's Opinion: Going Beyond Apple

According to Ryan Alley’s blog, the federal circuit’s strict interpretation of the non-obvious standard has important ramifications for the electronics industry (and most likely, for the holders of design patents more generally). This blog focuses on the impact of the federal circuit’s opinion on the primary reference standard.

Alley specifically draws the point that the designs of issue in Apple are most certainly applicable in other electronics design cases (i.e. where the products involve screens, surfaces, bezels, frames, tablet shapes, etc.). The federal circuit’s holding indicates that courts will examine the appearance of electronic devices closely; perhaps allowing even seemingly minor differences between the appearance of the prior art references and the appearance of the claimed electronic device design to bar prior art from serving as a primary reference. Of course, to the federal circuit the differences between the Fidler tablet and the design patent were far from being minor. In fact, the federal circuit identified the differences as being “substantial differences”. Yet, it appears that many patent litigation bloggers find this to be puzzling, as the design differences seems “somewhat minor” to them. One blogger goes even further, writing, “I personally think these [referring to the Fidler tablet and D’889] create almost identical visual impressions.”
 
At a glance, based on online pictures, the Fidler tablet and the claimed design of the D’889 patent do in fact seem very alike in appearance. Enough so that it is perturbing that the Fidler tablet doesn’t satisfy the “basically the same visual appearance” requirement. Certainly, according to Blog Authoress Sarah Burstein, the federal circuit decision to reject the Fidler tablet as a primary reference was unexpected. Under the obviousness standards from a few years ago, Fidler would have been categorized as a primary reference.  Burstein expresses some reluctance to declare this decision (as well as another) to reflect a current trend that tightens the obviousness standards. However, Alley expresses no such hesitation in expressing his viewpoint that the Apple decision imposes a narrow (strict) obviousness standard (at least in the context of design patents that cover electronics). As he concisely terms it, “[t]his is a tough set of hoops for any…defendant to successfully jump through.” 
 
Please see the previous post: The Ramifications of the Federal Circuit’s Decision on the Secondary References Standard for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.
 
**SOURCES**
Apple, Inc. v. Samsung Elec. Co., Ltd., U.S. Court of Federal Appeals, May 14, 2012
Ryan Alley, “Apple v. Samsung- Design Prosecution Lessons,” Intellectual Property Law: Building Assets from Ideas, 2012-05-21, http://alleylegal.com/2012/05/apple-v-samsung-design-prosecution-lessons/
Sarah Burstein, “Apple v. Samsung,” PatentlyO: The Nation’s Leading Patent Blog, 2012-05-18, http://www.patentlyo.com/patent/2012/05/guest-post-by-sarah-burstein-apple-v-samsung.html
Rebecca Tushnet, “Brand Dilution as a Design Patent Theory of Harm,” Rebecca Tushnet’s 43(B)log, 2912-05-16, http://tushnet.blogspot.com/2012/05/brand-dilution-as-design-patent-theory.html

The Ramifications of the Federal Circuit's Decision on the Secondary References Standard

The primary reference can be modified with secondary references to create a combination that has the same overall visual appearance as the appearance of the design patent. Or where there are only minor differences between the two, a gap between the primary reference and the design patent can be bridged with secondary references. The references must be “so related to the primary reference that the appearance of certain ornamental features in one would suggest the application of those features to the other” for the references to constitute secondary references that can modify the appearance of the primary reference.

Even if the Fidler had been categorized as a primary reference, the Federal Circuit said obviousness would fail because the two references could not be combined since they were so different from each other in appearance that “[they did] not qualify as a comparison reference under” the secondary reference standard. According to Alley, the Federal Circuit’s decision “has effectively instituted a strict TSM test, requiring that the prior art features not only call out for combination, but do so in a manner demonstrated by the visual closeness of the references.” This is another difficult standard for a defendant to meet. Even if the defendant is able to find a primary reference, he still may not fulfill the secondary reference standard if he needs a secondary reference to modify the primary reference. Such a strict standard for secondary references reinforces the difficulty for defendants in challenging the validity of a design patent on obviousness grounds.
 
Please see the previous post: Part Two: The Ramifications of the Federal Circuit’s Decision on the Primary Reference Requirement for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.
 
**Sources**
Ryan Alley, “Apple v. Samsung- Design Prosecution Lessons,” Intellectual Property Law: Building Assets from Ideas, 2012-05-21, http://alleylegal.com/2012/05/apple-v-samsung-design-prosecution-lessons/

Part Two: The Ramifications of the Federal Circuit's Decision on the Primary Reference Requirement

Popular Blogger Sarah Burstein proposed that the federal circuit tighten the requirements of defining “basically the same overall visual appearance” with its decision on the non-obviousness of the D’889 patent. Apparently, a few years ago the “basically the same” standard indicated that about a 75 to 80% similarity between the appearances of primary reference and the designed patent was required for a prior art reference to qualify as a primary reference. Burstein declared that such a percentage definition would have permitted the Fidler tablet to constitute a primary reference. Although the federal circuit does not clarify a new percentage requirement (i.e. the primary reference must share an 85% similarity in appearance with the design patent), its decision indicates a tightening of the requirement to necessitate the showing of a higher degree of similarity. 

Burstein hesitated in drawing any conclusions about future trends of the federal circuit by stating, “this strict reading of the ‘basically the same’ requirement may make it more difficult to prove obviousness in future design patent cases. And while it’s too early to declare a trend, it is worth noting that the Federal Circuit affirmed a rather strict reading of this requirement last year.”
 
Another Blogger Ryan Alley criticized that “basically the same overall visual appearance” standard for primary references was permitting the patent holder “to eliminate whole swaths of prior art based on rather abstract optics alone.”  He argued that the federal circuit had disqualified the Fidler tablet from being a primary reference due to some minor differences.  
Essentially, his critique of the federal circuit (and in fact the general standard for obviousness in design patents) is that the test for primary references is too narrow and strict. When defendants object to an injunction based on patent obviousness, patent holders can defeat the objection through differences in “design minutiae” between the primary reference and design patent.
 
Please see the previous post: Part One: The Ramifications of the Federal Circuit’s Decision on the Primary Reference Requirement for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.
 
**Sources**
Ryan Alley, “Apple v. Samsung- Design Prosecution Lessons,” Intellectual Property Law: Building Assets from Ideas, 2012-05-21, http://alleylegal.com/2012/05/apple-v-samsung-design-prosecution-lessons/
Sarah Burstein, “Apple v. Samsung,” PatentlyO: The Nation’s Leading Patent Blog, 2012-05-18, http://www.patentlyo.com/patent/2012/05/guest-post-by-sarah-burstein-apple-v-samsung.html

Part One: The Ramifications of the Federal Circuit's Decision on the Primary Reference Requirement

To categorize a prior art reference as a primary reference, one reference must single-handedly have design characteristics that are basically the same as the design characteristics of the design patent. However, note of caution: the terms “design characteristics” from the primary reference test have been defined to mean “overall visual appearance.” This definition means that the test for a primary reference necessitates having one reference that has basically the same overall visual appearance as the claimed design. What does this “basically the same overall visual appearance” standard require, especially when compared to the “same overall visual appearance” standard for the general obviousness inquiry for design patents?

The “basically the same overall visual appearance” requirement for primary references is incredibly important to the obviousness analysis for design patents. Primary references act as a per-se threshold requirement for obviousness. In order to conduct the obviousness inquiry, the challenger of the patent must present a primary reference. Whereas, without a primary reference, the challenge to patent validity based on obviousness automatically fails. Thus if the federal circuit is tightening (making it more difficult to prove), the requirements for finding a prior art reference to be a primary one are stricter and more obvious challenges are barred from being presented. Tightening the requirements for primary references makes it easier for the patentee to argue likely success on the merits in the sense that it will be harder for the defendant to argue invalidity due to obviousness.

Please see the previous post: Ramifications of Federal Circuit Opinion: Proving Irreparable Harm re Design Patent Infringement through Design Dilution? for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.

**Sources**

Ryan Alley, “Apple v. Samsung- Design Prosecution Lessons,” Intellectual Property Law: Building Assets from Ideas, 2012-05-21, http://alleylegal.com/2012/05/apple-v-samsung-design-prosecution-lessons/

Sarah Burstein, “Apple v. Samsung,” PatentlyO: The Nation’s Leading Patent Blog, 2012-05-18, http://www.patentlyo.com/patent/2012/05/guest-post-by-sarah-burstein-apple-v-samsung.html

Ramifications of Federal Circuit Opinion: Proving Irreparable Harm re Design Patent Infringement through Design Dilution?

Did the federal circuit create a new common law theory to prove irreparable harm resulting from infringement of a design patent? Recall that Apple’s original motion for a preliminary injunction against Samsung devices for infringing its design patents presented two new kinds of arguments in its irreparable harm section: design dilution and brand dilution. Dilution is a cause of action in trademark law—whereby the owner of a famous trademark can bring an infringement suit against a defendant on grounds of trademark dilution.  Trademark dilution occurs where defendant’s use either impairs the distinctiveness of the owner’s mark (dilution by blurring) or tarnishes the owner’s reputation or corporate goodwill (dilution by tarnishment). Dilution is a doctrine under trademark law. Can a dilution argument extend to patent design protection?

 
Tucked into Apple’s arguments about likely irreparable harm, Apple also brought forth the novel arguments of design dilution and brand dilution. Apple argued that Samsung’s infringing designs caused design and brand dilution; the design and brand dilution in turn caused Apple to lose consumer goodwill. Under the design theory, Samsung’s infringing products were so substantially similar to Apple’s that the introduction of Samsung’s product to the marketplace impaired the distinctiveness of the design of Apple’s products. Apple called this, “eroding” the design distinctiveness of its products or otherwise phrased design dilution, declaring, “Samsung’s sale of products…threatens to erode the value of the designs and attenuate the hard-won link in the public’s mind between the designs and Apple” (Apple’s Motion for Preliminary Injunction at 26). Apple’s brand dilution argument was tied to the fact that its brand was inextricably tied to product design. When Samsung sold its infringing products, it also harmed and weakened the value of the Apple brand itself.
 
The district court rejected Apple’s arguments about design and brand dilution. According to the court’s opinion, it rejected the design dilution idea because Apple had not presented sufficient evidence to explain how design dilution (“erosion of ‘design distinctiveness’”) had actually caused irreparable harm to Apple (for example, Apple had not provided enough proof to show that design dilution harmed its reputation). The district court hesitated in addressing the issue of applicability of the brand dilution theory of harm. The court explained its hesitation as “[i]t is not entirely clearly that irreparable harm in the form of brand dilution should apply to Apple’s claim for design patent infringement. Apple has offered no argument that trademark doctrines are applicable to design patent infringement cases” (Court Order Denying Apple’s Motion for Preliminary Injunction at 30). Nonetheless, it was not necessary for the district court to reach a conclusion on the applicability of the brand dilution doctrine; even if brand dilution was an actionable harm to demonstrate irreparable harm in design patent cases. The court found that Apple had failed to provide sufficient evidence that Samsung’s alleged infringement would actually cause brand dilution.
 
In its opinion pursuant to Apple’s appeal, the federal circuit addressed both design and brand dilution in a fairly nonchalant manner, which is somewhat strange since these theories are so novel to design patent infringement cases. The federal court held that categorical rules precluding these two theories from being used to demonstrate irreparable harm would be “improper.”  The appellate court was explicit in its statement that a categorical rule regarding design dilution would be improper, declaring:
“wholesale rejection of design dilution as a theory of irreparable harm…would have been improper.” federal circuit Opinion at 19.  On the other hand, the federal circuit is ambiguous about the possible application of brand dilution to prove irreparable harm in design patent infringement cases, but it does imply that a categorical rule against brand dilution would also be impermissible: “the district court’s opinion thus makes clear that it did not categorically reject… ‘brand dilution’ theories, but instead rejected those theories for lack of evidence at this stage” (implying that a categorical rejection of brand dilution theories would possibly have been reversed by the federal circuit). Id. at 19-20. It appears that bloggers view the federal circuit opinion as rejecting a categorical rule against brand dilution as a theory to show irreparable harm.
 
What does this mean? The federal circuit provided no guidelines other than prohibiting district courts from implementing categorical rules against the theories of brand and design dilution. Blogger Sarah Burstein also exclaims over the lack of discussion in the opinion about this theory, writing: “The other especially striking portion…is the federal circuit’s unquestioning acceptance of Apple’s ‘design dilution’ theory of irreparable harm. This sort of express equation of the harm caused by design patent infringement with the harm caused by trademark dilution is unprecedented in design patent case law…and Apple’s theory deserves more attention.” 
 
Samsung has filed a petition at the federal circuit for an en-banc rehearing of its earlier decision. Perhaps the en-banc panel will provide further guidance or explanation on this topic (of course, it could also reverse this and find that categorical rules against dilution based theories are perfectly proper).
 
The federal circuit’s decision on these two theories seems utterly baffling, especially without any further guidance or explanations. Burstein notes that while these theories had been mentioned in academic literature, they are completely novel concepts to design patent law. The federal circuit holding seems to collapse trademark (trade dress) law and patent design law, finding an actionable harm infringing under trade dress functions as an actionable harm under patent design law. Under my current understanding of the law, I do not believe that there is any authority to support such an extension of dilution harms, especially given that federal trademark dilution based infringement is currently governed by statute. The Trademark Dilution Revision Act of 2006 could easily have been written to include a short text applying dilution based theories to design patents, especially given the overlap between the subject matter covered by trade dress forms of trademarks and the subject matter of design patents.
 
As of right now, it appears as though holders of design patents (probably those whose designs are particularly distinctive and well known to the public) should try to assert design dilution and brand dilution as theories to support a finding of likely irreparable harm. The patentees should be careful to ensure they provide sufficient evidentiary support to demonstrate how the defendants’ infringing conduct leads to such dilution and how the dilution causes irreparable harm.
 
Please see the previous post: After the federal circuit Opinion: What Happens Now
for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.
 
**SOURCES**
Apple, Inc. v. Samsung Elec. Co., United States District Court Northern District of California, Apple’s Motion for a Preliminary Injuction, 2011-07-01, Docket No. 86.
Apple, Inc. v. Samsung Elec. Co., United States District Court Northern District of California, Court Order Denying Motion for Preliminary Injunction, 2011-12-02, Docket No. 450.
Apple, Inc. v. Samsung Elec. Co., United States Court of Appeals for the federal circuit, Opinion on Apple’s Appeal re Court Order Denying Motion for Preliminary Injunction, 2012-05-14.
Sarah Burstein, “Apple v. Samsung,” PatentlyO: The Nation’s Leading Patent Blog, 2012-05-18, http://www.patentlyo.com/patent/2012/05/guest-post-by-sarah-burstein-apple-v-samsung.html.
Rebecca Tushnet, “Brand Dilution as a Design Patent Theory of Harm,” Rebecca Tushnet’s 43(B)log, 2912-05-16, http://tushnet.blogspot.com/2012/05/brand-dilution-as-design-patent-theory.html.