By Steven Seidenberg for Intellectual Property Watch
For the past two decades, industrial design rights have received little respect in the United States. But no longer.

The recent court ruling in Egyptian Goddess, Inc v Swisa, Inc has dramatically strengthened industrial design rights in the US, bringing the country’s protections for these rights back into line with international standards, according to many experts.

The ruling was issued in late September by the US Federal Circuit Court of Appeals, often called the nation’s “patent court.” In a unanimous en banc opinion, the court overruled a series of its own decisions stretching back more than two decades. Those decisions had created a two-prong test for infringement which was often extremely difficult for plaintiffs to satisfy. It effectively prevented many owners of industrial design rights from enforcing their rights in court.

Egyptian Goddess replaces the two-prong test with a one-prong standard, making industrial design infringement much easier to prove, according to many experts.

”It puts teeth back into the law,” said Michael McCabe, Jr, a partner in Oblon, Spivak, McClelland, Maier & Neustadt, located in Alexandria, Virginia.

Countries around the world have different names for industrial design rights. They are “industrial design rights” in Europe, “design patents” in the United States, and “design rights” in much of Asia, including Japan.

Whatever they are called, these IP rights protect the ornamental aspects of manufactured items. Designs must be new and original in order be protected.

In most of the world, these rights have grown in importance over the past two decades. Businesses have relied on them to protect the ornamental aspects of a growing array of products - from athletic shoes to perfume bottles to consumer electronics.

”Industrial design rights are more important and more widely used outside the US,” McCabe said. “These rights are viewed as a valuable type of IP protection - another tool for protecting your innovations and competing.”

In the US, however, these IP rights have fallen into disrepute over the past 24 years. “Design patents have long been considered the redheaded stepchild of the patent world, and for good reason,” said Christopher Carani, a partner in Chicago firm of McAndrews Held & Malloy.

The problem began in 1984, when the Federal Circuit issued its ruling in Litton Systems, Inc v Whirlpool Corp. The court held that the traditional test for design patent infringement was insufficient; it was not enough for a plaintiff to demonstrate substantial similarity between its patented design and the infringing design. The court added a second prong to the test for infringement. Henceforth, in order to prove infringement, a plaintiff would have to show what precise aspect of its design was different from prior designs and show that the defendant’s design infringed this point of novelty.

This “point of novelty” test was intended to protect defendants whose works were substantially similar to plaintiffs’ only because both parties’ designs contained pre-existing, non-patented design elements. The test would thus impose reasonable limits on design patentees, preventing them from effectively asserting patent rights over non-patentable design elements.

Unfortunately, the point of novelty test did far more. It rendered many design patents unenforceable.

For instance, suppose a plaintiff’s design was particularly original and had many points of novelty. A defendant might escape liability so long as its design did not copy all the points of novelty, even if it copied most of these points and its overall design was almost identical to the patented design, the Federal Circuit stated in Egyptian Goddess.

Alleged infringers could take another approach. “Defendants could pick a design apart by showing different aspects of the design were in different pieces of prior art,” said Patricia Rogowski, a partner in the Wilmington, Delaware office of Connolly Bove Lodge & Hutz. The plaintiff’s design would be left with no point of novelty, and it would thus be unenforceable.

”You could have a design that was a literal copy of a design patent and still not be found to have infringed,” McCabe said. “It was absurd. …The point of novelty test became a real drag on the value of design patents.”

Egyptian Goddess, Inc and Swisa, Inc are privately held beauty products companies. They both make fingernail buffers, among other things. Egyptian Goddess obtained a design patent on its buffer and claimed that this design was infringed by Swisa’s buffer. The trial court found the two designs were different enough so that there was no infringement. Egyptian Goddess appealed. The Federal Circuit applied a different legal standard more favourable to patentees, but the court still concluded that Swisa’s buffer did not infringe.

In Egyptian Goddess, the Federal Circuit recognised the problems of applying the point of novelty test and did away with it as a separate element to establish infringement. The court largely returned to the infringement test that was established by the US Supreme Court in the 1871 case of Gorham Co. v. White: infringement exists if “in the eye of an ordinary observer, giving such attention as a purchaser usually gives, [plantiff's and defendant's] two designs are substantially the same….”

The Federal Circuit, however, has not completely abandoned the point of novelty test, according to experts. “The court is overlaying on the ordinary observer test the requirement that the observer has knowledge of the prior art,” Rogowski said. “It’s not enough to say that [plaintiff's and defendant's] designs look alike. The ordinary observer must be aware of the prior art in the industry.”

Nevertheless, by getting rid of the separate point of novelty test, Egyptian Goddess will significantly boost the enforceability of design patents. “The ruling makes it easier for design patent owners to prove infringement,” Rogowski said.

That, in turn, will encourage more businesses to apply for US design patents, according to experts.

”Over time, Egyptian Goddess will have the effect of increasing the importance and use of these IP rights in the United States,” McCabe said. “Design patents will once again be viewed as an important tool for businesses.”

Carani said: “We will see a lot more companies using design patents to protect their designs in the US.”

Steven Seidenberg may be reached at info@ip-watch.ch.