Design patents protect the aesthetic appearance of a product (or a part of a product). They are relatively easy and inexpensive to get, but are they worthwhile?

A design patent is a patent, meaning while the application is pending (typically about 20 months) the applicant can mark the product “patent pending,” and after the patent issues “patented.”  The design patent allows its owner to sue competitors for making, using, selling, or importing a product that is substantially the same as the patented design.  Substantially the same does not mean identical, and if the patent owner can show  the resemblance is such as to deceive such an observer and sufficient to induce him to purchase one supposing it to be the other, he or she has proven infringement.

A patent owner is usually entitled to an award of its lost profits, but no less than a reasonable royalty, however there is an alternative remedy for design patent infringement: the infringer’s profits. Moreover, this is the profit on the entire product.  Thus Apple was awarded Samsung’s entire profits on the phones found to infringe Applies design patents on the iPhone shell, not just the profits attributable to the shells (which were not sold separately).

Finally, a fifteen year design patent can be a stepping stone to perpetual trade dress protection, providing a period of exclusive use of the design needed to establish that the design has acquired “secondary meaning” and has become a protectable trade dress.

If a design patent makes sense in the United States, what about foreign protection.  Interestingly, while design patents are reasonably popular in the US, with more than 35,000 applications filed last year, design patents are even more popular in Asia,.  More than half a million design patent applications were filed in China last year (sixteen times as many as filed in the US), more than 65,000 were filed in South Korea, (nearly twice as many as filed n the US),and nearly 30,000 were filed in Japan (almost tying US filings):

1. China (564555)
2. S. Korea (64574)
3. United States (35378)
4. Japan (19738)
5. EC (25745)
6. Turkey (10251)
7. India (9309)
8. Iran (8864)
9. Germany (7392)
10. Australia (6597)
11. Brazil (6590)
12. Canada (5767)
13. Russia (5184)
14. UK (5084)
15. France (4782)

Perhaps of more interest to US businesses is which countries are most popular with non-residents:

1. China
2. US
3. EC
4. Canada
5. Japan
6. Australia
7. S. Korea
8. India
9. Russia
10. Brazil

and in particular which countries are most popular with other U.S. filers:

1. China
2. Canada
3. EC
4. Australia
5. Japan
6. Brazil
7. Mexico
8. S. Korea
9. India
10. Russia

Design patents help round out an IP portfolio, but domestically, and abroad.

The district court’s September 30 Order in Ethox Chemical, LLC vs. The Coca-Cola Company, 6:12-1682-KFM (D.S,C.2015) is an important reminder to pay close attention to the contributions made by vendors and consultants, and in particular to plan in advance for the possibility of such contributions.

Coca-Cola’s packaging group pioneered the use of polyethylene terephthalate (“PET”)
beverage containers.  One disadvantage of PET was that it is porous to gas, so the carbonation in beverages would gradually escape from the bottle.  Coca-Cola scientists identified an additive, BPO-1, that functioned as a gas barrier, and sought the assistance of several vendors including Ethox to make BPO-1 on a commercial scale.  Ethox determined that it it was not commercially feasible to use BPO-1, but one if its employees, Dr, Tanner, proposed PEM as an alternative.

Coca-Cola proceeded with a patent application on PET containers, and included PEM, which eventually resulted in the issuance of U.S. Patent No. 8,110,265.  However Coca-Cola did not include Dr. Tanner as a co-inventor.  Ethox and Dr. Tanner sued to have Dr. Tanner named as a co-inventor, and in the Order issued on September 30, the court agreed.  While adding Dr. Tanner as a co-inventor would not affect Coca-Cola’s access to the technology under 35 U.S.C. 262, it would affect Coca-Cola’s ability to block competitor from using the technology.  While the dispute is not yet over, and Coca-Cola may yet prevail, the dispute could have been avoided entirely with some advance planning.

Whenever a business deals with a third party who could potentially solve a technical problem it is facing, that business should address  the possibility upfront taking steps to secure access to the solution, and if desired secure exclusivity over the solution.  In addition, when preparing a patent application, the potential contributions of anyone who might have contributed to the invention should be vetted..

Many of the states have passed legislation purporting to restrict a patent owner’s right to make accusations of infringement.  Some of these statutes seem to be of questionable validity, but we will have to wait for a determination.  In State of Vermont v, MPHJ Technology Investments, LLC, [2015-1310] (September 28, 2015), the Federal Circuit affirmed the district court’s remand back to state Court, finding that the Vermont Bad Faith Assertions of Patent Infringement Act (“BFAPIA”) had not (yet) been raised by the state.

The State of Vermont initiated an action under the Vermont Consumer Protection Act, 9 V.S.A. § 2453(a) for unfair trade practices and deceptive trade practices arising from MPHJ’s conduct in sending patent infringement warnings in the State of Vermont.  The district court found that Vermont was not seeking an injunction that requires MPHJ’s compliance with the Vermont Bad Faith Assertions of Patent Infringement Act (“BFAPIA”), 9 V.S.A. §§ 4195–99.. Given this conclusion, the Federal Circuit agreed that if the State
prevails on the merits in state court, it may not seek an injunction requiring MPHJ to comply with the BFAPIA.  The Federal Circuit found that because MPHJ relies
on the BFAPIA as its basis for removal under § 1442(a)(2), the necessary consequence of our decision is that we find no grounds for removal to federal court.

The Delaware Court of Chancery recently dismissed Joseph Alfred’s Complaint against the Walt Disney Company for its breach of implied contract resulting from Disney’s refusal to negotiate with Mr. Alfred for a license to Disney’s T-65 X-wing fighter plane and thereby stalling the next evolution of human transportation.  The crux of Mr. Alfred’s complaint, if there is one, is that Disney varied from its standard policy not to accept unsolicited proposals, and in so doing created an expectation in Mr. Alfred that his proposal would be accepted.

While such policies are often cited as being short sighted and stifling, they do in fact protect businesses from litigation, and a variance from such a policy invites trouble, as Mr. Alfred has proven.  Disney was able to get the suit dismissed in its early stages, but its doubtful that the Disney employees who participated in July 22, 2014, call had factored in the cost in both money and time, of taking the initiative with an unsolicited disclosure.

So far the USPTO reports a total of only 1382 submissions, about 25% of which were deficient.

 Of the 1044 “proper” submissions, how many resulted in an Office Action relying upon the submitted art?  Just 12.5%.  Given that some interested party went to the effort and expense of making a submission, the fact that only 1 out of 8 is relied upon suggests that the Examining Corps is ignoring these submissions.

Curious about the prior art the USPTO is ignoring?  There are average of about 3.2 references per submission, which is likely due to the fact that there is no fee for a submission of three references or less.  28% of the submitted art are prior patents, 20% are prior published applications, 19% are foreign references, and 32% are non-patent literature.

One of the few benefits to inventors in the AIA was the creation of Supplemental Examination, a procedure by which a patent owner could “cure” possible inequitable conduct.  However in two years, only 80 requests for Supplemental Examination have been filed.

Of course the one reason why Supplemental Examination has languished is the Therasense’s but for materiality standard.  See, Therasense v. Becton Dickinson 99 U.S.P.Q. 2d 1065, 1074 (Fed. Cir 2011).  After Therasense,  If the invention is not found unpatentable over the reference, then that reference is not material (of course even if the patent survives the litigation, it might still be found unpatentable over the reference under the Patent Office’s lower evidentiary standard.

Of course there are other ways to commit inequitable conduct besides failing to disclose material prior art, such as false claim of small entity status (Outside the Box Innovations v. Travel Caddy), false statements regarding late payment of maintenance fees (Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co.), false statements in supporting declarations  (eSpeed v. Brokertec); failure to disclose the relationship between the declarant and the applicant (Ferring B.V. v. Barr Laboratories, Inc.).

With just 80 takers in over two years, Supplemental Examination seems like a solution in search of a problem.