Legal Ruling on Design Patents Favors Consumer Goods Companies

The following is excerpted from an October 28, 2008 Brinks Hofer Gilson & Lione press release appearing at PR Newswire:

According to Kelly Burris, an attorney with Brinks Hofer Gilson & Lione, one of the largest intellectual property law firms in the U.S., the legal standard for design patent infringement has changed. In a recent decision by the Federal Circuit in Egyptian Goddess v. Swisa, Inc., (decided September 22, 2008), the more recent "Point of Novelty" test was eliminated in favor of exclusive application of the long-established "Ordinary Observer" test. Previously, with the Point of Novelty test, an accused product only constituted infringement if it incorporated the element or elements of the patented design that distinguished the patented design from prior art. Using the Ordinary Observer test, when an ordinary observer (purchaser) is deceived into confusing the accused product with the patented design, an infringement has occurred.

The Egyptian Goddess decision favors design patent holders and strengthens their ability to prove infringement. The ruling comes at a time when interest in design patents is on the rise.

Ms. Burris notes that a utility patent, (commonly referred to as "a patent") protects the way something works or how it is constructed, while a design patent protects only the aesthetic appearance of a product.

The United States leads the world in the number of design patents sought, with more than 25,500 filed and 11,691 issued in 2006. In addition to the branding emphasis, Ms. Burris cites several factors behind the increasing popularity of design patents.

Design patents are issued more quickly than utility patents and are less expensive. They also offer the right to exclude others from using the design, allow use of the "patent pending" statement upon filing, and can supplement other forms of intellectual property. Often, a product can be protected by a utility patent, a design patent and a trademark, making protection much stronger. Further, design patents offer unique financial protection for the patentee. For example, Nike is currently engaged in a design patent battle with Wal-Mart over a shoe design. When Nike sued Wal-Mart in 1996 in a similar patent case, Nike won more than $5 million. That's because with design patents, one can get the infringer's profits, lost profits and a reasonable royalty. Only the latter two are available for utility patents.

Read the full press release here.