The USPTO issued the first derivation certificate for a design patent on November 3, 2021, cancelling the claim, finding it derived from another inventor.

Six years after implementation of the American Invents Act (AIA), which went into effect on March 16, 2013, changing the U.S. patent system from first-to-invent to first-to-file, the first derivation proceeding was filed for a design patent. Thirty months later, the PTAB found the claim derived from the petitioner and cancelled it.

Derivation Proceeding Overview

Petitions for patent derivation may be filed for design patent applications in order to determine “whether (1) an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application; and (2) the earlier application claiming such invention was filed without authorization”.[1] Only an applicant for the same or substantially the same design can file a petition for derivation of a design patent, and the petition must be supported by substantial evidence, set forth a basis for finding the patented design derived from an inventor named in petitioner’s application, include an affidavit that the design was communicated and the application resulting in the patented design was filed without petitioner’s authorization, present evidence corroborating conception and communication of petitioner’s claimed design, identify how the claimed design is to be construed, and show why it is the same or substantially the same as petitioner’s claimed design.[2]

Tomte Toy Design Derivation Proceeding

In 2016, a designer “conceived an original design” for a stuffed tomte (gnome) toy, and his company, a Chinese toy manufacturer, began production of his Tomte Toy.[3] After the toy manufacturer successfully marketed the toy, an individual from Texas contacted the manufacturer about purchasing and distributing the Tomte Toy.[4] The individual purchased one Tomte Toy as a “test product” and signed an agreement which would allow her to buy Tomte Toys at a discounted price for resale.[5] Shortly into the new year, the individual began selling products that resembled the Tomte Toy on Amazon and when questioned by the toy manufacturer, she admitted that she was manufacturing these products with another vendor.[6] She applied for a design patent claiming the Tomte Toy design, and soon after, the toy manufacturer also applied for patent claiming the Tomte Toy design.[7] The USPTO issued a design patent to the individual, and later rejected the toy manufacturer’s design patent application over the individual’s patent.[8]

By 2019, several of the toy manufacturer’s Amazon listings for the Tomte Toy had been removed due to a complaint filed by the individual asserting patent infringement.[9] Following this, the individual retracted her complaints and asked that the toy manufacturer’s listing be reinstated because she had given the manufacturer “a temporary license to sell the products claimed in [her] patent”.[10]

Consequently, the toy manufacturer filed petitions to institute derivation proceedings, and later filed a complaint in the U.S. District Court for the Western District of Texas against the individual seeking a declaratory judgment that the individual’s design patent was unenforceable and invalid under 35 U.S.C. §102 (anticipation) and/or §103 (obviousness).

The district court later entered judgment that the individual’s design patent claim was anticipated by the toy manufacturer’s product which was publicly available through Amazon.com prior to the individual’s filing date.[11]

Shortly thereafter, the USPTO issued the first derivation certificate (issued from proceeding DER 2019-00005) for a design patent, cancelling the claim, and finding it derived from another inventor.

Now seven months later, the toy manufacturer’s design patent application is still pending and unpublished, and none of the toy manufacturer’s Amazon listings have been restored. The derivation proceeding itself is not open to the public, however, the derivation certificate cancelling the individual’s patent was published in the USTPO’s weekly Gazette. Derivation proceedings can be identified by searching the USPTO’s public End to End online system. As of this writing there are no other known design patent derivation proceedings.

AIA Validity Challenges

In addition to derivation proceedings to determine true inventorship in the case of competing claims, the AIA also ushered in validity challenges in the form of Inter-Partes Review (IPR), based on prior art patents or printed publications, and Post-Grant Review (PGR) based on any statutory ground that could be raised under § 282(b)(2) or (3). Specifically, an IPR petition must be filed after the later of (1) nine months after the grant of a patent, or (2) if PGR is instituted, the date of termination of such proceeding.[12] Conversely, PGRs must be filed within nine months after the grant of a patent or issuance of a reissue patent.[13]

At the time of this writing, there have been 52 design IPRs filed and 22 design PGRs filed. Of the 52 IPRs, there have been 48 decisions on institution, of which 28 were denied institution and 20 PTAB trials were instituted. Of the 20 PTAB trials, the claims were found unpatentable in 14 cases, and held not unpatentable in 6 cases. Of the 21 PGRs, there have been 19 decisions on institution, of which 14 were denied institution and 5 PTAB trials were instituted. Of the 5 PTAB trials, the claims were found unpatentable in 3 cases, and held not unpatentable in 2 cases.

Considerations for Derivation Proceeding

Timing for Filing

A petition to institute a derivation proceeding against a design patent may only be filed within 1 year after the first publication of the claim. Under 35 U.S.C. §122(b)(2) a design patent application is typically confidential and unpublished while pending and a design patent claim is first published upon issuance of the design patent.

If the period for filing a derivation proceeding has passed, inventorship might be corrected by litigation in District Court under 35 U.S.C. §256.

Cautions for International Design Filing

Although US design patents typically remain unpublished until issue date, an applicant for International Design Registration through the Hague System can select publication immediately or at 12 months from registration or may defer publication as allowed by the designated contracting parties. Early publication poses an early derivation risk, or opportunity. Moreover, early publication opens a pending application to another AIA implemented proceeding, third party pre-issuance submission of prior art under 35 U.S.C. 122(e).

Timing for Result

The declaratory judgement for invalidity litigation in district court ran less than four months from filing to entry of judgment of invalidity for anticipation, whereas thirty months lapsed from filing the petition to institute a derivation proceeding to receiving the derivation certificate, and the outcome was likely influenced by the earlier concluded district court litigation.

Derivation Scope

The first design patent derivation noted above was not contested, rather the patentee admitted anticipation in the district court litigation, so the parameters of comparing two designs to determine derivation was not explored. The relevant statutes and rules state that derivation proceedings only apply to designs that are the “same or substantially the same”.[14] For the purposes of derivation proceedings, the USPTO defines “same or substantially the same” as patentably indistinct.[15] This means that the derived design need not be identical to the claimed design.  Qualifying similarity using the language of appearing “the same or substantially the same” also applies to design patent anticipation.[16] Likewise, the test for infringement looks for the designs to be “substantially the same.”[17] Thus, derivation scope is a factual issue to be determined in each case and could extend beyond identical copies and cover equivalents.