Egyptian Goddess, Inc. v. Swisa, Inc., Appeal No. 2006-1562 (Fed. Cir. September 22, 2008)

In a unanimous en banc decision, the U.S. Court of Appeals for the Federal Circuit streamlined the standard for determining infringement of a design patent. Previously, the Federal Circuit employed a two-pronged analysis in determining whether a design patent has been infringed. The design patent holder had to prove both (1) that the accused design is "substantially similar" to the patented design under the "ordinary observer" test and (2) that the accused design contains "substantially the same points of novelty that distinguished the patented design from the prior art." In the September 22, 2008, ruling, the court held the point of novelty test should no longer be used in the analysis of a claim design patent infringement, and that the sole test should be the ordinary observer test, which the court found already takes into consideration the prior art when properly applied.

Egyptian Goddess sued Swisa in the Northern District of Texas alleging design patent infringement. As opposed to utility patents that protect inventions defined by written claims found to be useful, novel and non-obvious, design patents protect the ornamental nonfunctional design of an object. Egyptian Goddess' design patent consisted of a series of drawings depicting the design for a nail buffer, constructed as a four-sided hollow tube with open corners and pads affixed to only three sides, whereas the accused Swisa nail buffer also had a four-sided hollow tube with open corners, but with pads affixed to all four sides. The district court granted Swisa's motion for summary judgment of noninfringement upon concluding the Swisa design did not incorporate the "point of novelty" of the D'389 patent - specifically, a fourth side without a pad.

Egyptian Goddess appealed to the Federal Circuit, where a three-judge panel agreed with the district court that there was no issue of material fact as to whether the Swisa product appropriated the point of novelty of the claimed design. In reaching the conclusion, the Federal Circuit panel stated that the point of novelty could be the combination of individually known design elements if the combination was a "non-trivial advance over the prior art." The Federal Circuit granted rehearing en banc and asked the parties to address several issues, including whether the point of novelty test should continue to be used as a test for design patent infringement.

In reconsidering the role of the point of novelty test in design patent law, a unanimous en banc Federal Circuit noted that the starting point for any discussion of design patent law is the 1872 Supreme Court decision Gorham Co. v. White in which the Supreme Court set forth what is referred to as the "ordinary observer" test, specifically: "[I]f in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."

However, the en banc court also noted its own precedent that can be traced to the 1984 Federal Circuit decision in Litton Systems, Inc. v. Whirlpool Corp. In Litton Systems, the Federal Circuit concluded that proof of similarity under the ordinary observer test was not enough to establish design patent infringement and proceeded to set forth an additional requirement that an accused design also appropriate the novelty of the claimed design in order to be found infringing. Under this point of novelty test set forth in Litton Systems, "the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art." In cases after Litton Systems, a finding of design patent infringement depended up on the design patent holder satisfying both the point of novelty test and the ordinary observer test.

Although Swisa argued on appeal that the point of novelty test was adopted in the 1893 Supreme Court decision in Smith v. Whitman Saddle Co., the Federal Circuit disagreed, finding that the Supreme Court did not adopt a separate point of novelty test in Whitman Saddle. Rather, the Federal Circuit concluded the Whitman Saddle decision simply emphasized the importance of conducting the ordinary observer test "in light of the prior art." Similarly, while acknowledging Litton Systems for the proposition that the point of novelty test is separate, an en banc Federal Circuit now concluded that its own ruling in Litton Systems and other design predecessors are "more properly read as applying a version of the ordinary observer test in which the ordinary observer is deemed to view the differences between the patented design and the accused product in the context of the prior art."

In rejecting the point of novelty test, the en banc court observed the difficulty in applying the point of novelty test in cases where the design patent involves numerous features that could arguably be points of novelty, or where the patented design consists of a combination of features that individually may be found in the prior art, but not in combination. In cases where several different features can be argued as points of novelty, there is a risk a court may improperly focus on whether the accused design copied a particular feature as opposed to focusing on the proper issue, that is whether the claim as a whole has been copied. The ordinary observer test, unlike the point of novelty test, did not present the risk of "assigning exaggerated importance to small differences between the claimed and accused designs relating to an insignificant feature simply because that feature can be characterized as a point of novelty" in the context of litigation. The court concluded that applying the ordinary observer test "through the eyes of an observer familiar with the prior art" not only avoids these problems but also equally serves the purpose of the point of novelty test, that purpose being "to focus on those aspects of a design which render the design different from prior art designs."

The Federal Circuit also considered the role of claim construction in design patent cases, holding that it is within a district court's discretion to determine the level of verbal detail to provide a jury in describing the claimed design. However, in recognition of the difficulties in describing a design in words and the risks of placing undue emphasis on particular features as opposed to the design as a whole, the unanimous court stated "the preferable course ordinarily will be for a district court not to attempt to 'construe' a design patent by providing a detailed verbal description of the claimed design."

Upon applying the ordinary observer test in comparing the asserted design patent to the accused nail buffer, the Federal Circuit found that no reasonable fact-finder could conclude that Swisa infringed the patented design in light of the similarities between the two prior art nail buffers and the accused nail buffer. In so ruling, the Federal Circuit gave little weight to Egyptian Goddess' expert testimony since the expert failed to explain why an ordinary observer would have considered the accused design closer to the patented design as compared to the prior art designs.