The Court of Appeals for the Federal Circuit recently continued its efforts to clarify the law governing design patents. In International Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233 (Fed. Cir. 2009), the court held that the “ordinary observer” test must be used to determine the validity of a design patent. The decision builds on the court's 2008 decision in Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc), which dictated that the ordinary observer test, rather than the “point of novelty” test, should be used to determine infringement of design patents. While International Seaway was intended to clarify the law, the decision suggests that the Federal Circuit and district courts may still struggle with the application of the ordinary observer test.

Design patents fill a unique niche of intellectual property protection. A design patent covers the ornamental design of a functional item, in contrast to a utility patent, which protects the functional aspects of an item regardless of ornamental design. Design patents also differ from copyright protection, which is intended to protect artistic works that are either non-functional or separable from the functional aspects of a product. And they differ from trade dress protection, which only protects product designs that serve to identify the source of goods.

The Federal Circuit addressed the infringement of design patents in Egyptian Goddess. Before Egyptian Goddess, courts applied two tests, both of which had to be satisfied to find design patent infringement. The first is the ordinary observer test, which the Federal Circuit described as follows:

[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.

The second test, the point of novelty test, required a court to determine whether the accused design incorporated the points of novelty of the patented design, i.e., the features in the patented design that distinguished the design over the prior art. In Egyptian Goddess, the Federal Circuit eliminated the point of novelty test as a separate test, holding that only the ordinary observer test should be used to determine design patent infringement.

International Seaway extends that reasoning, holding that the elimination of the point of novelty test also applies when determining whether a design patent is invalid. When determining anticipation using the point of novelty test, courts previously compared the patented design to a potentially anticipatory prior art reference in order to determine whether the patented design appropriated the novel features of the prior art reference. The Federal Circuit rejected this test, affirming the district court's position that the ordinary observer test is the sole test for determining anticipation of a design patent.

In eliminating the point of novelty test, the Federal Circuit emphasized that many of the same problems associated with the point of novelty test in an infringement context also are applicable when anticipation is considered. For example, the court noted that the point of novelty test encouraged a focus on minor differences between an allegedly anticipatory piece of prior art and the patented design, rather than looking at the design as a whole. Additionally, the court recognized that the point of novelty test created difficulties when determining whether a combination of old design features could serve as a point of novelty. These factors, in combination with longstanding precedent that the same test should be used for both patent infringement and anticipation, led the court to rule that the ordinary observer test is the sole test for anticipation.

In addition to eliminating the point of novelty test for invalidity purposes, the court also clarified the role of a person of ordinary skill in the art when considering invalidity issues. The court noted that, when considering obviousness, the views of one of ordinary skill in the art are limited to determining whether two or more references should be combined to arrive at a single piece of prior art. Once this determination has been made, only the views of the ordinary observer are considered when determining whether the patented design is obvious over the prior art.

The Federal Circuit's application of the ordinary observer test to the product at issue in International Seaway shows that courts may still struggle with this test in future. Although the Federal Circuit ruled that the district court had selected the correct legal test, it found that the district court had applied the test improperly. The products at issue were a type of clog footwear. When considering whether the patents at issue were anticipated by the prior art, the district court did not consider any aspect of the products' insoles because, in the district court's view, “the insoles were hidden by the user's foot and therefore were not visible during normal use.” The Federal Circuit rejected this reasoning, noting that the normal use of a product is not limited to only one phase of the product's lifetime. In this case, the court noted that the insoles were visible when the product was being sold, as well as during various times when the clog was not on a user's foot. The court held that the insoles should have been considered when comparing the patented designs to the prior art.

The Federal Circuit also addressed the patentee's argument that genuine issues of material fact existed as to whether the exterior features of the patented designs precluded a finding of anticipation. Disagreeing with the patentee, the court noted that the exterior features of the patented designs included only slight dissimilarities to the corresponding features in the prior art. The court held that “these minor variations in the shoe are insufficient to preclude a finding of anticipation because they do not change the overall visual impression of the shoe.” The Federal Circuit nevertheless remanded the case to the district court on the issue of whether the differences in the insole patents between the prior art and the patented designs precluded a finding of anticipation or obviousness.

In a partial dissent, Judge Clevenger took issue with the majority's analysis of the exterior features in the patented designs and the prior art. Judge Clevenger disagreed with the majority's willingness to declare that certain individual design differences did not raise genuine issues of material fact. Emphasizing that the ordinary observer test requires an assessment of the designs as a whole, Judge Clevenger asserted that the differences in the inner sole designs should have been considered in conjunction with all of the other differences in the various designs when considering the issue of anticipation.

From a procedural point of view, the Federal Circuit's elimination of the point of novelty test in an anticipation context may make it simpler for parties to focus their invalidity arguments for the court. Rather than having to separately identify and analyze distinct points of novelty in a piece of prior art, and then determine whether the patented design includes these features, the litigants and the court will be able to focus solely on the ordinary observer test when considering anticipation.

At the same time, Judge Clevenger's dissent suggests that the Federal Circuit and district courts will struggle with how to consistently apply the ordinary observer test. On the one hand, the Federal Circuit has repeatedly noted that the ordinary observer test requires the comparison of designs as a whole. Such a comparison, however, inevitably involves a review of individual design features. While the majority opinion considered whether genuine issues of material fact were raised by dissimilarities in individual features, Judge Clevenger argued that the court should only compare individual features in the context of the designs as a whole. We can expect this issue to be raised again in the future, until courts settle on how individual features should be considered in the infringement and invalidity contexts for design patents.