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Design Patents Stage a Comeback: What It Means for Manufacturers

Date: 10/28/08

Sporting goods manufacturers seeking to protect the unique look of their goods may now have a better weapon in their arsenal, thanks to a recent decision on the subject of design patents handed down by the Court of Appeals for the Federal Circuit. The decision, entitled Egyptian Goddess, Inc. v. Swisa, Inc., provides much-needed guidance on what a design patent holder must prove in order to establish infringement and also makes it more difficult for infringers to avoid liability based on technicalities. As a result, design patents could play a bigger role than ever in the battle against knockoffs.

What is a design patent?
U.S. patent laws provide for the granting of a design patent to anyone who invents any new and nonobvious ornamental design for a manufactured good. A design patent protects only the appearance of an article, not its structural or functional features (which may be entitled to utility patent protection, a separate topic). Sporting goods companies routinely obtain design patents on the appearance of footwear, apparel, golf clubs, lacrosse sticks, baseball bats, and ice skates, to name just a few examples.

Compared to utility patents, design patents are inexpensive to prepare and shepherd through the Patent Office. Once granted, a design patent entitles the owner to prevent others from making, using, selling, offering to sell in the Untied States, or importing into the United States, any designs that an ordinary observer would view as substantially the same as the patented design for 14 years from the date of grant.

Upon proving infringement of a design patent, the owner may be entitled to a court-issued injunction that prohibits the infringer from doing anything that would constitute further infringement, as well as monetary damages, either in an amount adequate to compensate for the infringement or in an amount equal to the infringer's total profit. Moreover, if the owner can prove that the infringement was willful, a court can increase the damages by up to three times and award the design patent owner its attorney fees.

How do you prove infringement?
The test for infringement of a design patent, until recently, had two parts, both of which had to be satisfied for there to be infringement. The first part, known as the "ordinary observer" test, asked whether an ordinary observer, giving such attention as a purchaser usually gives, would be induced to purchase the accused design thinking it to be the patented design. The second part of the test, known as the "point of novelty" test, asked whether the accused design appropriates the novelty in the patented design that distinguishes it from the "prior art," which encompasses all designs already in the public domain.

The point of novelty test has proved difficult to apply in practice and in many cases has been susceptible to manipulation by patent owners and accused infringers alike, causing much uncertainty. Accused infringers almost always could point to some aspect of their design that the patented design had and the prior art lacked and call that the point of novelty. Somewhat counterintuitively, the more points of novelty a patented design had-and the more worthy of protection it was-the easier it was for an accused infringer to point to one that its design lacked. If a court accepted the accused infringer's alleged point of novelty, then there would be no infringement, no matter how similar the overall appearance of the two designs.

To illustrate the above, consider, for example, a patented design for a sneaker that differs from a prior art sneaker in three ways-major differences relating to the heel and toe, and a minor difference relating to the laces. If the accused design is exactly the same as the patented design except for the laces, the accused infringer might still have avoided infringement if it could convince a court that the laces were part of the point or points of novelty that distinguished the patented design from the prior art. Thus, the point of novelty test often made if difficult for design patent owners to stop knockoffs that varied from the patented design in minor respects, but still copied its overall look and feel.

What changed as a result of Egyptian Goddess?
On September 22, 2008, in Egyptian Goddess, Inc. v. Swisa, Inc., the Federal Circuit rejected the point of novelty test as a requirement for proving infringement of a design patent. Instead, the court held that the ordinary observer test should be the sole test for determining whether a design patent has been infringed. The court was careful to note, however, that differences between the patented design and the prior art still play a role-just not as part of a separate test. According to the court, the ordinary observer test is to be applied through the eyes of someone familiar with the prior art. Thus, if an accused design copies features of a patented design that depart conspicuously from the prior art, the accused design is likely to infringe. But, unlike the point of novelty test, this modified ordinary observer test does not run the risk of exaggerating the importance of small differences relating to insignificant features of the overall design.

How will Egyptian Goddess impact manufacturers?
The initial reaction to the Egyptian Goddess decision has been almost universally positive for design patent holders. Indeed, shortly after the decision came out, Nike sued Wal-Mart for design patent infringement based on Wal-Mart's sale of shoes alleged to be knockoffs of Nike's Shox line. Other lawsuits are sure to follow.

In addition to spurring design patent holders to enforce their patented designs, the Egyptian Goddess decision could motivate those not previously active in this area to seek protection for their designs. Be aware, however, that there is a time limit for applying for a design patent. If possible, consult your patent attorney before publicly disclosing your design or offering your design for sale, or, at the very latest, within one year of doing so. If you wait too long, you may find yourself barred from obtaining a design patent under U.S. law.

Article By:
Edmund Haughey, Partner
Fitzpatrick, Cella, Harper & Scinto

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