Thursday, September 24, 2009

2009 USPTO Reexamination Statistics

The use of ex parte reexamination proceedingscontinues to increase. Requests for reexamination are routinely granted (92% proceed to reexamination on the merits). Average pendency of ex parte proceedings is a bit over two years (median is closer to 1.5 years), which indicates that some small percentage of proceedings take much longer than two years. Of all of the ex parte reexamined patents, nearly one quarter pass through without any amendments to the claims. Eleven percent fail to certify any of the claims. The remaining majority of ex parte reexamined patents certify claims with amendments made during the ex parte reexamination process.

While inter partes reexaminations are still comparatively few in number, the rate of increase in the use of the inter partes reexamination continues, as a less costly way of challenging the validity of an issued patent than patent litigation. 95% of all inter partes reexamination requests are accepted by the USPTO. The average pendency is 3 years for inter partes proceedings (median pendency being only a bit shorter). Significantly, few patents reexamined under the inter partes proceeding escape without amending the claims, and 60% result in all of the claims being cancelled or disclaimed. The remaining patents, about one-third of the total reexamined, result in amended claims.

Friday, January 23, 2009

Egyptian Goddess

The United States Court of Appeals for the Federal Circuit has clarified previously ambiguous tests for design patent law. In Egyptian Goddess, Inc. v. Swisa, Inc. (Fed. Cir. 9/22/08), a rehearing en banc established a single test for determining whether a design patent is infringed. Design patents, which protect only inventive ornamental features of an article of manufacture, are different than utility patents, which protect the functional features of inventions. Design patent infringement is more closely related to trade dress infringement than infringement of a utility patent. The objective test of infringement is whether an accused design may be reasonably viewed as so similar to the claimed design that a purchaser familiar with the prior art would be deceived by the similarity between the claimed and accused designs when making a purchasing decision. How much attention does an ordinary purchaser give to a purchase of an article having the patented design, and what design features are important to the purchaser in distinguishing one design from another? These are the questions that will often arise in design patent litigations. The decision in Egyptian Goddess has selected a single test, based on Supreme Court precedent, has clarified the burdens on the patentee and the accused infringer, and has made life simpler for trial courts.

The court held that the point of novelty test could not be applied as a separate, stand-alone test or threshold for patent infringement. Rigid applications of such tests have been overturned by the Supreme Court in recent decisions. Instead, the finder of facts in a trial must apply an ordinary observer test, applied through the eyes of an observer familiar with the prior art. Using this approach, there is no debate about how a combination of old design features define a point of novelty. The fact finder may take into consideration the similarity between the prior art and an alleged infringing article within the ordinary observer test. If an alleged infringing article is very similar to the prior art, then it may be difficult for a patentee to meet its burden to show that the alleged infringing article infringes the claim of the design patent. “[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,” then the alleged infringing article infringes the claim of the design patent. Egyptian Goddess citing Gorham Co. v. White, 81 U.S. 511, 528 (1871). This early Supreme Court decision and a later decision by the Supreme Court form the basis for the en banc court’s decision in Egyptian Goddess.

The point of novelty test was sometimes confusing to a jury, and the court decided that if “…the accused design has copied a particular feature of the claimed design that departs conspicuously from the prior art, the accused design is naturally more likely to be regarded as deceptively similar to the claimed design, and thus infringing” by an ordinary observer familiar with the prior art. “At the same time, unlike the point of novelty test, the ordinary observer test does 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,” according to the en banc court.

The ordinary observer test is the appropriate test to be used in all circumstances to inform a fact finder of infringement. There will be cases when “…the claimed design and the accused design will be sufficiently distinct that it will be clear without more that the patentee has not met its burden of proving the two designs would appear ‘substantially the same’ to the ordinary observer,” as required by the decision in Gorham. However, in other cases, when “…the claimed and accused designs are not plainly dissimilar, resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art…,” which might make otherwise unnoticeable differences “…significant to the hypothetical ordinary observer who is conversant with the prior art.”

Elimination of the points of novelty as a separate, stand alone test means that the accused infringer, not the patentee, has the burden of production of the prior art, if the accused infringer chooses to rely on comparison prior art. However, it will remain the burden of the patentee to establish sufficient similarity between the claimed design and the accused design that would cause purchaser confusion. According to Egyptian Goddess, the burden of proof for infringement remains with the patentee to show that the accused design could “…reasonably be viewed as so similar to the claimed design that a purchaser familiar with the prior art would be deceived by the similarity between the claimed and accused designs, ‘inducing him to purchase one supposing it to be the other’” by a preponderance of the evidence.

Furthermore, the decision in Egyptian Goddess releases district courts from any perceived requirement for district courts to “treat the process of claim construction as requiring a detailed verbal description of the claimed design as would typically be true in the case of utility patents.” Instead, district courts are free to provide “…an appropriate measure of guidance to a jury without crossing the line and unduly invading the jury’s fact-finding process…,” leaving “…the question of verbal characterization of the claimed designs to the discretion of trial judges.” Time will tell if trial courts take this opportunity to provide less guidance to the jury on the meaning of design patent claims.

It is unclear whether the decision in Egyptian Goddess will give rise to more design patent infringement litigations, but the decision should make it easier for district courts to litigate design patent infringement cases. The decision provides a single test to be used, limits the patentee’s burden to establishing infringement by a preponderance of the evidence, places the burden of production of comparison prior art on the accused infringer, and releases the trial court from a tedious and sometimes burdensome exercise in design patent claim construction. These changes should reduce the length of design patent infringement litigations and should make litigation of design patent cases less costly for both plaintiffs and defendants.