Design patents can be invalid if the designs aren’t original. But when is a design “anticipated”? When a patent holder sued a retailer for selling an allegedly infringing product, the retailer successfully claimed that the designs were anticipated by a third party’s similar products. On appeal, the patent holder contended that the court had erred by basing its determination only on the ordinary observer test and failing to apply the point of novelty test. But the Federal Circuit concluded that the former must logically be the sole test for anticipation as well as infringement. However, as a sidebar to this article explains, the court did find fault with the district court’s application of the ordinary observer test.

“Ordinary observer” test used to determine design patent anticipation

Design patents can be declared invalid if a court finds that the design wasn’t new and original —that, in the patent vernacular, the design was “anticipated.” But how can you tell whether a design was, in fact, anticipated?

In International Seaway Trading Corp. v. Walgreens Corp., a case involving the design of footwear, the Federal Circuit Court of Appeals looked specifically to the “ordinary observer” test to determine whether the design patent in question was invalid based on anticipation.

SOLE OF THE MATTER

Seaway owns three patents for substantially similar designs for the casual, lightweight footwear commonly referred to as clogs. In February 2008, Seaway sued Walgreens, claiming the retailer infringed the patents by selling allegedly infringing shoes. Walgreens moved for summary judgment, arguing that Seaway’s patents were invalid because the designs were anticipated by two models of clogs sold and patented by Crocs Inc.

The district court granted summary judgment, finding that the Seaway patent designs were anticipated by Crocs’ patent and, therefore, invalid. On appeal, Seaway contended that the court erred by basing its determination only on the ordinary observer test and failing to apply the point of novelty test.

In an earlier decision, Egyptian Goddess, Inc. v. Swisa, Inc., the Federal Circuit changed the test for design patent infringement. It held that the point of novelty test should no longer be used. Rather, the ordinary observer test should be the sole test for determining whether a design patent has been infringed. Until International Seaway, however, the court hadn’t ruled on whether the Egyptian Goddess holding required a similar change in the test for patent anticipation.

COURT TRACKS ITS FOOTPRINTS

The Federal Circuit acknowledged that it had previously applied a “dual test for anticipation identical to the then-applicable test for infringement, namely the ordinary observer and point of novelty tests.” It explained, though, that applying the tests in the context of infringement and anticipation was necessarily different.

Generally, under the ordinary observer test for infringement, the court compared the patented design with the accused design to determine whether an ordinary observer would consider the two designs substantially similar. When applying the test for anticipation, the court compared the patented design with the alleged anticipatory reference — in this case, the Crocs designs.

Under the point of novelty test for infringement, the court looked at whether the accused design appropriated the points of novelty of the patented design by comparing the patented design to the designs of prior art or prior inventions. Similar appearance, the court pointed out, isn’t sufficient to establish infringement under the point of novelty test.

When applying the test for anticipation, the court compared the patented design with the alleged anticipatory reference to determine whether it appropriated the points of novelty of the prior art reference as determined by looking at earlier prior art.

KICKED TO THE CURB

As the Federal Circuit observed, “It has been well established for over a century that the same test must be used for both infringement and anticipation.” The court cited the U.S. Supreme Court, which proclaimed in 1889 that “that which infringes, if later, would anticipate, if earlier.” In light of the Egyptian Goddess holding that the ordinary observer test is the sole test for infringement, the Federal Circuit concluded that it must logically be the sole test for anticipation as well.

The court noted several problems inherent in the point of novelty test in both the infringement and anticipation contexts. For starters, the test is difficult to apply and encourages a focus on minor differences between the allegedly anticipatory reference and the patented design.

Further, the point of novelty test creates the need to canvass the entire prior art to identify the points of novelty. Finally, eliminating the point of novelty test for anticipation would avoid the debate over the extent to which a combination of old design features can serve as a point of novelty.

QUESTION RESOLVED

The Federal Circuit’s ruling in International Seaway resolves a crucial question: whether the Egyptian Goddess holding abandoning the point of novelty test for design patent infringement also required a change in the standard for anticipation. As in the past, the same test will be used for both infringement and anticipation.

SIDEBAR: WALGREENS IS TRIPPED UP

Despite the finding in International Seaway Trading Corp. v. Walgreens Corp. regarding the proper test for patent anticipation (see main article), Walgreens didn’t land a complete victory. The Federal Circuit found fault with the district court’s application of the ordinary observer test.

The district court concluded that a comparison of the shoes’ insoles wasn’t required, as the insoles can’t be seen while the shoes are worn— or during “normal use.” But the appellate court explained that “normal use” in the design patent context extends from the completion of manufacture or assembly until the article’s ultimate destruction, loss or disappearance.

The Federal Circuit found the point of sale in the case of a clog “clearly occurs during its normal use lifetime.” And, at the point of sale, potential purchasers can see the insole when the clog is displayed or picked up for examination. Similarly, removing a clog from a wearer’s foot, which would expose the insole, falls squarely within the clog’s normal use lifetime.

The Federal Circuit, therefore, remanded the case for a determination of whether the differences between the insoles at issue barred a finding of anticipation.

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