CPLRG™ 0014 - International Seaway Trading Corp. v. Walgreens Corp. - Dec. 17, 2009

F.3d –, 2009 U.S. App. LEXIS 27648 (Fed. Cir. 2009) (DYK & Bryson; CLEVENGER, dissenting)


MAJOR ISSUES: Design patents; ordinary observer standard for anticipation and obviousness; minor variations not avoiding anticipation; design as a whole; features visible any time during product’s life

This case contains some odd, unsupported language about the nonobviousness standard for design patents.  For a discussion of obviousness for design patents, see Chisum Patent Law Digest 1552; Chisum on Patents 23.03[6].

In 1966, the Federal Circuit’s predecessor, the Court of Customs and Patent Appeals (CCPA),  adopted “the ordinary intelligent man” standard for assessing obviousness of designs.  In re Laverne, 356 F.2d 1003, 148 USPQ 674 (CCPA 1966).  Subsequently, in 1981, the CCPA overruled Laverne and adopted as the standard, “designer of ordinary capability who designs articles of the type presented in the application.”  In re Nalbandian, 661 F.2d 1214, 211 USPQ 782 (CCPA 1981).

In International Seaway, the Federal Circuit addressed directly only the anticipation (lack of novelty) standard for design patents and held that the same “ordinary observer test” applied to infringement should apply to anticipation.  But on obviousness, the court suggested that the designer standard applied to obviousness only for a limited purpose (deciding whether prior art designs can be modified or combined) and that, otherwise, the ordinary observer standard applies.  The court did not cite or discuss Nalbandian or any other authority.

1. Clogs. Three design patents concerned footware, known as clogs.   uspatnod529263 uspatnod545032 uspatnod545033 A district court granted summary judgment that the patents were invalid as anticipated by a  prior patent (’789) on a similar clog. uspatnod517789
The Federal Circuit held that the district court applied the correct, sole test, that of the ordinary observer, for anticipation, but it erred in failing to consider the patented design as a whole, including the insole portions of the clogs, which were hidden when the clogs were worn but not at other times.  On remand, the district court should assess the alleged obviousness of the designs as well as anticipation, in both instances considering the patented designs as a whole from the perspective of the ordinary observer.

2. Ordinary Observer: Sole Test for Anticipation (Lack of Novelty); No “Point of Novelty” Test for Either Infringement or Anticipation; Egyptian Goddess (En Banc 2008). The district court correctly held that the ordinary observer test is the sole test for invalidity by anticipation (Section 102) of a design patent by a single prior art reference, just as it is the sole test for infringement.   Prior cases had applied an additional  “point of novelty” test for both infringement and anticipation.  Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc), changed the test for infringement.  Under a long-standing general patent law principle (that which infringes if later, anticipates if earlier), the tests for infringement and anticipation are the same.  See Chisum Patent Law Digest § 1211.10.
In describing pre-Egyptian Goddess case law, the court noted that “[t]he ordinary observer and point of novelty tests were applied in much the same manner for obviousness as for anticipation ….”    An exception was that “in the case of obviousness the features of the prior art could be combined to create a single anticipatory reference or an earlier single reference could be modified based on the knowledge of a skilled artisan.  See, e.g., Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996).”
The patent owner argued that preserving the “point of novelty” test for anticipation was necessary to prevent blurring the distinction between anticipation and obviousness.  The Federal Circuit disagreed.  It noted:

”For design patents, the role of one skilled in the art in the obviousness context lies only in determining whether to combine earlier references to arrive at a single piece of art for comparison with the potential design or to modify a single prior art reference.”

In a footnote, the court observed:

”That combination or modification would not necessarily yield a single piece of prior art identical to a patented design since there may be no motivation to change the prior art to achieve such identity.”

The court continued:

”Once that piece of prior art has been constructed, obviousness, like anticipation, requires application of the ordinary observer test, not the view of one skilled in the art.”

The court cited no authority for these statements about using the ordinary observer test for obviousness.

3. Failure to Compare Designs as a Whole; Features Hidden in Use. In finding anticipation, the district court refused to consider the differences between the insoles of the patented clog design and the insole of the prior art clog.  The Federal Circuit held that this was error.
a. District Court: Consider Only Portions of Product Visible in Normal Use; Insoles Hidden While Worn by User; Contessa (2002). Relying on Contessa Food Prods., Inc. v. Conagra, Inc., 282 F.3d 1370 (Fed. Cir. 2002), the district court reasoned that only portions of a product visible during normal use could be considered, whether in determining infringement or anticipation.  Insoles are hidden while a user wears a clog.
b. “Normal Use”: Consider Visibility of Product from Creation to Destruction; Point of Sale Not Excluded; Insole Visible at Point of Sale and When Not Worn. Under Contessa, “normal use” is from a product’s manufacture until its destruction or loss.  Contrary to the district court’s view, visibility at a “point of sale” is not excluded.  A clog’s insole is visible both at the point of sale and when a user is not wearing it, for example, when a user removes the clogs at a beach.
The accused infringers conceded that the district court erred in failing to consider the insoles but argued that the error was harmless.  First, the accused infringers argued that insoles had an insignificant effect on the designs as a whole because, inter alia, it is a “universal truth” that consumers buy shoes primarily for external appearance.  However, the accused infringers bore the burden of proof on invalidity by anticipation, and they introduced no evidence supporting their assertion.  Second, the accused infringers argued that the insoles of the patented designs varied only slightly from the prior art design.  However, a comparison of the two showed that they were “distinctly different.”  A court could not say that, as a matter of law, an ordinary observer would view them as substantially similar.

4. Four Differences in External Features: Minor Variations Not Sufficient to Preclude Anticipation; No Change in Overall Visual Impression of the Shoe. The patent owner pointed to four differences in the external features of the patented clog design and the prior art design.  It argued that there were material fact issues as to these differences that should preclude summary judgment of invalidity on remand.  The Federal Circuit held that these differences were “minor variations” that were not sufficient “to preclude a finding of anticipation because they do not change the overall visual impression of the shoe.”
The ordinary observer test mandates “consideration of the design as a whole.”  However, that mandate does not preclude a summary judgment determination that “individual features of the design are insignificant from the point of view of the ordinary observer and should not be considered as part of the overall comparison.”

5. Obviousness on Remand. The accused infringers asserted invalidity for obviousness as well as anticipation.  The district court did not determine obviousness because it had found invalidity for anticipation.  On remand, the district court should consider obviousness.   The court repeated:”Obviousness, like anticipation, requires courts to consider the perspective of the ordinary observer.”  Again, it cited no authority.  But, from this proposition, it concluded that failure to “compare the insoles of the patented designs to the prior art designs” would preclude a finding of obviousness, as well as of anticipation.

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