Last month, the Federal Circuit released its en banc decision in LKQ Corporation v. GM Global Technology Operations, LLC. The following day, the USPTO released its updated guidelines for how examiners should evaluate design patents in view of the shift in the law. Although much ink has been spilled on the topic by patent bloggers, it will take some time to determine the ultimate ramifications of the decision.

The “executive summary” of the decision is that the Federal Circuit changed the law regarding obviousness with respect to design patents, throwing out the Rosen-Durling test that had been used for ~50 years and adopting the Graham factors used for utility patents in its place. We predict that this will make design patents both harder to obtain here in the US moving forward and also easier to invalidate design patents that have already been granted in a post-grant proceeding.

Procedurally, this decision arose out of an inter partes review (IPR) proceeding before the USPTO’s Patent Trials and Appeals Board (PTAB) involving a design patent. No ruling was made by the Federal Circuit on the obviousness of the design patent itself. Instead, the case was remanded to the PTAB for further proceedings in view of the decision. However, as a fundamental reinterpretation of the law, the case has immediate effect and general applicability – applying to all pending design patent applications as well as those design patents already granted.

For background, design patents in the US have been evaluated under a separate test than utility patents when it comes to obviousness – the Rosen-Durling test. That test required for obviousness rejections of a design patent that (1) the primary reference must be “basically the same” as the challenged design claim and (2) any secondary references be “so related” to the primary reference that the features in one would suggest application of those features to the other. This means that the bar for an obviousness rejection of a design patent is quite high under the previous Rosen-Durling test – almost as high as the bar for an anticipation (i.e., “novelty”) rejection since there is only a hair’s breadth between “the same” and “basically the same.” This is one of the reasons why design patents have historically been relatively easy to acquire compared to utility patents.

The holding of this case is that design patents must be evaluated using the same factors as utility patents (the Graham factors) when it comes to obviousness, making the standard for design patents consistent with KSR and other recent decisions. The Graham factors include identifying the scope and content of prior art (where analogous art had not previously been a consideration for design patents), determining the differences between the prior art and the design claim (casting aside the previous similarity requirement), the level of ordinary skill in the art (which had not previously been a consideration for design patents), and whether one would have been motivated to combine the prior art to create the same overall visual appearance (which had not previously been a factor). Although unstated, this holding may also overrule some recent Federal Circuit case law regarding what qualifies as prior art for a design patent (e.g., In re Surgisil), which were decided while the Rosen-Durling test was still the law for evaluating the obviousness of a design patent.

There are several potential consequences for clients to consider moving forward. How significant these consequences prove to be will remain to be seen, and probably resolved through litigation over the next few years.

First, design patents will likely be harder to obtain in view of the prior art. This is because the universe of available prior art to sustain a rejection is greatly expanded. Moreover, examiners are allowed to consider reasons for combining references beyond whether secondary references are “so related” to the primary reference that the features in one would suggest application of those features to the other.

Second, design patents will be easier to invalidate post-grant for the same reasons they will likely be harder to obtain. This is a sword that cuts both ways. On the one hand, clients can invalidate design patents asserted against them more easily, which means clients are at a lower risk from design patent infringement lawsuits generally. On the other hand, it would make it harder for clients to assert any of their design patents against potential infringers if they desired to do so. Whether this is a net positive or a net negative probably depends on the client and its litigation profile.