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Court overturns GM intellectual property decision, puts 40-year patent test into question

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A federal appellate court has overturned a patent infringement decision and put a 40-year patent test in question, according to a May 21 opinion.

The decision stems from a lawsuit filed in November 2021, and amended in January 2022, by LKQ and its subsidiary, Keystone Automotive to which General Motors countersued.

LKQ argued in its complaint that they didn’t infringe on two GM vehicle fender design patents. GM argued that its patent design wasn’t obvious — essentially that the idea behind it wasn’t already familiar to experts and the general public and, as a result, should be protected as intellectual property.

In January 2023, a three-judge panel of Federal Circuit judges affirmed the U.S. Patent and Trademark Office and Appeal Board’s decision in favor of GM because LKQ “failed to show by a preponderance of the evidence that U.S. Patent D797,625 (the “’625 patent”) was anticipated or would have been obvious over the cited prior art before the effective filing date.”

LKQ’s lawsuit was stayed in September, pending a decision from the U.S. Court of Appeals for the Federal Circuit. The appeal was reviewed by all 10 judges regarding the standard for design patent obviousness, whether the test for obviousness should be changed, and if so, to what, according to the joint motion to stay.

The court also weighed whether Supreme Court precedent overrules or abrogates the Rosen-Durling test.

The use of the Rosen-Durling test was overruled by the majority for being too rigid by requiring challenged design claims to be either “basically the same” or “so related” to the patent in question.

“We adopt an approach consistent with Congress’s statutory scheme for design patents, which provides that the same conditions for patentability that apply to utility patents apply to design patents, as well as Supreme Court precedent which suggests a more flexible approach than the Rosen-Durling test for determining nonobviousness,” the opinion states.

“We reinstate the portion of the panel opinion holding that substantial evidence supports the [United States Patent and Trademark
Office, Patent Trial and Appeal] Board’s finding of no anticipation. The panel decision remains vacated in all other respects. We vacate the final written decision of the Board as to the nonobviousness determination and remand for further proceedings consistent with this opinion… The statutory rubric along with Supreme Court precedent including Whitman Saddle, Graham, and KSR, all suggest a more flexible approach than the Rosen-Durling test when determining obviousness.”

The panel determined the Rosen test imposes limitations that aren’t included in the federal obviousness standard which states patent infringement occurs when the design would’ve been obvious to the maker before the patent filing date. The test is also inconsistent with Supreme Court precedent of not considering whether designs were “basically the same.”

“This analysis reflects the reality that the one-size-fits-all approach of Rosen — in which a single primary reference discloses nearly every aspect of the claimed design — does not fit all obviousness scenarios for designs and cannot be reconciled with Supreme Court precedent,” the opinion states. “…the Durling ‘so related’ requirement has evolved into a rigid rule that limits the broad standard set forth in § 103 and “den[ies] factfinders recourse to common sense” when assessing a motivation to combine prior art references.”

However, Circuit Judge Alan D. Lourie provided a separate opinion that rather than overrule the test, it should be modified. He agreed with the court’s decision to vacate and remand the board’s decision.

“Overruling is destabilizing,” Lourie wrote. “Courts should, if possible, rule in modest steps, not abrupt acts of overruling… The majority walks away from Rosen and Durling as if they violated basic tenets of patent law. In reality, all they needed was a bit of tinkering.

“It is important to note that the U.S. Patent and Trademark Office, which also knows a good deal about evaluating design patents, basically endorsed Rosen and Durling, but found their application needed a little more flexibility. Oral Arg. at 32:25–48 (‘We’re saying that the existing test is fine. …The Rosen-Durling test is fine, but we do recommend some changes to it.’).”

Other organizations, Lourie added, have also said the test is basically correct including the American Intellectual Property Law Association, the Institute for Design Science and Public Policy, the International Trademark Association, and the Industrial Designers Society of America.

In a May 22 post on the Automotive Body Parts Association (ABPA)’s website, Executive Director Edward Salamy wrote about the effect the case could have on the competitiveness of the aftermarket parts industry.

ABPA submitted an amicus brief in support of LKQ that highlighted “the detrimental effects of restrictive design patents on the automotive repair industry and advocated for a more balanced approach to patent law,” according to Salamy.

“We are committed to understanding how this decision will impact our members and the broader industry, particularly regarding design patents which have a direct effect on the availability of aftermarket parts,” Salamy wrote.

Consumer Access to Repair (CAR) Coalition, for which LKQ is a founding member, contends in a May 21 press release that “over the past two decades, automakers have increasingly applied for design patents to restrict consumer access to basic functional parts, including headlamps, doors, and fenders.”

“Preserving consumer choice and affordable repair in the automotive collision parts industry anticompetitive practice hurts vehicle owners’ ability to choose from a variety of brands and products when making repairs and costs American consumers more than $1.5 billion per year, according to recent research from the CAR Coalition and DePaul University College of Law,” the release states.

SEMA also praised the court’s decision in a May 30 press release.

“Replacement part manufacturers have criticized this test, maintaining it set an impossibly high bar and allowed automakers to patent parts that contained only incremental, noninnovative design changes over previous iterations,” SEMA wrote. “Under Rosen-Durling, a design patent could be invalidated or a design patent application rejected when an older design was ‘basically the same’ and a secondary design reference was ‘so related’ to the first that ‘the appearance of certain ornamental features in one would suggest the application of those features to the other.'”


Featured image credit: Olivier Le Moal/iStock

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