In this series, we are looking at how to create strong design patents and to use them to protect your business. In the first three articles, we looked at The Power of the Broken Line to protect the shape of your product, The Power of Color to protect your graphical images, and The Power of Portfolio to build a wall of protection around your product. In this article we are looking at the “The Power of Policing Trademarks and Design Patents”.
“Policing” means actively searching for people copying your product and enforcing both your trademarks and design patents against them. Patents and trademarks don’t stop copying. If you are successful, you will be copied. They do allow you, however, to shut down counterfeiters fast. We’ve expanded the scope of our discussion to include trademarks since trademarks are your first line of defense to stop “on-line” counterfeiting. The on-line shopping sites like Amazon, eBay and Aliexpress respect them and will remove knock off listings. Design patents come into play when the counterfeiting gets serious and you need to stop bulk importers of knockoffs.
Our case study of how a small growing company can use trademarks in combination with design patents to effectively stop knockoffs will be Olloclip®, a very popular 3-in-1 iPhone camera lens attachment.
MacWorld Conference & Expo 2007, San Francisco. Steve Jobs presents Apple’s phone.
In this series, we are looking at Apple’s design patents and their strategies for using them to protect the iPhone from being copied. In the first two articles, we looked at The Power of The Broken Line, and The Power of Color. In this article we are looking at the The Power of Portfolio. In the patent industry, a “portfolio” is a grouping of patents that each protect different aspects of the same invention. Patents are like shingles on a roof, there needs to be some overlap between them to provide complete protection.
On January 9, 2007, Steve Jobs introduced the iPhone to the world. It was an historic event. He was immensely proud of what Apple had accomplished and he made it clear he was going to defend it. Steve was passionate about both style and technology, so when he said “Boy have we patented it” he meant both design and utility patents. We are focusing on design.
In the past decade, design patent filings and grants have experienced continuous growth. The 2013 IP Record confirms that design patent filings and grants are still on the rise—658 more design patents were filed in 2012 than in 2011—and the data suggests that the trajectory of design patent applications is going nowhere but up.
Design patents are essential in protecting the ornamental design of consumer products and their components; the intense litigation of the Apple v. Samsung lawsuits stressed the importance of design protection. The significance of design patents to the Apple v. Samsung lawsuitappears to have affected other companies’ patent strategies as well. The fifty companies on the IP Record’s list of the top 50 U.S. design patent grantees for 2012 were collectively granted greater than 150 more patents than the top 50 companies of 2011. Samsung, the top design patent recipient in both 2011 and 2012, alone accounts for almost a third of this growth—it was granted 378 design patents in 2012, exactly 50 more than in 2011. Apple, the #7 patent owner in 2011, rose one spot in 2012 and acquired 25 more patents than its total in its previous year.
Editor’s note: This is the second in a four part series on Strong Design Patents. In this series, author Mark Nowotarski looks at Apple design patents and the strategies behind building a strong design patent portfolio. Part 1 was The Power of the Broken Line. Subsequent articles will discuss “The Power of the Portfolio” followed by “The Power of Policing.”
Color matters. For example, the success of Apple Computer’s recent lawsuit against Samsung was largely due to Apple’s design patent on a single color image of their iPhone graphical user interface (GUI). This design patent accounted for $725 million of the $1 billion jury verdict on damages. There were many differences between Samsung’s Galaxy phone GUI and Apple’s patented GUI, but the overall color schemes were sufficiently similar to convince the jury that there was a likelihood of confusion between the Samsung GUI and the Apple patented GUI. Hence Samsung infringed the design patent, and Apple was entitled to all of the profits Samsung made from the confusingly similar phones.
You can patent the look and feel of a graphical user interface. More precisely, you can patent an electronic device that displays a graphical user interface of a certain design by filing an image of the GUI with the USPTO as a “design patent.” If the overall design is new and not obvious, the design patent will be allowed and is valid for 14 years from the issue date. For the next 14 years, no one will be able to make, use or sell an electronic device in the US that displays a graphical user interface that is confusingly similar to yours. It doesn’t matter what the device is.
Design matters. For example, the success of Apple Computer’s products is due not only to their technical capabilities, but also to their aesthetic design, which Apple has justifiably protected with a substantial portfolio of design patents. Recently, Apple’s iPhone design patents and other intellectual property were under scrutiny in comparison with the Samsung Galaxy family of phones. However, because of the strategy Apple utilized when filing these patents, their counsel at trial was able to obtain a jury award of over $1 billion, $980 million of which could be attributed to infringement of the design patents[i].
In this four part series, titled Strong Design Patents, we will look at Apple’s design patents to see how to build a strong design patent portfolio. In this first article, we will look at “The Power of The Broken Line,” then “The Power of Color”, followed by “The Power of the Portfolio”, and lastly, “The Power of Policing”.
Design patents are deceptively simple. They are merely drawings or photographs of an object. They protect against someone else making a similar looking object. Infringement is determined by comparing the accused object against the figures in the patent. If the accused object is sufficiently similar to the figures so that a typical observer using normal care would confuse the two, then the accused object infringes the patent. The damages for infringement are either the lost profits of the patent holder, a reasonable royalty the patent owner would have received for a license to the patent or all of the profits the infringer made by selling the infringing devices, whichever is greater. It doesn’t matter how much of the value of the accused object can be attributed to the design. If the accused object infringes, the patent owner is entitled to the full damages.
When it comes to DVR, no one can argue with the convenience of being able to record your favorite shows and watch them later. But when the case of DVR patent infringement came to court, the big lesson was that “later” just isn’t going to work. Earlier this month at the Symposium of SIPO/US Bar Liaison Council with ACPAA held at Cardozo Law School, prominent figures in intellectual property law tackled strategic and ethical issues for patent attorneys in the wake of the TiVo v Echostar case. They came to the conclusion that asserting your rights early and often is the best practice for attorneys faced with injunction cases.
In TiVo v. Echostar, Echostar lost on infringement of TiVo’s patented DVR functionality. Judge Folsom issued an injunction and ordered that Echostar stop offering the service and disable all storage to and playback from the hard disk. Unfortunately for Echostar, they did not appeal the wording of the injunction and took no action against the disablement provision. Instead they designed around it by downloading new code to get the set-top box to operate in a different way, in what appeared to be a pretty clean design-around. TiVo filed a contempt motion. Echostar was sanctioned on the grounds that there were not “colorable differences” and their design-around infringed. The dissent argued that not only were there colorable differences but moreover the differences established non-infringement. After two years of back-and-forth and one too many trips to Judge Folsom, the original 70 million that Echostar had to pay for the initial infringement rose to 300 million because of Echostar doing what they thought would get them out of infringing. (Ultimately, Echostar wound up settling for 500 million.)
Interest in design patents is increasing, in part, because they can be obtained relatively inexpensively and quickly. Dennis Crouch recently reported that from 2010-2012 the majority of design patents issue within 12-months of their filing date (see “Design Patents Are Still Relatively Quick” by Dennis Crouch, Patently-O, January 21, 2012,. In addition, most design patents issue without amendment and with little or no file wrapper estoppel, potentially leading to a “cleaner” patent with potentially fewer issues to be raised in litigation that could negatively affect the scope of the patent. The number of design patent filings has increased approximately 20% since 2009 (Robert Olszewski, “State of the Technology Center,” USPTO Design Day 2013), and, with this increase it is reasonable to expect an increase in design patent enforcement.
Design patent infringement is based on a finding of “substantial similarity” between an accused design and the patented design in the eyes of an “ordinary observer”. This typically involves a more straightforward analysis than utility patent enforcement, particularly given the Federal Circuit’s warning of the dangers of reliance on a detailed verbal claim construction. SeeEgyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 680 (Fed Cir. 2008) (en banc). Moreover, the potential for disgorgement of the infringer’s profit can motivate a defendant to quickly settle on reasonable terms.
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