It is about that time of year where we start to wind down the old and prepare for the new. So with retrospectives on my mind I thought it might be interesting to take a look at the United States Patent and Trademark Office Annual Report for 2009. The Patent Office adheres to a slightly different “year” than most of the rest of us, so year end results for the Patent Office coincide with Fiscal Year 2009, which ended on September 30, 2009. In looking at the FY 2009 information the first thing that jumped out at me was the fact that design patent applications were down for 2009 compared with 2008. This came as quite a surprise, and was even a little shocking. Last year, on Monday, September 22, 2008, the United States Court of Appeals for the Federal Circuit decided the much anticipated design patent case – Egyptian Goddess v. Swisa. This decision is quite important because it changed the law applicable to design patent infringement in a way that has made design patents much stronger than they have ever been in the past. In Egyptian Goddess, the Federal Circuit did away with the point of novelty test, set the new design patent infringement test as the “ordinary observer” test, which basically means if the infringers device looks like the illustration in the design patent there is infringement. With that being the case everyone should be filing design patents. So what is going on?
Many throughout the popular press have been writing that the recession is to blame for patent filings being down, which is really complete and utter nonsense. The overall patent application filings were not off by very much at all compared with 2008, and in the first quarter of calendar year 2009 the Patent Office had an overall allowance rate of just 42%, which is abysmal to say the least. In recessions patent filings typically are not impacted, and this recession would not have been any exception had the Patent Office actually be interested in granting patents early in the year. Starting in about March 2009 a different philosophy grabbed hold, which seems to have accelerated significantly with David Kappos becoming the USPTO Director. The Patent Office now seems to be granting patents once again, and Kappos says he is interested in clearing out the backlog and getting assets into the hands of individuals and businesses in order to drive economic development. So don’t believe the recession had any impact on any of this. It is far more complicated than that, and in fact the recession likely played no role or contributed to applications not be off as much as they could have been.
Below is a graph showing the number of design patent applications filed in the United States from 1989 through 2009. For those interested in the raw numbers, see the data used for this chart. You will notice that during fiscal year 2008 the number of design patent applications peaked at 28,217 design patent applications filed. During fiscal year 2009 there were only 25,581 design patent applications filed, for a decline of about 9.4%.
In my opinion, the net effect of the Federal Circuit ruling in Egyptian Goddess cannot be overstated. While it is true that over the years design patents have been much maligned as the awkward step-sister of utility patents, they are easy to get, quick to issue (comparatively). Historically they had been weak in terms of strength, but that all changed with the Federal Circuit’s decision in Egyptian Goddess. The reason design patents have gained so much in terms of strength is that it is now much easier to prove design patent infringement and harder to invalidate the single claim in a design patent, which essentially is nothing more than “see the picture.” Given the low cost of filing, prosecuting and achieiving design patents and what is an extremely pro-patent decision, design patents must become an important part of any patent portfolio. Of course, the more you have the better. Somethings never change in that respect I suppose.
So as to not get carried away, allow me to point out that design patents only protect the way a particular invention looks. The protection offered is said to be for an “ornamental design,” which means the focus is on the outside, not what is under the hood (so to speak). Utility patents are still and always will be stronger than design patents because a utility patent protects functionality. If you have a utility patent you can prevent others from making, using, selling, offering for sale or importing into the United States products that are the same in terms of structure and function, but look different. With design patent you cannot prevent someone from making something that does the same or similar thing but looks different. So design patents are not as strong as utility patents, that is for sure, but design patents can be obtained in as little as 7 months, compared with upwards of 3 years for utility patents.
Whenever possible I encourage the clients I work with to consider design patents. My approach to intellectual property, and patents in particular, is to have overlapping protections. A single patent is good, but a web of protection that ties together patents, copyrights, trademarks and trade secrets is better, and it is even better if you have both design patents and utility patents. I have seen situations prior to the new found strength of design patents when an individual had multiple design patents, turning what would otherwise be weak protection into strong protection because of sheer quantity.
Today, moving forward, inventors should be asking themselves not only about utility patents, but also about whether filing a design patent or two would also be helpful. If you are trying to move forward in a responsible business manner and looking for partners, investors or just trying to get some financial support from family or friends, having a patent can be quite important. I think in many situations a good strategy is to file a provisional patent application, follow it up with a nonprovisional patent application within 12 months, and at some point in the process, likely sooner rather than later, file a design patent application or two. The design patents will issue relatively quickly, allow you to say that your invention is “patented,” which could come with some marketing benefit. Little by little it also starts to lay the foundation for a portfolio, which will be most helpful if your invention starts to pay off.