Surprisingly, US Design Patent Filings Down in 2009

By Gene Quinn
December 11, 2009

iPhone Design Patent D600241

FIG. 1 from iPhone Design Patent D600241

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.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 7 Comments comments.

  1. Jeff Sweetman December 15, 2009 5:30 pm

    “So don’t believe the recession had any impact on any of this”

    Gene, I agree it’s a complex issue, but no impact at all?

    We speak to huge numbers of clients (and potential clients) every month, across the US, Europe, Australasia, Israel, etc, and we KNOW they are choosing to file less often and in fewer countries for financial reasons. The change has been palpable over the last 18 months.

    We’ve heard stories of patent managers being brought into meetings with the CEO and finance director and given a revised budget, mid-year, requiring them to immediately cut their IP spending by 30 or 40%.

    We’ve seen largish clients who filed in the same set of countries month after month for all their cases suddenly start filing in a smaller set of countries for most applications, reserving the full set for mission critical IP.

    And we’ve been told by at least some clients to expect a period of less work due to them having to reduce the number of applications filed, again solely for financial reasons.

    Perhaps half of our clients are patent firms and they relay similar stories.

    I agree it’s a complex issue, and I’m not for a moment suggesting everyone’s suddenly decided to cut back their filings. But I don’t think you should dismiss one of the biggest recessions since the Great Depression as having had no impact at all on filings.

    regards
    Jeff

  2. Gene Quinn December 15, 2009 5:54 pm

    Jeff-

    I should probably write something more at length about this, and probably will later this week. The total number of US patent applications filed in fiscal year 2009 was down a little more than 11,000 versus fiscal year 2008. Notwithstanding, Fiscal 2009 saw more patent applications filed than any other year other than fiscal year 2008. In fact, Fiscal year 2009 saw more than 18,000 more patent applications filed in the US than in fiscal year 2007, which was not a year in which there was a recession.

    I am sure international filings are down as a result of the recession and I don’t doubt many are choosing to file in fewer countries, but the US is the dominant market and I doubt many are deciding to file less in the US. Certainly, during recessions there will be some, perhaps big and notable companies that file less during a recession, but this is historically outpaced by individuals and start-ups that pick up the slack. Essentially, during bad times big companies do exactly what they should not do, which is cut R&D and cut patent budgets. Then when things turn around they fall way behind and the next wave of new, hot companies takes over.

    The question I ask is this: would US filings be more in fiscal 2009 had the Patent Office not had a 5 year policy of “reject, reject, reject”? Had the USPTO not driven the allowance rate so low, and lengthened the pendency to ridiculous lengths would US filing have been more in fiscal 2009? I think the answer is a resounding YES. Would there have been more than an additional 11,000 patent applications filed? I think the answer is yes. Have the USPTO not tried to kill innovation for so long their projections for fiscal 2009 would have likely been accurate and there would have been an increase over fiscal 2008. Some are affected by recession no doubt, but the story hear is that during one of the worst recessions ever, and at a time when the USPTO ceased to be in the patent granting business, it was still nearly a record year in term of patent applications filed.

    More to come!

    I hope all is well.

    -Gene

  3. Jeff Sweetman December 16, 2009 10:21 am

    Hi Gene

    I’m well thanks – hope you are too.

    Something like two thirds of the discussions we have are with US-based clients, and many of them are telling us they’re filing fewer applications of all sorts – including US applications – because the recession is hurting them. This isn’t something we heard at all until a couple of years ago, but now it’s a relatively common comment.

    Unless they’re all lying, the recession is therefore having SOME impact, and that’s all I’m suggesting.

    Now, would there have been more applications filed if the USPTO was doing a better job? Very possibly. That doesn’t negate the argument about the recession’s impact.

    Finally, I’m not that surprised design patents have been hit hard. As you say, they are (rightly or wrongly) considered the poor cousin of “proper” patents. As such, I suspect they’re thought of as “nice to have if you can afford them”, and therefore one of the first classes of IP rights many applicants feel can be put on hold until finances recover.

    regards
    Jeff

  4. Gene Quinn December 16, 2009 7:34 pm

    Jeff-

    I don’t doubt that the recession is hurting some, perhaps many, in terms of filing decisions. What I am really referring to is the overall number of patent applications. Big companies do silly things in a crisis, like cut R&D and protect less — as if that is a strategy to advance. Really it is a strategy to stagnate and ultimately take a step back to new competition. But this is a natural process that happens all the time in the patent world, and for a very long time this dip has been more than taken up by new businesses filing. In a recession a lot of creative people get laid off, and they start their own companies. Lately, however, it has been increasingly difficult for small businesses to get patents, and the pendency is ridiculous. There seems to be one track for big companies who get patents quickly, and another for small businesses that get dragged out. So many are questioning (or were through at least the first quarter of 2009) whether filing made sense, particularly when the allowance rate hit a low of 42%.

    So I don’t doubt the stories you are being told, but without previous Patent Office incompetence in the previous regime the overall numbers would be an all time high for FY 2009 even though large businesses are not doing as much filing.

    If you are interested in writing something for publication regarding what you are hearing I would love to publish it.

    -Gene

  5. Amar Sehmi December 31, 2009 7:56 pm

    As an owner of a patent drafting company the amount of design drawing applications we prepared this year was three times more than 2008.