Navigating AI Patent Applications to Avoid Section 101 Rejections
It feels like AI is becoming more popular and ubiquitous with each passing day. This naturally means that more and more people and companies are looking to patent AI-based inventions that cover more and more types of technologies. However, as the intersection of artificial intelligence (AI) and patent law grows increasingly complex, these people and companies may find themselves in a patent-eligibility minefield. Particularly, there is a risk of an AI-based patent application being deemed an abstract idea and rejected under 35 U.S.C. § 101. Below, we will discuss the following points:
- Framework for Thinking about Section 101 Rejections
- What Leads to Rejection?
- What Can Help Overcome Rejection?
- Critical Steps in the USPTO’s Analysis
What Are Section 101 Rejections: Framework for Thinking about Section 101 Rejections
Although this post is not intended to cover all the complexities of Section 101 (of which there are many!), we provide a quick overview for context as it relates to AI-specific issues. At its core, the question of Section 101 is whether an invention amounts to an abstract idea that is merely implemented by a computer. In the Alice case, which is a 2014 Supreme Court case from which the modern law on this issue is derived, the patents were related to a computer-implemented scheme for mitigating “settlement risk” (i.e., the risk that only one party to a financial transaction will pay what it owes) by using a third-party intermediary (i.e., escrow). In that case, the Supreme Court found that the patents were patent-ineligible because their central concept is the abstract idea of intermediated settlement, and merely implementing that abstract idea on a computer is insufficient to take it out of the realm of “abstract.”
In many instances, AI-based patent applications relate to software, and therefore, the question of patent eligibility under Alice is relevant. In other words, AI-based patent applications are often a subset of software-based patent applications.
The Alice case provided a test for determining whether a patent claim is patent-eligible under Section 101. The chart below provides a (simplified) reference guide. The intricacies of this chart are outside the scope of this post, but the chart does provide a helpful visual reference for thinking through Section 101 issues as they relate to AI-based patent applications.
Avoiding the Pitfalls: What Leads to Rejection?
When drafting a patent application for an invention that involves AI, it is best to avoid elements that may be construed as abstract ideas without practical application.
The USPTO often identifies claims that involve purely mathematical concepts or mental processes as abstract ideas. These are seen as non-patentable because they do not add any substantive technical improvement or innovation.
For instance, an application that merely recites a process of using a neural network to perform calculations or detect patterns without any specific technological application or improvement is likely to be rejected as abstract. The USPTO may view these types of claims as too broad and merely instructing one to apply the abstract idea using a generic computer, which fails to meet the patent eligibility requirements under Section 101.
Enhancing Your Chances: What Can Help Overcome Rejection?
To increase the likelihood of your patent application being accepted, it’s helpful to demonstrate that your invention applies AI technology in a concrete and innovative way. Claims should integrate the AI-driven abstract idea into a practical application or show that the AI system improves the functionality of a particular technology.
For instance, demonstrating how an AI innovation enhances network security by detecting and preventing malicious attacks in real time can establish its practical application. Clearly outlining how AI drives technological improvements, like boosting security or efficiency, strengthens claims against Section 101 rejections.
Critical Steps in the USPTO’s Analysis: Where Rejections Are Made or Avoided
Step 2A Prong One: The USPTO examines whether your claims recite an abstract idea. This hurdle will often be easy for examiners to satisfy. It is often difficult to reframe an invention to avoid such characterizations.
For example, an examiner might argue that, under the broadest reasonable interpretation, your claim covers the steps that could practically be performed in the human mind but using generic computer components.
This includes using a fundamental economic concept or managing interactions between people.
Simply describing mathematical relationships, formulas, or calculations without practically, concretely, and/or tangibly being applied to solving an actual problem in the real world is not sufficient. In short, you cannot patent E=MC2, but you can patent a nuclear bomb.
Step 2A Prong Two: The USPTO then considers whether the claim integrates the abstract idea into a practical application. Demonstrating that your invention applies AI in a specific, meaningful way to solve a technical problem can help your application pass this prong.
This is your best chance to turn a Section 101 rejection into an allowance. If your claim is too broad, the examiner will repeat what they said in their Step 2A Prong One rejection. While an examiner may concede that your claim may include “additional elements,” these elements are often dismissed by repeating the examiner’s previous characterization of your claim as mere instructions to use generic computer components or the like.
Step 2B: Finally, if the claim is deemed to involve an abstract idea, the USPTO assesses whether there is an "inventive concept" that transforms the abstract idea into a patent-eligible invention. This step can be pivotal if your application shows that the AI method contributes significantly more than just the abstract idea, thereby justifying patentability.
If your claim has not survived any of the previous steps, it is unlikely to be saved in Step 2B. Usually, the same analysis as Step 2B will be applied. If you can successfully overcome Step 2B, you can overcome Step 2A Prong Two. This may be preferable because it is often easier to clearly describe the technical details of your invention rather than getting drawn into a vague, philosophical discussion of what constitutes an “inventive concept.”
Understanding these steps and crafting your patent claims to address them directly can make the difference between a successful and rejected patent application.
Tips for a Successful Patent Application
Examiners may reject your AI invention for various reasons, some of which can be avoided with well-drafted claims. Others require refining the claim language or presenting compelling arguments. Avoid encountering these common USPTO objections.
Claims should be written to prevent the patent examiner from characterizing your invention in the following ways.
BAD:
- You claimed the “idea” of a solution rather than an actual solution.
- You “simply applied” AI to automate something.
- Your claim is equivalent to a generic instruction to “apply” an abstract idea.
- Your claim performs a mathematical calculation that could be practically performed in the human mind.
- Your claim is just data gathering activities. Examiners call this a “well-known extra-solution activity.”
- Your claim does not “meaningfully limit” the claim beyond a mere indication of the field of use or technological environment in which the abstract idea is performed.
Instead, your claims should support the patent examiner characterizing your invention in one of the following ways.
Pro Tip: Envision someone reviewing your application cold, without additional context. How easily could they challenge your claim? Consider what concise argument they might use to justify allowing it to their supervisor.
GOOD:
- Your claimed AI model and training data provide a “particular way to achieve a desired outcome.” Be specific about both the method and the outcome.
- Your claim includes specific technical details about the AI model. Most AI inventors leverage existing models, such as Gemini, Llama, and countless others, and apply them to custom datasets or integrate them into tailored workflows or interfaces.
- Your claim should include precise details about the AI model training process. Most small AI inventors use pre-trained models without direct control over or insight into the training, avoiding the need for extensive resources.
- Your claim includes technical details about how the AI model is integrated into a particular method to improve conventional approaches.
- Your claim includes a neural network model trained using a plurality of training datasets.
- Your claim includes a training dataset with at least two data types associated with each other. For example, a dataset of patient records or medical information might include physiological parameters related to a patient's disease indicator.
- Your claim “meaningfully limits” the application of the abstract idea. This guidance is vague but important. The USPTO gives the example of claiming to select something specific from a list of specifically enumerated items rather than a broad category.
Conclusion
Understanding and addressing Section 101 rejections is paramount in navigating the complex landscape of AI patent applications. Inventors can effectively distinguish their innovations from abstract ideas by crafting claims emphasizing specific technological applications and meaningful improvements. A clear and strategic approach mitigates rejection risks and strengthens the foundation for securing intellectual property rights in the evolving intersection of AI and patent law. With a proactive mindset and attention to detail, applicants can ensure their inventions contribute to technological advancement while meeting the rigorous standards of the USPTO. To learn more about how the experienced attorneys at NK Patent Law can assist you in navigating the complexities of AI inventions and patent applications, contact us today.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
NK Patent Law Shines in Chambers USA Regional Spotlight Guide 2025
NK Patent Law is thrilled to announce its debut recognition in the prestigious Chambers USA Regional Spotlight Guide 2025. This honor marks a significant milestone for our firm as we are celebrated as a leading small to medium-sized law firm, offering a credible alternative to Big Law.
Our inclusion in this esteemed guide is a testament to the exceptional expertise, experience, and talent that our team brings to the table. The selection process, based on an independent and in-depth market analysis, underscores the high caliber of our legal services.
A New Era of Recognition
The Chambers USA Regional Spotlight Guide highlights the best small and medium-sized firms in specific regions. Unlike the broader Chambers USA guide, which focuses on top-tier firms and individual attorneys, the Regional Spotlight shines a light on middle and lower-mid-market firms, recognizing their expertise and significant contributions to the legal field.
NK Patent Law stands out for its distinguished work in Patent Law. Our managing partner, Doug Meier, expressed his delight, stating, "This recognition by Chambers and Partners reflects the quality of work we provide our clients and the complex matters we help them navigate. We are honored to be acknowledged for our dedication and expertise."
About NK Patent Law
NK Patent Law is committed to delivering exceptional intellectual property legal services. Our team of skilled attorneys and professionals is dedicated to helping clients protect their innovations and navigate the complexities of intellectual property law. From startups to established corporations, we provide strategic advice and comprehensive legal support to ensure our clients' success.
About Chambers and Partners
With over 30 years of research in the US legal market, Chambers and Partners is uniquely positioned to identify and champion the best legal talent nationwide. Their mission is to uncover and recognize leading smaller firms that offer a credible alternative to Big Law, ensuring that exceptional legal services are accessible to all.
For more information about NK Patent Law and our services, please visit our website at www.nkpatentlaw.com.
USPTO CAF Fees in 2025: Are You Ready?
On January 19, 2025, the United States Patent and Trademark Office (USPTO) implemented a significant change to its fee structure by introducing the Continuing Application Fee (CAF). This new fee will impact patent prosecution strategies for many applicants, particularly those relying on continuing applications filed years after their earliest priority date.
What is the Continuing Application Fee?
The CAF is a new fee (37 CFR 1.17(w)) that applies to utility, plant, and design continuing applications (continuations, divisionals, and continuation-in-part applications) with an actual filing date more than six years after their Earliest Benefit Date (EBD).
The fee structure is tiered:
- Applications filed more than 6 years but not more than 9 years after their EBD: $2,700 (§1.17(w)(1))
- Applications filed more than 9 years after their EBD: $4,000 (§1.17(w)(2))
Key Concepts to Understand
Earliest Benefit Date (EBD)
The EBD is the earliest filing date for which a benefit is claimed under 35 U.S.C. 120, 121, 365(c), or 386(c). Important notes:
- EBD is determined on an application-by-application basis
- Foreign priority applications (35 U.S.C. 119(a)) do NOT count toward determining the EBD
- Provisional applications (35 U.S.C. 119(e)) do NOT count toward determining the EBD
- For reissue applications, the EBD is based on the earliest filing date claimed in the original patent
When is the CAF Due?
Applications filed on or after January 19, 2025
Payment is required when presenting a benefit claim that makes the EBD more than six years earlier than the filing date.
- If the claim is presented at filing, the fee is due at filing
- If the claim is presented later, the fee is due concurrently with presenting the claim
Applications Filed Before January 19, 2025
Even applications filed before the effective date may be subject to the CAF if:
- A new benefit claim is presented on or after January 19, 2025, AND
- The application's filing date is more than six years after its EBD
The CAF is required in this case, even if the newly presented benefit claim doesn't change the application's EBD.
Important Scenarios and Considerations
Multiple Benefit Claims
- The CAF is based on the application's EBD, not the number of benefit claims
- Presenting multiple claims at the same time incurs only one fee
- If benefit claims are presented at different times and change the EBD to more than 9 years, the additional amount owed is the difference between the §1.17(w)(2) fee and any previously paid §1.17(w)(1) fee
Non-Payment Consequences
If the CAF is not paid when due, the USPTO will not enter the benefit claim. This is the same consequence as for other deficiencies under §1.78(d). Applicants should verify that benefit claims have been entered by checking the application's Filing Receipt.
Reissue Applications
- Non-continuing reissue applications: The USPTO has waived the CAF for benefit claims that were properly presented and entered in the original patent
- Continuing reissue applications: Likely to incur a CAF due to the presentation of the benefit claim to the parent reissue application
Certificate of Correction
When adding a benefit claim to a patent via a certificate of correction, the CAF is required if the application was issued as a patent had a filing date more than six years after its EBD.
Planning Tips for Patent Applicants
- Review your pending applications: Identify applications with filing dates approaching six years from their earliest benefit date
- Consider timing: If the 6-year or 9-year anniversary falls on a weekend or federal holiday, you can file on the next business day without incurring the higher fee
- Check filing receipts: Always verify that benefit claims have been entered correctly
- Calculate fees carefully: When presenting multiple benefit claims or adding claims after initial filing, ensure you've calculated the correct fee amount
Conclusion
The new Continuing Application Fee represents a significant change to the USPTO fee structure that will affect prosecution strategies. By understanding when and how this fee applies, patent applicants can make informed decisions about their continuing application strategies while minimizing unnecessary costs.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
NK Patent Law Attorneys Recognized in BNC's Legal Elite 2025
Charlotte, North Carolina, January 6, 2025—In an affirmation of its leadership and skill in the field of intellectual property law, NK Patent Law is proud to announce the recognition of three of its attorneys, Doug Meier, Justin Nifong, and Ani Agrawal, as top patent lawyers in Business North Carolina's (BNC) Legal Elite 2025.
BNC conducts a rigorous peer-review process annually, reaching out to every member of the North Carolina Bar. This process is instrumental in identifying lawyers who have demonstrated exceptional proficiency and earned the respect of their peers in specific legal categories. In this competitive process, three of our firm’s patent and trademark attorneys have been honored this year, showcasing our firm's commitment to excellence and our role as a partner for businesses navigating the complexities of intellectual property protection and strategy.
Spotlight on NK Patent Law's Esteemed Honorees:
Doug Meier: As the managing partner of NK Patent Law, Doug brings unparalleled insight from his prior experience as an electrical engineer, where he contributed to projects including NASA’s Space Shuttle Program. His transition into the legal field has been marked by a dedication to patent prosecution, intellectual property (IP) strategy, and providing comprehensive guidance on patent-related business challenges.
Justin Nifong: A founding member of our firm, Justin has established himself as a respected figure in North Carolina's IP law landscape. His knowledge and skill encompass patent prosecution in both U.S. and international jurisdictions and advising clients on patentability, clearance opinions, and IP litigation preparedness.
Ani Agrawal: Ani stands out for his extensive experience in patent and trademark prosecution across a diverse range of industries, from medical devices to retail and technology. His global perspective and commitment to client service make him a key asset in our pursuit of protecting and maximizing the value of intellectual property for our clients.
This recognition by Business North Carolina reflects our firm’s unwavering commitment to delivering strategic, personalized IP counsel.
About NK Patent Law:
NK Patent Law represents the pinnacle of intellectual property legal services, catering to a diverse clientele across the United States and abroad. Providing patent and trademark preparation and prosecution, alongside general IP counseling, our firm is dedicated to empowering businesses—from innovative startups to established corporations and academic institutions—to navigate and thrive in an increasingly competitive intellectual property landscape. Our strategic advice and legal expertise are tailored to help our clients protect their innovations, maintain their competitive edge, and achieve sustainable market leadership.
For additional information on NK Patent Law and our services, please visit our website.
Patent Eligibility Restoration Act (PERA) - Clarity for Software Patents?
At our firm, we work with Section 101 issues in software patents every day, and we know firsthand how frustrating and unpredictable this area of law has become. We hear it from clients every day, and we often share their frustration. Talking to Examiners, it seems like they also share some of this frustration. Since the Alice decision in 2014, the Patent Office (and, later, courts) have been rejecting software-related inventions as claiming “abstract ideas” that are ineligible for patent protection. This has made it incredibly difficult for companies and people who focus on software to secure patents, even when their software is actually a “real” invention.
The Problem with Section 101 for Software Patents
At the bottom, the issue is how the Patent Office and the courts have applied judicial exceptions to patent eligibility. Under current law, inventions that are categorized as abstract ideas, laws of nature, or natural phenomena are generally ineligible for patent protection. For software specifically, this means that many useful inventions—like algorithms, data processing methods, or systems that improve computing or computing performance—are deemed patent-ineligible and, therefore, denied patents because they are seen as abstract.
We loosely refer to the test used to determine patent-eligibility as the Alice test. The Alice test itself is tricky: first, patent examiners/courts determine if the invention is directed to an abstract idea, and if it is, they have to decide then whether the claim includes additional elements that integrate the exception into a practical application or whether the claim as a whole amounts to significantly more than the judicial exception. If this sounds confusing, that’s because it is. This confusion has led to inconsistent decisions across cases.
What is PERA?
The Patent Eligibility Restoration Act (PERA) is a proposed piece of U.S. legislation designed to reform Section 101 of the U.S. Patent Act, particularly to address the challenges mentioned above. Introduced in 2023 by Senators Thom Tillis and Chris Coons, PERA targets the judicial exceptions that have made it difficult for software-based inventions to qualify as patent eligible. PERA aims to eliminate these judicial exceptions and restore patent eligibility (thus, the name…) for software inventions that meet the basic statutory requirements of being a process, machine, manufacture, or composition of matter. PERA’s primary goal is to create clearer, more predictable rules around patent eligibility for software, bringing the U.S. in line with global standards and making it easier for innovators in software-based fields, such as AI, cybersecurity, and cloud computing, to protect their inventions.
How PERA Could Change the Game
The Patent Eligibility Restoration Act (PERA) aims to fix this problem by eliminating the judicial exceptions that have made patenting software inventions so difficult. Here’s how PERA would directly benefit the software industry:
- Broader Patent Eligibility: PERA wipes away the confusing exceptions for abstract ideas, laws of nature, and natural phenomena. This means that, under PERA, software inventions will be patentable as long as they meet the basic requirements of being a useful process, machine, manufacture, or composition of matter. This is a huge shift from the current system, where software-related patents are frequently rejected.
- Defined Exclusions: While PERA opens up broader patent eligibility, it’s still smart about drawing some lines. Things like pure mathematical formulas and mental processes that can be performed entirely in your head will still be excluded from patentability. However, for software that solves real-world technical problems—like improving computer efficiency or securing data—PERA will make it clear that these inventions are patentable.
- Aligning with Global Standards: One of the big advantages of PERA is that it would bring U.S. patent law back in line with the rest of the world. In Europe, Japan, and China, software patents are generally granted as long as they provide a technical solution to a problem. The U.S., on the other hand, has been much stricter since Alice, leaving American software developers at a global disadvantage. PERA would correct that and make the U.S. more competitive in key technology fields.
Why the Current System Holds Back Software Innovation
The Alice test has made patent eligibility for software inventions unpredictable. Even when an invention clearly improves a computer's functionality or solves a real problem, it can still be rejected as abstract. For software startups, for example, this can be a significant obstacle. Without clear patent protection, it can be difficult to find funding or to protect their market differentiation. Investors want to know that their investment is safe, and patents provide a key part of that security.
Startups and smaller software developers often lack the resources to navigate this uncertainty. They need clear, predictable rules around patent eligibility, and that’s exactly what PERA promises to deliver.
The Bottom Line
The Patent Eligibility Restoration Act (PERA) appears to be the reform that patent attorneys and the software industry have been waiting for. By eliminating the confusing and inconsistent judicial exceptions, PERA would hopefully provide the clarity and predictability that software developers, patent attorneys, and businesses need. With more certainty around what is or is not patentable, we would expect to see an increase in innovation, investment, and growth in key fields like AI, cybersecurity, and cloud computing.
While PERA is still making its way through Congress, the fact that it has bipartisan support is a good sign. If passed, it would have the opportunity to restore confidence in the U.S. patent system and ensure that software innovations get the protection they deserve. This is a welcome and much-needed change for those of us in the patent world.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
Innovation to Protection: The Patent Puzzle for Large Companies
Managing patents at large companies is a complex process with many layers, from protecting new inventions to defending against legal claims. Here’s a more in-depth look at some of the main challenges companies face:
Balancing Innovation and Legal Protection
Patents need to support broader business goals, but aligning innovation with legal strategy can be tricky.
- Aligning with Business Goals: Patents aren’t just legal assets—they’re also business tools. Companies need to make sure their patent filings fit into their long-term strategy. For instance, they might prioritize patents that protect core technologies or open up new markets. Filing patents for everything isn’t feasible, so companies need to be selective and strategic.
- Choosing What to Patent: Companies are constantly developing new technologies, but not every idea is worth patenting. Patenting costs time and money, so companies need to focus on innovations that will give them a competitive edge, have significant market potential, or could become a key part of future products.
- Managing a Large Patent Portfolio: As companies grow, so do their patent portfolios. This requires constant attention to ensure that patents are up-to-date and still relevant. Some patents may no longer be valuable and maintaining them just adds unnecessary costs. A smart patent portfolio strategy involves regular reviews and decisions on which patents to keep, sell, license, or let expire.
Dealing with Global Patent Systems
For companies operating across multiple countries, managing patents globally is a huge challenge due to differing laws and regulations.
- Handling International Filings: Every country has its own rules about how and when to file patents, making international protection complex. Filing patents in key markets like the U.S., Europe, and Asia is essential for global companies but requires significant coordination. Each jurisdiction also has different standards for things like patent eligibility, which adds another layer of complexity.
- Adapting Strategies for Different Markets: A patent that’s critical in one region might be less important in another. For example, a technology might be revolutionary in the U.S. but less competitive in Europe. Companies need to be strategic about where they file patents, balancing costs with the importance of protection in specific markets. They also need to be mindful of cultural and economic differences that could affect how patents are enforced or challenged.
Patent Litigation and Enforcement
Protecting patents doesn’t stop once they’re filed—companies need to actively enforce them and defend against claims of infringement.
- Defending Against Lawsuits: Large companies are frequent targets for patent infringement lawsuits, especially from competitors or non-practicing entities (patent trolls). These lawsuits can be extremely costly and time-consuming, sometimes dragging on for years. Companies need strong legal teams to defend against these claims and to minimize the financial and reputational damage they can cause.
- Enforcing Patents: On the flip side, companies also need to enforce their own patents to prevent others from using their innovations without permission. This can be difficult, especially when dealing with infringers based in foreign countries, where enforcement mechanisms may be weaker or slower. Companies have to decide when it’s worth pursuing legal action and when to negotiate settlements or licensing agreements.
- Managing Licensing Agreements: In many industries, large companies enter into cross-licensing agreements or participate in patent pools, especially for technologies that are widely used. These agreements can be complex, requiring careful negotiation to protect the company’s interests while maintaining good relationships with partners.
Controlling Costs
Managing patent portfolios is expensive, so keeping costs under control is a major priority for companies.
- Budgeting for Patent Costs: Filing and maintaining patents, especially on a global scale, can be a significant financial burden. On top of that, patent litigation can lead to enormous legal fees. Companies need to budget carefully and ensure they’re spending resources on the most important patents. This might mean scaling back in certain areas or focusing on high-value patents that protect key innovations.
- Working with Outside Experts: Large companies often rely on external law firms, particularly for international filings or high-stakes litigation. While these experts bring valuable experience, their services can be expensive. Companies have to balance the need for specialized expertise with the desire to keep legal costs manageable. This often involves building long-term relationships with outside counsel and negotiating favorable fee structures.
Staying Ahead of Emerging Technologies
As new technologies rapidly emerge, companies need to stay ahead of the curve to protect their innovations.
- Keeping Up with New Technologies: In industries like tech, biotech, or pharmaceuticals, advancements happen quickly, and companies need to be proactive in identifying new technologies worth patenting. Missing the window to file for protection can mean losing out on valuable competitive advantages. It’s also important for companies to monitor technological trends in their industry to anticipate where future patent challenges might come from.
- Navigating Overlapping IP: Many emerging technologies involve multiple forms of intellectual property. For example, a new software platform might include patentable algorithms, but it could also involve copyright-protected code and trade secrets. Companies need a comprehensive IP strategy that covers all aspects, ensuring they’re not leaving valuable innovations unprotected or creating gaps that competitors could exploit.
Working with R&D Teams
Collaboration between the legal and technical sides of a company is essential for identifying patentable innovations early.
- Identifying Patents Early: The sooner a company can recognize that something is patentable, the better. However, technical teams may not always know what qualifies as a patentable invention. That’s why strong collaboration between R&D and legal departments is essential. Companies need systems in place that encourage communication between teams and ensure that patentable innovations are flagged early in the development process.
- Educating Teams: Often, R&D teams are focused on product development and may not fully understand the patent process. Companies need to invest in educating their technical staff about the importance of patents and how the filing process works. This can prevent missed opportunities and ensure that valuable innovations are protected as early as possible.
Handling IP in Mergers and Acquisitions
When companies acquire or merge with others, patents are often a major part of the deal, but integrating IP can be complex.
- Evaluating Patents in M&A: Before finalizing a merger or acquisition, companies need to thoroughly assess the other company’s patents. This involves checking the validity of the patents, identifying any ongoing litigation, and assessing how these patents fit into the acquiring company’s overall strategy. A bad patent portfolio can lower the value of a deal or lead to unexpected legal issues down the road.
- Integrating New Patents: Once the acquisition goes through, companies need to integrate the new patents into their existing portfolio. This can be a logistical challenge, particularly when dealing with patents in different jurisdictions or industries. Companies must decide how to manage these new assets and whether to consolidate or sell off certain patents.
Navigating Regulatory and Compliance Issues
Patent strategies must comply with legal regulations, and this adds an extra layer of complexity to managing patents.
- Avoiding Antitrust Problems: Companies that hold significant patent portfolios, especially in areas like telecommunications or pharmaceuticals, need to be careful about how they manage licensing to avoid running afoul of antitrust laws. Regulators may look closely at how companies license their patents, particularly if they hold market power. Ensuring compliance with antitrust rules while still maintaining strong patent protection is a delicate balancing act.
- Protecting Confidential Information: Keeping trade secrets and unfiled patents confidential is crucial for companies, especially with the rise of digital threats and stricter data privacy laws. If sensitive information leaks before a patent is filed, it can jeopardize protection. Companies need robust cybersecurity measures and clear internal processes to ensure that critical information stays secure.
Adapting to Patent Law Changes
Patent laws and procedures are constantly evolving, and companies need to stay up-to-date to avoid falling behind.
- Keeping Up with Legal Reforms: Patent laws vary by country, and legal reforms can change the way companies file, enforce, or maintain patents. Companies operating in multiple jurisdictions need to keep track of changes in key markets and adjust their strategies accordingly. For example, recent changes in U.S. patent law, like the introduction of post-grant review processes, have significantly altered how companies approach litigation and patent challenges.
- Navigating New Procedures: Changes in how patent offices examine applications or handle disputes mean that companies must stay flexible. New procedures, like post-grant review or updates to the patent examination process, require companies to be proactive in adjusting their strategies to avoid unnecessary delays or legal risks.
Managing Standardization and Open Source
As industries move toward standardization and open-source platforms, companies need to manage their patents carefully.
- Dealing with Standard-Essential Patents (SEPs): Many industries, such as telecom and IT, rely on standardized technologies, meaning companies often hold patents that are considered essential to the standard. Managing SEPs comes with its own set of challenges, including ensuring compliance with fair, reasonable, and non-discriminatory (FRAND) licensing terms. Companies must balance their own business interests with the need to avoid regulatory scrutiny and ensure fair licensing practices.
- Handling Open Source: As more companies adopt open-source software, managing patents in this space becomes more complex. Companies need to ensure that their patent strategies align with open-source licensing rules, which can be tricky since open-source platforms encourage free use and modification. Companies need to walk a fine line between protecting their proprietary innovations and participating in open-source ecosystems.
In the end, managing patents at large companies is about striking the right balance between protecting valuable innovations, keeping costs under control, and staying flexible in a changing legal landscape.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
Everyday Products: A List of Some of the Largest Patent Awards
Patent lawyers may never be accused of being the coolest people in the room. And patent battles might sound boring, but they can be a huge deal—especially when the products at the center of the fight are everyday items or life-saving drugs. Companies pour massive amounts of money into research and development, so when another company comes along and uses their patented ideas, it's war. And the damages can be eye-popping. Let’s take a look at some of the largest patent-infringement awards, with the products you probably know at the heart of the disputes. As you will see below, many of these large awards were ultimately overturned, either on appeal or through the Patent Office. This highlights that these large patent awards can be quite difficult to collect.
- Idenix v. Gilead (2016) – $2.5 Billion
Idenix v. Gilead was about the active ingredient in a breakthrough Hepatitis C drug. Idenix, a company owned by Merck, claimed that Gilead’s wildly successful drugs Sovaldi® and Harvoni® infringed Idenix’s patent. Gilead’s drugs made billions of dollars, so when Idenix sued them for patent infringement, the jury returned the largest-ever patent award of $2.54 billion, which included willful infringement. Ultimately, the award was overturned, but it nevertheless caught everybody’s attention when it was handed down.
- Intel v. VLSI (2021) – $2.1 Billion
Intel v. VLSI is one of the more recent massive patent awards. It involved microprocessors, which are ubiquitous in our technology-driven society. VLSI claimed that Intel had used their patented designs in their processors without paying for them. The jury agreed, handing down a $2.18 billion verdict. As with the Idenix award, this award was likewise overturned on appeal.
- Centocor v. Abbott Labs (2009) – $1.6 Billion
The Centocor case centered around Humira®, Abbott’s blockbuster drug for arthritis and other inflammatory conditions. The jury awarded Centocor, a Johnson & Johnson subsidiary, $1.67 billion, which included willful infringement. This award was likewise ultimately overturned on appeal.
- Carnegie Mellon v. Marvell (2012) – $1.5 Billion
Carnegie Mellon v. Marvell was a patent case about a method for accurately reading data off of hard drives. A jury awarded the university $1.54 billion, but public reports indicate that Marvell settled for $750 million after appealing.
- Microsoft v. Alcatel-Lucent (2007) – $1.5 Billion
Remember when everyone was using MP3s? Alcatel-Lucent sued Microsoft over the audio compression tech used in Windows Media Player. The jury initially awarded $1.52 billion, but the ruling was overturned on appeal.
- Samsung vs. Apple (2012) – $1 Billion
Perhaps one of the most famous patent battles is the Apple v. Samsung smartphone war. Apple accused Samsung of copying the look and feel of the iPhone, from the way it looked to how users swiped and pinched the screen. The jury awarded Apple $1.05 billion, though that amount was reduced over the years. Both companies continued fighting until they reached a settlement in 2018, but this case was huge news and set the stage for smartphone patent wars across the globe.
- Monsanto v. DuPont (2012) – $1 Billion
Monsanto v. DuPont was a patent battle about genetically modified crops. Monsanto, famous for its Roundup Ready® soybeans, sued DuPont for their use of Monsanto’s patented seed technology. The jury awarded $1 billion, which included willful infringement. The two agriculture giants eventually settled, with DuPont reportedly agreeing to a licensing deal valued at $1.75 billion over time.
- VirnetX v. Apple (2018) – $502 Million
Apple’s FaceTime and iMessage apps were the focus of this lawsuit. VirnetX claimed that Apple had infringed their secure communication patents. The jury awarded VirnetX $502 million in damages. Ultimately, this award was overturned when the Patent Office invalidated the patents.
- Bristol-Myers & Sanofi-Aventis v. Apotex (2006) – $442 Million
Plavix®, a blood-thinning medication used by millions to prevent heart attacks and strokes, was at the heart of this lawsuit. Bristol-Myers Squibb and Sanofi-Aventis held the patent for Plavix®, and they sued Apotex, a generic drug maker, when Apotex launched a cheaper version in what is referred to as an at-risk launch. The court ruled in favor of the original makers, and the ruling was upheld on appeal, with Apotex reportedly paying $442 million.
These cases show just how high the stakes can be when patents are involved—especially when the products in question are ones we use every day or that can change entire industries. From smartphones to life-saving drugs, patents can be worth billions, and when they’re violated, it can lead to massive courtroom battles.
At NK Patent Law, our talented IP attorneys help clients protect and enforce their rights in patent litigation, trademark oppositions, infringement claims, trade secret violations, and other intellectual property disputes. Put us to work and start harnessing the power of your intellectual property.
Contact us today to learn more.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
Shaping Success: Why Design Patents Matter in Today’s Market
Design patents—sometimes thought of as the less-important version of utility patents—are all about protecting the look of a product. Unlike utility patents, which focus on how a product works, design patents are concerned with the visual aspects—the shape, surface decoration, or overall appearance. They don’t cover functionality. For a long time, it seemed that design patents weren’t seen as particularly valuable compared to utility patents. After all, if you’re only protecting how something looks and not how it functions, how valuable could that be? However, that thinking has evolved over the years, especially after the highly publicized Apple v. Samsung case, which brought design patents into the spotlight and showed just how important they can be, particularly in industries where aesthetics matter.
Why Design Patents Matter and What They Protect
At their core, design patents give you the exclusive right to stop others from copying the appearance of your product. This could be anything from the shape of a smartphone, the design of a piece of furniture, or even the pattern on a piece of clothing. In industries where looks are a key factor in sales—think tech gadgets, fashion, or home decor—having a unique design can make or break a product’s success. That’s why design patents are so important. They protect your brand’s visual identity and ensure that your competition can’t just copy your style and confuse customers into thinking they’re buying your product when they’re really buying a knockoff.
For example, when Apple comes up with a new iPhone design, it’s not just the tech inside that sells the product—it’s also the way the phone looks and feels in your hand. If a competitor could copy that look without consequences, they could ride on the coattails of Apple’s design success. That’s where design patents come in handy. They lock down the appearance, so only the patent holder can use that specific design.
How Design Patents Differ from Utility Patents
The main difference between design patents and utility patents is what they protect. Utility patents cover the functionality of a product, meaning how it works or how it’s put together. If you invent a new gadget, a utility patent protects the internal mechanics, the method it uses, or the way it operates. It’s all about how the product works.
With a design patent, you’re protecting what the product looks like—not how it works. It’s much more focused on the aesthetics. So, if you have a utility patent on a new kind of coffee machine, you’d be protecting the way the machine brews coffee. But if you have a design patent on the coffee machine, you’d be protecting the way that same machine looks on your kitchen counter, such as its shape, buttons, or even color scheme.
A utility patent tends to be more valuable in terms of the broad protection it offers. It’s harder for competitors to get around because if their product works the same way, even if it looks different, they’re still infringing on your utility patent. Design patents, on the other hand, are more specific. They only protect the specific design shown in the patent drawings, which means a competitor could change the look slightly to avoid infringing. Still, in industries where design is a huge part of the product’s appeal—like smartphones, clothing, or cars—a design patent can be quite valuable.
How the Apple v. Samsung Case Changed Perceptions
For years, design patents weren’t really seen as all that important. People thought they were nice to have, but utility patents were where the real protection was. That seemed to have all changed with the Apple v. Samsung case, which made headlines over a decade ago. In that case, Apple sued Samsung for copying the design of its iPhone, including things like the rounded corners and the layout of the icons on the screen. The result? Apple was awarded hundreds of millions of dollars in damages. People started paying attention to just how powerful design patents can be when it comes to protecting a product’s visual identity.
The case sent a clear message: design patents aren’t just for show. They can be incredibly valuable, especially in industries where the look of a product can be as important as its functionality. Apple’s victory over Samsung wasn’t just about the technology inside the iPhone but also about its sleek, recognizable design. The court ruled that Samsung’s phones infringed Apple’s design patents, and the damages awarded were based on Samsung’s total profits from the infringing products. This showed that copying the look of a product can be just as costly as copying its function.
Around the same time as the Apple v. Samsung battle was making waves, YETI coolers similarly fought a high-profile battle with competitor RTIC. YETI, an Austin-based company known for its premium outdoor products, filed multiple lawsuits against RTIC, a Houston-based competitor that offered similar products at a lower price point. YETI claimed that RTIC was infringing, among other things, its design patents. RTIC was growing rapidly and was seen as a major competitor to YETI, primarily due to its cheaper yet similar-looking products. The parties ultimately settled in 2017, resulting in RTIC significantly changing its product designs and packaging. This allowed YETI to maintain its distance in the marketplace from RTIC.
Shifting Views on the Value of Design Patents
After the Apple v. Samsung ruling, companies and legal scholars started to rethink the value of design patents. More industries began to realize that design matters, and protecting the look of a product can be just as important as protecting how it works. Think about companies like Nike, Tesla, or even furniture brands like IKEA. These companies invest heavily in design because they know that consumers often choose products based on their visual appeal. A well-designed product can create a strong connection with consumers, and design patents help keep competitors from mimicking that connection.
Design patents have become a key part of the overall intellectual property strategy for many businesses. Legal scholars now see design patents as a more powerful tool than they once did, especially as courts continue to recognize the importance of aesthetics in product design. Apple v. Samsung set a precedent for how damages are calculated in design patent cases, often leading to significant financial consequences for companies that infringe on patented designs.
Today, as consumers care more and more about brand recognition and visual appeal, the look of a product plays a huge role in buying decisions. This is especially true in industries like tech, fashion, and consumer goods, where the design is often what sets products apart. Design patents are often used alongside utility patents, trademarks, and copyrights to build a comprehensive IP strategy. If you’ve got a product that both looks and works in a unique way, having both types of patents can provide stronger protection. The utility patent covers how it works, and the design patent covers what it looks like. This combination can give businesses an edge in competitive markets where both function and form matter to customers.
Conclusion
Design patents may have once been seen as the little sibling to utility patents, but their importance has grown, especially in recent years. They protect the visual design of a product, giving companies the ability to stop competitors from copying the way their products look. While utility patents cover functionality, design patents focus on aesthetics, which can be just as valuable in industries where the look of a product plays a big role in consumer choice.
The Apple v. Samsung case was a turning point that showed how powerful design patents can be, especially when the design is a big part of a product’s success. Since then, companies and legal scholars have started to take design patents more seriously. In today’s market, where brand identity and visual appeal are critical, design patents have become an important tool for protecting a company’s competitive edge. Whether you’re a tech giant or a fashion brand, a strong design patent can help you lock down your product’s unique look and keep copycats at bay.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
Copyright Damages in Warner Chappell Music v. Nealy
The Warner Chappell Music Inc. v. Nealy case, decided by the Supreme Court on May 9, 2024 (opinion available here), was not only a win for independent creators but also closely followed by legal scholars. This case focused on the unauthorized use of songs associated with Flo Rida, which were owned by Sherman Nealy. Nealy discovered in 2016 that Warner Chappell Music and others had been licensing his songs without his knowledge or permission, including tracks used by Flo Rida. Nealy’s 2018 lawsuit set off a legal debate over whether he could recover damages for the entire period of infringement, even though the misuse started years before he found out.
Why it Matters
The case gained a lot of attention because it tackled a major issue in copyright law: when does the clock start ticking for recovering damages? Under 17 U.S.C. § 507(b) of the Copyright Act, a plaintiff must file suit “within three years after the claim accrued.” Historically, there have been two differing views on how to interpret this. Under one view, a copyright claim accrues when an infringing act occurs. Under the competing view, the claim accrues when the plaintiff discovers, or with due diligence should have discovered, the infringing act. This second view is referred to as the “discovery rule.” The discovery rule allows a (diligent) plaintiff to raise claims about even very old infringements so long as the suit is filed within three years of the discovery.
Here, Nealy invoked the discovery rule to sue for infringement going back ten years, arguing that his claims were timely because he first learned of the infringement less than three years before he sued. Nealy argued that, under the discovery rule, because he didn’t know his songs were being used while he was in prison, he should still be able to recover damages for all the years his work was being misused. The Supreme Court agreed, with Justice Kagan stating that “there is no time limit on monetary recovery.” This means that as long as Nealy filed his lawsuit within three years of discovering the infringement, he could claim damages for the entire period of infringement, no matter how far back it went.
This ruling also resolved a circuit split. Some courts, like the Second Circuit, had ruled that damages should be limited to the three years before a lawsuit, even if the discovery rule applied. However, other courts, like the Eleventh Circuit, allowed plaintiffs to claim damages for the full length of the infringement. The Supreme Court sided with the Eleventh Circuit, clarifying that the Copyright Act doesn’t impose a time limit on damages as long as the discovery rule applies. This was a major win for Nealy, allowing him to recover from all the unauthorized licensing of the Flo Rida tracks.
Justice Kagan made it clear that the important factor is when the infringement was discovered, not when it started. As long as a lawsuit is filed within three years of discovering the infringement, copyright holders can recover damages for the entire period their work was misused. This decision caught the attention of legal scholars because it cleared up how far back damages could go in copyright cases and strengthened protections for creators who might not be aware of a violation right away.
Conclusion
For everyday creators, this ruling means that even if they only discover years later that their work has been used without permission—like Nealy did with the Flo Rida songs—they can still recover damages for the entire period of infringement. Legal experts see this case as a big shift, ensuring broader protections and larger potential recoveries for creators. It’s a major victory for anyone trying to protect their intellectual property, giving them more time and flexibility to seek justice.
About NK Patent Law
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. We focus on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. We help startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets. Visit us at www.nkpatentlaw.com to learn more.
NK Patent Law Hires Patent Attorney Drew Hagerty
Veteran Patent Attorney Drew Hagerty
“Drew brings first-hand experience in finding business-focused solutions to complex patent issues,” said Managing Partner Doug Meier. “His background, legal acumen, and problem-solving skills will be invaluable to our firm’s clients.”
With a mechanical engineering and R&D background, Drew Hagerty is a skilled Patent Attorney with deep experience managing complex global patent issues for a Fortune 50 company. Drawing on his experience as an engineer, inventor, and business partner, Drew offers comprehensive patent counsel that combines practical legal strategies with real-world applications.
His career spans the full spectrum of intellectual property, including patent strategy and portfolio development, freedom-to-practice analysis and opinions, invalidity and design-around endeavors, due diligence and patent-valuation considerations, litigation and dispute strategy, support and resolution, and post-grant efforts.
Before joining the firm, Drew spent multiple years as an associate patent attorney at Woodcock Washburn (now part of Baker Hostetler) and then went in-house at the Procter & Gamble Company for 18 years.
About NK Patent Law:
NK Patent Law is an intellectual property boutique serving clients throughout the United States and abroad. The firm focuses on patent preparation and prosecution, trademark preparation and prosecution, and general IP counseling to help businesses navigate complex IP issues and potential disputes. NK helps startups, established companies, and universities protect their intellectual property and navigate the competitive landscape to protect their valuable intellectual property assets.
Doug Meier Receives Recognition from Best Lawyers
NK Patent Law is delighted to announce that Best Lawyers® in America 2025 has recognized Doug Meier for his outstanding legal knowledge and skills in Intellectual Property. This recognition is a testament to his dedication and expertise.
Since 2022, Doug has served as managing partner for the firm. His practice focuses on patent prosecution before the USPTO, IP strategy, and general guidance on other patent-related business issues. Having experience with various electrical technologies, including smartphones, computers, wireless communications, networking, semiconductors, and digital image processing, Doug has represented numerous small and large companies.
Doug loves helping clients develop strategic patent portfolios covering a wide variety of technology areas. However, he understands that patent protection is often just one aspect of a larger, multi-faceted business strategy. As a result, he looks for ways to maximize business value through patent assets.
Before becoming a patent lawyer, Doug worked as an electrical engineer for a major defense contractor in Houston, Texas, where he designed and developed software tools to support NASA’s Space Shuttle Program.
About Best Lawyers
Best Lawyers is the oldest and most respected peer-review publication company in the legal profession. Both clients and legal professionals widely regard recognition by Best Lawyers as a significant honor conferred on a lawyer by their peers. For more than four decades, the publications have earned the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals anywhere.
Listings are compiled by conducting exhaustive peer-review surveys in which tens of thousands of leading lawyers confidentially evaluate their professional peers. If the votes for a lawyer are positive enough for recognition by Best Lawyers, that lawyer must maintain those votes in subsequent polls to remain in each edition. Lawyers are not permitted to pay any fee to participate in or be recognized by Best Lawyers.
For more information about Best Lawyers, visit www.bestlawyers.com.
No More Rosen-Durling: The Federal Circuit Moves to Graham and KSR for Nonobviousness of Design Patents
Patents come in two flavors: utility patents and design patents. Section 103 of the Patent Act, which addresses the nonobviousness requirement for patentability, does not differentiate between design patents and utility patents. It applies to all types of patents. Nevertheless, the tests for nonobviousness of utility patents and nonobviousness of design patents have diverged over the years.
Yesterday, the Federal Circuit, sitting en banc, addressed this divergence in LKQ Corp. v. GM Global Technology Operations (decision available here), ultimately overruling the Rosen-Durling test for design patents and attempting to align the obviousness analysis for design patents with the Graham and KSR analyses of utility patents.
The Rosen-Durling Test
Historically, nonobviousness of design patents has been governed by the Federal Circuit’s long-standing Rosen-Durling test. The Rosen-Durling test for nonobviousness of a design patent claim is a two-step test. Step one requires that a single primary reference–referred to as a Rosen reference–that has design characteristics that are “basically the same” as the claimed design must be identified. If no Rosen reference is identified, the obviousness inquiry ends without going to step two. If a Rosen reference is identified, then step two of the Rosen-Durling test requires that other references used to modify the Rosen reference to create a design that has the same overall visual appearance as the claimed design must be “so related” to the Rosen reference that the appearance of certain ornamental features in one would suggest the application of those features to the other.
Background
The Federal Circuit addressed the principal question of whether the Supreme Court’s KSR precedent—which applies to nonobviousness of utility patents—should cause a rethinking of the Rosen-Durling test for nonobviousness of design patents. After a lengthy analysis, the Federal Circuit overruled the Rosen-Durling test’s requirements that the primary reference must be “basically the same” as the challenged design claim and that any secondary references must be “so related” to the primary reference that features in one would suggest application of those features to the other. According to the Federal Circuit, Supreme Court precedent suggests a more flexible approach than the Rosen-Durling test for determining nonobviousness.
In this case, the Patent Trial and Appeals Board had used the Rosen-Durling test to determine that the patent challenger had failed to establish that the challenged claim would have been obvious because the challenger had failed to identify a Rosen reference. In particular, the Board found that the reference identified by the challenger did not create “basically the same” visual impression as the patented design and therefore did not qualify as a Rosen reference. Because of the lack of a Rosen reference, the Board’s inquiry into nonobviousness ended there. A panel of the Federal Circuit had previously affirmed the Board’s decision; however, in the panel decision, two judges separately addressed the tension between the Supreme Court’s holding in KSR and the then-operative Rosen-Durling test.
Given this tension, the Federal Circuit reheard the case en banc. The questions presented on rehearing were:
(1) Does KSR overrule or abrogate the Rosen-Durling test?
(2) If not, should the Federal Circuit nonetheless eliminate or modify the Rosen-Durling test?
(3) If the answer to either of the previous two questions is yes, what test should apply for evaluating design patent obviousness challenges?
The Supreme Court Precedent
The Supreme Court addressed nonobviousness under Section 103 in Graham v. John Deere, which involved utility patents. This decision provided the well-known Graham factors for determining obviousness, with the ultimate question being whether differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious to a person of ordinary skill in the pertinent art at the time of the invention.
The Supreme Court again addressed Section 103 in KSR v. Teleflex, ultimately rejecting the Federal Circuit’s rigid application of the “teaching, suggestion, or motivation” (TSM) test for obviousness.
The Supreme Court has also addressed the validity of design patent claims in view of combined prior art designs in the Whitman Saddle case. There, the Supreme Court considered the prior art in the field of the article of manufacture, the knowledge of an ordinary saddler, and the differences between the prior art and the claimed design, and concluded that combining the two known saddle designs was nothing more than an exercise of the ordinary skill of workmen of the saddle trade. Notably, in Whitman Saddle, neither of the two references was “basically the same” as the claimed design, yet the Supreme Court still held that combining the two references was not inventive because such combination was customary for saddlers.
The Federal Circuit’s Holding
Given this backdrop of the Supreme Court’s rejection of rigid tests in both KSR (for utility patents) and Whitman Saddle (for design patents), the Federal Circuit held that “Rosen-Durling is out of keeping with the Supreme Court’s general articulation of the principles underlying obviousness, as well as its specific treatment of validity of design patents.” Specifically, the Federal Circuit concluded that the Rosen-Durling test requirements—that (1) the primary reference be “basically the same” as the challenged design claim; and (2) any secondary references be “so related” to the primary reference that features in one would suggest application of those features to the other—are improperly rigid. According to the Federal Circuit, the statutory rubric along with the Supreme Court precedent including Whitman Saddle, Graham, and KSR, all suggest a more flexible approach than the Rosen-Durling test when determining obviousness.
How to Evaluate Obviousness of Design Patent Claims
With the Rosen-Durling test overruled, the Federal Circuit turned to what the framework for evaluating obviousness of design patent claims should be, finding that “invalidity based on obviousness of a patented design is determined based on factual criteria similar to those that have been developed as analytical tools for reviewing the validity of a utility patent under § 103, that is, on application of the Graham factors.”
First Graham Factor
Regarding the first Graham factor (the scope and content of the prior art), the Federal Circuit held that there is no threshold similarity or “basically the same” requirement to qualify as prior art. Instead, the Federal Circuit reaffirmed that an analogous art requirement applies to each reference for obviousness of design patents. This analogous art requirement limits the scope of prior art and guards against hindsight.
For utility patents, a two-part test determines the scope of analogous art: (1) whether the art is from the same field of endeavor as the claimed invention; and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved. The Federal Circuit held that the first part of this two-part test applies to design patents in a straightforward manner, such that analogous art for a design patent includes art from the same field of endeavor as the article of manufacture of the claimed design. The second part of this two-part test, however, does not translate to design patents because, unlike a utility patent, a design patent does not clearly or reliably indicate the particular problem with which the inventor is involved. Accordingly, the Federal Circuit elected not to delineate the full and precise contours of the analogous art test for design patents.
Second Graham Factor
Regarding the second Graham factor (the differences between the prior art designs and the design claim at issue), there is no threshold “similarity” requirement. The Federal Circuit held that, in the context of design patent validity, the visual appearance of the claimed design should be compared to the prior art designs from the perspective of an ordinary designer in the field of the article of manufacture.
Third Graham Factor
Regarding the third Graham factor (the level of ordinary skill in the pertinent art), in the design patent context, obviousness of a design patent claim is assessed from the viewpoint of an ordinary designer in the field to which the claimed design pertains.
Putting It All Together
With these Graham factors in mind, the Federal Circuit explained that the question is whether an ordinary designer in the field to which the claimed design pertains would have been motivated to modify the prior art design “to create the same overall visual appearance as the claimed design,” with the inquiry focusing on the visual impression of the claimed design as a whole and not on selected individual features. If a primary reference alone does not render the claimed design obvious, then secondary reference may be considered. Although the primary and secondary references need not be “so related” such that features in one would suggest application of those features in the other, they nevertheless must both be analogous art to the patented design. The motivation to combine these references need not come from the references themselves, but there must be a reason (without hindsight) that an ordinary designer in the field of the article of manufacture would have modified the primary reference using the secondary references to create the same overall appearance as the claimed design.
Secondary Considerations
Finally, the Federal Circuit noted that, consistent with Graham, the obviousness inquiry for design patents still requires assessment of secondary considerations as indicia of obviousness or nonobviousness, when evidence of such considerations is presented.
This LKQ decision represents a fairly significant departure from the long-standing method of analyzing obviousness of design patent claims under the more rigid Rosen-Durling test. While, in the long run, it will likely prove beneficial to use harmonized obviousness analyses for design patents and utility patents, this decision nevertheless has caused some concern among design patent holders because of the perceived uncertainty it will create in the short term. This seems like a fair criticism; however, as the Federal Circuit pointed out, there is a significant body of existing law in the context of utility patents that patent holders and courts alike can draw from.
The en banc decision can be found here.