IP News

Federal Circuit Clarifies Infringement Standard for Design Patents, Obviousness Standard for Utility Patents

In Crocs, Inc. v. ITC, No. 2008-1596 (Fed. Cir. Feb. 24, 2010), the Federal Circuit reversed the ITC's decision holding: 1) Crocs' utility patent invalid as obvious, and 2) Crocs' design patent was not infringed.

Crocs, a well-known company that makes shoes of the same name, held U.S. Patent No. 6,993,858 (“the '858 patent”), a utility patent on “Breathable Footwear Pieces,” along with U.S. Patent No. D517,789 (“the '789 design patent”), on a particular ornamental design for its shoes. Crocs first filed its complaint with the ITC on March 31, 2006, against 11 entities that Crocs claimed were importing foam shoes infringing both patents.

The '858 patent claims Crocs' iconic shoe, shown in Diagram 1, ('858 patent, Fig. 2).

[IMGCAP(1)]

The patent in particular claims, “a strap section formed of a moldable material that is attached at opposite ends thereof to the upper of the base section with plastic direct contact with the moldable material of the base section and pivots relative to the base section at the connectors”; this strap section is labeled as 120 in Diagram 1. The Federal Circuit focused on this strap feature as distinguishing the '858 patent's shoe from the two prior art references, the Aqua Clog and U.S. Patent No. 6,237,249 (“the Aguerre '249 patent”). While the Aguerre '249 patent had a strap, it was made of, “an elastic or other flexible elastic material.” The ITC found that making the strap from foam was logical as it would result in a show of uniform composition. The Federal Circuit found instead that the prior art taught against an inelastic strap as used by the '858 patent, since this strap without the innovative high friction connectors (labeled 130b in Diagram 1) was known to perform poorly at holding the shoe on a foot. The Federal Circuit's decision, in focusing on the functional challenges of Crocs' approach, indicates that a patent will not be held obvious merely because a modification provides clear benefits; those benefits must be weighed against known disadvantages of the modification to determine obviousness.

Regarding the '789 design patent, the ITC attempted to create a thorough verbal claim construction, which will not be reproduced here for brevity. Applying its decision in Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc), the Federal Circuit emphasized the need to apply the “ordinary observer” test to the design in its entirety, rather than focusing on particular details of a written description of the design. The correct comparison is instead a side-by-side view of the drawings of the design patent and the accused products. For example, the court reproduced the comparison set forth in Diagram 2, below, between the '789 patent on the left and two of the accused products on the center and right.

[IMGCAP(2)]

Simply looking at these comparisons, the Federal Circuit held that the '789 design patent was indeed infringed. The court then remanded to the ITC for determination of whether the '858 patent was infringed.

The Scope of the Best Mode Requirement

In Ajinomoto Co. v. ITC, No. 2009-1081 (Fed. Cir. Mar. 8, 2010), the Federal Circuit affirmed the ITC's decision concerning two patents related to methods of producing L-lysine; one patent was invalid for failure to comply with the best mode requirement, and the other was unenforceable due to inequitable conduct.

Ajinomoto owned U.S. Patents Nos. 5,827,698 (“the '698 patent”) and 6,040,160 (“the '160 patent”). The two patents concerned methods for engineering E. coli to better produce L-lysine, an essential amino acid that is regularly added to livestock feed. Both patents disclose specific E. coli host strains to be used for practicing the invention. The '698 patent in particular discloses using a wild-type E. coli strain, WC196, and then inserting in the mutant ldc gene to create the mutant strain WC196L. The actual strain used by the inventors, however, had two additional mutations, and is identified as WC80-196S. In simpler terms, the inventors used a different strain of E. coli to practice the invention than the strain that was disclosed in their patent. Ajinomoto did not dispute that its inventors preferred this actual strain to that disclosed in the patents.

Ajinomoto attempted to argue first that the best mode requirement only applies to the patents' “innovative aspects,” meaning that they only had to disclose the best mode of accomplishing the new aspects of the invention ' here, the specific new ldc mutation that went beyond the prior art. The ITC and then the Federal Circuit rejected this approach, holding that the best mode requirement applies to the invention as a whole. The inventors therefore had to disclose their entire preferred embodiment including their preferred base bacterium and their preferred carbon source, not just the new mutations they invented. The preferred embodiment of any part of the invention that is claimed must be disclosed; because they claimed a host strain of bacterium, the inventors had to disclose their preferred host strain.

Ajinomoto made no separate argument as to inequitable conduct on its '160 patent, noting that the ITC's decision relied on its best mode conclusions. Accordingly, the court affirmed the ITC's decision on both patents.

TTAB Rejects Mark As Disparaging to Muslims

In In re Lebanese Arak Corp., Ser. No. 77072261 (T.T.A.B. March 4, 2010), the Trademark Trial and Appeal Board in a 3-2 decision affirmed the USPTO's refusal to register the mark “KHORAN” for wines under Section 2(a) as disparaging to Muslims.

Lebanese Arak Corporation (“Arak Corp.”) filed its application to register KHORAN on Dec. 27, 2006, based on use in commerce with its first use in commerce from July 1, 2000. The word KHORAN is actually Armenian, and translates to “ALTAR.” The examiner found that KHORAN is the phonetic equivalent of “Koran,” the sacred text of Islam, that the Koran forbids consumption of alcoholic beverages, and therefore that the use of KHORAN for wine is disparaging to the beliefs of Muslims. In a precedential decision, the TTAB affirmed the rejection.

The disparagement analysis is a two-part test, and here the only disputed question was as to the first part: “What is the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services[?]” Arak Corp. argued that KHORAN is in fact Armenian for “ altar,” and will be understood that way in part because it was used in particular for Armenian wine. In Armenian, the word is not pronounced the same; the “H” is not silent.

The TTAB noted, in part citing a series of unrelated random blog posts, that many Americans have misspelled “Koran” as “Khoran,” and would be likely to pronounce the term phonetically, believing that the mark would refer to the Muslim Holy Book. While in some cases the alternative non-disparaging meaning might be more well known and thus prevail, where the majority of Americans believe the use of the term is the use that a minority group would find disparaging, registration must be refused. It does not matter that only Muslims would find the use of the term disparaging, nor does it matter that Arak Corp. did not intend for the term to be disparaging. It also does not matter that the mark would be applied to Armenian wine specifically, as the mark could be used without specifying that the wine was Armenian.

The dissent did not disagree with the point of law, but focused on the fact that the majority was only guessing as to how the majority of Americans would interpret KHORAN on wines. As the majority's only real evidence as to Americans' understanding was the aforementioned blog posts and a guess as to how Americans would pronounce KHORAN, the dissent argued that the mark should have been understood as the non-disparaging use ' especially because the well-known fact that the Koran forbids drinking alcoholic beverages would discourage Americans from believing that the mark referred to the Muslim holy book. Additionally, the dissent noted that it would have contested the PTO's contention that the term Koran, non-disparaging in and of itself, becomes disparaging when linked innocuously with wine solely by virtue of wine being alcoholic. The dissent would instead have ordered the mark published for opposition and then see the evidentiary record that might result should someone oppose it.

Federal Circuit Reaffirms Separate Written Description Requirement

In Ariad Pharms., Inc. v. Eli Lilly and Co., No. 2008-1248 (Fed. Cir. Mar. 22, 2010), the Federal Circuit sitting en banc affirmed a panel decision holding that a number of claims to methods of reducing activity of transcription factor NF-kB in genes to ameliorate the effects of some diseases were invalid for lack of written description. Judge Alan D. Lourie wrote the majority opinion, which was joined by Judges Paul R. Michel, Pauline Newman, Haldane Robert Mayer, William C. Bryson, Arthur J. Gajarsa, Timothy B. Dyk, Sharon Prost, and Kimberly A. Moore; Judges Richard Linn and Randall R. Rader filed dissenting opinions.

The majority's decision focused on reaffirming longstanding Federal Circuit precedent that 35 U.S.C. ' 112 contains a written description requirement separate and distinct from the enablement requirement, and that the standard for written description is that the description must, “convey [ ] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.” Having reaffirmed the existence of and standard for the written description requirement, the majority proceeded to adopt the panel's factual analysis in full.

Judges Linn and Rader both dissented from the majority, arguing that the written description requirement was equivalent to ' 112's enablement requirement. Judge Rader's dissent focused on the legal problems caused by a separate written description requirement, arguing, for example, that a properly construed claim could not go beyond the scope of the specification, and so all properly construed claims must meet the written description requirement. Judge Linn's dissent focused on deficiencies in the majority's statutory analysis.

Howard J. Shire is a partner and Brian J. Beck is an associate in the New York office of Kenyon & Kenyon LLP.

Federal Circuit Clarifies Infringement Standard for Design Patents, Obviousness Standard for Utility Patents

In Crocs, Inc. v. ITC, No. 2008-1596 (Fed. Cir. Feb. 24, 2010), the Federal Circuit reversed the ITC's decision holding: 1) Crocs' utility patent invalid as obvious, and 2) Crocs' design patent was not infringed.

Crocs, a well-known company that makes shoes of the same name, held U.S. Patent No. 6,993,858 (“the '858 patent”), a utility patent on “Breathable Footwear Pieces,” along with U.S. Patent No. D517,789 (“the '789 design patent”), on a particular ornamental design for its shoes. Crocs first filed its complaint with the ITC on March 31, 2006, against 11 entities that Crocs claimed were importing foam shoes infringing both patents.

The '858 patent claims Crocs' iconic shoe, shown in Diagram 1, ('858 patent, Fig. 2).

[IMGCAP(1)]

The patent in particular claims, “a strap section formed of a moldable material that is attached at opposite ends thereof to the upper of the base section with plastic direct contact with the moldable material of the base section and pivots relative to the base section at the connectors”; this strap section is labeled as 120 in Diagram 1. The Federal Circuit focused on this strap feature as distinguishing the '858 patent's shoe from the two prior art references, the Aqua Clog and U.S. Patent No. 6,237,249 (“the Aguerre '249 patent”). While the Aguerre '249 patent had a strap, it was made of, “an elastic or other flexible elastic material.” The ITC found that making the strap from foam was logical as it would result in a show of uniform composition. The Federal Circuit found instead that the prior art taught against an inelastic strap as used by the '858 patent, since this strap without the innovative high friction connectors (labeled 130b in Diagram 1) was known to perform poorly at holding the shoe on a foot. The Federal Circuit's decision, in focusing on the functional challenges of Crocs' approach, indicates that a patent will not be held obvious merely because a modification provides clear benefits; those benefits must be weighed against known disadvantages of the modification to determine obviousness.

Regarding the '789 design patent, the ITC attempted to create a thorough verbal claim construction, which will not be reproduced here for brevity. Applying its decision in Egyptian Goddess, Inc. v. Swisa , Inc. , 543 F.3d 665 (Fed. Cir. 2008) (en banc), the Federal Circuit emphasized the need to apply the “ordinary observer” test to the design in its entirety, rather than focusing on particular details of a written description of the design. The correct comparison is instead a side-by-side view of the drawings of the design patent and the accused products. For example, the court reproduced the comparison set forth in Diagram 2, below, between the '789 patent on the left and two of the accused products on the center and right.

[IMGCAP(2)]

Simply looking at these comparisons, the Federal Circuit held that the '789 design patent was indeed infringed. The court then remanded to the ITC for determination of whether the '858 patent was infringed.

The Scope of the Best Mode Requirement

In Ajinomoto Co. v. ITC, No. 2009-1081 (Fed. Cir. Mar. 8, 2010), the Federal Circuit affirmed the ITC's decision concerning two patents related to methods of producing L-lysine; one patent was invalid for failure to comply with the best mode requirement, and the other was unenforceable due to inequitable conduct.

Ajinomoto owned U.S. Patents Nos. 5,827,698 (“the '698 patent”) and 6,040,160 (“the '160 patent”). The two patents concerned methods for engineering E. coli to better produce L-lysine, an essential amino acid that is regularly added to livestock feed. Both patents disclose specific E. coli host strains to be used for practicing the invention. The '698 patent in particular discloses using a wild-type E. coli strain, WC196, and then inserting in the mutant ldc gene to create the mutant strain WC196L. The actual strain used by the inventors, however, had two additional mutations, and is identified as WC80-196S. In simpler terms, the inventors used a different strain of E. coli to practice the invention than the strain that was disclosed in their patent. Ajinomoto did not dispute that its inventors preferred this actual strain to that disclosed in the patents.

Ajinomoto attempted to argue first that the best mode requirement only applies to the patents' “innovative aspects,” meaning that they only had to disclose the best mode of accomplishing the new aspects of the invention ' here, the specific new ldc mutation that went beyond the prior art. The ITC and then the Federal Circuit rejected this approach, holding that the best mode requirement applies to the invention as a whole. The inventors therefore had to disclose their entire preferred embodiment including their preferred base bacterium and their preferred carbon source, not just the new mutations they invented. The preferred embodiment of any part of the invention that is claimed must be disclosed; because they claimed a host strain of bacterium, the inventors had to disclose their preferred host strain.

Ajinomoto made no separate argument as to inequitable conduct on its '160 patent, noting that the ITC's decision relied on its best mode conclusions. Accordingly, the court affirmed the ITC's decision on both patents.

TTAB Rejects Mark As Disparaging to Muslims

In In re Lebanese Arak Corp., Ser. No. 77072261 (T.T.A.B. March 4, 2010), the Trademark Trial and Appeal Board in a 3-2 decision affirmed the USPTO's refusal to register the mark “KHORAN” for wines under Section 2(a) as disparaging to Muslims.

Lebanese Arak Corporation (“Arak Corp.”) filed its application to register KHORAN on Dec. 27, 2006, based on use in commerce with its first use in commerce from July 1, 2000. The word KHORAN is actually Armenian, and translates to “ALTAR.” The examiner found that KHORAN is the phonetic equivalent of “Koran,” the sacred text of Islam, that the Koran forbids consumption of alcoholic beverages, and therefore that the use of KHORAN for wine is disparaging to the beliefs of Muslims. In a precedential decision, the TTAB affirmed the rejection.

The disparagement analysis is a two-part test, and here the only disputed question was as to the first part: “What is the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services[?]” Arak Corp. argued that KHORAN is in fact Armenian for “ altar,” and will be understood that way in part because it was used in particular for Armenian wine. In Armenian, the word is not pronounced the same; the “H” is not silent.

The TTAB noted, in part citing a series of unrelated random blog posts, that many Americans have misspelled “Koran” as “Khoran,” and would be likely to pronounce the term phonetically, believing that the mark would refer to the Muslim Holy Book. While in some cases the alternative non-disparaging meaning might be more well known and thus prevail, where the majority of Americans believe the use of the term is the use that a minority group would find disparaging, registration must be refused. It does not matter that only Muslims would find the use of the term disparaging, nor does it matter that Arak Corp. did not intend for the term to be disparaging. It also does not matter that the mark would be applied to Armenian wine specifically, as the mark could be used without specifying that the wine was Armenian.

The dissent did not disagree with the point of law, but focused on the fact that the majority was only guessing as to how the majority of Americans would interpret KHORAN on wines. As the majority's only real evidence as to Americans' understanding was the aforementioned blog posts and a guess as to how Americans would pronounce KHORAN, the dissent argued that the mark should have been understood as the non-disparaging use ' especially because the well-known fact that the Koran forbids drinking alcoholic beverages would discourage Americans from believing that the mark referred to the Muslim holy book. Additionally, the dissent noted that it would have contested the PTO's contention that the term Koran, non-disparaging in and of itself, becomes disparaging when linked innocuously with wine solely by virtue of wine being alcoholic. The dissent would instead have ordered the mark published for opposition and then see the evidentiary record that might result should someone oppose it.

Federal Circuit Reaffirms Separate Written Description Requirement

In Ariad Pharms., Inc. v. Eli Lilly and Co., No. 2008-1248 (Fed. Cir. Mar. 22, 2010), the Federal Circuit sitting en banc affirmed a panel decision holding that a number of claims to methods of reducing activity of transcription factor NF-kB in genes to ameliorate the effects of some diseases were invalid for lack of written description. Judge Alan D. Lourie wrote the majority opinion, which was joined by Judges Paul R. Michel, Pauline Newman, Haldane Robert Mayer, William C. Bryson, Arthur J. Gajarsa, Timothy B. Dyk, Sharon Prost, and Kimberly A. Moore; Judges Richard Linn and Randall R. Rader filed dissenting opinions.

The majority's decision focused on reaffirming longstanding Federal Circuit precedent that 35 U.S.C. ' 112 contains a written description requirement separate and distinct from the enablement requirement, and that the standard for written description is that the description must, “convey [ ] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.” Having reaffirmed the existence of and standard for the written description requirement, the majority proceeded to adopt the panel's factual analysis in full.

Judges Linn and Rader both dissented from the majority, arguing that the written description requirement was equivalent to ' 112's enablement requirement. Judge Rader's dissent focused on the legal problems caused by a separate written description requirement, arguing, for example, that a properly construed claim could not go beyond the scope of the specification, and so all properly construed claims must meet the written description requirement. Judge Linn's dissent focused on deficiencies in the majority's statutory analysis.

Howard J. Shire is a partner and Brian J. Beck is an associate in the New York office of Kenyon & Kenyon LLP.