Don’t neglect design patents in the next round of reform

Lack of transparency and the issuance of vague patents plague the current system.

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“As legislators continue to consider the issue of patent reform, they should add design patents to the discussion. At a minimum, adding transparency into the design patent process, similar to that granted to utility patents, should be incorporated into a bill to ensure the issuance of quality patents.”
Just when we thought patent reform was dead in Congress, lawmakers are now considering a draft bill, introduced by Rep. Lee Terry (R-NE), that seeks to address abusive patent demand letters sent by “patent trolls.” Terry’s bill, the Targeting Rogue and Opaque Letters (TROL) Act of 2014, recently passed a House subcommittee on a bipartisan vote and takes a balanced approach supported by the patent bar and innovators.

As this proposal gains momentum and patent reform wins new life, policymakers should consider including another area of reform: design patents. Due to a lack of transparency in the application process and the continued issuance of vague and overly-broad patents, design patents require reform just as much as the more mainstream topic of patent trolling.

So far, current patent reform proposals addressing the quality of patents issued by the U.S. Patent and Trademark Office (USPTO) and the litigation tactics used by patent trolls, focus on utility patents, not design patents. While utility patents protect the way the article is used and how it functions, such as a pharmaceutical product or a medical device, a design patent protects only the appearance of the article and not its structure or functionality.

Once overlooked due to their perceived narrow protection, design patents are increasingly becoming recognized as important corporate assets. They cover visual, non-functional characteristics embodied in, or applied to, an “article of manufacture” – like the shape of a bottle for Coca-Cola or the design of a chair. They may relate to the configuration or shape of an article, the surface ornamentation applied to an article, or to a combination of the two.

But while design patents may be as important to innovators as utility patents, the current patent system does not treat them the same – to the detriment of inventors.

For example, under the current system, utility patent applications are made public by the USPTO after 18 months from the earliest filing date of a patent application (with a few exceptions). This transparency spurs greater public participation, prevents duplicative research, provides knowledge that leads to improvements, and allows competitors to design around discovered technologies. But under current law, these benefits of transparency do not confer to design innovators.  Unlike utility patents, design patent applications are kept confidential by the USPTO during the prosecution process (i.e. while a patent application is being considered), shutting out public participation and prompting fears of unknowing infringement, thereby stifling growth.

All the while, extremely broad design patents, such as those covering simple shapes or colors, continue to be awarded despite their susceptibility to challenges of invalidity and concerns that they may ultimately be unenforceable. As a result, thoughtful innovation suffers.

One obvious source of ideas for reform is the Hague Agreement Concerning International Registration of Industrial Designs, which the United States is preparing to join as a full member. The Hague Agreement enables applicants around the world, including from America, to obtain international protection for design patents in multiple countries by filing one application at considerable cost savings.

Key provisions include provisional rights to damages, which allow patent owners to collect royalties for infringement that occurs after publication of the design patent application but before the patent issues.  Additionally, patent applications filed under the Hague Agreement are published during the prosecution process.  The Hague filing system operates alongside the U.S. design patent filing system and does not preempt it.  Therefore, applicants can elect to file for U.S. design protection using either system, or both.

Lawmakers should look to the Hague Agreement as they craft patent reform legislation and add provisions that mirror the publication and provisional damages protections afforded to design patent applicants.  Moreover, this would not be the first time the U.S. has revised its intellectual property laws to conform with its neighbors.

To match the provisions of the Hague Agreement, the United States passed a law extending the term of design patents from 14 years to 15 years from the date of issuance. And just last year, provisions of the America Invents Act went into effect that changed the U.S. patent system from “first to invent” to “first to file,” to harmonize with most of the world.

As legislators continue to consider the issue of patent reform, they should add design patents to the discussion. At a minimum, adding transparency into the design patent process, similar to that granted to utility patents, should be incorporated into a bill to ensure the issuance of quality patents.

Julie Hopkins is a Partner and Chair of the Intellectual Property Practice Group at Tydings & Rosenberg, LLP.

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