As detailed in LKQ Corp. et al. v. GM Global Technology Operations LLC ¹,petitioners LKQ Corporation and Keystone Automotive Industries, Inc. (“LKQ”), which sell automotive body repair parts, were granted a license by General Motors (“GM”) to many of GM’s design patents. Among these designs was U.S. D797,625 (“the ‘625 patent”), which is directed to the appearance of a front fender for a vehicle. Upon expiration of the license in February 2022, GM asserted that the replacement parts being sold by LKQ were infringing GM’s patents, including the ‘625 patent.

LKQ responded by petitioning the Patent Trial and Appeal Board (PTAB) for an inter partes review of the ‘625 patent. LKQ claimed that the ‘625 patent was invalid because it was anticipated by U.S. D773,370 (“Lian”) and would have been obvious over Lian alone or in combination with a promotional brochure depicting a 2010 Hyundai Tucson vehicle. The PTAB was unconvinced by LKQ’s arguments and subsequently concluded that the ‘625 patent remained valid.

LKQ appealed the decision, taking issue with two aspects of the PTAB’s decision. The first challenge involved the PTAB’s method of determining anticipation of the ‘625 patent. As GM is a car manufacturer, LKQ disagreed with the PTAB’s finding that the ordinary observer of the design would include only retail consumers looking to buy replacement fenders and commercial replacement part buyers.

In the second challenge of the appeal, LKQ argued that the tests used by the PTAB to determine obviousness in design patents – referred to as the Rosen–Durling tests – were no longer valid since they had been implicitly overruled by the Supreme Court’s decision in KSR Int’l Co. v. Teleflex Inc.², (“KSR“). KSR made obviousness easier to prove by replacing the rigid “teaching, suggestion, and motivation” (“TSM”) test with a more flexible standard for analyzing obviousness. When assessing patentability of claims under KSR, considerations such as common sense, hindsight, and level of ordinary skill of a person skilled in the art of the invention are permitted. It is this latter challenge regarding the determination of obviousness in design patents that the CAFC has now made its focus.

In the inter partes review, the PTAB applied the established and controlling Rosen–Durling tests for obviousness to the claimed design. Rosen has two criteria for design patent obviousness. First, there must be a primary reference that is basically the same as the claimed design to support a holding of obviousness. Second, if a sufficient primary reference exists, the court must consider whether an ordinary designer would have modified the primary reference to achieve the claimed design.³ Durling contributed an additional condition that secondary references may only be used to modify the primary reference if the two references are so related that the “appearance of certain ornamental features in one would suggest the application of those features to the other.”⁴ Ultimately, the PTAB ruled that LKQ failed to identify a sufficient primary reference and, thus, failed to prove obviousness of the claimed design of the ‘625 patent.

In their appeal of the PTAB’s decision to the CAFC, LKQ argued that the Rosen–Durling tests were implicitly overruled by KSR. LKQ contended that the analysis and reasoning of KSR should, therefore, be applied to the ‘625 patent. GM asserted that LKQ forfeited this argument by not raising it before the PTAB and that KSR does not overrule Rosen or Durling. The CAFC’s initial opinion¹ pointed out that since KSR was decided by the U.S. Supreme Court, more than fifty appeals involving obviousness of design patents have been decided using the Rosen–Durling tests. Of those appeals, only two cases raised the issue of the correctness of the current design obviousness guidelines in light of KSR. The three-judge panel of the CAFC concluded that they cannot overrule Rosen or Durling without a clear directive from the Supreme Court. Ultimately, the court affirmed the PTAB’s decision that LKQ failed to show that the ‘625 patent would have been obvious over the cited references based on the Rosen–Durling tests for obviousness of design patents.

In response, LKQ petitioned for rehearing en banc requesting that the CAFC overrule Rosen and Durling and replace these decisions with a test consistent with KSR. The petition was granted in an order dated June 30, 2023. In the order, the CAFC requested that LKQ and GM address several questions in their briefs. For instance, does KSR overrule or abrogate Rosen and Durling? Further, if KSR neither overrules or abrogates Rosen and Durling, does KSR apply to design patents and should KSR be used to eliminate or modify the Rosen–Durling tests for design patents? In addition, if the Rosen–Durling tests are modified or eliminated, what test (or tests) should be used for evaluating design patent obviousness challenges moving forward? In addition to the briefs from LKQ and GM, the CAFC has invited briefs of amicus curiae, that is, briefs from interested non-parties to the case.

It is evident that the answers to the aforementioned questions have significant implications for design patent owners and their competitors seeking to invalidate design patents. A decision overruling Rosen may make it easier to invalidate design patents, reducing the value of obtaining a design patent in the first instance. Moreover, obtaining a design patent may become far more challenging if Rosen is overruled and the criteria for obviousness during examination of design patent applications are broadened to coincide with the KSR criteria If Rosen is upheld, the CAFC may decide to provide further guidance regarding the criteria for analyzing obviousness in design patents. Alternatively, the CAFC may rule against LKQ and simply maintain the Rosen–Durling tests for design patentability.

This case has instantly caused much uncertainty in the field of design patents. What is certain, however, is that all interested design patent owners and their competitors will be waiting for the CAFC’s en banc decision. We will report again when that decision is issued.

Footnotes

1. Appeal No. 21-2348, (Fed. Cir. January 20, 2023).

2. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).

3. In re Rosen, 673 F.2d 388 (CCPA 1982).

4. Durling v. Spectrum Furniture, 101 F.3d 100 (Fed. Cir. 1996).