On Monday, February 5, 2024, the Federal Circuit held its first en banc oral argument on a patent case in five years. This oral argument was for the case of LKQ Corp. v. GM Global, addressing a question of the patentability standard for design patents over prior art references under 35 U.S.C. §103. The Federal Circuit took up this argument en banc as Appellant LKQ Corp. sought to overturn the 40-year old Rosen-Durling test of obviousness for design patents, first established In re Rosen (1982) and further clarified in Durling v. Spectrum (1996).

The Rosen-Durling test includes two parts for challenging validity of a claimed design. It includes first determining whether a primary prior art reference design is "basically the same" as the patent design considered as a whole. The challenge fails if the answer is no. Otherwise, in order to invalidate the patent design, the challenger must proceed with further art to account for any differences between the reference design and the patented design using additional prior art "so related" to the primary reference. The designs in question in LKQ Corp. v. GM Global cover car fenders (US D797,625)). Prior to this appeal, LKQ sought to invalidate this GM patent in the Patent Office. In its decision, the Patent Office upheld the validity by only enquiring into the first part of the Rosen-Durling test, determining that the primary reference is not "basically the same" as the patent design by enumerating several differences. LKQ appealed the decision of the Patent Office.

Appellant argues that the Rosen-Durling test for obviousness is overly rigid. So rigid, in fact, that it qualifies as the type of rigid rule that the later Supreme Court case KSR sought to get rid of. Appellant began its arguments explaining that the Rosen-Durling test prohibits obviousness inquiries unless the primary reference used in that analysis is nearly identical to the invention in question.

Judge Moore jumped in early in Appellant's argument to question what the bounds obviousness-type prior art should be. Judge Moore questioned, if Rosen's strict threshold test of art were removed or relaxed, where instead should the threshold be for allowing art to be used in showing obviousness of a design? Appellant seems to suggest that such a threshold should broadly focus on the problem being solved. The judges, however, could not get a clear answer as to how a design problem is defined and identified because technicality, function, and utility are of little concern in design patents. Much of Appellant's remaining time was filled by the panel questioning possible options for tests to limit what art could be used for a broader obviousness inquiry with analogies to the facts of Whitman Saddle, a case focused on infringement, where the design of a front half and back half from two different saddles were combined into a new design.

On a final note during Appellant's argument, Judge Reyna pointed out that the facts of the case and many of the amici were within the automotive industry, which seemed to take note of an argument from Hyundai/Kia's amicus brief that stated "the interests of the aftermarket auto parts industry should not dictate the invalidity standard for all of design patent law" (given the factual history that many design patent law challenges arise from aftermarket auto parts makers). Appellant responded by pointing out that only 2% of design patents applications receive obviousness rejections as evidence that this represents a problem across all design patents. However, the Patent Office and Appellee later addressed this low rejection rate, arguing that it is not necessarily because of a faulty standard. Rather, the nature of all design claims dictates that they are usually much narrower in scope than utility patent claims and thus it is normal to have much lower initial rejection rate.

The USPTO Solicitor went next and sought to modify the Rosen-Durling test, but immediately faced Judge Moore's same question on an analogous arts test. The PTO's proposed solution is to remove the stringency of Rosen-Durling's threshold requirement for introducing obviousness references, but to keep Rosen-Durling as a valid way to proceed with a KSR analysis of obviousness. When asked to expand upon this, the Solicitor stated that instead of "basically the same," the primary reference used should have an "overall similar visual impression." The PTO further clarified that this need not be a two-step test and the Rosen-Durling test would not be the only means to an obviousness rejection and an examiner can still rely on what a PHOSITA would find as obvious given the prior art. The panel referred back to Appellant's comment about the rarity of design patent obviousness rejections, asking from the PTO what the rate of rejections were, to which the Solicitor responded with a recent estimate of 4%.

Appellee focused on the age of the Rosen-Durling test and the amount of caselaw that has been established in that time to further clarify the test, and tried to show that the test is more flexible than Appellant contends. Appellee remarked that part of this flexibility includes that references outside of the same field as the patent may be relevant, and it would depend on the field as to whether the outside reference would be sufficiently similar. Later on, Appellee returned to this point in reference to the Whitman case pointing to it as an example where the field permitted combining two halves of different references rather than finding a first reference that was almost identical to the invention first. Appellee also addressed the question of going around Rosen-Durling to still arrive at an obviousness rejection stating that this isn't impossible, however, there is no known prior example of this and a way to add flexibility to obviousness in design patents would be to acknowledge this other avenue. The judges took a detour to discuss the difference between the ordinary observer standard, which is applied to infringement, and the ordinary designer standard, which is applied to invalidity. The panel seemed troubled by the differences between these standards and the implication that it could lead to a situation where a patent is granted for a design over prior art by pointing out minute differences, but a patent jury would have thought the patented design would have infringed on the prior art and would ignore those differences. Appellee characterized this potential situation as rare, implying it should not be a concern. Then, Appellee turned back to the USPTO's stance and noted that it agrees with the PTO that the Rosen-Durling test should remain, but disagrees that any semantic change or modification should be made as it may not make the test more flexible and would endanger the body of caselaw following Rosen and Durling.

Appellant on rebuttal re-emphasized that the USPTO is really in agreeance with them on the most important question: that there needs to be some change to the law. But Appellant insisted that they disagree with how the USPTO framed in its argument what the test should look like, which should instead be something more like what is used in utility patents and question more broadly what problem a designer is looking to solve. Appellant jumped on the discussion of the ordinary observer vs designer problem that the panel raised and insisted it is a valid concern that should motivate a change of the test.

A prediction of the court's ruling is difficult here because, as Judge Moore pointed out, no party presented a standard with clear language that should be the rule. But for those hoping for a dramatic result, the last ten seconds of the session should provide some hint:

Judge Reyna: "If we only made one change, what should that change be?"

Appellant: "Uh... overrule Rosen and Durling your honor."

*Laughter*

Judge Reyna: "That's not gonna happen."

*Laughter*

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