By Emmanuel Filandrianos. A member of our Patent Practice Group
Business-savvy designers with an eye towards global design protection should be excited. The U.S. has recently joined the international design system established by the Hague Agreement Concerning the International Registration of Industrial Designs, giving designers a streamlined procedure for obtaining protection of their design. The U.S. began accepting these industrial design applications on May 13, 2015. Although the term “industrial design” may sound more relevant to an engineer than to a fashion designer, the concept has broad applicability.
From Ferragamo[1] to Ferrari[2], diverse designers can now take advantage of the broadly applicable “industrial design” protection afforded to the ornamental design of manufactured products.
What are the benefits of adding an industrial design to your intellectual property portfolio? First, the application provides a single procedure for filing, maintaining and managing industrial design protection internationally. This is a cost-effective approach for applicants with limited legal budgets.
This consolidated procedure was unavailable to U.S. inventors before the U.S. joined the Hague Agreement. Previously, U.S. applicants had to file a new application locally in every country in which they wanted their designs protected. This involved the headache of filing multiple applications in different languages, with accompanying high fees and translation costs, and of complying with diverse in-country procedures. As of May 13, an application in English, French or Spanish, accompanied with a single currency filed at a designated receiving office such as the USPTO, will launch the procedure for registering an industrial design in all member jurisdictions selected by the applicant. These 62 jurisdictions include the United States, the European Union, Korea and Japan.
Some countries, such as the United States, issue design patents protecting industrial design and provide particularly strong remedies for infringement of designs. Other countries merely register the industrial design and leave for a later day the question of whether the design satisfies applicable standards for protection.
The Hague Agreement introduces provisional rights that accrue upon publication of the industrial design application, rather than upon later issuance of the design patent itself. Applications will be published in the online “industrial design bulletin” approximately six months after the filing date, unless the applicant requests delayed publication or immediate publication. Provisional rights may provide a reasonable royalty to the patent owner for the period before the patent’s issuance. This is of particular importance to designers in industries where popular designs have rapid turnover, for example, in the fashion industry where styles change seasonally. Previously, a designer filing a new U.S. design patent application had to wait until the patent issued to start accruing damages, by which point the infringement may have already ceased.
Once the U.S. design patent is issued, damages that accrue thereafter may be calculated based on total profits reaped by an infringer. Recent U.S. case law indicates that a patented design feature can lead to damages for total profits for the entire article, a rule that is in stark contrast with damages for utility-patent infringement, which usually provide reasonable royalty or lost profits attributable to the smallest saleable component containing the patented feature.
For example, Apple’s design patents covering the exterior of the iPhone likely were responsible for the enormous $1.05 billion verdict for profits on an entire smartphone against Samsung in the Northern District of California (2012). Although the decision to award total profits from the sale of an entire article for a design patent claiming only a portion of the article was controversial, in May 2015 the Federal Circuit upheld the award. Clearly, a design patent can be a powerful weapon, especially for a plaintiff suing a well-to-do defendant in a lucrative industry.
The distinction between utility-patent lost profits and design-patent total profits is subtle but significant. To recover lost profits, the patentee must prove that, but for the infringement, the patentee would have made the profits that were lost. Usually, this requires the patentee to establish demand for the patented product; absence of acceptable non-infringing substitutes; manufacturing and marketing capacity to exploit the demand; and the amount of profit that would have been made. Notably, the infringer may argue that some portion of the sales and profits resulted from factors other than the patented feature. (More)
[1] Ferragamo design published on international bulletin at http://www.wipo.int/designdb/hague/en/ on March 20, 2015.
[2] Ferrari design published on international bulletin at http://www.wipo.int/designdb/hague/en/ on August 22, 2014.
