Latest Federal Court Cases, 7/29/19
PATENT CASE OF THE WEEK
Automotive Body Parts Ass’n. v. Ford Global Techs., LLC, Appeal No. 2018-1613 (Fed. Cir. July 23, 2019)
Our case of the week is a design patent case. It concerns two primary issues—what types of functionality can render a design patent invalid, and whether patent exhaustion and repair rights apply to design patents.
The patents at issue cover the hood design and headlight design for a pickup truck, and are the designs used in the Ford F-150:
Plaintiff, an association of companies that distribute automotive body parts, sued Ford seeking a declaratory judgment of invalidity or unenforceability of the two patents. It sought summary judgment that the patents were invalid as primarily functional, and that the patents were unenforceable against auto parts companies, who were free to sell these products under the doctrines of patent exhaustion and repair. The district court denied summary judgment and instead sua sponte granted final judgment to Ford.
ABPA asserted that the design was purely functional because “consumers seeking replacement parts prefer hoods and headlamps that restore the original appearance of their vehicles.” Thus, the appearance itself provides a functional benefit—to match the automobile’s original design. In other words, “Ford’s hood and headlamp designs are functional because they aesthetically match the F-150 truck.”
The Federal Circuit rejected this argument, noting that “ABPA does not identify, nor can we find, any design patent case ruling aesthetic appeal of this type functional.” The Federal Circuit noted that design patent law covers only ornamental designs, and designs that are “dictated by function” are invalid, though “a valid design may contain some functional elements.” The Court noted the fact that all products, after all, “necessarily serve a utilitarian purpose.” However, a design patent may not claim a “primarily functional” design. Quoting L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993), the Court reiterated the test: “If [a] particular design is essential to the use of the article, it can not be the subject of a design patent.”
The Court held, “even in this context of a consumer preference for a particular design to match other parts of a whole, the aesthetic appeal of a design to consumers is inadequate to render that design functional.” Relying on Gorham Mfg. Co. v. White, 81 U.S. 511, 525 (1871), the Court held that “functionality” cannot refer to the mere “function” that an ornamental design serves—appeal to customers. “Functionality” refers to mechanical or utilitarian functions.
The Court rejected ABPA’s invitation to apply the “aesthetic functionality” test of trademark law—i.e., that value can come “from the fact that a product looks a certain way that is distinct from the value of knowing at a glance who made it.” In Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 170 (1995), the Supreme Court had allowed color to be trademarked only on a showing that color served a significant non-trademark function. The Court found this doctrine inapplicable to design patent law.
The Court found it important that there were numerous other designs for headlights that fit the F-150 truck design that did not infringe the design patent—i.e., performance parts that have a different design.
With respect to exhaustion, the Court held that Ford’s rights may be exhausted with respect to the sale of the pickup truck, but that does not extend to replacement parts. The replacement parts are new sales of new parts, not authorized by Ford. The Court held that exhaustion does not apply.
Likewise, the Court held that the repair doctrine was inapplicable. The patents here covered the headlamp and front hood. If those products need repair, they can be repaired. But that does not extend to replacement of those components. The Court relied on Aiken v. Manchester Print Works, 1 F. Cas. 245 (C.C.D.N.H. 1865), which was endorsed by the Supreme Court in Morgan Envelope Co. v. Albany Perforated Wrapping Paper Co., 152 U.S. 425, 435–36 (1894). In short, where the replacement part is not separately patented, there is a right to replace it. But where the replacement part is separately patented, there is not. Or, more eloquently:
though a sale of the F-150 truck permits the purchaser to repair the designs as applied to the specific hood and headlamps sold on the truck, the purchaser may not create new hoods and headlamps using Ford’s designs. Like the needles in Aiken, such new hoods and headlamps are subject to Ford’s design patents, and manufacturing new copies of those designs constitutes infringement.
In light of these decisions, the Federal Circuit affirmed the judgment in favor of Ford.
The opinion can be found here.