Summary
- Car parts makers say auto manufacturers use design patents to stifle competition
- Court to consider if Supreme Court overruled design patent validity test
June 30 (Reuters) – Auto parts maker LKQ (LKQ.O) on Friday persuaded a U.S. appeals court to reconsider a decision to uphold a General Motors (GM.N) design patent for a car fender, imperiling an earlier win for GM in a case that has been closely watched by the auto and insurance industries.
In a rare step, the U.S. Court of Appeals for the Federal Circuit said all 12 of its sitting judges would hear LKQ’s challenge to a three-judge panel’s ruling for GM.
The full court said it would address the standard for when a design is unpatentable based on preexisting designs, and whether a 2007 U.S. Supreme Court ruling related to non-design patents applies to the design-patent standard.
Auto-parts companies told the appeals court that carmakers misuse design patents to stifle competition for aftermarket parts, and that affirming the decision on GM’s fender patent would make replacement parts more expensive and harder to obtain.
A trade group for home, auto and business insurers also told the court that design patents like GM’s “unfairly exclude competitive aftermarket repair parts from the marketplace” and “substantially increase repair costs.”
GM said in a brief that its fender design was innovative and that the court should let the decision stand.
An LKQ spokesperson said on Friday that the company was pleased that the Federal Circuit agreed to rehear its case. GM declined to comment on the ruling.
Design patents protect novel visual characteristics of manufactured objects. LKQ asked a U.S. Patent Office tribunal last year to cancel a GM design patent covering a front vehicle fender after their licensing agreement expired and GM threatened to sue LKQ partners for infringement.
LKQ told the Patent Trial and Appeal Board that the patent was invalid based on two preexisting publications — an earlier design patent and a brochure that disclosed a similar design on a 2010 Hyundai Tucson.
The board ruled for GM on grounds including that the earlier patent was not independently similar enough to the GM design to be a “primary reference” that could justify declaring the GM patent obvious. The Federal Circuit affirmed the decision in January.
The full Federal Circuit agreed on Friday to rehear LKQ’s argument that the test for obviousness in design patents was overruled by a 2007 Supreme Court ruling that rejected “rigid and mandatory formulas” for obviousness in patents covering inventions.
The case is LKQ Corp v. GM Global Technology Operations LLC, U.S. Court of Appeals for the Federal Circuit, No. 21-2348.
For LKQ: Barry Irwin of Irwin IP, Mark Lemley of Lex Lumina
For GM: Joseph Herriges of Fish & Richardson
