Background
Shenzhen Jisu Technology Co., Ltd. (Shenzhen), owner of a U.S. design patent for a foldable fan, filed a “Schedule A” lawsuit against numerous e-commerce vendors for patent infringement. The district court initially granted an ex parte temporary restraining order (TRO) and subsequently a preliminary injunction (PI) against the defendants, including an appearing defendant, Zhouty.
After the PI was issued, a third party obtained a new design patent (the ‘104 patent) for a similar foldable fan, which cited Shenzhen’s patent as prior art. Zhouty moved for reconsideration, arguing the ‘104 patent’s issuance demonstrated a patentable difference between its product (which allegedly practiced the ‘104 patent) and Shenzhen’s patented design, thus undermining the infringement claim. The court denied reconsideration. Subsequently, Shenzhen added new defendants, including the owner of the ‘104 patent, and moved for a new TRO.
This time, the district court was persuaded by the argument regarding the new patent. Finding that the ‘104 patent’s issuance over Shenzhen’s patent suggested a patentable difference between the designs, the court concluded that Shenzhen’s likelihood of success on the merits of its infringement claim was diminished. It therefore denied the TRO against the new defendants and, in a significant reversal, dissolved the existing PI against Zhouty. Shenzhen appealed the decision.
The Court’s Holding
The Federal Circuit affirmed the district court’s decision. The court first rejected Shenzhen’s argument that collateral estoppel should have barred the defendants from relitigating the relevance of the ‘104 patent after the court had already rejected the argument once. The panel held that collateral estoppel is inapplicable to a judge’s reconsideration of a prior, non-final ruling within the same, ongoing case; a court is free to revisit such rulings.
The court then addressed Shenzhen’s primary argument: that the district court misapplied patent law by effectively requiring Shenzhen to prove the later ‘104 patent was invalid to win its infringement claim. The Federal Circuit disagreed with this characterization of the lower court’s ruling. While acknowledging that the legal test for obviousness differs from the test for infringement, the court emphasized that the test for anticipation is identical to the infringement test for design patents—the “ordinary observer” test. Therefore, the court held, it was not an error for the district court to consider the implications of the ‘104 patent’s issuance.
The Federal Circuit reasoned that a patent is presumed valid upon issuance, which includes a presumption that it is novel and not anticipated by prior art like Shenzhen’s patent. The district court was within its discretion to use the ‘104 patent’s issuance as an analytical aid. Because the accused products purportedly practiced the later, presumptively valid ‘104 patent, it was reasonable for the district court to conclude that Shenzhen’s likelihood of success on its infringement claim was reduced, thereby justifying the denial of preliminary injunctive relief. The court clarified that this finding was limited to the preliminary injunction context and did not decide the ultimate outcome of the infringement case.
Key Takeaways
- The issuance of a later-in-time design patent that cites an earlier patent as prior art can be used as evidence to argue against a preliminary injunction for infringement of the earlier patent.
- The doctrine of collateral estoppel does not prevent a judge from reconsidering an earlier, non-final ruling within the same, ongoing case.
- While the tests for obviousness and infringement differ, the tests for design patent infringement and anticipation are the same (“ordinary observer” test). This allows a court to infer that if a design was patentably distinct from a prior art design, it may not be “substantially the same” for infringement purposes.
Why It Matters
This decision provides a significant strategic data point for defendants in design patent litigation, particularly in the e-commerce space where “Schedule A” lawsuits are common. It validates the argument that a defendant’s own design patent can be a powerful shield against a preliminary injunction, a critical tool used by patent holders to quickly halt sales. The ruling shows that courts may give evidentiary weight to the Patent Office’s determination of novelty, making it more difficult for a patentee to argue that a newly patented design is merely an infringing copy.
For patent holders, the ruling underscores the challenge of enforcing design patents against competitors who have also secured their own patent rights. It suggests that to win a preliminary injunction in such a scenario, a patentee may need to present a more robust case, potentially including stronger evidence of similarity and a clearer rebuttal to the presumption of the later patent’s validity. This could raise the bar for obtaining early injunctive relief in design patent disputes.