Federal Circuit Sees Logic in Allowing Expert Testimony on Ordinary Observers in Design Patent Cases

Today, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Smartrend Manufacturing Group (SMG), Inc. v. Opti-Luxx Inc. reversing and vacating an infringement ruling from the Western District of Michigan following a jury verdict for patent owner SMG in a case over illuminated school bus signs. In assessing Opti-Luxx’s challenge to Smartrend’s expert testimony offered on the perspective of ordinary observers, the Federal Circuit strongly hinted that such testimony could support design patent infringement allegations by drawing upon relevancy principles from the utility patent context.

In Utility Patent Cases, Expert Must Demonstrate Familiarity With POSA’s Perspective

SMG filed a lawsuit in Western Michigan accusing Opti-Luxx’s single-piece bus sign with a rigid plastic housing inseparable from an LED light board and yellow lens with black lettering of infringing U.S. Patent No. 11348491, Illuminated Signs for Vehicles, Mounting Systems Therefor and Related Methods, and U.S. Design Patent No. D932930, LED Light Panel. The district court granted summary judgment to Opti-Luxx on literal infringement as the ‘491 patent claims an illuminated school bus sign with a “frame” that the district court construed to be a separate distinct component from the rest of the sign, but allowed SMG’s doctrine of equivalents theory to proceed to trial.

At trial, Opti-Luxx did not oppose SMG’s motion to recognize its infringement witness as an expert in LED lighting and illuminated signage. However, Opti-Luxx objected when SMG’s expert witness began testifying as to the perspective of an ordinary observer to show infringement of SMG’s design patent, citing the expert’s lack of qualifications. This objection was overruled, leading to the jury’s infringement finding on both SMG’s utility and design patents. After trial, the district court also denied Opti-Luxx’s motion for judgment as a matter of law, which argued that SMG’s expert conceded that the accused product did not perform functions required by the ‘491 patent.

“We have not yet had the occasion to decide what exactly qualifies an expert witness to testify as to the perspective of the ordinary observer,” the Federal Circuit noted in its ruling authored by Circuit Judge Timothy Dyk. Tracing case law on expert testimony from utility patent cases decided by the appellate court, the CAFC acknowledged that experts of extraordinary skill in the art may testify as to the perspective of a person of ordinary skill in the art (POSA). Those cases underscored that, for the expert’s testimony on a POSA’s perspective to be relevant, the expert must also establish familiarity with that perspective. “It seems logical that these same principles will apply in a design patent context,” the appellate court opined.

However, the Federal Circuit did not reach that determination as it agreed with the Western Michigan district court that Opti-Luxx had forfeited its objection to SMG’s expert witness. The expert report submitted by SMG well ahead of voir dire described the expert’s analysis of the ordinary observer’s perspective. Because of this knowledge, Opti-Luxx forfeited its challenge to expert testimony on the ordinary observer’s perspective when it failed to object to SMG’s motion to admit its expert witness.

Equivalency Finding Fails Under Removable Sign Embodiments in Specification

Although the district court did not err in admitting this testimony from SMG, the Federal Circuit found that the lower court erred in construing the claim term “transparency” from the ‘930 design patent. At summary judgment, the district court construed transparency to be synonymous with translucency and submitted that construction in its jury instructions. However, the oblique shading used in the ‘930 design patent, which typically denotes transparent or translucent surfaces according to the Manual of Patent Examining Procedure (MPEP), was expressly limited by the patent’s description as denoting “transparency.” As a result, a new trial on design patent infringement is required, with the Federal Circuit adding that the jury must apply the plain and ordinary meaning of “transparency” as there was no contention that this meaning was disclaimed or that SMG acted as its own lexicographer.

SMG appealed the district court’s construction of “frame” from the ‘491 utility patent, but the Federal Circuit determined that the court correctly determined that a “frame” was a separate, distinct component from the rest of the sign based on the specification’s description that the frame “removably receive[s] the sign” and allows the insertion of customized frames.

The ‘491 patent’s description of the sign’s removable nature ultimately undid the district court’s denial of JMOL on the jury’s doctrine of equivalents finding. In assessing whether the differences between the patent claims and the accused product are insubstantial, articulating the function-way-result test for equivalency, the Federal Circuit identified language throughout the ‘491 patent describing the function of the separate and distinct frame. For example, the specification touts the benefits of removing the sign from the frame to improve service or replacement, or to swap signs for different language requirements in a new service area, which cannot be accomplished by Opti-Luxx’s products. Further, the appellate court noted that SMG’s expert witness admitted on cross-examination that Opti-Luxx’s accused products are incapable of removably receiving the sign and replacing the signage.

Along with vacating and remanding the design patent infringement findings and reversing the JMOL denial, the Federal Circuit also vacated the permanent injunction entered by the district court for SMG.