Federal Circuit Affirms Dissolution of Preliminary Injunction in Split Decision Over Foldable Fan Design Patent

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision today affirming a district court’s dissolution of a preliminary injunction (PI) and denial of a temporary restraining order (TRO) in a Schedule A design patent dispute over foldable fans. Circuit Judge Hughes wrote for the majority, joined by Circuit Judge Prost, while Circuit Judge Stoll dissented from the portion of the opinion addressing the merits of the design patent analysis.

Shenzhen Jisu Technology Co., Ltd. owns U.S. Design Patent No. D886,982, which covers a design for a foldable fan. In April 2024, Shenzhen filed a Schedule A complaint in the U.S. District Court for the Northern District of Illinois against a group of e-commerce vendors accused of selling infringing fans through online storefronts such as Amazon and Temu. Shenzhen sought an ex parte TRO against all defendants, which the district court granted before Shenzhen moved to convert the order into a PI.

Unlike most Schedule A cases, in which defendants typically do not appear, defendant Zhouty opposed the PI, contending its product differed from the patented design in ways that defeated any likelihood Shenzhen would succeed on its infringement claim. The district court disagreed, finding the two designs conveyed a similar overall visual impression to an ordinary observer, and granted the PI.

The dispute shifted after the U.S. Patent and Trademark Office (USPTO) issued U.S. Patent No. D1,046,104 to a third party for a design that also covers a foldable fan and lists the ‘982 patent as prior art. Zhouty asked the district court to reconsider its PI ruling, arguing the newly issued patent undercut Shenzhen’s likelihood of success on its infringement claim since the ‘104 patent presumably would not have been issued if the ‘982 patent anticipated its design. However, the district court denied reconsideration.

About a month later, Shenzhen added five new defendants to the case, including the owner of the ‘104 patent, and sought an ex parte TRO against them. Those defendants appeared and raised the same argument regarding the significance of the ‘104 patent. On February 28, 2025, the district court denied the requested TRO against the new defendants and simultaneously dissolved the PI against Zhouty. The court found newly uncovered facts indicating that Zhouty and the new defendants were authorized to sell fans embodying the ‘104 patent’s design, and concluded that since the ‘104 patent issued over the ‘982 patent, its presumed validity suggested a patentable difference between the two designs. This undermined Shenzhen’s likelihood of success on its infringement claim, according to the district court, making injunctive relief inappropriate.

Shenzhen appealed and contended the district court violated collateral estoppel principles by allowing the new defendants to relitigate an argument the court had already rejected when denying reconsideration. The Federal Circuit disagreed, explaining that collateral estoppel bars relitigation of issues already finally decided in a prior proceeding, but has no application to a judge revisiting an earlier, non-final ruling within the same ongoing case. The court cited the Seventh Circuit precedent, and noted that within a single lawsuit “there is no basis for using res judicata or collateral estoppel to prevent a judge from reconsidering an earlier ruling.”

Moreover, Shenzhen argued that the district court misapplied design patent law by effectively requiring it to prove the ‘104 patent was invalid to establish a likelihood of success on infringement. According to Shenzhen, this improperly conflated the standards for patentability and infringement. The CAFC acknowledged that the test for obviousness differs from the ordinary observer test used for infringement, but found no indication the district court had blurred those standards. Instead, the majority read the district court’s ruling as relying on the established principle that anticipation and infringement of a design patent are assessed under the same test. Under that framework, since an ordinary observer comparison determines both anticipation and infringement, a later design patent’s issuance over an earlier one carries a presumption that the later design is not anticipated by, and therefore not substantially the same as, the earlier one. The majority found no abuse of discretion in the district court’s consideration that “the accused products purportedly practice the later-issued and presumed-valid ‘104 patent.”

Judge Stoll dissented from that portion of the ruling and argued that the proper framework for assessing a likelihood of success on a design patent infringement claim requires a three-way comparison among the accused product, the patented design, and the prior art. She argued that this approach is consistent with the ordinary observer test set out in ABC Corp. I v. Partnerships and Unincorporated Associations Identified on Schedule “A.” In her view, the district court instead applied a shortcut, presuming noninfringement based solely on the presumed validity of the later issued ‘104 patent, without conducting the required three-way analysis. She wrote that “such a shortcut may reach an accurate result in some cases,” but said it is not the framework required by CAFC precedent, and would have vacated and remanded for the district court to apply the proper test.

The CAFC ultimately affirmed the district court’s dissolution of the PI and denial of the TRO.

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