Background
ABC Corporation I and related entities own four design patents — U.S. Patent Nos. D737,723, D738,256, D784,195, and D785,112 — covering the ornamental appearance of hoverboard products. They filed suit in the Northern District of Illinois against numerous unknown online sellers identified only on a “Schedule A” to the complaint — a litigation strategy common in the Northern District of Illinois, where plaintiffs target large groups of anonymous e-commerce merchants alleged to sell infringing goods on platforms like Amazon and eBay.
The district court granted preliminary injunctions against multiple defendants without conducting a full merits hearing. The injunctions were premised on a finding that ABC was likely to succeed on its infringement claims. Defendants appealed, challenging both the injunctions’ procedures and substance. The Federal Circuit consolidated related appeals and issued two separate precedential opinions on the same day.
The Court’s Holding
The Federal Circuit vacated the preliminary injunctions in both decisions, finding multiple legal errors in how the district court assessed likelihood of success on design patent infringement.
First, the court held that design patent infringement under the ordinary observer test — which asks whether an ordinary observer would mistake the accused product for the patented design — must be performed on a product-by-product basis. When a plaintiff asserts multiple patents against multiple accused products, a court cannot aggregate the analysis or compare one product’s features to a mix of claims across different patents. Because the four accused hoverboard products differed significantly from each other in appearance, a single collective analysis was legally insufficient.
Second, the court reaffirmed the role of prior art in design patent infringement analysis. When a feature of the patented design — here, the hourglass body shape common to hoverboards — also appears in prior art, the infringement analysis must focus on the differences between the patented design and the accused product that go beyond what the prior art already disclosed. A plaintiff cannot establish a likelihood of infringement by pointing to a shared feature that was already in the prior art and thus not protected by the patent.
Third, in the companion appeal (Nos. 21-2150 et al.), the court vacated injunctions issued without proper notice and an opportunity to be heard as required by Federal Rule of Civil Procedure 65(a), holding that preliminary injunctions “issued without notice, motion, hearing or evidence should be vacated.”
Key Takeaways
- Design patent infringement must be analyzed on a product-by-product basis; courts cannot conduct a single, aggregated infringement analysis across multiple distinct accused products in a Schedule A case.
- Prior art constrains design patent infringement analysis: design features that appear in the prior art cannot be the basis for an infringement finding, and the focus must be on what the patent adds beyond the prior art.
- Preliminary injunctions in design patent cases require the same rigorous, evidence-based analysis as injunctions in other patent cases — procedural shortcuts do not survive appellate review.
- Schedule A design patent cases face heightened scrutiny: the Federal Circuit’s two opinions together impose significant analytical requirements on courts and patentees seeking early injunctive relief against groups of defendants.
Why It Matters
The ABC Corp. decisions are among the Federal Circuit’s first precedential opinions directly addressing the merits of design patent enforcement in the “Schedule A” litigation model that has exploded in popularity in the Northern District of Illinois. In that model, brand owners file suits against large groups of anonymous online sellers and seek immediate injunctions to freeze seller accounts and seize funds before defendants can even appear in the case.
The Federal Circuit’s rulings impose meaningful analytical requirements on these mass-defendant cases: courts must evaluate each accused product individually, must account for prior art when assessing infringement, and cannot issue injunctions without basic procedural protections. For design patent owners, the decisions raise the bar for obtaining quick relief in Schedule A litigation. For accused sellers — often small businesses operating on e-commerce platforms — the rulings provide important procedural protections against sweeping injunctions entered without notice or meaningful judicial scrutiny.