An appeal court ruling has reversed a previous decision in favor of General Motors (NYSE:GM) in a patent disagreement with LKQ Corporation (NASDAQ:LKQ). The court suggested that the dispute be sent back to the U.S. Patent Office for additional examination.
The lawsuit was initiated by GM (GM) who accused LKQ (LKQ) of employing its patented designs to produce replacement parts for vehicles involved in accidents. GM (GM) maintained that its Chevy Equinox front fender design could be patented under a “basically same” patent law. Conversely, LKQ (LKQ) argued for a reassessment of the applied patent law, emphasizing that the GM designs were “obvious” and the GM patent didn’t safeguard original or distinct designs. Should this principle be applied, GM (GM) patents would then become invalid, and LKQ (LKQ) would have the liberty to use the same fender design for the Hyundai front fender LKQ (LKQ) was producing.
In its efforts to nullify GM’s design patents, LKQ (LKQ) faced constant rejection, leading to its appeal to progressively higher courts. LKQ (LKQ) might have finally caught a break with the Court of Appeals for the Federal Circuit’s ruling, which deemed the basis of the GM (GM) patent to be “unduly inflexible” and suggested the case be reevaluated by the Patent Office.
Despite the ruling being a positive outcome for LKQ (LKQ), its shares have barely moved from their intra-day lows, remaining slightly negative. GM (GM) shares are also performing poorly, down 1.8% at midday.
