FEDERAL CIRCUIT DODGES DESIGN PATENT DAMAGES ISSUE AND GOES LOCO OVER INFRINGER’S LOGO

November 17, 2019 by Perry Saidman

In Columbia Sportswear v. Seirus Innovative Accessories (No. 2018-1329, 2018-1331 and 2018-1728) (November 13, 2019), the U.S. Court of Appeals for the Federal Circuit declined to decide the single most important and unresolved issue in design patent law: determining the “article of manufacture” upon which the infringer’s total profit is calculated under 35 U.S.C. Sec. 289.

BACKGROUND: The Supreme Court’s 2016 decision in Samsung v. Apple held that the article of manufacture upon which the infringer’s total profit is to be calculated can be either the end product sold by the infringer, or a component of the end product. It did not, however, provide any guidance to the lower courts as to how the article of manufacture is to be determined in any given case. Three years have passed since the Supreme Court’s pronouncement. This is the first case to reach the Federal Circuit on this admittedly difficult issue.

Columbia’s design patent, D657,093, claimed a heat reflective material, and included drawings that showed this material applied to several end products, such as socks and gloves (the end products – socks & gloves - were shown in broken lines, i.e., disclaimed):

Columbia, of course, wanted the end products, e.g., socks and gloves, to be the articles of manufacture, simply because the total profit on those end products would be far larger than the total profit on the material alone. Naturally, the infringer Seirus wanted the material alone to be the article of manufacture, which would minimize the total profit. The jury awarded Columbia $3 million in total profit damages and the infringer Seirus appealed.

The urgent issue before the Federal Circuit was to determine the relevant article of manufacture, and in the process fashion an appropriate set of factors that a court should consider. The Columbia case was supposed to be the case where the Federal Circuit would finally give the lower courts – and litigants – guidance on this critical issue.

The Federal Circuit punted, kicked the can down the road - again! (see earlier post re: Campbell Soup case).

LOCO: Instead of wrestling with the article of manufacture gorilla, the court strained to reverse the district court’s grant of summary judgment of infringement and remanded the case.

In so doing, the court – rather remarkably, and unfortunately – said that the infringer’s logo on its products is a factor that must be considered in determining infringement. This is a startling ruling that will ultimately weaken design patents. It handed infringers a new, powerful weapon: simply include their logo/name on their infringing products.

Following are enlargements showing the infringer’s logo on two of its products:

In discussing this issue, the court tried to distinguish the venerable (and precedential) L.A. Gear case, (L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993)). The court, citing L.A. Gear, said: “A would-be infringer should not escape liability for design patent infringement if a design is copied but labeled with its name.” But a few sentences later, it inexplicably said that the trier of fact cannot “ignore elements of the accused design entirely, simply because those elements included the name of the defendant”. How does one reconcile these two statements?

Those of us in the real world know that infringers are clever. Many copy exactly (or very closely) a design patented product, and put their own logo on it. Take footwear as an example: Nike shoes have their famous swoosh on every sneaker. Of course, Nike’s design patents do not claim the swoosh, because it would significantly narrow their scope.

After the Federal Circuit’s ruling in Columbia, an infringer is now incentivized to copy a patented design and try to avoid infringement by using, e.g., the word “balloons” on the side of its shoes, as did the infringer in L.A. Gear:

In fact, it is a rather common practice. The infringers generally avoid putting the patentee’s name/logo on their product, because to do so would amount to counterfeiting which carries severe criminal penalties.

The presence of a logo/name significantly weakens the patentee’s case for infringement, because obviously the logo – any logo or name – is not going to be part of the patentee’s claimed design. Requiring courts to consider the overall appearance of the design including the logo by definition will make it more difficult for a design patentee to get an infringement ruling, for the logo will provide another visual element that the infringer can use to argue that its design is not substantially the same in overall appearance as the patented design.

OTHER FALLOUT: The court further chastised the district court for its “piecemeal approach” in that it spoke of individual design elements during its comparison of the patented design and accused products. The Federal Circuit said that: “the fact-finder must analyze the design as a whole”. But, as a practical matter, how does one analyze the design as a whole except by comparing individual elements of the design?

The Federal Circuit also criticized the district court for violating Rule 56 (Summary Judgment) in that it did fact-finding in the course of granting summary judgment. But district courts on summary judgment make findings of fact all the time, otherwise such motions would never be granted. The real question is whether the non-movant (infringer) introduced sufficient evidence - not simply a list of facts in dispute - such that a reasonable jury could find in its favor. The whole idea of summary judgment is to avoid potentially wasteful jury trials where there’s no triable issue of fact. The Federal Circuit glossed over this nicety.

UPSHOT: The Federal Circuit’s entire opinion regarding the design patent practically mandates another jury trial – hoping perhaps that the parties will now settle and postpone the necessity of the court to wrestle with the admittedly difficult – but extremely important – article of manufacture issue.

FEDERAL CIRCUIT KICKS THE CAMPBELL SOUP CAN DOWN THE ROAD

October 02, 2019 by Perry Saidman

In Campbell Soup Co. et al. v. Gamon Plus, Inc, (2018-2029, 2018-2030, September 26, 2019), the U.S. Court of Appeals for the Federal Circuit ignored the absence of a major visual element in a claimed design by finding that a prior art reference - that lacked this element - was nevertheless a proper primary reference under 35 USC 103.

The design patent in question, U.S. Pat. No. D612,646, claimed a portion of a can dispenser, namely a label area above a cylindrical can having flat vertical tabs in front of the can. The sole figure is shown below:

Following is the Linz primary reference:

The test for a proper primary reference in design patent obviousness analysis is whether the reference’s overall visual appearance is “basically the same” as the claimed design. This goes back to the Court’s seminal case, Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996).

The most basic legal analysis – and logic - is that Linz cannot be basically the same in appearance as the ‘646 design if it is missing a claimed major visual element.

The Federal Circuit came to its conclusion with the flimsiest of logic:

“Accepting the Board’s description of the claimed designs as correct, the ever-so-slight differences in design, in light of the overall similarities, do not properly lead to the result that Linz is not “a single reference that creates ‘basically the same’ visual impression” as the claimed design. The parties do not dispute that Linz’s design is made to hold a cylindrical object in its display area.” [emphasis added]

Interestingly, neither the majority nor the dissent nor the Board discuss the claimed flat, vertical tabs that rest adjacent the cylindrical object. Linz shows curved tabs. Since only 3 elements are claimed in the ‘646 patent, the flat, vertical tabs certainly qualify as another major visual element.

Because of Gamon’s admission during oral argument that Linz’s dispenser was for a can, the Court used its imagination and imputed the appearance of a can into the Linz reference, and reversed the Board’s finding that Linz was not a proper primary reference.

To understand how ridiculous the Court’s holding is, imagine the hypothetical situation where Linz’s product appeared on the market after Gamon’s patent issued. Gamon sues Linz for infringement. The test for infringement is whether the designs are “substantially the same” in overall appearance, which is eerily similar to the test for a primary reference: whether it is “basically the same” as the claimed design. So, if Linz is a proper primary reference, it follows that the Linz product would infringe the Gamon patent – and I am 100% sure that no court in the land - much less a jury - would ever come to that conclusion.

Judge Newman in her dissent had it exactly right:

“My colleagues propose that since “Linz’s design is made to hold a cylindrical object in its display area”, the Linz design must be viewed with judicial insertion of the missing cylindrical element. This analysis is not in accordance with design patent law. Only after a primary reference is found for the design as a whole, is it appropriate to consider whether the reference design may be modified with other features, selected to match the patented design”. (emphasis added)

Ironically, in the seminal Durling case (citation above), the Court found the prior art reference to Schweiger was deficient as a proper primary reference precisely because it failed to disclose a significant visual element of the claimed design. The images of the patented design (top image) and Schweiger (bottom image) follow:

The Federal Circuit found that the absence of a triangular corner table in Schweiger prevented it from creating “basically the same visual impression as does Durling's design, and therefore cannot suffice as a primary reference.”

The Federal Circuit also contradicted the Board’s established precedent.

For example, in Vitro Packaging, LLC v. Saverglass, Inc., 2015 WL 5766302 (Sept. 29, 2015), the prior art bottle was deemed an improper primary reference despite having all the major visual elements of the claimed design.

And in Key-Bar LLC v. Curv Brands, LLC, PGR 2017-0006 (March 22, 2017), the prior art was visually quite close, but was found insufficient as a primary reference:

The fallout from the Campbell Soup decision is potentially devastating. USPTO examiners will now freely assert prior art in Sec. 103 rejections that is missing a major visual element against a claimed design, making design patents much more difficult to obtain. Similarly, petitioners in IPRs will have a much easier time invalidating design patents.

Campbell Soup’s radical departure from established case law reduces the certainty that design owners crave, and thus adversely affects business decisions. It also increases litigation costs and reduces the likelihood of successful settlement negotiations. This may be a stretch, but it also paves the way for another Supreme Court reversal of a Federal Circuit decision – if Gamon decides to go that way (a large part of me hopes that it will not, lest SCOTUS has another opportunity to muck up design patents again, as it did in Samsung v. Apple).

So, what will the Board do on remand? I predict it will reaffirm its original decision that Linz is not a proper primary reference, which will, as noted above, be in accordance with years of well-established case law.

Curver v. Home Expressions is Straight but the Prosecution of its Patent Application was Curved

September 15, 2019 by Perry Saidman

In Curver Luxembourg v. Home Expressions from the Federal Circuit, Curver asserted U.S. Pat. No D677,946 (the ‘946 patent) against Home Expressions. The ’946 patent claims an overlapping “Y” design, as illustrated below.

The title, description of figures, and claim of the ’946 patent all consistently recite a “pattern for a chair.” But none of the figures illustrate a design being applied to a chair. The term “chair” first appeared through amendment during prosecution. Curver originally applied for a patent directed to a pattern for “furniture,” not a chair specifically. The original title was “FURNITURE (PART OF-).” The original claim recited a “design for a furniture part.”And each of the figures was described as illustrating a “design for a FURNITURE PART.” None of the figures illustrated a chair, any furniture, or any furniture part.

During prosecution of the application, the examiner requested that the title and claim be amended to “Pattern for a Chair”, and the applicant complied, despite the fact that the drawings did not illustrate a chair. The defendant Home Engravings applied the pattern to a basket, and was sued for infringement.

The Federal Circuit held that the claim language limited the scope of the ‘946 design patent to a chair, and therefore the basket did not infringe. This is straightforward and not controversial at all. This simply reinforces the common knowledge that the title and claim of a design patent really matter.

But several things went wrong during prosecution of the design patent application that became the ‘946 patent.

The most obvious error was the applicant agreeing to the examiner’s suggestion to change the title from “Furniture Part” to “Pattern for a Chair”. This smacks of prohibited “new matter”, and the Federal Circuit could have invalidated the patent on that ground alone.

Second, the applicant could have chosen a better, broader title (and claim). For example, instead of “Furniture Part” it could have said “Portion of Furniture, Tabletop Products, Office Products, Home Products, Baskets, and the like”. This would have considerably broadened the scope of the claim. The applicant could also have illustrated the pattern on those various products, showing the products in broken lines.

This was the approach taken in an important case now pending before the Federal Circuit, Columbia Sportswear v. Seirus, where Columbia illustrated in its design patent D657,093 its “Heat Reflective Material” on products such as gloves, footwear, socks, and the like, showing all of those products in the drawings in broken lines with the heat reflective material in solid lines. Columbia seeks Seirus’ total profit on the end products as sold, while Seirus wants to limit the damages to the heat reflective material. Columbia’s main problem was not claiming “Heat Reflective Material Applied to Gloves, Footwear, Socks, and the like”, giving it a chance of recovering total profits based on the end products as sold. We’ll have to wait and see how the Federal Circuit handles that issue, which has more to do with “total profit” under Sec. 289 (oral argument was held just last week). But the title and claim of Columbia’s patent may turn out to be the critical factor, just as in Curver.

One of the Federal Circuit’s gaffes in Curver was its misinterpretation of In re Glavas, when it declared that “a design patent disclosing a surface ornamentation applied to a given article [cannot] be anticipated by an unrelated article having a very different physical appearance and form.” Slip. at 13. This is counter to the very language of the M.P.E.P. 1504.02 that states: “Anticipation does not require that the claimed design and the prior art be from analogous arts.” So, insofar as anticipation is concerned, a 2D design on a flower pot can be anticipated by the same design on a laptop computer. Of course, under Sec. 103, the prior art and the claimed design must be from analogous arts, since a designer of ordinary skill would not look at laptop designs in considering the obviousness of a flower pot.

Further, the Federal Circuit unfortunately continues to rely on the International Seaway case that held that the test for anticipation is the same as the test for infringement, that relied in turn on the ancient Peters v. Active case. This is demonstrably an incorrect legal conclusion, as I wrote in a 2011 article.

In short, Curver’s holding was not at all surprising, but the Court’s opinion left something to be desired, and the attorney who prosecuted Curver’s design patent could have been more imaginative.

PERRY SAIDMAN SPEAKING IN CINCINNATI AND CLEVELAND SEPTEMBER 18-19, 2019

August 12, 2019 by Perry Saidman

Perry will be making a presentation at the All-Ohio Annual Institute on Intellectual Property (AOAIOIP) next month as part of the patent breakout session in the afternoon. His topic is: The Latest and Greatest: How Design Patent Litigation Informs Prosecution.

The session will be in Cincinnati on September 18th, moving to Cleveland on September 19th.

Full program information can be found here.

U.S. ITC LIES DOWN IN ITS FAILURE TO CONSIDER PRIOR ART IN ITS DESIGN PATENT INFRINGEMENT ANALYSIS

July 27, 2019 by Perry Saidman

The U.S. International Trade Commission (ITC) handed down an Initial Determination that a certain line of sofas – the Amelio line manufactured by the Respondent Krug, Inc. – did not infringe U.S. Pat. No. D716,576 (the ‘576 patent) owned by the Complainant Sauder Manufacturing Company. See In the Matter of Certain Convertible Sofas and Components Thereof, Inv. No. 337-TA-1122 (USITC, July 12, 2019).

Following are FIGS. 3 and 8 of the ‘576 design patent that illustrates a sofa with two upholstered seating areas, each bordered with a vertical armrest, and separated by a flat table member.

And following is a photo of an exemplary accused product:

In its extensive analysis, the ITC got one or two things right. For example, in analyzing infringement, it cited the Federal Circuit’s Ethicon case, 796 F.3d 1312, 1327 (2015), for the proposition that “functional elements cannot be entirely factored out of a patented design when performing an infringement analysis”, noting that the “fact finder cannot ignore the depicted ornamental aspects of functional elements appearing in the design claim”.

However, it also micro-examined similarities and differences between the patented and accused designs. It spent 7 full pages noting just about every single difference between the claimed design and the accused design, such as the seat cushion of the ‘576 design wraps in front of the arm, whereas in the accused design the arm extends to the front face of the seat.

After its exhaustive micro-examination of just about every element of the sofas, it concluded that “the two designs at issue here are plainly dissimilar”.

But, it did not consider any prior art. At all.

I have often noted that a conclusion that two designs are “plainly dissimilar” robs the finder of fact from the possibility of concluding that they are substantially the same in view of the prior art. The ITC ignored its own earlier pronouncement where it quoted the seminal Egyptian Goddess case: “For purposes of design patents, an ‘ordinary observer’ is one who is familiar with the prior art. Egyptian Goddess, 543 F.3d at 677.”

This is in spite of the fact that the Respondent Krug in its Verified Response to the Complaint alleged that the ‘576 design was anticipated or made obvious by DE Pat. No. 1790544U (DE ‘544). The DE ‘544 patent was the only prior art asserted in Krug’s Response that showed a retractable table between two seating surfaces that can also be used for a sleeping surface. Clearly, Krug believed that the DE ‘544 patent was quite close to the ‘576 design.

What if the ITC had actually considered the prior art DE ‘544 patent in determining infringement, as mandated by Egyptian Goddess?

Shown below are representative figures comparing the ‘576 patented design, the accused Krug design, and the DE ‘544 patent.

’576 Patented Design

Accused Krug Design

Prior Art DE ‘544

Clearly, and without any doubt, the appearance of the ‘576 patented design and the accused design are closer to each other – much closer – than either is to the DE ‘544 patent. Under normal circumstances, a reasonable finder of fact could easily conclude that the accused design was substantially the same in overall appearance as the patented design.

One must keep in mind that in an infringement determination the comparison of the patented and accused design is made by “an ordinary observer”. This is because, as noted by the seminal 1871 Supreme Court case of Gorham v. White, if the comparison was made by an expert, no design patent would ever be infringed, since experts will see many more details than an ordinary observer. Apparently, the ITC put itself in the role of an expert, noting every jot and tittle in its comparison of the patented and accused designs. This was directly contrary to Gorham v. White and Egyptian Goddess.

Maybe the fault lies with the Respondent. The pleadings in this case are mostly confidential, and not accessible. Thus, it’s not clear whether Respondent failed to raise this issue, or this was simply an error by the Commission.

It’s too bad that after all these years, the prior art can be ignored in analyzing design patent infringement.

AIPLA SPONSORS DESIGN RIGHTS BOOT CAMP IN CHICAGO AUGUST 5-6, 2019

July 12, 2019 by Perry Saidman

The AIPLA is holding a program that will introduce attendees to design rights, including design patents, trade dress and copyrights. The program will extend over 2 full days, August 5-6, 2019, at the Chicago-Kent Center for Design, Law & Technology in Chicago, IL.

Perry Saidman will open the first session with “Introduction to Design Patents”, that will include tips on how to handle the “Article of Manufacture” issue that is a hot topic regarding design patent damages.

The full program and registration information can be found at:

https://ams.aipla.org/eweb/DynamicPage.aspx?webcode=EventInfo&Reg_evt_key=12bb36c9-d4a8-49a9-bfb-cb6a779748b1b&RegPath=EventRegFees&FreeEvent=0&Event=2019%20Design%20Rights%20Boot%20Camp%20-%20Chicago,%20IL&FundraisingEvent=0&evt_guest_limit=0

DISTRICT COURT ANALYSIS OF DESIGN PATENT FUNCTIONALITY IS (SIGH) OFF THE MARK

June 26, 2019 by Perry Saidman

In Tactical Medical Solutions, Inc. v. Dr. Ronald Karl and EMI Emergency Medical International a/k/a Emergency Medical Instruments (ND Ill., June 11, 2019), the court denied EMI’s motion for summary judgment (MSJ) of design patent invalidity based on functionality.

The court’s opinion missed the mark in holding that the issue of functionality in this case needs to be decided by the jury, saying material facts were in dispute.

The author posits that the issue of functionality was clear cut; the claimed design was not functional as a matter of law.

Below is the plaintiff TMS’s U.S. Pat. No. D649,642, next to images of the accused design.

ACCUSED DESIGN

Note that the claimed design is confined to the shape of the beveled ends, shown in solid lines.

The court relied on the Federal Circuit’s 2015 Ethicon decision, which is the go-to case for design patent functionality.

The district court began on the wrong foot in misquoting Ethicon where it said: “The existence of alternative designs is an important but not dispositive factor [in determining functionality].” (Slip. op. at 14).

The Federal Circuit actually said just the opposite: “…the availability of alternative designs [is] an important – if not dispositive – factor in evaluating the legal functionality of a claimed design.” Ethicon at 1329-1330.

In other words, the Federal Circuit elevated the importance of alternative designs by saying it was very likely a dispositive factor, while the district court reduced the importance of alternative designs by saying that it was not dispositive. This led the district court to analyze the discredited Berry Sterling “factors” (which were dicta in that case), such as “whether the protected design is the best design.” One might as well ask why this factor should matter. Does this factor incentivize the patentee to prove its design is less than the best, or to intentionally make an inferior product? Do witnesses need to testify about the excellence or poor aesthetics of a design? Or, worse yet, the excellence or poor utilitarian aspects of a design? Does this make any sense? As this author has previously written, the functionality factors in Berry Sterling are eerily (and improperly) similar to the factors for determining trade dress functionality (perhaps the result of a law clerk’s sloppy research).

Further, the availability of alternative designs is always dispositive of the issue of design patent functionality. The purpose of the functionality doctrine is to prevent the patentee from using a design patent as a utility patent, i.e., using a design patent to monopolize the function embodied by the claimed design. Thus, if there are alternative designs to the one claimed, that perform substantially the same function, it is proof positive that the claimed design is not monopolizing that function, and therefore is not functional as a matter of law. Period. End of analysis.

In other words, the alternative designs test trumps other considerations, as it should.

The district court compounded its shaky analysis when it examined the “functional purpose” of the beveled ends of the design, forgetting that it’s not the purpose or utilitarian aspects that matter, but rather the appearance aspects. As pointed out in Ethicon: “Articles of manufacture necessarily serve a utilitarian purpose, but design patents are directed to ornamental designs of such articles”, Id. at 1328. Stated differently, all products have utilitarian features, but it’s the appearance of those features that are protected by a design patent.

When the district court finally looked at alternative designs, which clearly existed, it discounted them, saying: “…it is not clear [that] those alternative designs would work as well”, echoing another piece of misguided dicta from Berry Sterling. Having concluded that the issue of functionality could go either way, the court left the issue for the jury.

Let’s hope that design patent litigants – and eventually the courts – will someday “get” how the issue of functionality should be properly analyzed, and avoid wasting court resources.

ps@perrysaidman.com