BREAKING (BROKEN?) NEWS! IN COLUMBIA V. SERIUS, THE FEDERAL CIRCUIT GIVETH WITH ONE HAND, TAKETH WITH THE OTHER

The long-awaited decision in Columbia Sportswear North America, Inc. v. Serius Innovative Accessories, Inc. (Columbia II) came down last week from the U.S. Court of Appeals for the Federal Circuit.  The Court ultimately reversed the jury’s finding of infringement, and remanded to the district court for a 3rd trial (the first trial being limited to damages).  For a full discussion of the background to this case, including images and opinions cited below, see my earlier blog posts.

This was a 33-page opinion, focusing on two substantive issues:  (1) whether comparison prior art must be of the same article of manufacture as the claimed design;  and (2) whether the infringer’s logo on its product has any bearing in determining infringement.   The Court spent 10 pages deciding the first issue, and 5 pages on the second.

The conclusion on the first issue was somewhat predictable in view of the Court’s prior decisions in Surgisil and Curver.  The Court concluded that comparison prior art must be of the same article of manufacture as the accused design.  Interestingly, the Court listed a half dozen previous cases where comparison prior art was a non-issue, because the comparison prior art used in those cases was always the same article of manufacture as the patented design.  It was able to identify only one case (and in a footnote no less) – Lanard Toys v. Dolgencorp – where it could have been an issue had the patentee raised it.  In that case, pencils had been used as comparison prior art for a claimed design to a chalk holder.

The more important issue was whether the infringer’s use of logos on its design could be taken into account in determining whether it was substantially the same in appearance to the claimed design.  If the answer is yes, then it offers infringers a rather easy roadmap to attempt to avoid infringement.  Simply stick your logo on your product. 

During oral argument on this case in January, 2023, Columbia’s counsel Chris Carani valiantly tried to impress upon the Court the critical importance of this issue when he said:

“[Branding information] is not just another line, or curve, or surface, this is supercharged information” and “This is radioactive information, a maiden voyage, a tinderbox. If upheld, the infringers have a slam-dunk holding of non-infringement.”

He was not overstating the problem. 

Columbia hung its hat on improper jury instructions, saying the court failed to tell the jury (1) that consumer confusion as to source is irrelevant to design-patent infringement, or (2) that a jury need not find a likelihood of confusion to find such infringement.  This caused the Court to launch into a discussion to distinguish trademark/trade dress infringement from design patent infringement, noting that the presence of a logo/labeling on a product helps to avoid consumer confusion in trademark law, but design patent infringement “does not consider consumer-confusion as to source” so that infringement is “not avoided by labeling”, curiously citing the 1993 LA Gear v. Thom McAn case in support (“A would-be infringer should not escape liability for design patent infringement if a design is copied but labeled with its name”).   

Yes, there are certainly differences between trademark/trade dress law and design patent law when it comes to determining infringement.  And it’s clear that in trademark law labeling can help to avoid a likelihood of confusion.  But it is hard for this writer to distinguish the L.A. Gear case – where the infringer used its brand BALLOONS on the side of its shoe - from this one where Serius used it’s logo (including its brand “Serius”) on its products.  Nevertheless, the Federal Circuit – and Columbia - was stuck with the Court’s decision in the first appeal (Columbia I) where it found that its precedent, i.e., the L.A. Gear case, “does not prohibit the fact finder from considering an ornamental logo, its placement, and its appearance as one among other potential differences between” a claimed and accused design.

Indeed, the Court said, it would be improper “to ignore elements of the accused design entirely, simply because those elements included the name of the [accused infringer].”

Adding insult to injury, the Court said:  “… just because a logo’s potential to eliminate confusion as to source is irrelevant to design-patent infringement, its potential to render an accused design dissimilar to the patented one – maybe even enough to establish non-infringement as a matter of law – should not be discounted.” (emphasis added). This is an open invitation for lower courts to grant summary judgment of non-infringement simply because an accused infringer includes its logo on its products. 

After analyzing the propriety of the jury instructions, the Court said it was “not insensitive to Columbia’s overarching concern” stating further “In design patent infringement cases involving logos, we appreciate the potential for a jury to be led astray and mistakenly conflate the significance of a logo’s source-identifying function with whatever impact it might have on a comparison of the designs.”  Ultimately, the Court left it up to the trial judge to determine whether and when to provide clarification of this issue to the jury.

Of course, just as happened in the second trial in this case, once the district court instructs the jury by quoting the language of the Federal Circuit in Columbia I, it’s game over.

(note to infringers:  it’s the logo, stupid.)