Professional Documents
Culture Documents
IN THE
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
HIGH POINT DESIGN LLC,
Plaintiff/Counterclaim Defendant-Appellee,
and
MEIJER, INC., SEARS HOLDINGS CORPORATION,
AND WAL-MART STORES, INC.,
Third Party Defendants-Appellees,
v.
BUYERS DIRECT, INC.,
Defendant/Counterclaim Plaintiff-Appellant.
Appeal from the United States District Court for the
Southern District of New York in Case No. 11-CV-4530,
Judge Katherine B. Forrest.
BRIEF FOR APPELLANT BUYERS DIRECT, INC.
October 11, 2012
ANDREW M. OLLIS
FRANK J. WEST
PHILIPPE J.C. SIGNORE
OBLON, SPIVAK, MCCLELLAND,
MAIER & NEUSTADT L.L.P.
1940 Duke Street
Alexandria, VA 22314
(703) 413-3000
Attorneys for Appellant
CERTI FI CATE OF I NTEREST
Counsel for Appellant, Buyers Direct, Inc., certifies the following:
1. The full name of every party or amicus represented by me is:
Buyers Direct, Inc.
2. The name of the real party in interest (if the party named in the
caption is not the real party in interest) represented by me is:
N/A.
3. All parent corporations and any publicly held companies that own 10
percent or more of the stock of the party or amicus curiae represented by me are:
N/A.
4. The names of all law firms and the partners or associates that
appeared for the party or amicus now represented by me in the trial court or agency
or are expected to appear in this court are:
Andrew M. Ollis
Frank J . West
Philippe J .C. Signore
OBLON, SPIVAK, McCLELLAND,
MAIER & NEUSTADT L.L.P.
Anthony F. Lo Cicero
David A. Boag
AMSTER, ROTHSTEIN & EBENSTEIN LLC
Dated: October 11, 2012 /s/ Andrew M. Ollis
Andrew M. Ollis
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES................................................................................... iii
STATEMENT OF RELATED CASES.....................................................................1
STATEMENT OF J URISDICTION..........................................................................1
STATEMENT OF THE ISSUES...............................................................................1
STATEMENT OF THE CASE..................................................................................2
STATEMENT OF FACTS........................................................................................4
I. Introduction..................................................................................................4
II. The 183 Design Patent................................................................................6
III. The Woolrich Shoes & the 183 Design Patent...........................................8
IV. The District Courts Decision....................................................................14
SUMMARY OF THE ARGUMENT ......................................................................17
ARGUMENT...........................................................................................................21
I. Standard of Review........................................................................................21
II. The District Courts Legal Errors Require Reversal of the Grant
of Summary J udgment of Invalidity of the 183 Design Patent....................22
A. The Law of Obviousness for Design Patents..........................................22
B. The Legal Errors in the District Courts Analysis..................................24
1. The Woolrich shoes cannot be a primary reference...............................24
2. The district court failed to explain why a person of
ordinary skill in the art would modify the Woolrich
ii
shoes to achieve the same overall visual impression
as the 183 design patent.........................................................................29
3. The district court applied the wrong legal tests for
obviousness.............................................................................................31
4. The district court failed to consider the secondary
considerations of non-obviousness.........................................................33
C. The District Court Committed Legal Error by Applying the Wrong
Legal Test for Functionality...................................................................35
1. A design patent is invalid as functional if the design
is dictated by the use or purpose of the article....................................35
2. The district court erred by failing to determine whether
the 183 patent design was dictated by function.................................36
3. The 183 patent design is ornamental and not
dictated by function.............................................................................38
III. The District Court Abused its Discretion in Dismissing
BDIs Trade Dress Claim with Prejudice......................................................40
CONCLUSION........................................................................................................43
iii
TABLE OF AUTHORI TI ES
CASES
Allergan, Inc. v. Athena Cosmetics, Inc.,
640 F.3d 1377 (Fed. Cir. 2011)................................................................................22
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986).................................................................................................21
Apple, Inc. v. Samsung Elecs. Co.,
678 F.3d 1314 (Fed. Cir. 2012)........................................................................ passim
Avia Group Intl., Inc. v. L.A. Gear Cal., Inc.,
853 F.2d 1557 (Fed Cir. 1988).......................................................................... 36, 39
Benchcraft, Inc. v. Broyhill Furniture Indus., Inc.,
681 F.Supp. 1190 (N.D. Miss. 1988).......................................................................34
Berry Sterling Corp. v. Pescor Plastics, Inc.,
122 F.3d 1452 (Fed. Cir. 1997)................................................................................38
Crocs, Inc. v. Intl Trade Commn,
598 F.3d 1294 (Fed. Cir. 2010)................................................................................39
Durling v. SpectrumFurniture Co.,
101 F.3d 100 (Fed. Cir. 1996).......................................................................... passim
E*Trade Fin. Corp. v. Deutsche Bank AG,
420 F. Supp. 2d 273 (S.D.N.Y. 2006) .....................................................................42
E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C.,
525 F.3d 1353 (Fed. Cir. 2008)................................................................................22
Egyptian Goddess, Inc. v. Swisa, Inc.,
543 F.3d 665 (Fed. Cir. 2008)..................................................................................23
Ellis v. Chao,
336 F.3d 114 (2d Cir. 2003).....................................................................................22
Grahamv. J ohn Deere,
383 U.S. 1 (1966)........................................................................................ 19, 23, 33
iv
Hughes v. Anderson,
449 Fed. Appx. 49 (2d Cir. 2011)............................................................................41
Ideal Steel Supply Corp. v. Anza,
652 F.3d 310 (2d Cir. 2011).............................................................................. 20, 41
In re Harvey,
12 F.3d 1061 (Fed. Cir. 1993)..................................................................................18
In re Rosen,
673 F.2d 388 (CCPA 1982).............................................................................. 23, 32
Int'l Seaway Trading Corp. v. Walgreens Corp.,
589 F.3d 1233 (Fed. Cir. 2009)................................................................... 23, 32, 39
Iron Grip Barbell Co. v. USA Sports, Inc.,
392 F.3d 1317 (Fed. Cir. 2004)................................................................................33
L.A. Gear, Inc. v. ThomMcAn Shoe Co.,
988 F.2d 1117 (Fed. Cir. 1993)......................................................................... 35, 36
McCarthy v. Dun & Bradstreet Corp.,
482 F.3d 184 (2d Cir. 2007).....................................................................................41
Metz v. U.S. Life Ins. Co.,
662 F.3d 600 (2d Cir. 2011) (per curiam)................................................................22
Microsoft v. i4i Ltd. Pship,
131 S. Ct. 2238 (2011).............................................................................................22
OddzOn Prods., Inc. v. J ust Toys, Inc.,
122 F.3d 1396 (Fed. Cir. 1997)................................................................... 19, 21, 27
Payless Shoesource, Inc. v. Reebok Intl, Ltd.,
998 F.2d 985 (Fed. Cir. 1993)..................................................................................39
Perez v. Ortiz,
849 F.2d 793 (2d Cir. 1988).....................................................................................41
PHG Techs., LLC v. St. J ohn Cos., Inc.,
469 F.3d 1361 (Fed. Cir. 2006)........................................................................ passim
v
Power-One, Inc. v. Artesyn Techs., Inc.,
599 F.3d 1343 (Fed. Cir. 2010)................................................................................21
Rachman Bag Co. v. Liberty Mut. Ins. Co.,
46 F.3d 230 (2d Cir. 1995).......................................................................................41
Reebok Intl, Ltd. v. J . Baker, Inc.,
32 F.3d 1552 (Fed. Cir. 1994)..................................................................................39
Rosco, Inc. v. Mirror Lite Co.,
304 F.3d 1373 (Fed. Cir. 2002)................................................................... 35, 36, 38
Stratoflex, Inc. v. Aeroquip Corp.,
713 F.2d 1530 (Fed. Cir. 1983)......................................................................... 19, 33
Titan Tire Corp. v. Case New Holland, Inc.,
566 F.3d 1372 (Fed. Cir. 2009)................................................................................24
Transmatic, Inc. v. Gulton Indus., Inc.,
53 F.3d 1270 (Fed. Cir. 1995)..................................................................................21
STATUTES
15 U.S.C. 1125(a) ...................................................................................................1
28 U.S.C. 1295(a)(1)...............................................................................................1
28 U.S.C. 2201 et seq..............................................................................................1
35 U.S.C. 103..........................................................................................................1
35 U.S.C. 171........................................................................................................35
35 U.S.C. 282........................................................................................................22
35 U.S.C. 1331 and 1338......................................................................................1
vi
RULES
Fed. R. Civ. P. 12(c)...................................................................................................3
Fed. R. Civ. P. 15(a).......................................................................................... 22, 41
Fed. R. Civ. P. 52(a).................................................................................................21
1
STATEMENT OF RELATED CASES
There was no previous appeal in or from this civil action before this or any
other appellate court.
Civil action no. 10-CV-00065, Buyers Direct, Inc. v. Belk Inc. and Belk
International, Inc., is currently pending in the United States District Court for the
Southern District of North Carolina and will be directly affected by this Courts
decision in the pending appeal, as the same design patent (D598,183) is at issue in
both cases.
STATEMENT OF J URI SDI CTI ON
The jurisdiction of the district court was based upon 35 U.S.C. 1331 and
1338 with respect to the patent claims, 28 U.S.C. 2201 et seq. in relation to the
Declaratory J udgment Act, and 15 U.S.C. 1125(a) in relation to trade dress
infringement. J urisdiction of this timely appeal of a final judgment is based upon
28 U.S.C. 1295(a)(1).
STATEMENT OF THE I SSUES
1. Did the district court err in granting summary judgment of invalidity
of U.S. Design Patent No. D598,183 (the 183 design patent) under 35 U.S.C.
103, when it failed to correctly apply the test for obviousness of a design patent,
and when the Woolrich shoes do not convey the same overall visual impression as
the subject matter of the 183 design patent?
2. Did the district court err in concluding that the 183 design patent is
2
invalid as primarily functional, when it did not apply the correct legal test for
determining functionality, and when the 183 design patent covers an ornamental
design?
3. Inasmuch as granting Buyers Direct, Inc. (BDI) leave to amend its
pleading would not have prejudiced High Point Design LLC (High Point) or
hindered the district courts schedule, did the district court err in dismissing BDIs
trade dress infringement claim with prejudice?
STATEMENT OF THE CASE
High Point sued BDI on J uly 1, 2011 seeking a declaratory judgment that
High Point did not infringe the 183 design patent and that the 183 design patent
was invalid and/or unenforceable.
High Point waited nearly 120 days before serving its complaint on October
22, 2012.
BDI filed an answer and counterclaim against High Point on December 29,
2011, asserting that High Point infringed the 183 design patent and
misappropriated the trade dress in BDIs SNOOZIES!
slipper-socks. Also on
December 29, 2011, BDI filed a Third-Party Complaint against Meijer, Inc., Sears
Holdings Corporation, and Wal-Mart Stores, Inc., alleging that each retailer had
infringed the 183 design patent and misappropriated the trade dress in BDIs
SNOOZIES!
slipper-socks.
3
On February 16, 2012, the district court issued a Scheduling Order setting
J uly 2, 2012 as the close of discovery date.
On February 28, 2012, the district court issued a Stipulation and Schedule
setting March 16, 2012 as the deadline to amend the pleadings.
On March 20, 2012, High Point filed a combined motion for summary
judgment of invalidity and/or non-infringement of the 183 design patent and for
judgment on the pleadings with respect to BDIs trade dress infringement
allegations pursuant to Fed. R. Civ. P. 12(c).
On May 1, 2012, High Point requested a two month extension of all
discovery deadlines. The district court denied High Points requested extension
three days later, noting that it would promptly review High Points summary
judgment motion.
On May 11, 2012, the district court stayed all discovery.
On May 15, 2012, the district court issued an Order granting the motion for
summary judgment of invalidity of the 183 design patent on the grounds that the
183 design patent was obvious over certain Woolrich shoes in view of U.S.
D566,934 and U.S. D540,517 (A15-18; A20), and that the 183 design patent was
purely functional rather than ornamental (A18-19). The district court also
dismissed BDIs trade dress claims with prejudice, stating that at this stage of the
proceedings it would not allow an amended pleading. A10; A21-22.
4
BDI timely filed a notice of appeal on J une 13, 2012.
STATEMENT OF FACTS
I . I ntroduction
BDI manufactures and sells highly popular slipper-socks known as
SNOOZIES!
. The SNOOZIES!
slipper-socks is shown
below.
SNOOZI ES!
Slipper-Socks (A504)
5
The SNOOZIES!
are not
socks and theyre not slippers - sort of a crossover between the two. A497. The
SNOOZIES!
slipper-socks have an overall look and feel that is immediately recognizable and
constitutes protectable trade dress that is an embodiment of the ornamental design
in the 183 design patent (discussed below).
In early 2011, Marshall Bank, the President of BDI and the inventor of the
183 design patent, noticed products in stores that appeared to be direct copies of
the SNOOZIES!
design. A505, 8; compare with A34.
6
An I nfringing High Point Slipper (A505)
A505. After BDI brought the 183 design patent to High Points attention, the
lawsuit was filed by High Point and discussions between BDI and High Point
ensued. After it was clear that the dispute could not be settled, the Complaint was
eventually served by High Point.
I I . The 183 Design Patent
SNOOZIES!
.
Furthermore, as explained above, this is just one of the differences between the
183 design patent and the Woolrich shoes. As in Apple, this Court should find
that the district court committed reversible error in relying on the Woolrich shoes
as the base reference in its prior art analysis.
2. The district court failed to explain why a person of ordinary skill in the
art would modify the Woolrich shoes to achieve the same overall visual
impression as the 183 design patent
The district court also failed to address the many modifications of the
Woolrich shoes necessary to achieve the same overall visual impression as the
183 design patent either on its own or in combination with secondary references to
arrive at a hypothetical piece of prior art. See Durling, 101 F.3d at 103 (stating
that other references may be used to modify [the primary reference] to create a
design that has the same overall visual appearance as the claimed design). In its
opinion, the district court found that the Woolrich shoes were the same as the
183 design patent and that the only differences related to the soles. A18. In
reaching this conclusion, the district court summarily characterized the 183 design
patent as a generic piece of footwear, ignoring all constituent elements of the
30
design that distinguish the 183 design patent from the Woolrich shoes. This broad
and conclusory approach is contrary to the law. As explained in the Apple case,
modifications must not be considered from a broad or general concept (in that case,
a tablet, akin to footwear in this case). Apple, 678 F.3d at 1332.
For example, the district court never explained why an ordinary designer
would completely remove the visually prominent rolled collar on the Woolrich
shoes so that the fleece matched the interior fluff of the slipper-sock of the 183
design patent, creating a smooth outer surface. Notably, the analogous
modification of extending a sheet of glass over the frame at the edge of the Fidler
tablet (to arrive at a design with an overall visual impression that is basically the
same as the iPad
slipper-socks
(embodiments of the 183 design patent). A353; A505. High Point never denied
that it copied the SNOOZIES!
.
A353; A504, 4-5. Common sense tells one that the overall visual impression of
any footwear is an important component of whether or not the footwear is
successful. The SNOOZIES!
in
the first place.
C. The District Court Committed Legal Error by Applying the Wrong
Legal Test for Functionality
1. A design patent is invalid as functional if the design is dictated
by the use or purpose of the article
A design patent is directed towards the ornamental design of an article of
manufacture. 35 U.S.C. 171. Invalidity due to functionality must be proven by
the party asserting the defense by clear and convincing evidence. L.A. Gear, Inc.
v. ThomMcAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993). This Court applies
a stringent standard for invalidating a design patent on grounds of functionality.
Rosco, Inc. v. Mirror Lite Co., 304 F.3d 1373, 1378 (Fed. Cir. 2002). With respect
to the test for functionality, this Court has explained,
An article of manufacture necessarily serves a utilitarian
purpose, and the design of a useful article is deemed to be
functional when the appearance of the claimed design is
dictated by the use or purpose of the article
*****
In determining whether a design is primarily functional or
primarily ornamental the claimed design is viewed in its entirety,
for the ultimate question is not the functional or decorative
aspect of each separate feature, but the overall appearance of the
36
article, in determining whether the claimed design is dictated by
the utilitarian purpose of the article.
L.A. Gear, 988 F.2d at 1123 (Fed. Cir. 1993) (emphasis added; internal citations
omitted). Thus, whether a design is primarily functional requires consideration
of whether the claimed design is dictated by a utilitarian purpose or functional
considerations. See PHG Techs., 469 F.3d at 1366; Rosco, 304 F.3d at 1378; Avia
Group Intl., Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1563 (Fed Cir. 1988).
2. The district court erred by failing to determine whether the 183
patent design was dictated by function
Despite the fact that the 183 design patent depicts a slipper-sock which, as
an article of footwear, inherently creates a particular visual impression and has
important ornamental aspects, the district court summarily concluded there is little
doubt that all major characteristics of this slipper are functional, A17; see also
A10-11; A18-19. In reaching this conclusion, the district court misunderstood the
applicable law of functionality.
By definition, a design patent covers the ornamental design of a useful (i.e.,
functional) article and thus the features at issue are often primarily functional.
The prohibition on functionality of a design patent does not mean that the design
cannot contain functional elements. See, e.g., Avia Group, 853 F.2d at 1563
(stating that a distinction exists between the functionality of an article or features
thereof and the functionality of the particular design of such article or features
37
thereof that perform a function. Were that not true, it would not be possible to
obtain a design patent on a utilitarian article of manufacture). Indeed, the district
courts application of the primarily functional test would destroy the validity of
countless design patents.
The district court stated that when a design patents primary features are
functional rather than ornamental, it may be declared invalid citing PHG Techs.,
469 F.3d at 1366 (emphasis added). However, this Courts PHG decision states
[t]he design of a useful article is deemed to be functional when the appearance of
the claimed design is dictated by the use or purpose of the article. 469 F.3d at
1366 (internal citations omitted).Critically, the district court never found that the
183 design was dictated by function and the district court even acknowledged
that at least the fuzz extending out of the slipper-sock was ornamental.
This Courts PHG decision identifies various factors to consider in
determining whether the overall appearance of an article is dictated by function.
These include (1) whether the protected design represents the best design, (2)
whether alternative designs would adversely affect the utility of the article, (3)
whether advertising touts particular features of the design as having specific utility,
(4) whether there are concomitant utility patents, (5) whether there are elements in
the design not dictated by function, and especially (6) whether there are alternative
designs. PHG Techs., 469 F.3d at 1366 (quoting Berry Sterling Corp. v. Pescor
38
Plastics, Inc., 122 F.3d 1452, 1456 (Fed. Cir. 1997)). With respect to factor (6) in
particular, [w]hen there are several ways to achieve the function of an article of
manufacture, the design of the article is more likely to serve a primarily
ornamental purpose. PHG Techs.,469 F.3d at 1367 (quoting Rosco, 304 F.3d at
1378). Not one of these factors is discussed in the district courts decision. It thus
appears that the district court failed to recognize that it was required to determine
whether the 183 design patent was dictated by function before it could find the
patent invalid on this basis. For all of the above reasons, the district court
committed reversible legal error in its functionality analysis.
3. The 183 patent design is ornamental and not dictated by
function
Many of the PHG factors strongly support the conclusion that the 183
design patent is ornamental. For example, alternative designs would not adversely
affect the utility of the article, there are no concomitant utility patents covering the
slipper-sock embodied in the 183 design patent, many elements of the 183 design
patent are not dictated by function, and there are alternative designs that could
accomplish the goals of comfortably and warmly covering the foot. As just one
example, the Woolrich catalog excerpts attached to High Points motion for
summary judgment depict numerous different slippers and shoes all designed to
comfortably and warmly cover the foot. A205-06; A209-10; A221-22; A225-26;
A229-30; A233-34. Similarly, a number of the prior art patents of record during
39
prosecution of the 183 design patent show other designs of slippers designed to
comfortably and warmly cover the foot. A417; A420; A422; A425; A427-29.
9
Finally, and as previously pointed out, it defies common sense to state that
the overall appearance of any footwear article does not have an important
ornamental aspect to it.
10
BDI offered unrebutted testimony from Mr. Rake that
while a slipper must conform to a human foot, the foot only determines minimum
size and shape. A462. For example, the size, shape, and design of the foot
opening can vary substantially and still perform the necessary functions. Id.
Similarly, seams and stitch pattern placement and design perform a function, but
their placement and design can vary considerably and have a significant effect on
the overall appearance of the product. Id. In fact, there is no evidence in the
present record that the 183 design patent is dictated by function. Viewing the
evidence in the light most favorable to BDI, there can be no question that the 183
design patent is not dictated by function.
For all of the above reasons, the district court committed clear error in
determining that the 183 design patent is functional, and its holding of invalidity
9
The record further indicates that there may be thousands of design patents on
slippers. A339, footnote 2.
10
Indeed, the importance of the ornamental appearance of footwear is reinforced
by this Courts numerous decisions addressing design patents on footwear. See,
e.g., Crocs, Inc. v. Intl Trade Commn, 598 F.3d 1294 (Fed. Cir. 2010); Int'l
Seaway, 589 F.3d 1233; Reebok Intl, Ltd. v. J . Baker, Inc., 32 F.3d 1552 (Fed. Cir.
1994); Payless Shoesource, Inc. v. Reebok Intl, Ltd., 998 F.2d 985 (Fed. Cir.
1993); Avia Group, Inc., 853 F.2d 1557.
40
on this basis must also be reversed.
I I I . The District Court Abused its Discretion in Dismissing BDI s Trade
Dress Claim with Prejudice
The district court dismissed BDIs trade dress infringement claim with
prejudice even though substantial discovery remained to be taken, no prejudice
was found to High Point, and BDI offered an amended complaint within 30 days of
High Points motion. A339-40; A360-61; A431-50; see particularly A437
(specifying at least six elements of trade dress in the SNOOZIES!
slipper-socks).
High Points motion was also granted despite the district courts agreement that
High Points products shared some of the characteristics alleged to be
SNOOZIES!