On Friday, January 25,
the Federal Circuit issued its decision in Hall, et al. v. Bed Bath &
Beyond, Inc., --- F.3d ----, 2013 WL 276080 (Fed. Cir. 2013), reversing the
decision of the Southern District of New York, dismissing the case. In
this case, Hall is asserting its Design Patent No. 596,439 for a “Tote
Towel.” Below is a figure from the ‘439 Patent alongside a comparison
provided in Hall’s complaint:
Interestingly, Hall
appealed the decision of the district court despite the fact that Judge
Hellerstein granted Hall leave to amend. Judge Lourie’s dissenting opinion focuses on that fact and proposes penalizing Hall for declining the opportunity to amend. Nevertheless, the Federal
Circuit’s decision to reverse appears to be the correct decision.
At the district court,
Bed Bath & Beyond argued that Hall’s complaint failed to include factual
allegations plausibly suggesting that the accused products infringed the ‘439
Patent under the Supreme Court’s decisions in Ashcroft v. Iqbal and Bell
Atl. Corp. v. Twombley. Specifically, the defendants argued that the
complaint was insufficient because it failed to include any allegations
relating to how the ‘439 Patent should be construed. Evidently, Judge
Hellerstein agreed and held that the complaint should have included answers
to questions such as: “What is it about Plaintiff’s towel that he claims
is ‘new, original and ornamental,’ meriting the protection of a design
patent?”
The Federal Circuit
began its analysis by citing its pre-Iqbal and Twombley decision
regarding the pleading requirements in a design patent case - Phonometrics,
Inc. v. Hospitality Franchise Systems, Inc., 203 F.3d 790 (Fed. Cir.
2000). There, the Federal Circuit held that the pleading requirement in
design patent cases is no different than in a utility patent case. All
that is required are the basic elements of Form 18 – “(i) allege ownership of
the patent, (ii) name each defendant, (iii) cite the patent that is allegedly
infringed, (iv) state the means by which the defendant allegedly infringes, and
(v) point to the sections of the patent law invoked.” As with complaints
in utility patent cases, Iqbal and Twombley did not alter this
basic requirement.
The Court then went on
to explain that Hall’s complaint was adequate. The Court reasoned that
“Hall’s complaint identified the patent, showed the patented design, and
described the accused towel as follows: Ԧ27. The Counterfeit Towel is
virtually identical in design to the Tote Towel. It [has] the
same shape and almost the same dimensions -- 50” x 9.” The Counterfeit
Towel also features the Tote Towel’s unique zippered compartments and
hanging loop. In fact, the inseam of the Counterfeit Towel, from one
pocket to the other, is exactly the same length as that of the Tote
Towel.” Notably, the images in Hall’s Complaint also appear to support a
plausible claim of infringement at first blush.
While Hall v. Bed
Bath & Beyond, is not a watershed decision, it may be interpreted by
some as altering the pleading requirements for an allegation of design patent
infringement or as holding that Iqbal and Twombley had no impact
on the pleading requirements for design patent infringement. However, in
the author’s opinion, Hall should be understood as an isolated situation
where the complaint clearly made a plausible allegation and should not have
been dismissed. However, this case should not be construed as precluding
a Rule 12(b)(6) dismissal, where the design at issue and the accused product
(if shown in the complaint), clearly show an implausible (or frivolous) claim
for design patent infringement.