Thursday, September 18, 2014

Prestige Jewelry v. BK Jewelry - Diamond Cuts are Non-Functional

On Monday, Chief Judge Preska of the Southern District of New York handed down a fascinating summary judgment decision in an epic design patent feud between Prestige Jewelry and BK Jewelry.  The decision covers a great deal of design patent law, which Judge Preska navigates quite nicely.  Students and practitioners of design patent law would be wise to read this decision which provides an excellent overview of design patent law, generally.   

There's too much to comment on in this 52-page decision, but I would like to single out the discussion of functionality.  As we've said before on this blog, true functionality arguments are rare in design patent cases, but for some reason design patent defendants keep gravitating towards functionality like a moth to the flame.  This case is another classic example of a functionality argument that probably never should have been raised.  

BK's U.S. Design Patent No. 618,132 covers a diamond arrangement with a relatively larger "full-cut" diamond in the center, surrounded by 9 smaller single cut diamonds:

Those who have been married in the last five years might recognize this design, as the decision suggests it has been wildly popular.  

Prestige's theory of functionality really had more to do with the design process than the design itself.  Apparently, the inventor, Rocky Wong, testified that "he used a 'light box' to conduct 'refraction tests' and determined that, in his opinion, the 'full-cut center stone' surrounded by nine single-cut stones 'looked the best.'"  "Wong also agreed that the ‘132 Patent arrangement 'performed the best' because 'it had the best refraction.'"

While such testimony would clearly be relevant to the question of functionality in the trade dress context, it doesn't have the same bearing on design patent functionality.  Even assuming that the design of the '132 Patent was perfect (i.e. it provided the most potential refraction), the luster of the gem is not a function in the design patent context, it is an aesthetic effect.  All designs are intended to be as pleasing as possible, using the fundamental elements of human perception - color, brightness, texture, shape, etc.  Perfecting the perception of a design is inherently aesthetic, not functional, and Chief Judge Preska correctly granted summary judgment of non-functionality on this basis:
This argument incorrectly blurs the distinction between ornamental and functional designs. Admittedly, Wong sometimes described the design of the ‘132 Patent in language that superficially might suggest a functional design. He admitted that his design “performed the best” and stated that he used a light box to test various arrangements in search of the “best refraction.” (Wong Dep. Tr., at 74:4-9.) But these statements do not change the fact that the ultimate purpose of the ‘132 Patent design is to have a pleasing appearance—a quintessentially ornamental purpose. Simply because an inventor experiments with alternative designs or uses rudimentary tools and tests does not mean the resulting design is functional. Presumably, most designs are developed not on a whim but rather through some process of trial and error—whether by using a light box, consumer surveys, or simply taking a few steps back and squinting at the design from a distance. The relevant inquiry is the nature of the design, not how the design was developed. Here, the design of the ‘132 Patent is unquestionably ornamental—it is cluster of diamonds arranged solely to be pleasing to the eye.
Prestige Jewelry v. BK Jewelry, No. 1:11-cv-02930, at 32-33 (S.D.N.Y. Sept. 15, 2014).

As Chief Judge Preska reasoned, design patent functionality has nothing to do with a scientific design process.  Functionality depends on whether the article of manufacture has a utilitarian function, and whether the design claimed in the patent is dictated by that utilitarian function.  

There are lots of other great design patent nuggets in Chief Judge Preska's decision, including claim construction, reexamination, obviousness, infringement, and prior art.  It will be interesting to see what happens at the trial in this case.  Non-infringement may depend on how well the jury can distinguish between single-cut and full-cut diamonds so jury selection will be key.  We will keep an eye on this interesting saga, which is drawing to a close, and provide an update after trial. 

Thursday, September 11, 2014

Doorman v. Paccar - For Design Patents, Inter Partes Review is Non-Functional

Sometimes lawyers learn more from their failures than their successes, and this has proven to be true in the context of inter partes review of design patents.  Since the Patent Trial and Appeal Board launched the IPR program in 2012, there have been only a handful of design patent decisions, but with each new decision, we learn a bit more about how the PTAB will approach design patents. 

Last Friday, the PTAB handed down a decision in Doorman Prods., Inc. v. Paccar, Inc., IPR2014-00542, 2014 WL 4444041 (Patent Tr. & App. Bd. Sept. 5, 2014).  In its decision, the Board denied Doorman's Petition to institute an inter partes review, but it is the Board's reasoning that was noteworthy.  Below is an image from Paccar's U.S. Patent No. 525,731, which was the subject of the petition. 

First, the Board categorically rejected Doorman's request to filter out functional elements within the design in the context of claim construction.  The Board curiously found that the "Petitioner conflates invalidity based on functionality under 35 U.S.C. § 171 with invalidity based on obviousness under 35 U.S.C. § 103" and held that the it had no authority to entertain a functionality challenge to the design patent:
Further, a challenge based on functionality under 35 U.S.C. § 171 is not permitted in an inter partes review because it is not based on 35 U.S.C. § 103 nor is it based on prior art that consists of a patent or printed publication. 35 U.S.C. § 311(b); 37 C.F.R. § 42.105(b)(2). Therefore, we agree with Patent Owner that the allegedly functional elements identified by Petitioner (Pet. 12) must be considered in an obviousness analysis of the visual impression created by the patented design as a whole (Prelim. Resp. 26). 
Id. at  *3.

The Board appears to have badly misconstrued the Petitioner's claim construction argument with an invalidity challenge under § 171.  The Board's decision to construe the Petitioner's claim construction argument as a validity argument seems to be out of step with the Board's requirement to apply the "broadest reasonable construction."  Furthermore, it directly contradicts the Federal Circuit's guidance on design patent claim construction.  See OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997) (if "a design contains both functional and non-functional elements, the scope of the claim must be construed in order to identify the non-functional aspects of the design.").  Whatever the "broadest reasonable construction" means in design patent cases before the PTAB, it must at least be as broad as the construction that would be provided in the context of a district court litigation.  

The Patent Office's failure to appreciate how design patents are being construed in the district courts has led to a strange double standard wherein design patents are construed much more narrowly at the Patent Office then they are in litigation.  IPR may be an interesting venue for bringing this issue to a head and encouraging the Patent Office and the Board to consider modernizing its view of the broadest reasonable construction for designs, in light of how they are being construed, in practice. 

In Doorman, the Board's failure to consider functionality in the context of claim construction led to disastrous results for the Petitioner.  The Board ultimately concluded that the Petitioner's primary reference, Kobayashi, "does not include a side Lamp D, striations, and a checkered surface pattern as shown in the patented design," id. at *5, and therefore could not serve as a primary reference.    But these were the same features that Doorman argued were functional in claim construction.  Whatever the merits of the Petitioner's functionality argument were, they appeared to be central to its Petition, and the Board's refusal to even consider filtering out functional elements would appear to be a clear error of law.  

Nevertheless, while Doorman remains the law of the PTAB, design patent practitioners would be wise not to rely on PTAB claim construction to filter out functional elements of design patent in IPR Petitions.  

For those who are curious, below is an image of Paccar's '731 Patent alongside the proposed primary reference, U.S. Design Patent No. 498,859 to Kobayashi.  Basically the same?

Friday, September 5, 2014

Isolite Systems v. Zirc Dental Products - Arguing Invalidity in a Motion to Dismiss

On Tuesday, September 2nd, Judge David O. Carter in the Central District of California issued an interesting order on a Motion to Dismiss in Innerlite, Inc. d/b/a/ Isolite Sys. v. Zirc Dental Prods., Inc., et al., (No. 13-cv-7501-DOC). The relevant discussion concerns the Defendants' allegations that the asserted design patent is invalid.

The case concerns U.S. Design Patent No. D615,203.  The patent is assigned to Plaintiff Isolite Systems, and claims the ornamental features of a device for use by dental professionals to isolate the work area of a patient's mouth, retract the tongue and cheek, evacuate fluids and oral debris, and prevent inadvertent aspiration of material.  Defendant Zirc Dental Products manufactures and distributes "Mr. Thirsty," which Isolite alleges infringes the D'203 Patent.  A figure derived from the D'203 Patent is shown above, along side an image of the "Mr. Thirsty" product from Zirc Dental.

The bulk of the Court's order relates to issues that are germane to motions to dismiss in patent litigation.  In addition to the claims against Zirc Dental, Isolite's complaint recited claims of direct and indirect infringement of the D'203 Patent against Defendants Dr. Brian P. Black, the alleged designer of the product that Zirc Dental markets as the "Mr. Thirsty,"  as well as claims against two companies allegedly owned by Dr. Black, Brian P. Black DDS, Inc. and Joogatech, Inc. These Defendants filed the instant motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the complaint fails to state its claim for direct infringement against Joogatech, and its claims of induced infringement against all three of the so-called "Dr. Black Defendants."  The court agreed, and dismissed these claims without prejudice to Isolite.

The Defendants threw one additional argument into the mix: that the D'203 Patent infringement claims should be dismissed because the patent is invalid for being primarily functional, not ornamental. 

A patent can rarely be invalidated in a motion to dismiss.  At that stage in the litigation, the court's review is limited to the contents of the complaint and the material submitted with the complaint, although the court may still take judicial notice of outside facts which are generally known or whose accuracy is unquestioned.  Furthermore, all of the Plaintiff's factual allegations are assumed to be true for the purpose of this motion, and under these facts the Defendant must prove invalidity by clear and convincing evidence.  It is a very difficult case to make.

However, because invalidating a patent on a motion to dismiss is rare does not mean it is impossible.  In 2013, the Federal Circuit left this door open where "the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility."  Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1339 (Fed. Cir. 2013).  This may be particularly useful design patent patent defendants, because, as we discussed in greater detail earlier this year, design patents claim individual ornamental designs rather than a "range" of inventions.  Therefore in many cases, the only plausible reading of the design patent will be apparent at the time the complaint is filed.  This could put defendants in a better position to raise clear invalidity issues early, before the burden of litigation becomes too great.

Unfortunately for the Defendants in this case, Judge Carter found this was not the "rare" instances where invalidity could be determined from the facts pled in the complaint.  The Defendants argued that Isolite failed to identify anything non-functional in the D'203 patent.  But the burden was on the Defendants, not Isolite, to affirmatively prove invalidity by clear and convincing evidence.

While the Defendants could not prove invalidity here, this case still demonstrates that a motion to dismiss can pose a tangible threat to design patent plaintiffs.  Invalidation may be rare, defendants should not overlook this device where other defenses, including non-infringement, may be proven on the complaint alone.