District Court Mulls Design Patent Damages – Apple v. Samsung on Remand

Editor's Note:  The following guest post was authored by Thomas P. McNulty, Counsel at Lando & Anastasi LLP.  

In last year’s Samsung v. Apple decision, the Supreme Court held that the “article of manufacture” for which total profits are awarded upon a finding of design patent infringement may be either “a product sold to a consumer [or] a component of that product.”  The Supreme Court declined to establish the test for identifying the article of manufacture, instead remanding for consideration by the court below.

Given that the Supreme Court substantially changed the interpretation of damages under 35 U.S.C. § 289, it would seem clear that a new damages trial would be required. Nothing in litigation, however, is so simple. Instead, upon remand, the district court considered the parties positions on whether a new trial is warranted.  In the meantime, we will examine the procedural questions addressed by the district court in connection with its order requesting further briefing.

A Look at Motions for Judgment on the Pleadings in Design Cases

Design patents infringement cases tend to be particularly amenable to motions for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure.  Where no material facts are disputed, there may be situations where a claimed design and accused design are sufficiently distinct that it would be clear from the complaint, answer and accompanying exhibits that the patentee would not be able to meet its burden of proving the two designs would be "substantially the same" to an ordinary observer.  In those cases, judges are entitled to enter judgment as a matter of law disposing of the case without the burden or expense of discovery, experts or a jury trial.  But the fact that judges are capable of rendering judgment on the pleadings early in the case does not imply that they frequently do so.  Nor does it imply that motions for judgment on the pleadings in design patent cases are necessarily meritorious.  It is worth examining recent cases in which Rule 12(c) motions have been raised to consider just how likely these motions are to be brought in clear cases and whether judges are willing to cut clear cases off at the knees.  

Over roughly the past four years, we have identified design patent infringement cases that have reached a decision on motions for judgment on the pleadings. Two of the motions were granted, and two were denied.  The decisions reveal an interesting spectrum in terms of both the motions and the decisions reached.

At one clear end of the spectrum is Anderson v. Kimberly-Clark Corporation, brought in 2012 in the Western District of Washington and dismissed on a judgment on the pleadings on September 25, 2013.  Muffin Faye Anderson was the owner of a design patent directed to an absorbent disposable undergarment as shown above and to the left.  She asserted her patent against a number of products produced by Kimberly-Clark, including the adult diapers shown above and to the right.  The district court granted Kimberly-Clark's motion for judgment on the pleadings based on a side-by-side comparison of the products, which it concluded were plainly dissimilar.  Indeed, the only similarity between the products identified by the Court was that they were both disposable barriers to protect the wearer from incontinence, which was a purely functional consideration with no weight in a design patent infringement analysis.

The remaining cases tend to present closer questions. In a 2014 decision in Poly-America, L.P. v. API Industries, Inc., Judge Robinson in the District of Delaware denied a motion for judgment on the pleadings upon a finding that the claimed design for a six-sided box, shown above to and to the left, was not plainly dissimilar to the accused product box shown above and to the right. API had attempted to highlight three differences between its product and the claimed design, including: (a) the accused design had an opening that extends beyond the front panel of the box to the side panel; (b) the accused design had no top flaps with no tabs and no slots; and (c) the accused design had bottom flaps rather than a solid bottom. API further supported its argument with evidence of prior art boxes having similar perforated openings, as proof that an ordinary observer with knowledge of the prior art would view the claimed and accused designs as plainly different. Judge Robinson found these arguments unavailing. Given the same general appearance of the claimed box and the accused product, the court could not find as a matter of law that the designs were plainly dissimilar.

which was heard again on a motion for reconsideration, the court was unwilling to declare as a matter of law that the overall visual differences between the defendant’s design and the patented design are greater than the differences between the patented design and the prior art. The court concluded that there was an issue of fact to be decided upon consideration of all of the evidence.

Judge Bumb in the District of New Jersey reached a similar conclusion in the case of C&A Marketing, Inc. v. GoPro, Inc., in 2016. There, GoPro moved for judgment on the pleadings on the basis that its mountable camera, shown above and to the right, was plainly dissimilar to C&A's camera, shown above and to the left, marketed as the Polaroid Cube. GoPro called attention to a number of differences between the claimed and accused designs, highlighted in various colors, above. But the court held that “unless it is so obvious on the face of the pleadings that there is no infringement, this court should have the benefit of an evidentiary record which includes an actual inspection of the devices at issue.” The court also was cognizant of the fact that C&A had alleged actual confusion by consumers, who, of course, were ordinary observers.

Young v. Stone presents a more interesting decision. That action was filed in the U.S. District Court for the Northern District of Illinois in 2013, and was dismissed pursuant to Rule 12(c) on August 28, 2014. The case concerned Roger Young's patented design for a golf putting practice simulator, and the defendant's accused putting simulator, as shown above. The court performed an extensive claim construction that identified a number of functional elements, including the spaced upper and lower disks designed to trap a golf ball, but held that the flag pole was ornamental. The court keyed in on several relatively minor differences between the accused product and the patented product, such as the fact that claimed design used a raised washer to trap the ball, while the accused design relied on a sloped lower disk. These differences, among others were "so plainly dissimilar that [Stone was] entitled to judgment as a matter of law."

While the sample size is small, some trends from these cases tend to stand out. Young and Anderson, the two cases in which judgment on the pleadings was granted, involve individual rather than corporate patent owners. Indeed, Anderson was a pro se plaintiff. The outcomes of those cases, and at least in Anderson the question of whether the case should have been brought in the first place, may suggest the value of sophisticated design patent counsel. Also, while these cases tend to demonstrate an expected reticence from judges at the early stages of the case, Young is at least some evidence that it can be worthwhile for defendants to take a risk at getting a quick resolution. The right judge, and possibly even the right subject matter, may be all that is required to turn a close case into a clear victory.

Rule 12(c) motions remain a powerful, even if underused tool for design patent defendants.  It will be interesting to see if, in view of recent shifts in that law that affect the damages recoverable by design patent plaintiffs, we will be more likely to see prompt decisions in these cases, or less.

This post was written by Keith F. Noe, a partner at Lando & Anastasi.  Support was provided by Eric P. Carnevale

Supreme Court Finds Cheerleader Uniform Designs Copyrightable

Last fall, we examined the case of Star Athletica, L.L.C.  v. Varsity Brands, Inc., then pending before the Supreme Court on the question of whether the design of a cheerleader uniform is copyrightable subject matter, or if it is a useful article.  In a 6-2 decision, the majority laid out a new test for analyzing the separability of designs applied to useful articles, and further found that the cheerleader uniform designs at issue in this case were protectable works under that test.  This decision grants expansive rights to authors who apply designs to utilitarian objects, but as we will see below, the new test is far from free of ambiguity.

Supreme Court Sides with Samsung on Design Patent Damages

On December 6, 2016, the Supreme Court issued a unanimous opinion authored by Justice Sotomayor in the Samsung Electronics Co., Ltd. v. Apple, Inc. case concerning apportionment of design patent damages under 35 U.S.C. § 289. Specifically, § 289 makes it unlawful to produce or sell an “article of manufacture” bearing a patented design and makes infringers liable to the patent holder “to the extent of [their] total profit.” The Supreme Court’s ruling rejects Apple’s argument and holds that the meaning of the phrase “article of manufacture” can refer to a single component within a multicomponent product sold to consumers. In support of its reasoning, the Court cites a similarly broad interpretation of the phrase as previously applied to 35 U.S.C. § 171. The § 171 statute defines subject-matter eligibility for design patents.

District Court Relies on Prosecution History Estoppel in Judgment on the Pleadings

Two years ago we reported on the landmark Federal Circuit decision in Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC, holding for the first time that the doctrine of prosecution history estoppel applied to design patents.  A lingering question following that decision was whether this doctrine was likely to substantially impact design patent infringement cases going forward.  While prosecution history estoppel would bar patentees from claiming an embodiment that they had surrendered, the Federal Circuit also held that the estoppel effect only applied to the discrete embodiment that were disclaimed, and not to the range of embodiment between what was claimed and what was dedicated to the public.  Thus, unless an accused infringer seemingly designed their product to exactly copy an embodiment that the patentee had affirmatively disclaimed, one could wonder whether we might ever see prosecution history estoppel successfully invoked in a district court case.

Last week, prosecution history estoppel was successfully invoked in a district court case.

The Intersection of Copyrightable Works and Useful Articles at the Supreme Court

While most of the design patent world is focused on the Supreme Court's review of the Apple v. Samsung case, which we reported on last week, the Supreme Court is also set to hear oral arguments on Star Athletica, LLC v. Varsity Brands, Inc., a copyright case that could have implications for the scope of rights available to design owners.

Apple v. Samsung - Preview of Upcoming Oral Arguments before the Supreme Court of the United States

After a brief hiatus, nothing helps to kickstart the Ordinary Observer blog like another episode in the Apple v. Samsung saga. This installment, of course, takes place at the Supreme Court with next week’s oral arguments on the all-important apportionment issue. For those who are casually following the case or just need a refresher, we summarize the party positions and key amicus briefs after the jump. We’ll also be reporting from the Court next week so stay tuned for a first-hand account of the arguments and predictions from the courthouse steps next Tuesday.

USPTO Requests Comments on Proposed Written Description Guidance for Design Patents

The United States Patent and Trademark Office has issued a Request for Comments on its proposed guidance to patent examiners regarding the written description requirement in Section 112 of the Patent Act with respect to design patents.  The proposed guidance would address situations where an amended or continuing application claims only a subset of the elements disclosed in an earlier or original application.  In other words, in the example below, if the original claim comprised the images on the left, can the amended claim cover only the subset of elements shown in solid lines on the right?

Federal Circuit Ruling Opens the Door to "Offensive" Design Patents

This week, the en banc Federal Circuit issued an opinion in In re Tam, No. 14-1203 (Fed. Cir. Dec. 22, 2015), holding that the relevant portion of Section 2(a) of the Trademark Act barring the patent office from registering scandalous, immoral or disparaging marks was an unconstitutional infringement of the First Amendment.  The Federal Circuit's decision has significant implications for another trademark case pending in the Court of Appeals for the Fourth Circuit, wherein the Washington Redskins seek to overturn the Patent and Trademark Office's cancellation of the "Redskins" trademark on the same grounds.   Pro-Football, Inc. v. Blackhorse,  No. 15-1874 (4th Cir. filed Aug. 6, 2015).  But what does this decision mean for design patent law, which retains the authority to refuse to issue patents covering ornamental designs deemed "offensive to any race, religion, sex, ethnic group or nationality?"  Find out after the jump. 

Inter Partes Review for Design Patents - Part 2

Recently, we looked into the use of inter partes review, an administrative method for challenging the validity of a patent, as it has been used for challenging design patents.  Our examination showed that the practice was still in its infancy.  Moreover, only one patent had been successfully invalidated in IPR.  Munchkin, Inc. v. Luv N' Care, Ltd., No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014).  We reported on that decision last April.  Today, we can report on a decision on the merits by the Patent Trial and Appeal Board invalidating three more design patents.  We are also taking a look at two additional pending petitions for IPR that may tell us more about the usefulness of this process in future design patent cases.

Looking at Inter Partes Review for Design Patents

It has been nearly one year since the Patent Trial and Appeals Board first invalidated a design patent in inter partes review. Munchkin, Inc. v. Luv N' Care, Ltd. decision, No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014).  The Ordinary Observer reported on that decision last April.  The time seems right to check in on the PTAB to see how design patents have fared since that decision made waves in the patent community.

Despite the impact made by the PTAB in Munchkin, IPR remains a rarely used tool for defendants in design patent litigation.  In addition to Munchkin, we have found 7 petitions for review on 7 design patents from 3 petitioners since the practice began in September 2012.  To date, only Munchkin has reached a final decision on the merits.  While this subset is still limited, it may give us some insight into how the Board is interpreting these petitions, and where the practice may be headed.

We begin by looking at the petitions filed by each of the three petitioners.

Reddy v. Lowe’s Companies, Inc. – “As Shown and Described” means “As Shown”

In December, 2013, the Ordinary Observer initially reported on Reddy v. Lowe's Companies, Inc., (1:13-cv-13016), a case filed in the District of Massachusetts on November 25, 2013, concerning U.S. Design Patent No D677,423.  This week, Judge Young issued a memorandum in that case construing the claim of the D'423 Patent.  Judge Young's construction raises some questions as to the court's treatment of narrative elements of the claimed design which warrant further discussion.

The D'423 Patent is entitled "bathroom vanity light shade."  The left-hand image below shows two figures excerpted from the patent, Figures 1 and 2, which are fairly representative.  The right-hand image is a screen shot of what may be an accused device produced by the Defendants.

The claim of this patent is directed to "[t]he ornamental design for a bathroom vanity light shade, as shown and described."  The Court's present memorandum has little to say about what is shown.  It principally concerns what is described.

The specification of the D'423 Patent includes a brief narrative:

The bathroom vanity light shade is an ornamental fixture consisting of a rectangular, metal rod skeleton, wrapped in fabric on three sides (front side, left side, right side), with a stationary acrylic diffuser bottom. The bathroom vanity light shade mounts on the wall with top/back exposed mounting rod.

Virtually nothing recited in the narrative can be visually seen in the patent figures.  The shading applied to four of the sides indicates those surfaces are intended to be transparent, but there is no visible evidence of the so-called rod skeleton, or specific imagery distinguishing fabric and acrylic sides.

This sort of narrative description is unusual but generally not impermissible.  Patent & Trademark Office regulations state, "No description, other than a reference to the drawing, is ordinarily required."  (37 C.F.R. § 1.153(a)).  "However, while not required, such a description is not prohibited and may be incorporated, at applicant’s option, into the specification or may be provided in a separate paper." (M.P.E.P. § 1503.01).   An examiner can object to the inclusion of descriptive statements which are unclear or inaccurate, but absent a proper objection, the PTO will generally permit an applicant to incorporate descriptive statements into the claim by adding the words "and described" after "shown" in the traditional claim language, “The ornamental design for (the article which embodies the design or to which it is applied) as shown.”  (Id.).  The patent in this case claims "[t]he ornamental design for a bathroom vanity light shade, as shown and described."

Judge Young's approach represents a substantial diversion from PTO practices.  He concludes that design patents operate under a "figure-only" framework, where:

any written description that goes beyond the scope of the figures would be unprotected by the patent, and thus ought not be part of the construed claim.  Thus, the references to "wrapped in fabric" and an "acrylic diffuser bottom," since they are not shown in the figures, would stretch beyond the patent.

Judge Young proposes that regulations allow only "written descriptions that clarify features on an existing drawn figure" and not "written descriptions that add new features not present on the figure."  Because "fabric side" and "acrylic diffuser bottom" may be viewed as added features, Judge Young contends these statements are best viewed as a "preferred embodiment," though he admits, "they probably ought not have been included when the patent was issued."

The defendants also argued that the patentee was estopped from arguing the acrylic diffuser and fabric sides were not limitations on the claims based on statements made by the patentee during the prosecution of the patent.  Judge Young rejected this argument, finding the prosecution history subject to multiple interpretations and therefore not a clear disavowal of claim scope.

Judge Young's construction in this case is difficult to square with PTO regulations allowing descriptive  statements in the specification of design patents to "supplement the drawing disclosure to define the scope of protection sought by the claim."  (M.P.E.P. § 1504.04).  While the Judge correctly places a strong emphasis on the figures as the best description of the claimed invention, effectively ignoring narrative statements in the written description of a design patent is relatively unprecedented.  The court draws a distinction between narrative statements that clarify, such as those that disclaim broken lines appearing in the drawings, and those that add new features, but the line between the two is muddy.  If a patentee may use words to disclaim broken lines, why then, can a patentee not use descriptive statements to disclaim materials which do not form part of the claimed invention (i.e., materials except acrylic and fabric)? 

This is not likely a case where claim construction is effectively determinant.  Judge Young's construction is expressly without prejudice to future jury instructions or other grounds of invalidity and non-enforceability.  Furthermore, while the patentee has obtained a construction which likely help their arguments in favor of infringement, for the purpose of invalidity, the plaintiff faces the prospect of defending as novel and non-obvious a light shade in the shape of a rectangular box having four sides and two open sides.

We will be on the look out for future developments in this case.

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.

Poly-America, L.P. v. API Industries, Inc., - Identifying the Ordinary Observer

Here at the Ordinary Observer (the blog), one of the things we enjoy discussing most is the Ordinary Observer (the legal fiction).  Today, that discussion is facilitated by an August 6, 2014 Order on a Motion for Reconsideration issued in Poly-America, L.P. v. API Industries, Inc. (No. 13-cv-693-SLR) by Judge Sue L. Robinson from the United States District Court for the District of Delaware.
 

The Order on a Motion for Reconsideration follows an earlier denial of a motion for judgment on the pleadings, issued on April 10, 2014. There, Judge Robinson declined to find, as a matter of law, that API's design for a cardboard box and Poly-America's patented box design were plainly dissimilar.  In reaching her decision, the judge found that the ordinary observer would be a person who sees the box when it is merchandised in a store, and not one who views the box in a manufacturing facility.  Judge Robinson's Order on the Motion for Reconsideration is a great review of how the ordinary observer is defined, and why it matter so much in design patent litigation.

Supreme Court's Octane Fitness Decision Impacts Design Patent Litigation

Yesterday, two of the editors of The Ordinary Observer published a summary of the Supreme Court's recent decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc.  Dkt. No. 12-1184 (Apr. 29, 2014) (link goes to the opinion).   

Octane Fitness is one of the most significant patent rulings to come down from the Supreme Court in recent years, and for that reason alone it deserves mention here.  The decision substantially increases the possibility that a prevailing party in patent litigation will obtain his or her attorneys' fees when the court finds that the case is "exceptional" under Section 285 of the Patent Act.  The increased likelihood of obtaining fees should affect the considerations of patent owners seeking to assert weak patents in litigation, and may embolden patent defendants to defend more cases as opposed to settling out early at an affordable price.  For more information, follow the link below to the IP Law Advisory published by Lando & Anastasi, LLP.

W. Seymour, Esq. & E. Carnevale, Esq., The Supreme Court Makes it Easier to Obtain Attorneys' Fees in Patent Cases.

Octane Fitness is relevant in the design patent world for two additional reasons:

1. Because stakes in design patent cases tend to be lower than in utility patent cases, the new considerations for plaintiffs and defendants discussed above apply with that much more force in the design patent context; and 
2. Octane Fitness overruled the Federal Circuit's test articulated in Brooks Furniture Manufacturing, Inc. v. Dutalier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005) - a design patent case.

We will be on the lookout over the coming months to see whether Octane Fitness has a substantial impact on design patent litigation, or on the caliber of design patent suits being brought.

Inter Partes Review Invalidates First Design Patent

On Monday, April 21, the Patent Trial and Appeal Board handed down a milestone final decision, for the first time invalidating a design patent challenged in inter partes Review.  Munchkin, Inc. v. Luv N' Care, Ltd., No. IPR2013-00072 (P.T.A.B. Apr. 21, 2014) (Paper No. 28).

Design Patent Roundup - Jan. 17, 2014

The theme of this week’s design patent roundup is clearly automotive design patents. It might just be a coincidence that so many automotive design patent cases were filed this week, or the automotive industry may be getting nervous about the PARTS act. The “Promoting Automotive Repair, Trade, and Sales Act of 2013,” or PARTS Act, would reduce the effective life of automotive design patents covering collision repair parts to two and a half years. You can read the full text of the PARTS Act here. The PARTS Act was submitted to the House Committee on the Judiciary on April 23, 2013, but is still reported as having strong bi-partisan support. 

Design Patent Roundup - Second Half of November

The Thanksgiving holiday put a lot of schedules on hold, but not the schedules of design patent plaintiffs. In the latter half of November The Ordinary Observer has tracked nearly a dozen new design patent filings, involving major brands as parties, such as Lululemon, Ford and Rubbermaid. Some of the more interesting cases have nothing to do with these big names, however. These include one case filed by the Suffolk University Law School’s Intellectual Property Clinic in support of an inventors self-prosecuted patent, and another case filed on behalf of a pet care supply manufacturer who has now asserted this same design patent in half a dozen independent actions. There is a lot worth keeping an eye on in the design patent litigation world, after the jump.