NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not citable as precedent. It is a public record. 

## United States Court of Appeals for the Federal Circuit
04-1480, -1481, -1482, -1523 HARTCO ENGINEERING, INC., Plaintiff-Cross Appellant,

v. WANG’S INTERNATIONAL, INC ., PILOT AUTOMOTIVE, INC., PEP BOYS – MANNY, MOE & JACK, INC., and OVERTON’S, INC., Defendants-Appellants.

__________________________ DECIDED: July 25, 2005

__________________________ Before CLEVENGER, GAJARSA, and PROST, Circuit Judges

. PROST, Circuit Judge

. Defendants-Appellants Wang’s International , Inc. (“Wang’s”), Pilot Automotive, Inc., Pep Boys – Manny, Moe & Jack, Inc ., and Overton’s, Inc. (collectively, “appellants”) 1 appeal from a denial of their motion for judgment as a matter of law or alternatively for a new trial by the United Stat es District Court for the Eastern District of Louisiana after a jury verdict of willful pat ent and trade dress infringement, as well as damages. Hartco Engineering, Inc. (“H artco”) cross-appeals the damage award,

1 Pep Boys – Manny, Moe & Jack, Inc. and Overton’s, Inc. are customers of Wang’s International, Inc. and Wang’s sistercompany, Pilot Automotive, Inc., with limited involvement in the activiti es that gave rise to this action. Specifically, they are only involved in the patent infringement claim.arguing that it should be incr eased. The patent at issue, U.S. Patent No. D401,194 (“the ’194 patent”), is directed to a design fo r a decorative marine-propeller device that attaches to the trailer hitch of a vehicle and sp ins from the force of moving air similar to a windmill. The trade dress at issue generally relates to the design of the product, the decorative hitchcover, and the packaging of t hat product. Because the jury findings on design patent and product desi gn trade dress infringement are not supported by substantial evidence, we reverse the district court’s denial of appellants’ motion for judgment as a matter of law on those decisions. We affirm the district court’s denial of appellants’ motion for judgment as a matte r of law on trade dress infringement on packaging, vacate the damages decision, and dismiss the cross-appeal. I. BACKGROUND Hartco is the owner of the ’194 pat ent, issued on November 17, 1998, which claims a design for a novelty trailer hitchcov er featuring a three-bl ade marine propeller. The hitchcover is a decorative device that spins from the force of moving air when attached to the trailer hitch of a vehicle. In 1998, Wang’s, a major distributor of automotive accessories, agreed to purchase and distribute the hitchcovers from Hartco for two years under Wang’s “BULLY” tradem ark. Near the end of 2000, when the licensing agreement was due to expire, Ha rtco proposed to raise the price by approximately forty percent to correspond to t he price Hartco charged other distributors. Wang’s declined Hartco’s offer, opting instead to design its own four-blade hitchcover alleging that there were cert ain defects in Hartco’s product, including a poor chrome finish and problems with the propeller rotati on. Wang’s patent app lication on its four04-1480, -1481, -1482, -1523 2blade propeller was issued as U.S. Patent No. 6,086,438 (“the ’438 patent”) on July 11, 2000. While the agreement was in effect, Wang’ s marketed the licensed Hartco product with a blue insert card showing a picture of the product on the upper right corner and clear plastic packaging to display the product. The blue insert card also included both Wang’s “BULLY” trademark and Hartco’s “PROP’R-HITCHCOVER” trademark on the upper left corner, a green curved stripe underneath the lettering for Hartco’s trademark, and a yellow ten-pointed star below the gr een stripe with the slogan “rotates while you drive” written inside the star. Following t he agreement’s expiration in December 2000, Wang’s began marketing its new four-bladed hitchcover product without the Hartco trademark, the green curved stri pe, or the yellow ten-poin ted star that appeared on the earlier licensed product. Additionally, W ang’s added the ’438 patent number and model number. Wang’s also changed the slogan on t he packaging from “rotates while you drive” to “rotates freely as you drive.” Howe ver, Wang’s continued to use the blue insert card with a picture of the product in us e on the upper right co rner, its “BULLY” trademark on the upper left corner , and clear plastic packaging to display the product. Hartco packaged its own three- bladed product also in a clear plastic case with a blue insert card that had a picture on the same corner, but without any slogan, curved stripe,
or star. In May 2001, Hartco filed a compla int against appellants alleging patent and trade dress infringement. On October 7, 2003, the district court i ssued a pre-trial order adopting appellants’ construction of the scope of the ’194 patent of “an automotive hitch cover having a propeller with three blades attached to an elongate hollow tongue of

04-1480, -1481, -1482, -1523 3generally square cross section having four circular features in the interior corners of the tongue and a fifth central circul ar feature, all visible on the end remote from the propeller.” A jury trial was then held on March 22, 2004. After a three-day trial, the jury found willful patent and trade dress infringem ent and awarded $1,799,845 in damages to Hartco. The district court thereafte r entered final judgment on the jury verdict awarding injunctive relief and monetary relie f to Hartco. Because the jury award erroneously accounted for both Hartco’s lost sa les and Wang’s profits, the district court reduced the amount of the awar d to $826,749, Hartco’s lost sales, plus pre-judgment interest. The district court then in creased the damages awar d by $383,936 for enhanced damages, and awarded $190,000 for atto rney fees and $40,547 for out-ofpocket expenses. On July 13, 2004, the dist rict court denied appellants’ motion to enter a judgment as a matter of law in their favor or, alternatively, to gran t a new trial. This appeal ensued. This court has jurisdiction over this appeal under 28 U.S.C. § 1292(c)(2) and 28 U.S.C. § 1295(a)(1). II. DISCUSSION This court reviews a jury finding of in fringement under a “substantial evidence” test. Union Carbide v. Shell Oil Co. , 308 F.3d 1167, 1177 (Fed. Cir. 2002). We reverse the denial of a motion for judgment as a matter of law if there is “no legally sufficient evidentiary basis for a reasonable jury to find fo r that party on that issue.” Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 149 (2000). The issues on appeal involve design patent and trade dress infringement, as well as damages.

04-1480, -1481, -1482, -1523 4A. Design Patent The jury found that appellants willfully infringed Hartco’s design patent of a decorative hitchcover. Appellants appeal this decision on the grounds that the verdict of patent infringement is not supported by substantial ev idence, pointing out the differences, namely the extra (fourth) blade and the lack of the “four circular features” between the accused device and the patented design. Appellants additionally argue that the district court erred in its jury instructions for the patent infringement claim by failing to instruct the jury to apply the clai m construction and by directing the jury to compare the accused device to the commercia l product instead of t he claimed product. Finally, appellants contend that the district c ourt erred by allowing Hartco to show a videotape of the two devices in moti on, which appellants argue obscured the differences. Hartco responds that the differences between the accused device and the patented design of the extra blade and the “four circular features” are irrelevant because the two different designs are impossible for customers to distinguish. Hartco argues that an addition of a fourth blade and an absence of the four circular features are not substantial changes and that the jury correctly found that the products are visually the same. Furthermore, Hart co responds that the jury instructions were proper, arguing that the device claimed by the Hartco patent and its commercially produced device are identical. Design patent protection is very narrow, covering only what is shown in the drawings in the patent. In re Mann , 861 F.2d 1581, 1582 (Fed. Cir. 1988); see also Elmer v. ICC Fabricating , 67 F.3d 1571, 1577 (Fed. Cir. 1995) . Protection is further

04-1480, -1481, -1482, -1523 5limited to only the novel ornament al features of the patented de sign. OddzOn Prods. v. Just Toys , 122 F.3d 1396, 1405 (Fed. Cir. 1997); Keyst one Retaining Wall Sys., Inc. v. Westrock, Inc. , 997 F.2d 1444, 1450 (Fed. Cir. 1993); Lee v. Dayton-Hudson Corp. , 838 F.2d 1186, 1188 (Fed. Cir. 1988). Thus, if a des ign contains functional and ornamental features, the patentee must show the a lleged infringement based on the ornamental features only. OddzOn , 122 F.3d at 1405; Read Corp. v. Portec, Inc. , 970 F.2d 816, 825 (Fed. Cir. 1992). We agree with the district c ourt’s depiction of the drawings of the ’194 patent as showing a hitchcover “with three blades” a ttached to a tongue “having four circular features” that are visible. Only these ornamental as pects of Hartco’s patented hitchcover design, not the broader, general hi tchcover concept that merely mimics a propeller, are protected. See OddzOn , 122 F.3d at 1405; see also Durling v. Spectrum Furniture Co. , 101 F.3d 100, 104 (Fed. Cir . 1996). Therefore, Hartco’s design patent does not cover any hitchcover shaped as a propeller with any number of blades, regardless of its ornam ental features. See OddzOn , 122 F.3d at 1400. Specifically, the inclusion of blades, a nose, and a tongue are part of the general pr opeller concept and not protected ornamental as pects independent of their unique configuration. See Durling , 101 F.3d at 104. Instead, only the number and shape of the blades, as well as the four circular features, ar e ornamental aspects, subject to patent protection. Hartco chose to include these features in its design application and lim ited the scope of its patent claim to that design, see Elmer , 67 F.3d at 1577. Following claim construction, determi ning patent infringement next requires comparison of the patented and accused designs overall. Contessa Food Prods. Inc. v.

04-1480, -1481, -1482, -1523 6Conagra, Inc. , 282 F.3d 1370, 1376 (Fed. Cir. 2002); Elmer , 67 F.3d at 1577. “Comparison to the accused product includes two distinct tests, both of which must be satisfied in order to find infringement: (a) t he ‘ordinary observer’ te st, and (b) the ‘point of novelty’ test.” Contessa , 282 F.3d at 1377; Unidynamics Corp. v. Automatic Prods. Int’l, Ltd. , 157 F.3d 1311, 1323 (Fed. Cir. 1998); Gorham Co. v. White , 81 U.S. (14 Wall.) 511, 528 (1871). The two tests are separ ate, with the “point of novelty” test requiring proof that the accu sed device infringes the novel aspects of patented design as distinct from the prior art. Contessa , 282 F.3d at 1377; Litton S ys., Inc. v. Whirlpool Corp. , 728 F.2d 1423, 1444 (Fed. Cir. 1984). Underthe ordinary observer test, “[o]ne must compare the ornamental f eatures of the patented design, as shown in all of the drawings, to the features of the alleged in fringing product visible at anytime during normal use of the product.” Contessa , 282 F.3d at 1380. Comparing the two designs, we disagree wit h the district court that the jury verdict of design patent infr ingement was supported by s ubstantial evidence. The designs do not have to be identical to an accused device to be protected, see OddzOn , 122 F.3d at 1405, but Hartco’s patented design is limited to the design it claimed with the three-blades and four circ ular features. Appellants’ four-blade product has a substantially different ov erall ornamental appearance from the claimed three-blade product. See Elmer , 67 F.3d at 1577-78. As no reasonable jury could have concluded that the overall visual appearanc e of the claimed design is s ubstantially similar to the accused design, we do not need to employ the point of novelty test. See KeyStone Retaining Wall Sys. , 997 F.2d at 1451. We thus revers e the district court’s denial of

04-1480, -1481, -1482, -1523 7judgment of noninfringement as a matter of law, together wit h the award of damages for design patent infringement. 2 B. Trade Dress Infringement The jury found that the appell ants infringed Hartco’s trade dress of the hitchcover design and packaging. Appellants appeal the deni al of their motion for judgment as a matter of law on trade dress infringement as to both product configuration and packaging, also contending that t he district court erred in its jury instructions for the trade dress infringement claims. Specific ally, they argue that the instructions erroneously lacked any discussion of the el ements to prove secondary meaning for product configuration and inherent distinctiveness for packaging. Hartco responds that trade dress can be protected absent secondary meaning. Thus, under its interpretation of trade dress law, Hartco furt her argues that the jury was properly instructed, rendering a reasonable verdict. Hartco alternatively argues that, even if secondary meaning is necessary to prove trade dress infringement on the product and the package, it showed secondar y meaning and that this court should therefore uphold the jury verdict. Protection for trade dress is provided by § 43(a) of t he Lanham Act, which creates a federal caus e of action for trade dress infringement. See 15 U.S.C. § 1125(a) (1994); see also Elmer , 67 F.3d at 1578. Tr ade dress refers to product packaging and the design of the product itsel f, and involves the total image, including the size, shape, color, and texture. Elmer , 67 F.3d at 1578. Trade dress is protectible under § 43(a) if it

2 In light of our findi ng of non-infringement, we do not reach the other related issues raised by the appellants, includi ng their challenge of the jury instructions.

04-1480, -1481, -1482, -1523 8is distinctive, either i nherently or as acquired thr ough secondary meaning, and nonfunctional. Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 769 (1992). “It is, of course, also undisputed that liability under § 43(a) requires proof of the likelihood of confusion.” Id. “Because trade dress issues are not unique to the exclusive jurisdiction of the Federal Circuit, we defer to the law of the regional circuit in which the district court sits,” id. , and thus, we apply Fifth Circuit law on this issue. See Imagineering, Inc. v. Van Klassens, Inc. , 53 F.3d 1260, 1263 (Fed. Cir. 1995); see also KeyStone Retaining Wall Sys. , 997 F.2d at 1447. 1. Product Design Under Fifth Circuit law, trade dress prot ects only the overall appearance of a product. Eng’g Dynamics v. Structural Software , 26 F.3d 1335, 1350 (5th Cir. 1994); Allied Mktg. Group, Inc. v. CDL Mktg., Inc. , 878 F.2d 806, 812 (5th Cir. 1989); Elmer , 67 F.3d at 1578. In order to prevail on its tr ade dress infringement claims for the product configuration, Hartco was required show that the trade dress was “nonfunctional, distinctive, and has acquir ed a secondary meaning.” See Eng’g Dynamics , 26 F.3d at 1350. Second, it had to show a like lihood of customer confusion. Id. ; see also Taco Cabana Int’l, Inc. v. Two Pesos, Inc. , 932 F.2d 1113, 1117-18 (5th Cir. 1991), aff’d , 505 U.S. 763 (1992). We reject Hartco’s argument that the hitchcover design is inherently distinctive and thus it does not have to show that t he trade dress acquired secondary meaning as to the product. See Wal-Mart Stores, Inc. v. Samara Bros. , 529 U.S. 205, 212 (2000). Rather, a product design cannot be inherently distinctive as a matter of law. Id. at 215. Therefore, it is necessary to determine w hether Hartco met its burden of presenting

04-1480, -1481, -1482, -1523 9sufficient evidence to support a fi nding of secondary meaning. See Sugar Busters LLC v. Brennan , 177 F.3d 258, 269 (5th Cir. 1999). UnderFifth Circuit law, length and nature of use, sales volume and advertisi ng, consumer surveys and testimony, and appellants’ intent are the relevant factor s regarding secondary meaning. Pebble Beach Co. v. Tour 18 I , 155 F.3d 526, 541 (5th Cir. 1998). Reviewing the record, we note that although Hartco sold its hitchcover for four years before appellants released their own vers ion, it offered no evidence that sales volume, advertising, nature of use, or appell ants’ intent proved t hat its trade dress had acquired secondary meaning. Moreover, Hart co introduced no survey evidence, which is the most direct and persuasive evidence for establishing secondary meaning. Sugar Busters , 177 F.3d at 269. We thus conclude that Hartco di d not meet its burden of establishing secondary meaning and thus that the trade dress of the product is not protectible. See Two Pesos , 505 U.S. at 766, n.4; see also Inwood Labs., Inc. v. Ives Labs., Inc. , 456 U.S. 844, 851, n.11 ( 1982). Therefore, substantial evidence does not support a finding of trade dre ss infringement on the product design. As no reasonable jury could have concluded that Hartco showed secondary meaning, we reverse the district court’s denial of j udgment of noninfringement as a matter of law, together with the award of damages relevant to trade dress infringement. 2. Packaging Unlike product configuration, product pa ckaging is capable of being inherently distinctive and thus a showing of secondar y meaning may be unnecessary to prevail on a trade dress claim. Two Pesos , 505 U.S. at 766. Packagi ng trade dress is inherently distinctive if its intrinsic natur e identifies the source of a product. In this case, Hartco’s

04-1480, -1481, -1482, -1523 10packaging trade dress includes the clear pl astic package showing the product inside and the blue cardboard backg round with white lettering identifying the product and Hartco’s trademark “PROP ’R-HITCHCOVER” with red li nes in the upper left hand corner and a picture of the product in pos ition on a vehicle and the product’s patent information in the upper right hand corner . Separately, these elements may be descriptive and thus not subject to trade dress protection. See Taco Cabana , 932 F.2d at 1120. However, taken together , Hartco’s trade dress is ipso facto inherently distinctive and thus, subject to protec tion under § 43(a) of the Lanham Act. See id

. We next determine whether the packaging of the accused trade dress creates a likelihood of consumer confusion. Under Fifth Circuit law, the sev en elements relevant to determining consumer confus ion are: “(1) the type of mark allegedly infringed, (2) the similarity between the two marks, (3) the similarity of the pr oducts or services, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant’s inten t, and (7) any evidence of actual confusion.” Pebble Beach , 155 F.3d at 543. Here, Hartco presented evidence that the fo rms of trade dress are similar, the products are interchangeable, the purchasers and advertisers are the same, and there was actual confusion among customers. Hartco further presented evidence that Wang’s intended to copy Hartco’s packaging. We therefore find that appellants have not shown that the jury verdic t is not supported by substantial evidence and we therefore affirm the district court’s deni al of appellants’ motion for judgment as a matter of law for trade dress infringement on packaging.

04-1480, -1481, -1482, -1523 11CONCLUSION We reverse the district court’s denial of appellants’ motion for judgment as a matter of law on design patent infringement and trade dress infringement on product design. We affirm the distri ct court’s denial of appellants’ motion for judgment as a matter of law on trade dress infringement on packaging, and vacate the damages decision, including the enhancement of damages , out-of-pocket expenses, and attorney fees, for further proceedings to determi ne the appropriate damages award for the packaging trade dress infringement. 3 We dismiss the cross-appeal. No costs.

3 Because we are vacating the award of damages, we do not need to reach the issues raised by appellants regarding damages . We note, however , that Rule 52(a) of the Federal Rules of Civil Procedure provides that a cour t must explain the factual and legal conclusions supporting any enhancement decision, Chandler v. City of Dallas , 958 F.2d 85, 90 (5th Cir. 1992), and that award of attorney fees based on contingency fee agreements has been rejected by the Supr eme Court, City of Bu rlington v. Dague , 505 U.S. 557, 565-67 (1992).
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