Source: https://www.scribd.com/document/134588132/High-Point-Appellant-Brief
Timestamp: 2016-07-29 06:51:23
Document Index: 226131957

Matched Legal Cases: ['§ 1125', '§ 1295', '§ 2201', '§ 103', '§ 171', '§ 282', '§ 1331', '§ 1331', '§ 2201', '§ 1125', '§ 1295', '§ 103', '§ 103', '§ 282', '§ 103', '§ 171', '§ 171', '§ 282', '§ 103', 'art\n1']

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HIGH POINT DESIGN LLC,
MEIJER, INC., SEARS HOLDINGS CORPORATION, AND WAL-MART STORES, INC.,
BUYER’S DIRECT, INC.,
Appeal from the United States District Court for the Southern District of New York in Case No. 11-CV-4530, Judge Katherine B. Forrest.
OBLON, SPIVAK, MCCLELLAND, MAIER & NEUSTADT L.L.P.
CERTI FI CATE OF I NTEREST Counsel for Appellant, Buyer’s Direct, Inc., certifies the following: 1. The full name of every party or amicus represented by me is: Buyer’s 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 Court’s Decision....................................................................14 SUMMARY OF THE ARGUMENT ......................................................................17 ARGUMENT...........................................................................................................21 I. Standard of Review........................................................................................21 II. The District Court’s 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 Court’s 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 BDI’s 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 Int’l., 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. Int’l Trade Comm’n, 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. P’ship, 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 Int’l, 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 Int’l, 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, Buyer’s 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 Court’s 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 Buyer’s Direct, Inc. (“BDI”) leave to amend its pleading would not have prejudiced High Point Design LLC (“High Point”) or hindered the district court’s schedule, did the district court err in dismissing BDI’s 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 BDI’s 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 BDI’s 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 BDI’s 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 Point’s requested extension three days later, noting that it would promptly review High Point’s 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 BDI’s 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 have been hugely successful. SNOOZIES!
were first sold in September 2008, and by 2011, annual sales of SNOOZIES!
slipper-socks were in the millions of dollars. A340; A504, ¶ 5. Sales of SNOOZIES!
slipper-socks have continued to grow rapidly in 2012, are now sold globally, and have been featured on the Today Show and other popular media. A representative picture of BDI’s SNOOZIES!
slipper-socks is shown below. SNOOZI ES!
Slipper-Socks (A504) 5 The SNOOZIES!
marketing literature explains that “SNOOZIES!
are not socks and they’re not slippers - sort of a crossover between the two.” A497. The SNOOZIES!
advertising touts the advantages of the slipper-socks, describing them as “soft, comfy, warm, and simply adorable.” Id. (emphasis added). The slipper-socks are soft and squishy with visually pleasing bright colors and designs and presented outside of packaging, like stuffed animals, encouraging touching. The fleece-lined curved opening is far larger than a typical sock or slipper opening. Additionally, the fleece extends up and above the foot opening, but does not overlie the outer edge of the slipper-sock. A457, ¶13. As a result, 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!
slipper-socks. A504, ¶¶ 7-8. These products were distributed by defendant High Point (A505, ¶7) and sold by defendants Wal-Mart Stores, Inc., Sears Holdings Corporation, and Meijer, Inc. A photo of the infringing High Point product appears below, which shows its undeniable similarity to 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 Point’s 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!
slipper-socks are a commercial embodiment protected by the ‘183 design patent. The ‘183 design patent was filed and issued in 2009. Two years after the introduction of the slipper-socks, BDI observed that its SNOOZIES!
design had been copied. A33-37. Representative Figures 1 and 4 from the ‘183 design patent are reproduced below, showing perspective and side views of the patented slipper-sock. A34-35. 7 The ‘183 design patent depicts an ornamental design for a slipper-sock having a distinctive silhouette, important in attracting customers and a primary method of identifying footwear to consumers. A456, ¶ 8. The surface of the ‘183 design patent slipper-sock is also smooth and continuous right up to the foot opening. A456, ¶ 10. An important visual feature is the fleece-lined opening to the slipper-
sock. A457, ¶ 12. The opening is relatively large, more than half the length of the slipper-sock (as seen from the side view shown in Fig. 4), and has a gradual curve. FIG. 1
'I r 1111111111" 1/ f
I 111111111 II
8 Id. The fleece material extends up and above the foot opening, and does not overlie the outer surface of the slipper-sock. A457, ¶ 13. Thus, the fleece can be thought of like the head of beer in a mug that extends above the lip of the mug, but does not spill down the sides of the mug. The ‘183 design patent includes two embodiments with different soles. In the embodiment shown in Fig. 7 (A36), the sole has a pattern of two groups of dots. In a second embodiment shown in Fig. 8 (A37), the sole is smooth and has no dots. I I I . The Woolrich Shoes & the ‘183 Design Patent The district court granted summary judgment of invalidity of obviousness based primarily over two shoes known as the Laurel Hill and Penta (collectively “the Woolrich shoes”). The district court relied secondarily on two design patents showing various dot patterns on footwear (U.S. D566,934 and U.S. D540,517). BDI disputes that High Point presented sufficient evidence that the Woolrich shoes are, in fact, prior art to the ‘183 patent. See A353-54. Even if prior art, these two Woolrich shoes convey a dramatically different visual impression than the ‘183 design patent and are readily distinguishable from the slipper-socks in the ‘183 design patent. BDI explained in great detail the differences between the ‘183 design patent and the Woolrich shoes in opposing High Point’s motion for summary judgment. 9 A339; A349-50. BDI supported its opposition with the unrefuted Expert Declaration of Lance Rake. A455-502.
In contrast, High Point submitted no declarations and relied solely on attorney argument in making its invalidity allegations. Each of the Woolrich shoes is an indoor/outdoor shoe, which includes a prominent rolled over collar around the opening of the foot, a raised toe, and a thick sole made of different material. See A455-502; A206 (noting the Penta sole is “designed for inside or outside wear”); A226 (noting the Laurel Hill shoe has “indoor/outdoor soles”). Together with the overall contour of the shoes, these features present a distinctly different overall visual impression than the ‘183 design patent slipper-sock. Several of these differences are illustrated in relation to the Laurel Hill shoe in the following drawings: 1
Mr. Rake is an industrial designer with 36 years of experience, including experience in footwear design. A455-456. 10 ‘183 Design Patent Fig. 4 and Laurel Hill Shoe Side Views As can be seen from the above comparisons, the Laurel Hill shoe differs substantially from the ‘183 design patent. Among other differences, the Laurel Hill design is for a structured indoor/outdoor shoe that has a: • Prominent rolled collar that extends over the sides of the shoe that does not exist in the ‘183 design patent, A460, ¶ 24; • Substantially different curved silhouette (A456-57, ¶¶ 9-12) due to its: '183
-above foot
opening and does
not overlie sides
Longer foot opening
Flattoe .. ±'±' No thick sale line
FIG,4 Higher sidewall
Shorter foot opening
Rolled collar of
fleece overlaps
Thick sale line
11 o Raised toe and heel; o More pronounced vertical curve at the front of the foot opening; o Prominent seam on the sidewall with visible stitching; o Distinct contour around the toe; and o Shorter foot opening relative to the length of the shoe; • Lower sidewall, A460, ¶ 24; A494 and • Thick sole edge, A460, ¶ 25; A494-95. The prominent rolled collar by itself distinguishes the Laurel Hill shoe from the soft-bodied slipper-socks of the ‘183 design patent. Mr. Rake identified other differences that further distinguish the two designs. A456-57, ¶¶ 9-12; A460-61, ¶¶ 24-26; A494-95. A comparison between the ‘183 design patent and the Penta indoor/outdoor structured shoe leads to the same conclusion. 12 ‘183 Design Patent Fig. 4 and Penta Shoe Side Views As can be seen from the above comparisons, the Penta shoe differs substantially from the ‘183 design patent. Among other differences, the Penta indoor/outdoor structured shoe has a: • Prominent rolled collar that extends over the sides of the shoe that does not exist in the ‘183 design patent, A460, ¶ 24; Flat toe
Thinner front
I , I J II'" /I
No thick sole line
FIG. 4 Higher sidewall
Fatter front(oe body
l .FIG.4
Thick sole line Lower
13 • Thick two part welt that juts out prominently around the base of the entire shoe with visible stiching, A457, ¶ 11; A460, ¶ 25; and • Substantially different curved silhouette (A456-57, ¶¶ 9-12) due to o Raised toe and heel; o Fatter contour around the front of the shoe; o Prominent seam on the sidewall with visible stitching; o Shorter foot opening relative to the length of the shoe, and o Lower sidewall, A460, ¶ 24; A494-95. Mr. Rake identified additional differences that further distinguish the two designs. A456-57, ¶¶ 9-12; A460-61, ¶¶ 24-26; A494-95. These and other distinctions between the slipper-sock of the ‘183 design patent and the Woolrich shoes were identified in BDI’s brief opposing High Point’s motion for summary judgment and Mr. Rake’s Declaration. A339; A349-
50. Mr. Rake pointed out that, unlike the slipper design in the ‘183 design patent, the Woolrich shoes include (1) fleece which substantially overlapped the top of the shoe (a “rolled collar”), (2) substantial welts or a thick sole line, (3) an overall different contour, and (4) a low sidewall. A456, ¶¶ 8-12; A460-61, ¶¶ 24-26. For these and other reasons, Mr. Rake concluded that the Woolrich shoes do not convey the same overall visual impression as the ‘183 design patent. A461, ¶ 27. Ultimately, Mr. Rake concluded that “an ordinary observer, familiar with the 14 prior art and given such attention as a purchaser usually gives, would not find the prior art designs substantially similar in overall appearance.” A463, ¶ 34 (emphasis added). I V. The District Court’s Decision Despite the detailed evidence offered by BDI illustrating the differences between the design of the ‘183 design patent and the alleged prior art, and the explicit ornamental features of the slipper-sock of the ‘183 design patent, the district court granted summary judgment of invalidity. The district court found that the design was (1) obvious over the Woolrich shoes in view of U.S. D566,934 and U.S. D540,517, and (2) merely functional. A8-23. The district court summarily dismissed the ‘183 design patent, stating that it is “a rather run-of-the-mill fuzzy slipper” (A9) that “it looks like many slippers I purchased and wore throughout my youth some time ago - - and certainly before 2009.”
A11. Despite the footnoted comment that the adverse decision was not influenced by “anecdotal memories,” the statement and summary manner in which the court ruled on the various issues is striking. More importantly, the district court’s decision lacked any discussion, or even mention, of the multiple, readily 2
The district court added a footnote, stating, “[a]s discussed below, the critical legal basis for disposing of this matter rests not on the Court’s anecdotal memories and assumptions of common sense obviousness, but rather on the facts relating to prior art available in the marketplace prior to the time that Buyer’s Direct even applied for the ‘183 patent.” A11. 15 apparent features that contribute to a very different overall visual impression provided by the ‘183 design patent as compared to the Woolrich shoes. Nowhere did the district court acknowledge the prominent rolled collar, thick welts, or different shoe contours of the Woolrich shoes as compared to the ‘183 design patent. Instead, the district court concluded, without explanation, that “this Penta slipper looks indistinguishable from the drawing shown in the ‘183 patent” and “[t]o an ordinary observer, they are the same slippers.” A12; A18 (emphasis added). The district court also wrongly ignored the Rake declaration as merely the opinion of an expert rather than an ordinary observer. A20. Mr. Rake pointed out numerous differences between the ‘183 design patent and the Woolrich shoes. A455-502. Regardless of his status as an expert, the numerous differences observed are highly relevant to the overall appearance of the Woolrich shoes. In fact, Mr. Rake concluded that “an ordinary observer, familiar with the prior art and given such attention as a purchaser usually gives, would not find the prior art designs substantially similar in overall appearance.” A463, ¶ 34. In evaluating functionality, the district court summarily concluded that the ‘183 design patent’s “features are merely functional” and that “[t]he face of the patent itself leaves no doubt that there is nothing ornamental about the slippers.” A10. Most importantly, the district court never found that the ‘183 design was 16 “dictated by” function and, indeed, the district court even acknowledged that at least the “fuzz” overflow can be characterized as “ornamental.” A19. Last, the district court dismissed BDI’s trade dress claim with prejudice based on an alleged insufficiency of the trade dress pleadings. A21-22.
The district court dismissed the trade dress claim with prejudice due to what was asserted to be the “late stage of the proceedings” (A10) and thus refused to consider the amended counterclaim offered by BDI. The dismissal with prejudice was made despite the fact that substantial discovery remained to be taken at the time of the decision.
J ust prior to the district court’s ruling on the summary judgment motion, High Point had requested an extension of the discovery dates, so clearly there would be no prejudice to High Point. In contrast, the prejudice to BDI is clear in light of the district court’s recognition that “there are some trade dress characteristics shared between High Point’s slipper and the embodiment provided to the Court.” A22 (emphasis added). 3
BDI does not concede that the originally filed trade dress was insufficient, A359-
60, but focuses on the dismissal with prejudice aspect of the district court’s decision for the purpose of narrowing the issues on appeal. 4
Prior to the decision, the parties had taken only one fact deposition of a third party and noticed several others. Not a single deposition of any party had taken place. BDI and High Point had each produced limited discovery. No expert reports had been exchanged. 17 SUMMARY OF THE ARGUMENT The decision below should be reversed and remanded because the district court wrongly held that (1) on summary judgment the ‘183 design patent was obvious primarily in view of the quite distinct Woolrich shoes, (2) on summary judgment the ornamental ‘183 design patent was purely functional, and (3) BDI’s trade dress infringement claim should be dismissed with prejudice even though substantial discovery remained and BDI promptly offered an amended pleading. The district court’s legal conclusion that the ‘183 design patent was obvious contained a series of reversible errors. The district court committed clear error in deciding that a designer of ordinary skill in the art would have found the Woolrich shoes to be substantially the same design as the ‘183 design patent and thus suitable as a primary reference -- without even addressing BDI’s arguments and ignoring the unrefuted Rake Declaration. This conclusion was reached despite the many substantial differences, including the significant rolled collar, thick welts and sole line, smaller foot opening, raised toes, and overall differences in contour and stitching that readily distinguish the Woolrich shoes from the ‘183 design patent. See Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1328-32 (Fed. Cir. 2012) (finding error where the patented design for a tablet and the prior art created substantial differences in overall appearance). 18 Indeed, the facts in this case are remarkably similar to those in Apple v. Samsung. In Apple, this Court overruled a district court decision that focused on the broad similarities between the patented design for an iPad
and the prior art, rather than the substantial differences that distinguished the two. The prior art in Apple had a frame around the perimeter of the tablet’s screen. 678 F.3d at 1330-
31. This Court found that the prior art frame created a different visual impression than the unbroken slab of glass extending across the front of the Apple design. Id. Similarly, in this case, the Woolrich shoe collar overlays the surface of the shoe, breaking the smooth continuity of the shoe body, whereas the ‘183 design patent has a continuous upper body up to the foot opening. As with the frame in the Apple prior art, the Woolrich collar creates a substantial difference in visual impression in comparison to the ‘183 design patent. Thus, the Woolrich shoes cannot qualify as a primary reference. The district court further erred by concluding, without explanation or evidentiary support, that an ordinary designer would be motivated to perform major modifications to the Woolrich shoes to be substantially the same as the slipper-sock of the ‘183 design patent. See In re Harvey, 12 F.3d 1061, 1063 (Fed. Cir. 1993). Similarly, the district court made a clear error in determining that an ordinary observer would have found that the hypothetical prior art combination of Woolrich shoes, with the dot patterns of U.S. D566,934 and U.S. D540,517, 19 conveyed substantially the same overall visual impression as the slipper-sock of the ‘183 design patent. The district court’s summary and dismissive conclusion that the Woolrich shoes are “the same” as the slipper-sock of the ‘183 design patent (A18) constituted a failure to carry out the second step of the obviousness analysis articulated in the Supreme Court’s Grahamtest, which requires a court to compare the prior art with the patented features. Grahamv. J ohn Deere, 383 U.S. 1, 17-18 (1966). These errors were particularly significant in view of the procedural posture of the case, where all factual inferences must be drawn in favor of BDI, and the differences between the Woolrich shoes and the ‘183 design patent raised numerous genuine issues of material fact. See, e.g., OddzOn Prods., Inc. v. J ust Toys, Inc., 122 F.3d 1396, 1401 (Fed. Cir. 1997). Finally, the district court improperly failed to consider BDI’s evidence of secondary considerations of copying by High Point and BDI’s own commercial success. See, e.g., Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983). The district court’s conclusion that the ‘183 design patent was invalid as purely functional must also be reversed. To be invalid as primarily functional, a design must be “dictated by” function. PHG Techs., LLC v. St. J ohn Cos., Inc., 469 F.3d 1361, 1366 (Fed. Cir. 2006). The district court never applied this central legal test and failed to consider whether the ‘183 patent design was 20 “dictated by” function. This failure alone constitutes reversible legal error. Moreover, common sense shows that the ‘183 design patent is not dictated by function. There are countless alternative distinct designs that perform the same functions of warmly and comfortably covering a foot. The non-functional differences between these designs are ornamental. Thus, even if the correct legal test had been applied, the district court’s functionality conclusion constituted clear and reversible error. Finally, the district court abused its discretion by dismissing BDI’s trade dress claim with prejudice due to the “late stage of the proceedings.” A10. In fact, not one deposition of a party had been taken and substantial discovery remained—and High Point had requested an extension of the discovery period days before the decision on High Point’s summary judgment motion issued. Consequently, granting leave to amend BDI’s counterclaim with a more detailed recitation of its trade dress would have prejudiced neither High Point nor the district court’s schedule. In these circumstances, the Second Circuit has held that leave to amend should be liberally granted, see, e.g., Ideal Steel Supply Corp. v. Anza, 652 F.3d 310, 325 (2d Cir. 2011), and the district court’s dismissal with prejudice was an abuse of discretion. 21 ARGUMENT I . Standard of Review This Court reviews a district court’s grant of summary judgment de novo. OddzOn Prods., 122 F.3d at 1401. Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Id. Thus, summary judgment may be granted when no “reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there is a genuine issue of material fact, the evidence must be viewed in a light most favorable to the party opposing the motion, with doubts resolved in favor of the opponent. OddzOn Prods., 122 F.3d at 1401; Transmatic, Inc. v. Gulton Indus., Inc., 53 F.3d 1270, 1274 (Fed. Cir. 1995). A determination of obviousness under 35 U.S.C. § 103(a) is a legal question based on underlying questions of fact. Power-One, Inc. v. Artesyn Techs., Inc., 599 F.3d 1343, 1351 (Fed. Cir. 2010). This Court reviews “the ultimate determination of obviousness by a district court de novo and the underlying factual inquiries for clear error.” Id. (internal citations omitted). Furthermore, “[w]hether a patented design is functional or ornamental is a question of fact.” PHG Techs., 469 F.3d at 1365. Thus, this Court reviews the determination of functionality for clear error. Fed. R. Civ. P. 52(a). This Court 22 also “review[s] the district court’s … legal conclusions de novo.” E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C., 525 F.3d 1353, 1358 (Fed. Cir. 2008). Thus, the district court’s legal test for determining functionality must also be reviewed de novo. As a purely procedural issue, an appeal from an order granting a motion for judgment on the pleadings is reviewed under the law of the regional circuit. See, e.g., Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir. 2011). Under Second Circuit law, a district court’s decision to dismiss a complaint with prejudice, thereby implicitly denying a party’s request for leave to amend under Fed. R. Civ. P. 15(a), is reviewed for an abuse of discretion. See Metz v. U.S. Life Ins. Co., 662 F.3d 600, 603 (2d Cir. 2011) (per curiam). See also Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003) (stating that a denial of leave to amend is reviewed for an abuse of discretion). I I . The District Court’s Legal Errors Require Reversal of the Grant of Summary J udgment of I nvalidity of the ‘183 Design Patent A. The Law of Obviousness for Design Patents Patents are presumed valid. 35 U.S.C. § 282. An accused infringer asserting invalidity of a patent must prove invalidity under the clear and convincing evidentiary standard. Microsoft v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2245-47 (2011). The fact finder employs a two step process in making the determination of 23 obviousness for a design patent.
Apple, 678 F.3d at 1329-30; Durling v. Spectrum
Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996), distinguished on other grounds by Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008). First, “one must find a single [primary] reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design.’” Durling, 101 F.3d at 103 (quoting In re Rosen, 673 F.2d 388, 391 (CCPA 1982). Second, “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.” Durling, 101 F.3d at 103. Without a primary reference having the same overall visual impression as the claimed design, there can be no finding of obviousness under 35 U.S.C. § 103(a). See Apple, 678 F.3d at 1331-32. If a single reference is identified (or a hypothetical piece of art is created through combination by an ordinary designer), it must then be analyzed from the point of view of the ordinary observer. Int'l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240-41 (Fed. Cir. 2009). The ordinary observer test looks at whether the primary or hypothetical piece of combined prior art and the claimed design are “substantially the same” such that an ordinary observer, giving such attention as an ordinary observer usually gives, would be deceived into purchasing 5
These steps are required in order to follow the Supreme Court’s guidance in Graham. 383 U.S. at 17-18 (“the scope and content of the prior art are … determined; differences between the prior art and the claims at issue are … ascertained”). 24 one supposing it to be the other. Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1384 (Fed. Cir. 2009). B. The Legal Errors in the District Court’s Analysis 1. The Woolrich shoes cannot be a primary reference Prior art must create “basically the same” visual impression as the patented design to serve as a primary reference. Durling, 101 F.3d at 103. The “basically the same” test requires consideration of the “visual impression created by the patented design as a whole.”
Id. A reference does not convey “basically the same” visual impression as a patented design when there are “significant differences” between the two. Id. at 104. Neither of the Woolrich shoes meet this standard. Each of the Woolrich shoes is a structured indoor/outdoor shoe including a prominent rolled over collar around the opening of the foot, a distinctly different structured shoe body contour, and a thick sole and/or welt. A456, ¶¶ 8-12; A460-
61, ¶¶ 24-26. These and other features present a distinctly different overall visual impression than the ‘183 design patent for a slipper-sock. These differences are 6
Notably, the district court completely failed to carry out the first step of this analysis, i.e., discerning the correct visual impression created by the patented design as a whole, Durling, 101 F.3d at 103, even though both parties presented versions of the overall visual impression of the ‘183 patent in their briefing. A88; A346-47. The district court merely provided a statement of the concept of fuzzy slippers, and a description of a general concept in place of describing the overall visual impression of the patent in question has been held to be erroneous. See Durling, 101 F.3d at 104. 25 illustrated in relation to the Laurel Hill shoe in the following drawings: The prominent rolled collar by itself distinguishes the Laurel Hill shoe from the ‘183 patented design. The other substantial differences in the shape of the shoes and the sole of the shoes in relation to the ‘183 slipper-sock design further distinguish the Laurel Hill shoe to the ordinary designer. A comparison of the design for a slipper-sock in the ‘183 design patent in relation to the Penta shoe leads to the same conclusion. '183
Flat toe .. !':i':;::, No thick sale line
26 These and other distinctions between the slipper-sock of the ‘183 design patent and the Woolrich shoes were provided in BDI’s brief opposing High Point’s motion for summary judgment and in the Declaration of Mr. Rake. A339; A349-
50. Mr. Rake pointed out that, unlike the slipper-sock design in the ‘183 design patent, the Woolrich shoes include (1) fleece which substantially overlapped the top of the shoe (a “rolled collar”), (2) substantial welts or a thick sole line, (3) an Flat toe
27 overall different contour, and (4) a low sidewall. A456, ¶¶ 8-10; A460-61, ¶¶ 24-
26. For these and other reasons, Mr. Rake concluded that the Woolrich shoes do not convey the same overall visual impression as the ‘183 design patent. A461, ¶ 27. In view of these substantial differences, neither Woolrich shoe could be considered the primary reference in carrying out an obviousness analysis for the slipper-sock of the ‘183 design patent. See Durling, 101 F.3d at 104; Apple, 678 F.3d at 1331-32. Nowhere did the district court acknowledge or take into consideration the prominent rolled collar, thick welts, or different shoe contours of the Woolrich shoes as compared to the slipper-sock of the ‘183 design patent. Importantly, at the summary judgment stage, all of these differences must be viewed in the light most favorable to BDI. See, e.g., OddzOn Prods., 122 F.3d at 1401. Therefore, it was error for the district court to summarily determine that the Woolrich shoes created substantially the same visual impression as the ‘183 design patent and could be used as the primary reference when the unrefuted evidence of record concluded the exact opposite. In fact, this case is analogous to this Court’s recent decision in Apple v. Samsung. 678 F.3d 1314. In both Apple and the present case, elegant, simple, and highly successful products covered by design patents were compared to prior art inappropriate as primary references. Id. at 1330. In Apple, the district court found 28 that Apple’s design patent covering the iPad
was invalid based on prior art that included the 1994 Fidler reference. In fact, the alleged prior art reference in Apple was closer to the iPad
design than the Woolrich shoes are to the ‘183 patent design. The comparison presented by this Court showing the Apple patented design and the 1994 Fidler reference is shown below: Id. at 1330. The primary difference noted by this Court was that the Fidler tablet includes a frame surrounding the screen that contrasted with the screen itself, breaking the continuity of the glass surface. Id. at 1330-31. This difference was sufficient for the Court to find that the Fidler tablet could not be used as a primary reference. Id. at 1331 (stating that “the D‘889 design creates the visual impression of an unbroken slab of glass extending from edge to edge on the front side of the tablet. The Fidler reference does not create such an impression”). The Fidler 0504,889
1994 Fidler
29 tablet’s frame is directly analogous to the rolled collar of the Woolrich shoes: the collar overlays the surface of the shoe, breaking the smooth continuity of the shoe body. On the other hand, the design of the ‘183 design patent has a continuous outer body up to the foot opening, analogous to the surface of the iPad
. 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
) was precisely the modification that this Court rejected in Apple, even in combination with a secondary reference having a flat glass front. Id. at 1331. Furthermore, the district court never explained why an ordinary designer would remove the substantial welts and sole thicknesses in the Woolrich shoes to appear more like the ‘183 design patent. These changes would make the Woolrich shoes less functional. Considering the indoor/outdoor intended use of the Woolrich shoes, these design changes would make no sense. See A206 (noting the Penta sole is “designed for inside or outside wear”); A226 (noting the Laurel Hill shoe has “indoor/outdoor soles”). Removing the welt and thick sole of the 31 Woolrich shoes would make them less suitable for their intended purpose, and the district court provided no reasons as to why an ordinary designer would make such a modification. In addition, the district court never explained why an ordinary designer would expand the size and modify the contours of the foot opening of the Woolrich shoes to more closely match the ‘183 design patent. Finally, the district court never explained why an ordinary designer would modify the overall contours of the Woolrich shoes, such as by lowering the raised toe of the Laurel Hill shoe and reducing the thickness of the front of the Penta shoe, to be more similar to the design in the ‘183 design patent. In fact, the district court never even discussed why an ordinary designer would combine the dots on the soles of the prior art patents, the only difference noted by the court, with the Woolrich shoes.
Absent some explanation accounting for these significant differences, the district court failed to carry out the second step of the obviousness analysis, and its legal conclusion of obviousness must be reversed. See Durling, 101 F.3d at 103. 3. The district court applied the wrong legal tests for obviousness Not only did the district court come to the wrong conclusion for the reasons explained above, the district court arrived at the wrong conclusion in a legally 7
Notably, Mr. Rake found no reason for an ordinary designer to combine the sole designs of prior art patents U.S. D566,934 and U.S. D540,517 with the Woolrich shoes. A461-62, ¶¶ 28-29. 32 erroneous manner in at least two distinct ways. First, the district court’s conclusion (i.e., that “to an ordinary observer, they are the same slippers,” (A18) is contrary to the law, which requires an ordinary designer to determine the primary reference, not the ordinary observer. Int’l Seaway, 589 F.3d at 1240. This difference is significant because a designer in the art would have a more discriminating eye than an ordinary observer, who may be an ordinary purchaser of the shoes at issue. Applying the wrong standard constitutes legal error. Second, the law requires a district court to explain its reasoning in comparing references. Although the trial court judge “may determine almost instinctively whether the two designs create basically the same visual impression…the judge must communicate the reasoning behind the decision. This explanation affords the parties a basis upon which to challenge, and also aids the appellate court in reviewing, the judge's ultimate decision.” Durling101 F.3d at 103 (emphasis added). The district court failed to provide any legal explanation underlying the conclusion that the Woolrich shoes and the slipper-sock of the ‘183 design patent have the same overall visual impression and that either of the Woolrich shoes could qualify as the primary reference to one skilled in the art. See Rosen, 363 F.2d at 391; Int’l Seaway, 589 F.3d at 1240. In fact, it is even unclear 33 which Woolrich shoe the district court considered to be the primary reference.
4. The district court failed to consider the secondary considerations of non-obviousness An obviousness analysis requires a determination of secondary considerations that may indicate non-obviousness. Graham, 383 U.S. at 17-18; see also Stratoflex, 713 F.2d at 1538 (stating that it is “jurisprudentially inappropriate to disregard any relevant evidence” relating to secondary considerations). Thus, it was legal error for the district court to disregard BDI’s secondary considerations of non-obviousness. a. Copying Important secondary evidence of non-obviousness offered to the district court by BDI included High Point’s copying of the SNOOZIES!
slipper-socks (embodiments of the ‘183 design patent). A353; A505. High Point never denied that it copied the SNOOZIES!
slipper-socks in its reply brief (A513) and the similarity between SNOOZIES!
and the High Point slipper is striking. Copying by others is highly persuasive evidence of non-obviousness. Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2004) (stating that “[t]his court has previously identified, inter alia, commercial success, satisfaction of a long-felt need, and copying to be relevant factors” regarding secondary evidence of non-
obviousness); see also Benchcraft, Inc. v. Broyhill Furniture Indus., Inc., 681 8
See opinion at A18, line 3, referring to the “Woolrich prior art” in general. 34 F.Supp. 1190, 1217 (N.D. Miss. 1988) (stating that copying by others, including the infringer, “is perhaps one of the most probative and compelling arguments that the design is novel and unique”). SNOOZIES!
, a commercial embodiment of the ‘183 design patent, were copied by High Point, as illustrated in the photographs below: SNOOZI ES!
® (A504)
An I nfringing High Point Slipper (A505) b. Commercial success BDI also offered evidence of the commercial success of 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!
slipper-sock had sales of millions of dollars in 2011 alone. A340; A504, ¶ 5. Furthermore, sales have continued to expand worldwide. In contrast, the record indicates that the Woolrich shoes were far less successful than SNOOZIES!
, with sales two orders of magnitude lower ranging from $24,000 to $30,000 per year from 2005 to 2007 as compared to the millions of 35 dollars in sales in a single year for SNOOZIES!
. A512; A522-23, ¶¶ 5-7 (see also underlying exhibits on A525, A527, and A529); A504. Indeed, it appears that the commercial success of SNOOZIES!
enticed High Point to copy 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 Int’l., 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 court’s application of the “primarily functional” test would destroy the validity of countless design patents. The district court stated that “when a design patent’s primary features are functional rather than ornamental, it may be declared invalid” citing PHG Techs., 469 F.3d at 1366 (emphasis added). However, this Court’s 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 Court’s 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 court’s 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 Point’s 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.
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.
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 Court’s numerous decisions addressing design patents on footwear. See, e.g., Crocs, Inc. v. Int’l Trade Comm’n, 598 F.3d 1294 (Fed. Cir. 2010); Int'l Seaway, 589 F.3d 1233; Reebok Int’l, Ltd. v. J . Baker, Inc., 32 F.3d 1552 (Fed. Cir. 1994); Payless Shoesource, Inc. v. Reebok Int’l, 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 BDI’s 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 Point’s motion. A339-40; A360-61; A431-50; see particularly A437 (specifying at least six elements of trade dress in the SNOOZIES!
slipper-socks). High Point’s motion was also granted despite the district court’s agreement that High Point’s products shared some of the characteristics alleged to be SNOOZIES!
trade dress. A22. Nonetheless, the district court dismissed BDI’s trade dress infringement claim with prejudice, finding that the allegations pled in BDI’s original counterclaim were insufficient to state a cause of action and that it was not inclined to permit amendment of the pleadings “at this stage of the litigation.” A22. The dismissal with prejudice was improper and an abuse of discretion. BDI proposed and submitted an amended counterclaim as an exhibit to its opposition to High Point’s Rule 12(c) motion. A361; A437-39; A448-49. The proposed amended counterclaim alleged additional details with respect to SNOOZIES!
’ trade dress (A437), some of which the district court found to be embodied in the accused products (A22). This request was treated as a motion for 41 leave to amend. A22. BDI had not previously amended its counterclaims, and leave to amend is to be liberally granted. See Fed. R. Civ. P. 15(a)(2). See also Ideal Steel, 652 F.3d at 325 (stating that “[p]rior to trial, after the time to amend as of right has passed, ‘[t]he court should freely give leave [to amend] when justice so requires.’”) (interpolation in original) (citing Rachman Bag Co. v. Liberty Mut. Ins. Co., 46 F.3d 230, 234-35 (2d Cir. 1995)). Indeed, the March 16, 2012 deadline for amending pleadings in the case had passed only four days before High Point filed its Rule 12(c) motion on March 20, 2012. A646-50; A68-69. Under well settled Second Circuit law, “it is improper for a district court to dismiss a complaint [or counterclaim] with prejudice for failure to state a claim without giving the plaintiff notice and an opportunity to be heard and to offer an amended pleading.” Hughes v. Anderson, 449 Fed. Appx. 49, 51 (2d Cir. 2011) (non-precedential) (interpolation added) (citing Perez v. Ortiz, 849 F.2d 793, 797 (2d Cir. 1988)); A690-91. The Second Circuit has denied leave to amend only in circumstances that are inapplicable to this case, e.g., futility, undue prejudice, or delay of the court’s schedule. See, e.g., McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200-01 (2d Cir. 2007). High Point did not raise any issues regarding the specificity of BDI’s trade dress counterclaim until four days after the March 16, 2012 deadline to amend the pleadings. Under the circumstances presented here, when “a Rule 15(a) motion for 42 leave to amend is filed in response to a dispositive motion under Rule 12(b) or 12(c) based solely on the pleadings, the motion for leave to amend will be granted unless the amendment would be ‘futile.’” E*Trade Fin. Corp. v. Deutsche Bank AG, 420 F. Supp. 2d 273, 283 (S.D.N.Y. 2006) (citations omitted). As to this point, the amendment to the trade dress counterclaim would not have been futile as the district court itself noted that SNOOZIES!
’ trade dress shared characteristics with the accused products. A22. Moreover, granting BDI’s requested leave to amend would not have resulted in undue prejudice, or delay of the district court’s schedule. First, High Point was on notice of the trade dress claim and the accused products from the filing of the original counterclaim. Accordingly, there would have been no prejudice in defending against the claim. Second, the amendment would not have caused delay of the district court’s schedule as there was sufficient time remaining in discovery to serve and obtain responses to discovery regarding trade dress. Furthermore, High Point itself had requested that the court extend the discovery dates prior to the court’s ruling on High Point’s motion for summary judgment. In contrast, the dismissal with prejudice severely impairs BDI. For all of the above reasons, the district court’s extraordinary step of dismissing BDI’s counterclaim with prejudice constituted an abuse of discretion and should be reversed. 43 CONCLUSI ON For the foregoing reasons, BDI asks that this Court reverse the district court’s judgment that design patent D598,183 is invalid and reverse the district court’s dismissal of BDI’s trade dress infringement claim with prejudice. Respectfully submitted, BUYER’S DIRECT, INC. Dated: October 11, 2012 /s/ Andrew M. Ollis Andrew M. Ollis OBLON, SPIVAK, McCLELLAND, MAIER & NEUSTADT L.L.P. 1940 Duke Street Alexandria, Virginia 22314 Attorney for Appellant CERTI FI CATE OF COMPLI ANCE WI TH FED. R. APP. P. 32(a)(7)(B) Counsel for Buyer’s Direct, Inc. certifies that the body of this brief, beginning with the “Statement of Related Cases” on page 1 and ending with the last line of the “Conclusion” on page 43, contains 8667 words, in compliance with Rule 32(a)(7)(B)(i) of the Federal Rules of Appellate Procedure. October 11, 2012 /s/ Andrew M. Ollis Andrew M. Ollis Counsel for Buyer’s Direct, Inc. ADDENDUM A 1
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------X HIGH POINT DESIGN LLC, Plaintiff, -against-
BUYER'S DIRECT, INC., Defendant. ------------------------------------------------------------X BUYER'S DIRECT, INC., Counterclaim Plaintiff/ Third Party Plaintiff, -against-
MEIJER, INC., SEARS HOLDINGS CORPORATION, AND WAL-MARTS STORES, INC., Third Party Defendants. -------------------------------------------------------------X 11 CIVIL 4530 (KBF) JUDGMENT USOCSONY DOCUMENT ELECfRONICALLY FILED DOC 1: ,, ... -..r DATE FILED: ~ ' " I t ~ Plaintiff and third party defendants (collectively referred to herein as "Movants") having moved for summary judgment, Movants contend that Buyer's Direct's design for fuzzy slippers is invalid as a matter oflaw-i.e .. that the design is both obvious and merely functional, and separately, Movants having moved for judgment on the pleadings as to Buyer's Direct's trade dress counterclaim, and the matter having come before the Honorable Katherine B. Forrest, United States District Judge, and the Court, on May 15, 2012, having rendered its Memorandum and Order granting plaintiffs and third party defendants' motion for summary judgment as to invalidity; granting plaintiff's and third party defendants' motion for judgment on the pleadings with respect to defendant's trade dress claim, and directing the Clerk of the Court to enter judgment in favor of plaintiff High Point Design LLC and third party defendants Meijer, Inc., Sears Holdings Corporation, and Wal-Mart Stores, Inc. Declaring the '183 patent invalid and thus, not infringed by High Point Design LLC or Meijer, Inc., sears Holdings Corporation, and Wal-Mart Stores, Inc., it A 2
is, ORDERED, ADJUDGED AND DECREED: That for the reasons stated in the Court's Memorandum and Order dated May 15, 2012, plaintiffs and third party defendants' motion for summary judgment as to the invalidity is granted; plaintiffs and third party defendants' motion for judgment on the pleadings with respect to defendant's trade dress claim is also granted, and judgment is hereby entered in favor of plaintiff High Point design LLC and third party defendants' Meijer, Inc., Sears Holdings Corporation, and Wal-Mart stores, Inc. Declaring the '183 patent invalid and thus, not infringed by High Point Design LLC or Meijer, Inc., Sears Holdings Corporation, and Wal-Mart Stores, Inc. Dated: New York, New York May 16,2012 RUBY J. KRAJICK B TI fJS DOCUMENT WAS ENTERED ONTHEDOCKETON ______ __ Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 1 of 5
... United States Disbict urt Southern District of New ork Office of the ·Cleek U.S. Courthouse SOO Pearl Street, New York, N.Y. 0007-1213 Date: InRe: Case#: Dear Litigant, Enclosed is' a copy of the judgment entered in your case. Your.attention is directed to Rule 4(a)(l) of the F requires 1ha.t if you wish to appeal the judgment in yom case, you oftbe date of eil.1ry of the judgment (60 days if the United States is a party). -v-
( ) Rules of Appellate Procedure, which ust file a notice of appeal within 30 days an officer or agency of the United States If you wish to appeal the judgment but for any reason Y' are unable to file your notice of appeal within the required time, you may make a motion for an extensi of time in accordance with the provision of Fed. ll App. P. 4(a)(5). That rule requires you to show "exc le neglect" or "good cause" for your failure to file your notice of appeal within the time allowed. Any h motion must first be serVed upon the other patties and then filed with the Pro Se Office no later 60.days from the date of entry of the judgm.ent (90 days if the United States or an officer or agency o the United States is a party). The enclosed Forms 1, 2 and 3 cover some common si them if appropriate to your circl.JJI1Stimces. The Filing fee for a notice of appeal is $5.00 and the the "Clerk of the Court, USDC, SDNY" by certified check, m aecepted. APPEAL FORKS U.S.D.C. S.D.N.Y. CMIECF Support Unit 11ate docketing fee is $450.00 payable to order or cash. No personal checks are . . -· , Deputy Clerk Revised: May4, 2010 Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 2 of 5
United States District C urt Southern District of New ork Offiee of the Clerk U.S. Courthouse 500 Pearl Street, New York, N.Y. 0007-1213 __________ ..... -----··-----X I I I -"- I I I· l -------------------------X I NOTICE OF APPEAL I I civ. ( ) Notice is hereby given that ---------+-------------
(party) hereby to the United States Court of Appeals for the d Circuit from the Judgment [ desenoe it] entered in this action on the ---- day of ------1---
(day) (mo ) (year) (Signature) (Address) (City, State and Zip Code) Date:---------
( (Telephone Number) Note: You may use this form to take an appeal provided that it · received by the office of the Clerk of the District Court within 30 days of the date on which the judgment was entered ( 60 days if the United States or an officer or agency of the United States is a party). APJ?EAL f01!MS · IT!::: nc. S.D.N.Y. CM/ECF'SUDDort Unit 7. Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 3 of 5
FORM 1 United States District Ct urt Southern District of New ork Office of the Clerk U.S. Courthouse 500 Pearl Street, New York, N.Y. 0007-1213 ______________________ ;_ _____________ X I : I TO A NOTICE OF APPEAL -V- I I 1 civ. ( ) I ---------------------------X Pursuant to Fed. R. App. P. 4(a)(5), _____ _,If--------- respectfully (party) (party) _ __,1-------- but failed to file a requests leave to file the wjtl:rin notice of appeal out of time. desires to appeal the judgment in this action entered on notice of appeal within the required number of days because: (day) [Expla:in here the "excusable neglect'' or "good cause" which led to Y' fitilure to file a notice of appeal witlrin the required number of days.] (Signature) (Address) (City, State and Zip Code) Date:--------
( } ______ _ I (Telephone Nmnber) 1 . . You may u8e this :form, together with a copy of Form 1, . you are seeking to appeal a judgment and did not file a copy of Form 1 within the required time. If you llow this procedure, these forms must be received in the office of the Clerk of the District Court no later 60 days of the date which the judgment was entered{90 days if the United States or an officer or agen of the United States is a party). APl?BAI.o FORMS U.S.D.C. S.D.N.Y. CM/BCF Support Unit 3 R-evised: May 4. 2010 Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 4 of 5
r • 'I; ,. Court will receive it within the 30 days of the dare on FORM 3 United States District Southern District of New York -V-
Office of the Clerk u.s. Courthouse 500 Pearl Street, New York, N.Y. ·----·--X I I I I I I I ----·--------------------------X AFFIRMATION OF SERVICE I civ. ( ) I,---------------' penalty of perjury that I have· upon Date:-----------
NewYorlc, NewYodc APPEAL FQRMS U.SD.C. S.D.N.Y. CMIECF 'Support Unit 5 (Signature) (Address} (City, State and Zip Code) Revised: May4, 2010 Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 5 of 5
.. . . ' United States District Co Southern District of New ork Office of the Clerk U.S. Courthouse SOO Pearl Street, NeW York, N . Y ~ 1 -1213 ------------ ---
X I I OTICE OF APPEAL ·-----------
I I I AND FOREXTENSIONOFTJME I I ----------------------------X ( ) l. Notice is hereby given that ----------1------- hereby appeals to (party) the United States Court of Appeals for the Second Circuit :from e judgment entered on ------
[Give a description of the jud ent] 2. In the event that this form was not received in the Clerk office within the required time - - - - - - ~ - - - - - - respectfully requests comt to grant an extension of time in (party} accordance with Fed. R App. P. 4(a)(5). a. In support of this request, -------+--------- states that (party) this Court's judgment was received on ---------1--- and that 1his form was mailed to the (date) comton --------
(date) (Signature) (Address) (City, State and Zip Code) Date:-------
( ) (Telephone Number) Note: You may use this form if you are mailing your notice oi appeal and are not sme the Clerk of the APP.Jii:AL PORMS U.S.D.C. S.D.N.Y. CMIBCF Support Unit 4 Revised: May 4, 2010 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 1 of 16
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------X HIGH POINT DESIGN LLC, Plaintiff, -v-
BUYER'S DIRECT, INC., Defendant. ----- -----X BUYER'S DIRECT, INC., Counterclaim Plaintiff/ Third Party Plaintiff, -v-
HIGH POINT DESIGN LLC, Counterclaim Defendant, MEIJER, INC., SEARS HOLDINGS CORPORATION, AND WAL-MART STORES, INC. I Third Party Defendants. -----------------------------------X KATHERINE B. FORREST, District Judge: USDCSDNY DOCUMENT ELECTRONICALLY FILED DOC#: 11 Civ. 4530 (KBF) MEMORANDUM & ORDER This is a case about whether a design patent for fuzzy slippers is valid and enforceable--and therefore whether plaintiff High Point Design LLC ("High Point") and third party defendants Meijer, Inc., Sears Holding Corporation, and Wal-Mart Stores, Inc. (the "third party defendants") may be held liable 1 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 2 of 16
for infringement. As set forth below, the answer to both questions is "no." On July 1, 2011, High Point brought a two-count action against defendant Buyer's Direct, Inc. ("Buyer's Direct") for declarations that High Point's particular version of fuzzy slippers do not infringe the design patent owned by defendants and that such patent is, in any event, invalid and unenforceable. (Dkt. No. 1.) Buyer's Direct responded with a two-count counterclaim for patent and trade dress infringement, and joined as third party defendants three retailers--Meijer, Inc., Sears Holdings Corporation and Wal-Mart Stores, Inc.--to (and through) whom plaintiff is alleged to sell its slippers (Dkt. No. 13.} After a period of discovery, plaintiff and third party defendants (collectively referred to herein as "Movants"} have now moved for summary judgment. Movants contend that Buyer's Direct's design for fuzzy slippers is invalid as a matter of law--i.e., that the design is both obvious and merely functional. Separately, Movants seek judgment on the pleadings as to Buyer's Direct's trade dress counterclaim. This Court has carefully examined Buyer's Direct's patent--
Patent No. D598,183S (the "'183 patent"}--and finds that it is both obvious as against the prior art--at the end of the day it is a rather run-of-the-mill fuzzy slipper--and in all events, 2 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 3 of 16
its features are merely functional. The face of the patent itself leaves no doubt that there is nothing ornamental about the slippers. Accordingly, plaintiff and third-party defendants' motion for summary judgment is GRANTED. In addition, this Court finds that defendant
S counterclaim and third party claim for trade dress infringement is conclusory and fails to meet the minimal requirements for claims of this sort. Given the late stage of these proceedings, this Court dismisses that claim with prejudice. On the basis that Buyer's Direct's other counterclaim is for a declaration of infringement of the '183 patent by High Point and the Court finds the '183 patent invalid, Buyer's Direct's remaining counterclaim is rendered moot. This action is therefore dismissed in its entirety. I. FACTS No one can seriously doubt that slippers with an opening for a foot that contain a fuzzy (fleece} lining and have a smooth outer surface have been around for years. Indeed, the Court assumes that many readers of this opinion have had the experience of having placed their own foot in such a slipper. Nevertheless, in January 2009, Buyer's Direct applied for a design patent that appears to look like many slippers that are widely available. The Patent and Trademark Office ("PTO"}, 3 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 4 of 16
perhaps not being as familiar with slippers as some, saw fit to issue the patent on August 18, 2009, as Patent No. 0598,1838. The '183 patent references nine pieces of prior art dating back to 1942. That comparatively limited list of prior art is itself somewhat surprising given how ubiquitous similar fuzzy slippers are in retail stores. It is suggestive of an absence by slipper manufacturers of a need or desire for exclusive design rights/ or an assumption that such exclusivity could not reasonably be sought
1 let alone obtained, given the similarity and proliferation of many designs. The '183 patent is unremarkably entitled "slipper." It consists of a single claim: "The ornamental design for a slipper/ as shown and described." The slipper shown has a smooth exterior with a fuzzy interior. To the ordinary observer {about which more shall be said in a moment), it looks like many slippers that I purchased and wore throughout my youth some time ago--and certainly before 2009. Put another way, and as discussed further below, there does not appear to be anything ornamental about the design shown in the '183 patent at all.
1 Among the individuals deposed in this action was Richard Brayton/ President of Woolrich/ Inc., the consumer apparel 1 As discussed below, the critical legal basis for disposing of this matter rests not on the Court's anecdotal memories and assumptions of common sense obviousness, but rather on the facts relating to prior art available in the marketplace prior to the time that Buyer's Direct even applied for the '183 patent. 4 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 5 of 16
company. See Decl. of Jeffrey M. Kaden ("Kaden Decl. 11
) (Dkt. No. 34) Ex. 8 (Braden Dep. Tr.) .) Brayton testified that Woolrich had two slippers that Woolrich began to market in the United States in 2006 and that bear striking similarities to the design of the '183 Patent: Woolrich's "Penta
and "Laurel Hill/1 slippers. Woolrich's Penta slipper was marked at Exhibit 7A to Brayton's deposition and he identified it as a slipper that his company had designed in 2004 and had been selling to the public since 2005. (The Court returns below to the fact that this Penta slipper looks indistinguishable from the drawing shown in the '183 Patent.) Brayton's testimony was confirmed by his authentication of advertisements for sale for the Penta slipper in at least two 2006 Woolrich catalogues (Kaden Decl. Exs. 10, 11 (also marked as Brayton Dep. Exs. 6, 8)), the catalogue price is denominated in u.s. dollars and bears a mailing address to an individual in New York State, making clear (as Brayton so testified) that the slipper was offered for sale in the United States since that time. Brayton confirmed U.S. sales in his deposition testimony. In addition, Brayton testified that Woolrich continued to advertise and sell the Penta slipper in catalogues throughout 2007 (Kaden Decl. Exs. 13-16 (marked as Brayton Dep. Exs. 9, 11-
13)), and that the Penta was also offered for sale in 2008 and 2009. 5 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 6 of 16
The Penta slipper was joined by another fuzzy slipper that woolrich designed in 2006 and started to sell in 2007 called the "Laurel Hill" slipper. Brayton identified the Laurel Hill slipper as Exhibit 10-A at his deposition. That slipper again, while having certain differences with the Penta slipper that are insubstantial and might be referred to as streamlining, nonetheless has the precise look that an ordinary observer would think of as a physical embodiment of the drawings shown on the '183 Patent. Brayton testified that but for some minor changes, the slippers are in fact the same. (Kaden Oecl. Ex. 8 at 57 ("I would say it's essentially the same slipper.").) After 2007, the Laurel Hill slipper became part of a line of footwear sold by the Sierra Trading Post and that it is currently for sale through that line and retailer. Among the prior art cited in the '183 patent are U.S. Patent Nos. 0566,934 and 0540,517. (Kaden Oecl. Exs. 17-18.) Each of those design patents depicts slippers with a pattern of small dots on the bottom surface. High Point does not make a slipper that so closely resembles the drawings shown on the face of the '183 patent as the Penta and Laurel Hill slippers. High Point's slipper is marketed commercially under the name "JAQUES MORET Fuzzy Babba Slipper Socks." (Kaden Oecl. Ex. 19.) A photograph of that slipper shows a slipper that quickly stands out due to its 6 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 7 of 16
large, colorful round "dots,, or "balls
that are imprinted on the top and bottom surfaces of the slipper. ( Id. ) An ordinary observer would describe it as looking "floppy
--hence, the unsurprising description of it as a "Slipper Sock.
High Point does not contest that it sells its slipper commercially in the United States. Third party defendants do not contest that they sell High Point,s slipper, and thus, they join in each of High Point,s arguments regarding the '183 patent invalidity. In terms of its trade dress claim, Buyer,s Direct asserts that the slippers sold via the '183 patent, sold under the commercial name "Snoozies,
"have a distinctive and recognizable overall look and feel that constitutes protectable trade d r e s s . ~ ~ (Countercl. (Dkt. No. 13) ~ ~ 25-26.) Buyer,s Direct also contends that Snoozies have acquired secondary meaning in the marketplace and that the trade dress is non-functional and ornamental. (Id. ~ ~ 27-28.) DISCUSSION I. STANDARD OF REVIEW In reviewing a motion for summary judgment, this Court must determine whether there are material disputes of fact that must be resolved by a trier of fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). If the party opposing a summary judgment motion does not raise a triable issue of fact, the 7 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 8 of 16
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56; Celotex, 477 u.s. at 324. The Court must construe the facts and draw all reasonable inferences in favor of the non-
moving party. McClellan v. Smith, 439 F.3d 137, 144 (2d Cir. 2006}. To demonstrate the existence of a material, disputed issue of fact, the non-movant must do more than rely upon conclusory allegations or speculation--i.e., it "must offer some hard evidence showing that its version of events is not wholly fanciful." D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998}. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 u.s. 242, 249-50 (1986}. II. RELEVANT PATENT LAW PRINCIPLES A. Presumption of Validity The patent laws provide that a design patent may be granted for "any new, original, and ornamental design for an article of manufacture." 35 U.S.C. § 171. As with any patent, once it has been issued, a design patent carries a presumption of validity that can generally only be overcome only by a showing of clear and convincing evidence. 35 u.s.c. § 282; Microsoft v. i4i Ltd. P'ship, 131 S. Ct. 2238, 2245 (2011}. However, if at the time that the PTO was reviewing a patent application, it did not have before it certain prior art (which, as discussed below, was the case here with respect to the Woolrich slippers}, its 8 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 9 of 16
judgment may lose significant force and a challenger's burden may be easier to sustain. i4i Ltd. P'ship, 131 S. Ct. at 2251. B. Obviousness One defense to patent validity is that the patent "would have been obvious at the time the invention was made to a person having ordinary skill in the art.'' 35 U.S. C. § 103 {a) . There is no exception to that rule for design patents. Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1384 {Fed. Cir. 2009). Whether or not an invention is "obvious
is a question of law. See Crocs, Inc. v. Int'l Trade Commission, 598 F.3d 1294, 1308 {Fed. Cir. 2010). In order to make this determination, courts ask four questions: {1) the scope and content of prior art; (2) the level or ordinary skill in the art; (3) the differences between the prior art and the claimed invention; and (4) the extent of any objective indicia of non-obviousness. Id.; see also Advanced Design Display Systems, Inc. v. Kent State University, 212 F.3d 1272, 1284-85 (Fed. Cir. 2000). In the context of design patents, the Federal Circuit has held that the inquiry is whether one skilled in the prior art would have combined the teachings of that art "to create the same overall visual appearance.
Durling v. Spectrum Furniture Co., Inc., 101 F.3d 100 (Fed. Cir. 1996), distinguished on other grounds by Egyptian Goddess, Inc. v. Swisa, 543 F.3d 665, 679 9 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 10 of 16
{Fed. Cir. 2008). To undertake that inquiry, the Federal Circuit has outlined a two-step process. First, the Court must find a "primary reference"--that is, something in existence, the design characteristics of which are basically the same as the claimed design." Durling, 101 F.3d at 103. Second, after that primary reference has been located, additional references may be used "to modify it to create a design that has the same overall visual appearance of the claimed design." Id. Once the court has undertaken that comparison, then it must undertake the "ordinary observer test/ not the view of one skilled in the art." Titan Tire Corp., 566 F.3d at 1381-82. The ordinary observer test for obviousness is that same as that for patent infringement: they are flip sides of one another. See Egyptian Goddess/ Inc.
1 543 F.3d at 678. That test asks whether an ordinary observer, familiar with the prior art
1 would be deceived into thinking that the accused design was the same as the patented design. See id. at 677-78. Movants assert that the Woolrich Penta and Lauren Hill slippers constitute marketplace prior art that this Court should consider as the primary reference against which the obviousness of the '183 patent is measured. They also note that those two slippers were not before the PTO at the time that it was considering the defendant
S application of the '183 patent. Accordingly, this Court can take that fact into consideration 10 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 11 of 16
when determining how much deference the PTO's decision should be given. See i4i Ltd. P'ship, 131 S. Ct. at 2252. The overall visual effect created by the Woolrich prior art is the same overall visual effect created by the '183 patent. To an ordinary observer, they are the same slippers. The only difference between the slippers relates to the sole of the slippers, which is quite minor in the context of the overall slipper. Even if, however, this Court were to find that the differences in the sole design were of any note, the design of the dots on the '183 patent are anticipated by the dots on the two design patents that were before the PTO during the prosecution of the patent: D566
934 and D540
517. Since both of those design patents were noted on the face of the '183 patent, and since both relate to slippers, they would have been available to a slipper designer skilled in the art--and would have easily suggested the addition of "dots" to the sole of a slipper. Combining the dots shown on those two design patents with the prior art in the Woolrich slipper would have been obvious to any designer. That combination would have created a slipper with a virtually identical visual impression as Buyer's Direct's '183 patent. C. The '183 Patent is Primarily Functional Design patents only protect ornamental features--not functional aspects of an invention. OddzOn Prods. v. Just Toys, 11 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 12 of 16
Inc., 122 F.3d 1396, 1405 {Fed. Cir. 1997). When a design patent's primary features are functional rather than ornamental, it may be declared invalid. See, e.g., PHG Techs., LLC. V. St. John Cos., Inc., 469 F.3d 1361, 1366 (Fed. Cir. 2006). A review of the drawings on the face of the '183 patent as well as a review of the physical slipper attached as Exhibit 2 to the Declaration of David A. Boag ("Boag Decl.") (Dkt. No. 38) leaves little doubt that all major characteristics of this slipper are functional. It is a slipper that completely covers the foot; that is a functional design to provide complete foot warmth and protection. That's the primary function of innumerable slippers. The slipper at issue has a fuzzy interior for comfort--again, a functional characteristic that many slippers share. The fuzz overflows can be characterized as "ornamental," but can also be characterized as functional--i.e., as providing an extra element of comfort. It certainly cannot be said that the slipper shown in the '183 patent drawings is "primarily ornamental." It is therefore invalid for that reason as well. See Arminak & Assoc., Inc. v. Saint-Gobain Calmar, Inc., 501 F.3d 1314, 1319 (Fed. Cir. 2007), cert. denied, 553 u.s. 1102 (2008) .
2 2 Upon close inspection, it might be the case that the particular arrangement of the non-skid dots on the sole of Buyer's Direct's slipper could be considered "ornamental"--though since those are typically used while walking and not seen, it is analytically hard to get one's head around an ornamental design whose potentially unique look is most apparent to the floor. 12 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 13 of 16
D. The Expert Opinion and Consideration of the Prior Art Buyer's Direct has submitted a declaration from Lance Rake (Dkt. No. 39), a proposed expert in industrial design, as supportive of its claim that there are sufficient differences between the Woolrich prior art and the '183 Patent to defeat the obviousness test. In the context of the \\ordinary observer" test, the Court is not concerned with whether an expert could find differences, but rather whether an ordinary observer would find substantial similarity. As the Supreme Court stated more than one hundred years ago, \\To constitute infringement of a patent for a design, it is not essential that the appearance should be the same in the eye of the expert. The test of a patent for a design is the eye of an ordinary observer . . . II Gorham Co. v. White, 81 U.S. 511, 527 (1871) . Specifically regarding differences pointed out by an expert/ the Court said that if that was always required \\there never could be piracy of a patented design/ for human ingenuity has never produced a design
1 in all its details
1 exactly like another, so like, that an expert could not distinguish them." Id. Thus, Mr. Rake's declaration does not get Buyer's Direct over the hurdle of the ordinary observer test. 13 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 14 of 16
III. THE TRADE DRESS CLAIM Movants also seek to dismiss Buyer's Direct's trade dress claim under Fed. R. Civ. P. 12(c). Motions under Rule 12(c) of the Federal Rules of Civil Procedure are analyzed similarly to motions brought under Rule 12(b) (6). Nogbou v. Mayrose, 400 F. Appx. 617, 619 (2d Cir. 2010) (summ. order); Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). Accordingly, this Court assumes the truth of the allegations in the counterclaim, draws all inferences in favor of the counterclaimant, and seeks to determine whether the allegations state a plausible claim. Patel, 259 F.3d at 126. Movants' primary assertion, with which this Court agrees, is that in order to state a claim for trade dress infringement, a plaintiff must the specific characteristics and scope of the trade dress at issue. See Sherwood 48 Assoc. v. Sony Corp. of Am., 76 Fed. Appx. 389, 391 (2d Cir. 2003). Buyer's Direct has failed to do so. Mere conclusory reliance on the overall look of a product is insufficient to meet that requirement. Nat'l Lighting Co., Inc. v. Bridge Metal Indus., LLC, 601 F. Supp. 2d 556, 562 (S.D.N.Y. 2009). Buyer's Direct's sole allegation in support of the characteristics and scope of its allegedly distinctive trade dress is that the slippers "have a distinctive, immediately recognizable overall look and feel that constitutes protectable 14 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 15 of 16
trade dress." (Countercl. ~ 2 5 ; Third-party Compl. ~ 44.) As set forth above, that is inadequate as a matter of law. While the Court notes that there are some trade dress characteristics shared between High Point's slipper and the embodiments provided to the Court (Boag Decl. Exs. 2-3), that does not eliminate the pleading deficiency. At this stage of the litigation, the Court is unwilling to entertain an amendment to the pleadings and therefore dismisses this claim with prejudice. CONCLUSION For the aforementioned reasons, plaintiff's and third party defendants' motion for summary judgment as to invalidity is GRANTED; plaintiff's and third-party defendants' motion for judgment on the pleadings with respect to defendant's trade dress claim is also GRANTED. The Clerk of the Court is directed to terminate the motion at Docket No. 31 and to terminate this action. The Clerk of the Court is further directed to enter a judgment in favor of plaintiff High Point Design LLC and third party defendants Meijer, Inc., Sears Holdings Corporation, and Wal-Mart Stores, Inc. declaring the '183 patent invalid and 15 Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 16 of 16
thus, not infringed by High Point Design LLC or Meijer, Inc., Sears Holdings Corporation, and Wal-Mart Stores, Inc. SO ORDERED: Dated: New Y ~ k , New York May _(.S_, 2012 KATHERINE B. FORREST United States District Judge 16 CERTI FI CATE OF SERVI CE I hereby certify that the foregoing BRIEF FOR APPELLANT BUYER’S DIRECT, INC. was served by email (per agreement), this 11th day of October, 2012 on counsel for appellees High Point Design LLC as follows: J effrey Mark Kaden, Esq. Ariel Samuel Peikes, Esq. Steven Stern, Esq. GOTTLI EB RACKMAN & REI SMAN, P.C. 270 Madison Avenue 8
Floor New York, New York 10016 jkaden@grr.com apeikes@grr.com sstern@grr.com Tel: (212) 684-3900 Fax: (212) 684-3999 By: /s/ Andrew M. Ollis More From This UserLandscape Forms v. Anova - ComplaintCoastal Racks v. Granby - ComplaintRespire v. OravanOSA - ComplaintSpectrum Diversified Designs v. Argento SC By Sicura - ComplaintZipbuds v. 2X Mobile - ComplaintMMI v. Metal Motorsports - ComplaintTwelve South v. Spinido - ComplaintPro-Troll v. Shortbus Flashers - ComplaintJohnsonville Sausage v. Kelment Sausage - ComplaintCrocs v. Toys R Us - ComplaintU.S.A. Dawgs v. Crocs - ComplaintBattle Sports Science v. Shock Doctor - ComplaintDiscovery Inc. v. Lisi Group - ComplaintBradshaw Medical v. MedTorque - Second Amended ComplaintLifetime Brands v. Catchagecko - ComplaintTecmen Elecs. v. Menard - ComplaintCambria Company v. Stylen Quaza - ComplaintNavajo Nation v. Urban Outfitters - Order Denying SJ on Fair UsePS Prods. v. Dawson Family Heritage - ComplaintOakley v. Sunbelt - ComplaintFirestar Diamonds v. Gold-N-Diamonds - ComplaintGryphon Mobile v. Volitiger - ComplaintGryphon v. Volitiger - Order Granting Default Judgment1924 CD 71 - HughesOakley v. New South Bay - Complaint
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