Court Opinion

ID: 211779
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:31:30+00
Date Added: 2024-06-11T17:28:08.560100
License: Public Domain

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

 United States Court of Appeals for the Federal Circuit
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                             HARTCO ENGINEERING, INC.,

                                                         Plaintiff-Cross Appellant,

                                             v.

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

                                                         Defendants-Appellants.

                            __________________________

                            DECIDED: July 25, 2005
                            __________________________

Before CLEVENGER, GAJARSA, and PROST, Circuit Judges.

PROST, Circuit Judge.

       Defendants-Appellants Wang’s International, Inc. (“Wang’s”), Pilot Automotive,

Inc., Pep Boys – Manny, Moe & Jack, Inc., and Overton’s, Inc. (collectively,

“appellants”)1 appeal from a denial of their motion for judgment as a matter of law or

alternatively for a new trial by the United States District Court for the Eastern District of

Louisiana after a jury verdict of willful patent and trade dress infringement, as well as

damages.     Hartco Engineering, Inc. (“Hartco”) cross-appeals the damage award,

       1
              Pep Boys – Manny, Moe & Jack, Inc. and Overton’s, Inc. are customers of
Wang’s International, Inc. and Wang’s sister company, Pilot Automotive, Inc., with
limited involvement in the activities that gave rise to this action. Specifically, they are
only involved in the patent infringement claim.
arguing that it should be increased. The patent at issue, U.S. Patent No. D401,194

(“the ’194 patent”), is directed to a design for a decorative marine-propeller device that

attaches to the trailer hitch of a vehicle and spins from the force of moving air similar to

a windmill. The trade dress at issue generally relates to the design of the product, the

decorative hitchcover, and the packaging of that product. Because the jury findings on

design patent and product design trade dress infringement are not supported by

substantial evidence, we reverse the district court’s denial of appellants’ motion for

judgment as a matter of law on those decisions. We affirm the district court’s denial of

appellants’ motion for judgment as a matter of law on trade dress infringement on

packaging, vacate the damages decision, and dismiss the cross-appeal.

                                    I. BACKGROUND

       Hartco is the owner of the ’194 patent, issued on November 17, 1998, which

claims a design for a novelty trailer hitchcover featuring a three-blade marine propeller.

The hitchcover is a decorative device that spins from the force of moving air when

attached to the trailer hitch of a vehicle.      In 1998, Wang’s, a major distributor of

automotive accessories, agreed to purchase and distribute the hitchcovers from Hartco

for two years under Wang’s “BULLY” trademark. Near the end of 2000, when the

licensing agreement was due to expire, Hartco proposed to raise the price by

approximately forty percent to correspond to the price Hartco charged other distributors.

Wang’s declined Hartco’s offer, opting instead to design its own four-blade hitchcover

alleging that there were certain defects in Hartco’s product, including a poor chrome

finish and problems with the propeller rotation. Wang’s patent application on its four-

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blade propeller was issued as U.S. Patent No. 6,086,438 (“the ’438 patent”) on July 11,

2000.

        While the agreement was in effect, Wang’s marketed the licensed Hartco product

with a blue insert card showing a picture of the product on the upper right corner and

clear plastic packaging to display the product. The blue insert card also included both

Wang’s “BULLY” trademark and Hartco’s “PROP’R-HITCHCOVER” trademark on the

upper left corner, a green curved stripe underneath the lettering for Hartco’s trademark,

and a yellow ten-pointed star below the green stripe with the slogan “rotates while you

drive” written inside the star. Following the agreement’s expiration in December 2000,

Wang’s began marketing its new four-bladed hitchcover product without the Hartco

trademark, the green curved stripe, or the yellow ten-pointed star that appeared on the

earlier licensed product. Additionally, Wang’s added the ’438 patent number and model

number. Wang’s also changed the slogan on the packaging from “rotates while you

drive” to “rotates freely as you drive.” However, Wang’s continued to use the blue insert

card with a picture of the product in use on the upper right corner, its “BULLY”

trademark on the upper left corner, and clear plastic packaging to display the product.

Hartco packaged its own three-bladed product also in a clear plastic case with a blue

insert card that had a picture on the same corner, but without any slogan, curved stripe,

or star.

        In May 2001, Hartco filed a complaint against appellants alleging patent and

trade dress infringement. On October 7, 2003, the district court issued a pre-trial order

adopting appellants’ construction of the scope of the ’194 patent of “an automotive hitch

cover having a propeller with three blades attached to an elongate hollow tongue of

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generally square cross section having four circular features in the interior corners of the

tongue and a fifth central circular feature, all visible on the end remote from the

propeller.” A jury trial was then held on March 22, 2004. After a three-day trial, the jury

found willful patent and trade dress infringement and awarded $1,799,845 in damages

to Hartco.    The district court thereafter entered final judgment on the jury verdict

awarding injunctive relief and monetary relief to Hartco.       Because the jury award

erroneously accounted for both Hartco’s lost sales and Wang’s profits, the district court

reduced the amount of the award to $826,749, Hartco’s lost sales, plus pre-judgment

interest.    The district court then increased the damages award by $383,936 for

enhanced damages, and awarded $190,000 for attorney fees and $40,547 for out-of-

pocket expenses. On July 13, 2004, the district court denied appellants’ motion to enter

a judgment as a matter of law in their favor or, alternatively, to grant a new trial. This

appeal ensued.

       This court has jurisdiction over this appeal under 28 U.S.C. § 1292(c)(2) and 28

U.S.C. § 1295(a)(1).

                                    II. DISCUSSION

       This court reviews a jury finding of infringement under a “substantial evidence”

test. Union Carbide v. Shell Oil Co., 308 F.3d 1167, 1177 (Fed. Cir. 2002). We reverse

the denial of a motion for judgment as a matter of law if there is “no legally sufficient

evidentiary basis for a reasonable jury to find for that party on that issue.” Reeves v.

Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000).

       The issues on appeal involve design patent and trade dress infringement, as well

as damages.

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                                    A. Design Patent

       The jury found that appellants willfully infringed Hartco’s design patent of a

decorative hitchcover. Appellants appeal this decision on the grounds that the verdict of

patent infringement is not supported by substantial evidence, pointing out the

differences, namely the extra (fourth) blade and the lack of the “four circular features”

between the accused device and the patented design. Appellants additionally argue

that the district court erred in its jury instructions for the patent infringement claim by

failing to instruct the jury to apply the claim construction and by directing the jury to

compare the accused device to the commercial product instead of the claimed product.

Finally, appellants contend that the district court erred by allowing Hartco to show a

videotape of the two devices in motion, which appellants argue obscured the

differences.

       Hartco responds that the differences between the accused device and the

patented design of the extra blade and the “four circular features” are irrelevant because

the two different designs are impossible for customers to distinguish. Hartco argues

that an addition of a fourth blade and an absence of the four circular features are not

substantial changes and that the jury correctly found that the products are visually the

same. Furthermore, Hartco responds that the jury instructions were proper, arguing that

the device claimed by the Hartco patent and its commercially produced device are

identical.

       Design patent protection is very narrow, covering only what is shown in the

drawings in the patent. In re Mann, 861 F.2d 1581, 1582 (Fed. Cir. 1988); see also

Elmer v. ICC Fabricating, 67 F.3d 1571, 1577 (Fed. Cir. 1995). Protection is further

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limited to only the novel ornamental features of the patented design. OddzOn Prods. v.

Just Toys, 122 F.3d 1396, 1405 (Fed. Cir. 1997); Keystone Retaining Wall Sys., Inc. v.

Westrock, Inc., 997 F.2d 1444, 1450 (Fed. Cir. 1993); Lee v. Dayton-Hudson Corp., 838

F.2d 1186, 1188 (Fed. Cir. 1988). Thus, if a design contains functional and ornamental

features, the patentee must show the alleged infringement based on the ornamental

features only. OddzOn, 122 F.3d at 1405; Read Corp. v. Portec, Inc., 970 F.2d 816,

825 (Fed. Cir. 1992).

      We agree with the district court’s depiction of the drawings of the ’194 patent as

showing a hitchcover “with three blades” attached to a tongue “having four circular

features” that are visible.    Only these ornamental aspects of Hartco’s patented

hitchcover design, not the broader, general hitchcover concept that merely mimics a

propeller, are protected. See OddzOn, 122 F.3d at 1405; see also Durling v. Spectrum

Furniture Co., 101 F.3d 100, 104 (Fed. Cir. 1996). Therefore, Hartco’s design patent

does not cover any hitchcover shaped as a propeller with any number of blades,

regardless of its ornamental features. See OddzOn, 122 F.3d at 1400. Specifically, the

inclusion of blades, a nose, and a tongue are part of the general propeller concept and

not protected ornamental aspects independent of their unique configuration.        See

Durling, 101 F.3d at 104. Instead, only the number and shape of the blades, as well as

the four circular features, are ornamental aspects, subject to patent protection. Hartco

chose to include these features in its design application and limited the scope of its

patent claim to that design, see Elmer, 67 F.3d at 1577.

      Following claim construction, determining patent infringement next requires

comparison of the patented and accused designs overall. Contessa Food Prods. Inc. v.

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Conagra, Inc., 282 F.3d 1370, 1376 (Fed. Cir. 2002); Elmer, 67 F.3d at 1577.

“Comparison to the accused product includes two distinct tests, both of which must be

satisfied in order to find infringement: (a) the ‘ordinary observer’ test, and (b) the ‘point

of novelty’ test.” Contessa, 282 F.3d at 1377; Unidynamics Corp. v. Automatic Prods.

Int’l, Ltd., 157 F.3d 1311, 1323 (Fed. Cir. 1998); Gorham Co. v. White, 81 U.S. (14

Wall.) 511, 528 (1871). The two tests are separate, with the “point of novelty” test

requiring proof that the accused device infringes the novel aspects of patented design

as distinct from the prior art. Contessa, 282 F.3d at 1377; Litton Sys., Inc. v. Whirlpool

Corp., 728 F.2d 1423, 1444 (Fed. Cir. 1984). Under the ordinary observer test, “[o]ne

must compare the ornamental features of the patented design, as shown in all of the

drawings, to the features of the alleged infringing product visible at anytime during

normal use of the product.” Contessa, 282 F.3d at 1380.

       Comparing the two designs, we disagree with the district court that the jury

verdict of design patent infringement was supported by substantial evidence.            The

designs do not have to be identical to an accused device to be protected, see OddzOn,

122 F.3d at 1405, but Hartco’s patented design is limited to the design it claimed with

the three-blades and four circular features.       Appellants’ four-blade product has a

substantially different overall ornamental appearance from the claimed three-blade

product. See Elmer, 67 F.3d at 1577-78. As no reasonable jury could have concluded

that the overall visual appearance of the claimed design is substantially similar to the

accused design, we do not need to employ the point of novelty test. See KeyStone

Retaining Wall Sys., 997 F.2d at 1451. We thus reverse the district court’s denial of

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judgment of noninfringement as a matter of law, together with the award of damages for

design patent infringement.2

                               B. Trade Dress Infringement

       The jury found that the appellants infringed Hartco’s trade dress of the hitchcover

design and packaging. Appellants appeal the denial of their motion for judgment as a

matter of law on trade dress infringement as to both product configuration and

packaging, also contending that the district court erred in its jury instructions for the

trade dress infringement claims.        Specifically, they argue that the instructions

erroneously lacked any discussion of the elements to prove secondary meaning for

product configuration and inherent distinctiveness for packaging.

       Hartco responds that trade dress can be protected absent secondary meaning.

Thus, under its interpretation of trade dress law, Hartco further argues that the jury was

properly instructed, rendering a reasonable verdict. Hartco alternatively argues that,

even if secondary meaning is necessary to prove trade dress infringement on the

product and the package, it showed secondary meaning and that this court should

therefore uphold the jury verdict.

       Protection for trade dress is provided by § 43(a) of the Lanham Act, which

creates a federal cause of action for trade dress infringement. See 15 U.S.C. § 1125(a)

(1994); see also Elmer, 67 F.3d at 1578. Trade dress refers to product packaging and

the design of the product itself, and involves the total image, including the size, shape,

color, and texture. Elmer, 67 F.3d at 1578. Trade dress is protectible under § 43(a) if it

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

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is distinctive, either inherently or as acquired through secondary meaning, and

nonfunctional. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992). “It is,

of course, also undisputed that liability under § 43(a) requires proof of the likelihood of

confusion.” Id. “Because trade dress issues are not unique to the exclusive jurisdiction

of the Federal Circuit, we defer to the law of the regional circuit in which the district court

sits,” id., and thus, we apply Fifth Circuit law on this issue. See Imagineering, Inc. v.

Van Klassens, Inc., 53 F.3d 1260, 1263 (Fed. Cir. 1995); see also KeyStone Retaining

Wall Sys., 997 F.2d at 1447.

                                     1. Product Design

       Under Fifth Circuit law, trade dress protects only the overall appearance of a

product. Eng’g Dynamics v. Structural Software, 26 F.3d 1335, 1350 (5th Cir. 1994);

Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806, 812 (5th Cir. 1989); Elmer, 67

F.3d at 1578. In order to prevail on its trade dress infringement claims for the product

configuration, Hartco was required show that the trade dress was “nonfunctional,

distinctive, and has acquired a secondary meaning.” See Eng’g Dynamics, 26 F.3d at

1350. Second, it had to show a likelihood of customer confusion. Id.; see also Taco

Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1117-18 (5th Cir. 1991), aff’d, 505

U.S. 763 (1992).

       We reject Hartco’s argument that the hitchcover design is inherently distinctive

and thus it does not have to show that the trade dress acquired secondary meaning as

to the product. See Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 212 (2000).

Rather, a product design cannot be inherently distinctive as a matter of law. Id. at 215.

Therefore, it is necessary to determine whether Hartco met its burden of presenting

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sufficient evidence to support a finding of secondary meaning. See Sugar Busters LLC

v. Brennan, 177 F.3d 258, 269 (5th Cir. 1999). Under Fifth Circuit law, length and

nature of use, sales volume and advertising, consumer surveys and testimony, and

appellants’ intent are the relevant factors regarding secondary meaning. Pebble Beach

Co. v. Tour 18 I, 155 F.3d 526, 541 (5th Cir. 1998).

       Reviewing the record, we note that although Hartco sold its hitchcover for four

years before appellants released their own version, it offered no evidence that sales

volume, advertising, nature of use, or appellants’ intent proved that its trade dress had

acquired secondary meaning. Moreover, Hartco introduced no survey evidence, which

is the most direct and persuasive evidence for establishing secondary meaning. Sugar

Busters, 177 F.3d at 269. We thus conclude that Hartco did not meet its burden of

establishing secondary meaning and thus that the trade dress of the product is not

protectible. See Two Pesos, 505 U.S. at 766, n.4; see also Inwood Labs., Inc. v. Ives

Labs., Inc., 456 U.S. 844, 851, n.11 (1982). Therefore, substantial evidence does not

support a finding of trade dress infringement on the product design. As no reasonable

jury could have concluded that Hartco showed secondary meaning, we reverse the

district court’s denial of judgment of noninfringement as a matter of law, together with

the award of damages relevant to trade dress infringement.

                                       2. Packaging

       Unlike product configuration, product packaging is capable of being inherently

distinctive and thus a showing of secondary meaning may be unnecessary to prevail on

a trade dress claim. Two Pesos, 505 U.S. at 766. Packaging trade dress is inherently

distinctive if its intrinsic nature identifies the source of a product. In this case, Hartco’s

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packaging trade dress includes the clear plastic package showing the product inside

and the blue cardboard background with white lettering identifying the product and

Hartco’s trademark “PROP’R-HITCHCOVER” with red lines in the upper left hand

corner and a picture of the product in position on a vehicle and the product’s patent

information in the upper right hand corner.        Separately, these elements may be

descriptive and thus not subject to trade dress protection. See Taco Cabana, 932 F.2d

at 1120.    However, taken together, Hartco’s trade dress is ipso facto inherently

distinctive and thus, subject to protection under § 43(a) of the Lanham Act. See id.

       We next determine whether the packaging of the accused trade dress creates a

likelihood of consumer confusion. Under Fifth Circuit law, the seven elements relevant

to determining consumer confusion are: “(1) the type of mark allegedly infringed, (2) the

similarity between the two marks, (3) the similarity of the products or services, (4) the

identity of the retail outlets and purchasers, (5) the identity of the advertising media

used, (6) the defendant’s intent, and (7) any evidence of actual confusion.” Pebble

Beach, 155 F.3d at 543. Here, Hartco presented evidence that the forms of trade dress

are similar, the products are interchangeable, the purchasers and advertisers are the

same, and there was actual confusion among customers. Hartco further presented

evidence that Wang’s intended to copy Hartco’s packaging. We therefore find that

appellants have not shown that the jury verdict is not supported by substantial evidence

and we therefore affirm the district court’s denial of appellants’ motion for judgment as a

matter of law for trade dress infringement on packaging.

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                                   CONCLUSION

      We reverse the district court’s denial of appellants’ motion for judgment as a

matter of law on design patent infringement and trade dress infringement on product

design. We affirm the district court’s denial of appellants’ motion for judgment as a

matter of law on trade dress infringement on packaging, and vacate the damages

decision, including the enhancement of damages, out-of-pocket expenses, and attorney

fees, for further proceedings to determine the appropriate damages award for the

packaging trade dress infringement.3 We dismiss the cross-appeal.

      No costs.

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

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