High Point Design LLC v. Buyers Direct, Inc.
| Decision Date | 11 September 2013 |
| Docket Number | No. 2012–1455.,2012–1455. |
| Court | U.S. Court of Appeals — Federal Circuit |
| Parties | HIGH POINT DESIGN LLC, Plaintiff/Counterclaim Defendant–Appellee, and Meijer, Inc., Sears Holdings Corporation, and Wal–Mart Stores, Inc., Third Party Defendants–Appellees, v. BUYERS DIRECT, INC., Defendant/Counterclaimant–Appellant. |
OPINION TEXT STARTS HERE
Jeffrey M. Kaden, Gottlieb Rackman & Reisman, P.C., New York, NY, argued for plaintiff/counterclaim defendant-appellee and third-party defendants-appellees. With him on the brief were David S. Kashman and Steven Stern.
Andrew M. Ollis, Oblon, Spivak, McClelland, Maier & Neustdt L.L.P, Alexandria, VA, argued for defendant/counterclaimant-appellant. With him on the brief were Frank J. West and Philippe J. C. Signore.
Before O'MALLEY, SCHALL, and WALLACH, Circuit Judges.
Buyer's Direct, Inc. (“BDI”) appeals from a final judgment of the United States District Court for the Southern District of New York holding BDI's asserted design patent invalid on summary judgment and also dismissing BDI's trade dress claims with prejudice. See High Point Design LLC v. Buyer's Direct, Inc., No. 11 CIV. 4530, 2012 WL 1820565 (“Final Decision ”). For the reasons set forth below, we reverse the grant of summary judgment of invalidity, vacate the dismissal of BDI's trade dress claims, and remand for further proceedings consistent with this opinion.
BDI is the owner of U.S. Design Patent No. D598,183 (the “'183 patent”) and the manufacturer of slippers known as SNOOZIES®. An exemplary pair of SNOOZIES® slippers is shown below:
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The '183 patent recites one claim, for “the ornamental design for a slipper, as shown and described.” Two of the drawings included in the '183 patent are shown below:
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As additional design features, the '183 patent discloses two different soles: a smooth bottom (as shown in Figure 8) and a sole with two groups of raised dots (as shown in Figure 7):
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BDI alleges that SNOOZIES® are an embodiment of the design disclosed in the '183 patent.
High Point Design LLC (“High Point”) manufactures and distributes the accused FUZZY BABBA® slippers, which are sold through various retailers, including appellees Meijer, Inc., Sears Holdings Corporation, and WalMart Stores, Inc. (collectively, the “Retail Entities”). An exemplary pair of FUZZY BABBA® slippers is shown below:
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On June 22, 2011, after becoming aware of the manufacturing and sale of FUZZY BABBA® slippers, BDI sent High Point a cease and desist letter, in which BDI asserted infringement of the 1 183 patent and (2) that the ' 183 patent is invalid and/or unenforceable.
In its answer to High Point's declaratory judgment complaint, filed on December 29, 2011, BDI lodged counterclaims for infringement of the '183 patent and for infringement of the trade dress found in BDI's SNOOZIES® slippers. That same day, BDI filed a third-party complaint alleging that the Retail Entities infringed the '183 patent and infringed BDI's trade dress based on sales of High Point's FUZZY BABBA® slippers.
In a scheduling order that issued on February 28, 2012, the district court set March 16, 2012, as the deadline for the parties to amend their pleadings. BDI did not seek to amend its pleadings by that date. Four days after that deadline, High Point and the Retail Entities filed a combined motion seeking (1) summary judgment of invalidity and noninfringement of the '183 patent and (2) judgment on the pleadings with respect to BDI's trade dress claims. With its opposition to the motion, BDI included the declaration of an expert named Lance Rake, who opined that the '183 patent was not invalid because the “tests for anticipation, functionality and obviousness have not been met.” See J.A. 455. BDI also included amended pleadings with proposed amendments adding additional assertions as to the trade dress at issue in BDI's trade dress claims.
On May 15, 2012, the district court granted the motion for summary judgment, holding the '183 patent invalid on the ground that the design claimed in it was both (1) obvious in light of the prior art and (2) primarily functional rather than primarily ornamental. See Final Decision, 2012 WL 1820565, at *3–5. As to the obviousness ruling, the district court made various findings. The court characterized the '183 patent as disclosing “slippers with an opening for a foot that contain a fuzzy (fleece) lining and have a smooth outer surface.” Id. at *1. As to the prior art, the court found that a consumer apparel company, known as Woolrich, had, prior to the effective filing date of the '183 patent, sold two different models of footwear: the “Penta” and the “Laurel Hill” (collectively, the “Woolrich Prior Art”). Id. at *2. The Penta and the Laurel Hill models are shown in photographs below:
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J.A. 486–87 (Penta).
J.A. 490–91 (Laurel Hill). The court found that the Penta “looks indistinguishable from the drawing shown in the '183 Patent,” and that the Laurel Hill, “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.”Final Decision, 2012 WL 1820565, at *2.
The district court also identified two secondary references—U.S. Design Patent Nos. D566,934 and D540,517 (collectively, the “Secondary References”)—that disclose “slippers with a pattern of small dots on the bottom surface.” Final Decision, 2012 WL 1820565, at *2. Representative drawings from the Secondary References are shown below:
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U.S. Design Patent No. D566,934 fig. 1.
U.S. Design Patent No. D540,517 fig. 1. Based on these findings, the court concluded that the design in the '183 patent was invalid as obvious:
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 [Secondary References].
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 [the] '183 patent.
Final Decision, 2012 WL 1820565, at *4–5.
As to the second, and alternative, basis for invalidity—based on the alleged functionality of the design in the '183 patent—the district court concluded that “all major characteristics of th[e] slipper [in the '183 patent] are functional.” Id. at *5. Specifically, the court identified various design features and the functions those features allegedly perform:
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.”
Id. With that, the court held the claims invalid as primarily functional.
In the Final Decision, the district court also dismissed BDI's trade dress claims with prejudice. Id. at *6. The court found that the original trade dress claims (i.e., prior to the proposed amendments) were inadequate as a matter of law for failure to sufficiently identify the trade dress at issue. Id. As to the proposed amendments, the court stated: “At this stage of the litigation, the Court is unwilling to entertain an amendment to the pleadings and therefore dismisses this claim with prejudice.” Id.
Having held the '183 patent invalid, the district court dismissed BDI's claims for infringement and entered judgment in favor of High Point and the Retail Entities. Id. BDI timely appealed from the district court's rulings. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
On appeal, BDI challenges both the grant of summary judgment of invalidity and the dismissal with prejudice of its trade dress claims. This court reviews a district court's grant of summary judgment under the law of the regional circuit. Broadcast Innovation, L.L.C. v. Charter Commc'ns, Inc., 420 F.3d 1364, 1366 (Fed.Cir.2005). The Second Circuit reviews a grant of summary judgment without deference, construing the evidence in the light most favorable to the non-movant and drawing all reasonable inferences in that party's favor. Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir.2011). Summary judgment may only be granted when no “reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
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