A & H Mfg. Co., Inc. v. Contempo Card Co., Inc., C.A. No. 81-0779 S.

• Court: U.S. District Court — District of Rhode Island
• Writing for the Court: SELYA
• Citation: 221 USPQ 67,576 F. Supp. 894
• Parties: A & H MANUFACTURING CO., INC., Plaintiff, v. CONTEMPO CARD CO., INC., and Vark Markarian, Defendants.
• Docket Number: C.A. No. 81-0779 S.
• Decision Date: 16 November 1983

576 F. Supp. 894
221 USPQ 67

A & H MANUFACTURING CO., INC., Plaintiff,
v.
CONTEMPO CARD CO., INC., and Vark Markarian, Defendants.

C.A. No. 81-0779 S.

United States District Court, D. Rhode Island.

November 16, 1983.

576 F. Supp. 895

Salter & Michaelson by Elliott A. Salter, Leonard C. Michaelson, Feiner & Winsten by Harold H. Winsten, Providence, R.I., for plaintiff.

Fish & Richardson by John Skenyon, Wm. W. Rymer, Providence, R.I., Orlando A. Andreoni, East Providence, R.I., for defendants.

MEMORANDUM AND ORDER

SELYA, District Judge.

This is a suit charging an alleged infringement of United States Design Patent D-261,729 (the "patent"), issued November 10, 1981 to the plaintiff, A & H Manufacturing Company, Inc. ("A & H"), as assignee of an application filed in the name of the inventor, Jeffrey A. Feibelman. Feibelman is the president of A & H. The patent covers a design for a pendant display card. A & H seeks a permanent injunction against further infringement, money damages

576 F. Supp. 896

and an accounting of profits, and attorneys' fees and costs. Jurisdiction is premised on 28 U.S.C. § 1338

The defendants are Contempo Card Company, Inc. ("Contempo"), a competitor of A & H in the jewelry display card field, and Vark Markarian, Contempo's chief executive officer. Because this action raises no issues peculiar to the individual defendant, this memorandum will, for the most part, discuss the case as if Contempo was the sole defendant, but the court's findings and conclusions will apply with equal force to Markarian. Admitting that if the patent is valid, it has been infringed, Contempo has counterclaimed for a declaration that the patent is invalid. Contempo advances, inter alia, three grounds for invalidity: (i) the design is not ornamental because it is dictated solely by functional considerations, (ii) the design is not ornamental because it is hidden in normal use, and (iii) the invention is obvious in view of the prior art.¹ Contempo also claims that the patent is unenforceable because of fraud supposedly practiced upon the Patent Office and requests an award of attorneys' fees.

The battle between A & H and Contempo has raged unabated in this court for some two years, and extensive discovery has resulted. As trial approached, however, the parties (with the approval of the court), on August 10, 1983, entered into a stipulation waiving trial by jury, and providing for submission of the cause for decision by the court on the merits on cross-motions for summary judgment; the agreed facts contained in the Joint Memorandum filed by the parties on July 18, 1983 in response to the commands of the court's January 7, 1983 pre-trial order; and sundry ancillary documentary submissions (comprising, in the main, discovery materials). Since that time, the cross-motions have been filed and the selected documents submitted; in addition, the case has been amplitudinously briefed. Neither the plaintiff nor the defendants have requested oral argument, and the court cannot discern any benefit to be derived therefrom; oral argument is, therefore, deemed to have been forsworn. Railroad Salvage of Conn., Inc. v. Railroad Salvage, Inc., 561 F.Supp. 1014, 1018 n. 8 (D.R.I.1983). And see Local Rule 12.1(b). The cause is, therefore, ripe for decision.

Having scrutinized the evidence under the jeweler's glass of the applicable legal precedents, the court holds that the patent is invalid; but that no fraud has been contrived, and that Contempo is not entitled to a counsel fee award. This memorandum constitutes the court's findings of fact and conclusions of law in the premises, as required by Fed.R.Civ.P. 52(a).

I.

Both A & H² and Contempo manufacture and sell jewelry display cards — cards designed to hold and exhibit jewelry and which customarily are hung on standard retail display racks. All types of conventional display racks are constructed specifically to feature the front of the card, where the piece of jewelry is observable. While the backs of the cards may be visible when hung on certain kinds of racks, some racks completely conceal the rear of the cards. The card design which is covered by the patent in suit, the foam pouch pendant display card, is graphically illustrated below.

576 F. Supp. 897

The card is made of flat plastic which is molded at the top into a backward fold to form a bracket (a) which fits over a bar for suspension on a retail display rack. Attached to the front of the card is a velour or velvet pad (b), against which rests the pendant or necklace jewel. The upper corners of the pad and the plastic beneath it are traversed by diagonal slits (c) that end in round holes (d) at the interior of the card. The chain attached to the bauble passes through the slots and holes to the rear of the card. On the reverse side of the card is a rectangular piece of soft foam, ultrasonically bonded to the card on three edges to form a pouch (e) which retains the excess necklace chain. The bonded margins have a crosshatched pattern (f).

Pendant display cards are old in the art. Except for the foam pouch, all of the features described above are hoary in the trade, and have long been common to pendant display cards generally. Additionally, the evidence contains descriptions of certain prior art cards that also feature some type of pouch on the rear to contain surplus chain: the paper envelope pouch card, the polybag pouch card, the acetate bubble pouch card, and the two-piece snap-together pouch card. Of these four, only the last was referred to in the application for the patent at issue. The plaintiff knew of the four types of prior art cards at the time the application was filed, but referred the examiner to none but the snap-together card. The plaintiff explains this omission by its asseveration that the designs of the earlier pouches are so unlike the design of the foam pouch that they are plainly inapposite.

The paper envelope and the polybag (a small bag made of plastic) are both flat integuments which are glued to the back of display cards. The acetate bubble has gone the way of the dinosaur. Production ceased about five years ago and no sample is available. It was a three-dimensional receptacle which also was pasted onto the back of a display card. The bubble had a small die-cut, covered opening at the top through which a chain could be inserted. The snap-together card, protected by United States Patent No. 4,175,660 (invented by Feibelman and assigned to A & H), features a relatively rigid plastic compartment which snaps onto the back of a specially constructed card.

All of the prior art pouches required considerable labor to assemble because they had to be glued on or snapped on. In contrast, the foam pouch card overcomes this sticky problem; it is manufactured in a single automatic process during which the foam pouch is ultrasonically bonded to the card. Further, the prior art pouches were made of relatively inflexible materials, but the foam pouch is extremely malleable.

The A & H foam pouch card has enjoyed substantial commercial success. Prior to the issuance of the design patent in suit, Contempo copied one of the plaintiff's foam pouch cards and offered it for sale. The card that Contempo copied was not marked "patent pending," nor did it contain a patent number. When the patent issued, Contempo voluntarily ceased marketing its version of the product and filled only previously-received orders for the foam pouch card. Within four weeks after the patent was granted, Contempo ceased all sales of the card. That moratorium has been maintained pendente lite.

II.

The patentability of designs is governed by 35 U.S.C. § 171, which provides:

Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor,

576 F. Supp. 898

subject to the conditions and requirements of this title.

The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.

More than a century ago, the Supreme Court explained that it is the appearance of the article which is protected by and crucial to a design patent. Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 524-25, 20 L.Ed. 731 (1871). Accord Schnadig Corp. v. Gaines Manufacturing Co., 494 F.2d 383, 389 (6th Cir.1974); Rains v. Niaqua, Inc., 406 F.2d 275, 276 (2d Cir.), cert. denied, 395 U.S. 909, 89 S.Ct. 1751, 23 L.Ed.2d 222 (1969); Robert W. Brown & Co. v. De Bell, 243 F.2d 200, 202 (9th Cir.1957); Contico International v. Rubbermaid Commercial Products, 506 F.Supp. 1072, 1075 (E.D. Mo.), aff'd, 665 F.2d 820 (8th Cir.1981). To be patentable, a design must be primarily ornamental; designs dictated by functional considerations are not primarily ornamental and, therefore, are not patentable. Barofsky v. General Electric Corp., 396 F.2d 340, 342 (9th Cir.1968), cert. denied, 393 U.S. 1031, 89 S.Ct. 644, 21 L.Ed.2d 575 (1969); Methode Electronics, Inc. v. Elco Corp., 385 F.2d 138, 141 (3d Cir.1967); Bentley v. Sunset House Distributing Corp., 359 F.2d 140, 145 (9th Cir.1966); Day-Brite Lighting, Inc. v. Compco Corp., 311...