988 F.2d 1117 (Fed. Cir. 1993), 89-1488, L.A. Gear, Inc. v. Thom McAn Shoe Co.

Docket Nº:89-1488, 89-1497, 91-1104 and 91-1105.
Citation:988 F.2d 1117
Party Name:25 U.S.P.Q.2d 1913 L.A. GEAR, INC., Plaintiff/Cross-Appellant, v. THOM McAN SHOE COMPANY and Melville Corporation and Pagoda Trading Company, Inc., Defendants-Appellants.
Case Date:February 16, 1993
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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988 F.2d 1117 (Fed. Cir. 1993)

25 U.S.P.Q.2d 1913

L.A. GEAR, INC., Plaintiff/Cross-Appellant,

v.

THOM McAN SHOE COMPANY and Melville Corporation and Pagoda

Trading Company, Inc., Defendants-Appellants.

Nos. 89-1488, 89-1497, 91-1104 and 91-1105.

United States Court of Appeals, Federal Circuit

February 16, 1993

Rehearing Denied; Suggestion

for Rehearing In Banc

Declined April 13, 1993.

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Robert A. Horowitz, Law Office of Kelley, Drye & Warren, Stamford, CT, argued, for plaintiff, cross-appellant, L.A. Gear, Inc. With him on the brief was Mark S. Gregory.

Doreen L. Costa, Law Office of Brumbaugh, Graves, Donohue & Raymond New York City, argued, for defendants-appellants, Tom McAn Shoe Co. and Melville Corp. With her on the brief were Joseph D. Garon and Marina T. Larson.

William M. Borchard, Law Office of Cowan, Liebowitz & Latman, P.C., New York City, argued, for defendant-appellant, Pagoda Trading Co., Inc. Of counsel was Alasdair J. McMullan.

Before NEWMAN, MAYER, and PLAGER, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Thom McAn Shoe Company, the Melville Corporation, and Pagoda Trading Company, Inc. (together "Appellants") appeal the decision of the United States District Court for the Southern District of New York, 1 holding Melville and its division Thom McAn (together "Melville") liable for design patent infringement, and holding Appellants

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liable for unfair competition based on trade dress infringement in terms of § 43(a) of the Lanham Act and the New York State unfair competition law. The district court enjoined further infringement and awarded damages under the Lanham Act. The court declined to award enhanced damages or attorney fees.

We affirm the ruling of liability for patent infringement as to four shoe models, and reverse the ruling that infringement was not willful. We reverse the ruling of liability under § 43(a) of the Lanham Act as to six shoe models.

Background

In 1987 L.A. Gear designed a line of women's and girls' athletic shoes identified as the L.A. Gear's "Hot Shots" shoes. United States Design Patent No. 299,081 was granted on December 27, 1988 ("the '081 patent"). Figure 4 of the patent is shown:

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE


Although color is not part of the patented design, the colors used on these shoes and their placement are part of the trade dress for which L.A. Gear claims protection from unfair competition.

In the summer and fall of 1987 L.A. Gear exhibited the Hot Shots line of shoes to retailers at trade shows, and announced that these shoes had been selected as L.A. Gear's "hero" or featured shoe line, on which major promotion and advertising would be focused for the ensuing year. There was evidence at trial that L.A. Gear concentrated over seventy percent of its advertising expenditures on these shoes, including television commercials, billboards, and advertisements in magazines and newspapers, at a cost of over five million dollars in 1988. The district court found that the advertising was in color and prominently featured the design of the shoe. A L.A. Gear Hot Shots shoe is pictured:

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This line of shoes was a commercial success, with four million pairs sold by February, 1989. The sales volume was significantly higher than for any of L.A. Gear's other styles. The shoes were sold primarily in department stores, sporting goods stores, and athletic shoe stores, at a retail price ranging from $35 to $60. L.A. Gear testified that it had a policy against sale of its shoes in discount stores.

Melville Corporation sells shoes in discount stores, through its divisions Thom McAn and Meldisco. Thom McAn sells shoes in its own stores, and Meldisco sells shoes in K Mart stores. The Pagoda Trading Company arranges for the manufacture of shoes in the Far East and their importation into the United States.

The district court found that in early 1988 the Appellants, observing the success of L.A. Gear's Hot Shots design, decided to copy it. Designers employed by the Appellants used the L.A. Gear shoes as models for the shoes accused of infringement: a women's high top shoe sold in Thom McAn stores with the trademark BALLOONS; high and low top women's and girls' models sold in K Mart stores with the trademark AEROBIX; and a women's low top shoe sold in K Mart stores with the trademark MacGREGOR. (Additional models carrying the marks JUST KIDDING and SHOOTERS were stated to have been discovered after trial, and are not included in our decision.) All of the trademarks are displayed in the same location on the shoe, in the same color-coordinated style, as the L.A. GEAR trademark. Acknowledging the presence of these trademarks, the district court found that six models of Appellants' shoes were "strikingly similar" to L.A. Gear's Hot Shots design, and that the conditions of unfair competition were met. These and related issues are raised on this appeal.

I

THE DESIGN PATENT

35 U.S.C. § 171 provides that a patent may be obtained for the ornamental design of an article of manufacture.

35 U.S.C. § 171. Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title....

A patented design is ordinarily claimed "as shown", that is, by its drawing.

37 C.F.R. § 1.153(a). The title of the design must designate the particular article. No description, other than a reference to the drawing, is ordinarily required. The claim shall be in formal

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terms to the ornamental design for the article (specifying name) as shown, or as shown and described. More than one claim is neither required nor permitted.

L.A. Gear charged only Melville with patent infringement, since Pagoda had ceased importation before the issuance of the '081 patent. Melville was held liable for patent infringement with respect to four models of shoes: a women's high top BALLOONS shoe (model no. 78191); a women's high top AEROBIX shoe (model no. 78505); and two girls' high top AEROBIX shoes (models no. 71878 and 76878).

Melville raised defenses of patent invalidity and non-infringement, on the following premises:

Functionality

Melville asserted at trial, and argues on appeal, that the design of the '081 patent is "functional" and that the patent is therefore invalid. Invalidity due to functionality is an affirmative defense to a claim of infringement of a design patent, and must be proved by the party asserting the defense. Applying the presumption of validity, 35 U.S.C. § 282, invalidity of a design patent must be established by clear and convincing evidence.

A design patent is directed to the appearance of an article of manufacture. 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 re Carletti, 328 F.2d 1020, 1022, 140 USPQ 653, 654 (CCPA 1964); Power Controls Corp. v. Hybrinetics, Inc., 806 F.2d 234, 238, 231 USPQ 774, 777 (Fed.Cir.1986) (patented design must be primarily ornamental). If the particular design is essential to the use of the article, it can not be the subject of a design patent.

Melville argues that each element comprising the '081 design has a utilitarian purpose: that is, the delta wing provides support for the foot and reinforces the shoelace eyelets; the mesh on the side of the shoe also provides support; the moustache at the back of the shoe provides cushioning for the Achilles tendon and reinforcement for the rear of the shoe; and the position of each of these elements on the shoe is due to its function. However, the utility of each of the various elements that comprise the design is not the relevant inquiry with respect to a design patent. 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 article, in determining whether the claimed design is dictated by the utilitarian purpose of the article. Lee v. Dayton-Hudson Corp., 838 F.2d 1186, 1189, 5 USPQ2d 1625, 1627 (Fed.Cir.1988). See Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 530, 20 L.Ed. 731 (1872).

That elements of the '081 design, such as the delta wing or the side mesh, also provide support for the foot does not mean that the specific design of each element, and the combination of these elements into the patented design, is dictated by primarily functional considerations. The elements of the design may indeed serve a utilitarian purpose, but it is the ornamental aspect that is the basis of the design patent. Carletti, 328 F.2d at 1022, 140 USPQ at 654.

The district court remarked on the existence of a myriad of athletic shoe designs in which each of the functions identified by Melville as performed by the '081 design elements was achieved in a way other than by the design of the '081 patent. When 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. See Avia Group International, Inc. v. L.A. Gear California, Inc., 853 F.2d 1557, 1563, 7 USPQ2d 1548, 1553 (Fed.Cir.1988). It was not disputed that there were other ways of designing athletic shoes to perform the functions of the elements of the '081 design. In today's marketplace, the primacy of appearance in the design of shoes...

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