KeyStone Retaining Wall Systems, Inc. v. Westrock, Inc.

• Citation: 997 F.2d 1444,27 USPQ2d 1297
• Decision Date: 29 June 1993
• Docket Number: No. 92-1265,92-1265
• Parties: KEYSTONE RETAINING WALL SYSTEMS, INC., Plaintiff-Appellant, v. WESTROCK, INC., f/k/a Smithwick Western Block Company and Smithrock Block Company; Pumilite Salem, Inc.; Westblock Products, Inc., d/b/a Western Block Company and SNH Corporation, d/b/a Pumilite Building Products, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1444

997 F.2d 1444

27 U.S.P.Q.2d 1297

KEYSTONE RETAINING WALL SYSTEMS, INC., Plaintiff-Appellant, v. WESTROCK, INC., f/k/a Smithwick Western Block Company and Smithrock Block Company; Pumilite Salem, Inc.; Westblock

Products, Inc., d/b/a Western Block Company and SNH

Corporation, d/b/a Pumilite Building Products, Defendants-Appellees.

No. 92-1265.

United States Court of Appeals, Federal Circuit.

June 29, 1993.

Rehearing Denied Aug. 4, 1993.

Craig D. Diviney, Dorsey & Whitney, Minneapolis, MN, argued for plaintiff-appellant. With him on the brief was Ronald J. Brown.

John D. Vandenberg, Klarquist, Sparkman, Campbell, Leigh & Whinston, Portland, OR, argued for defendants-appellees. With him on the brief was James S. Leigh.

Before NEWMAN, PLAGER, and LOURIE, Circuit Judges.

LOURIE, Circuit Judge.

KeyStone Retaining Wall Systems, Inc. appeals the judgment of the United States District Court for the District of Oregon, Civil No. 91-0021-RE (December 11, 1991), entered on a jury verdict, holding, inter alia, that Westrock, Inc., f/k/a Smithwick Western Block Company and Smithrock Block Company; Pumilite Salem, Inc.; Westblock Products, Inc., d/b/a Western Block Company; and SNH Corporation, d/b/a Pumilite Building Products (collectively Westblock) did not infringe KeyStone's trade dress rights. KeyStone also appeals the court's grant of Westblock's motions for partial summary judgment, holding, inter alia, that U.S. Patent 4,914,876 was invalid under 35 U.S.C. § 102(b) (1988) and that U.S. Patent Des. 298,463 was not infringed by Westblock. KeyStone Retaining Wall Sys. Inc. v. Westrock, Inc., 792 F.Supp. 1552, 22 USPQ2d 1001 (D.Or.1991). We reverse the order granting summary judgment of invalidity of the '876 patent, affirm the judgment in all other respects, and remand to the district court for further proceedings.

BACKGROUND

The '876 patent, entitled "Retaining Wall with Flexible Mechanical Soil Stabilizing Sheet," issued to Paul Forsberg and was assigned to KeyStone. The claimed invention relates to a retaining wall structure made from a plurality of interlocked wall blocks, in which soil stabilizing (geo-grid) fabric ¹ is connected to the wall structure by means of pins that interconnect and align the blocks. The '876 patent issued from a continuation application and claims the priority date of May 26, 1987, the filing date of its parent application. Forsberg also invented and assigned to KeyStone several ornamental designs for retaining wall blocks, including the design claimed in the '463 patent, a design for a retaining wall having a tapered design with two voids, wherein the front of the block has a convex "split face" look with a naturally textured curved or slightly angled face, as shown below as Figure 9 of the patent.

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

KeyStone and Westblock are competitors in the mortarless retaining wall industry. Westblock manufactures a retaining wall system made of "Stonewall" blocks. The Stonewall system uses an interlocking pin system and the blocks have textured convex split front faces. A Stonewall block is depicted as follows:

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

In January 1991, KeyStone asserted claims of patent, trade dress, and copyright infringement; unlawful trade practice; and unfair competition. Westblock counterclaimed for interference with contract; unlawful trade practice and unfair competition; antitrust violation; and patent invalidity.

Prior to trial, Westblock filed motions for partial summary judgment, including summary judgment of noninfringement of KeyStone's design patents. On July 10, 1991, in an initial opinion, the district court denied the motion with respect to the '463 patent, finding that the Stonewall block creates a likelihood of confusion with KeyStone's '463 patent design, and granted the motion as to the other design patents in suit, determining that the accused design and the design of the patents in suit were not substantially similar and that an ordinary observer could easily tell them apart. On August 30, 1991, the court issued an amended opinion, partially reversing itself by granting Westblock's summary judgment motion of noninfringement of all of KeyStone's design patents in suit.

In a separate motion, Westblock moved, inter alia, for partial summary judgment of patent invalidity of the '876 patent, contending that its subject matter was placed "on sale" under section 102(b) prior to the May 26, 1986 critical date. On October 7, 1991, the court granted Westblock's motion.

The remaining claims, limited to Lanham Act violations and copyright infringement, were tried before a jury. In November 1991, the jury returned a verdict finding, inter alia, that Westblock did not infringe KeyStone's trade dress rights. ² Specifically, the jury found that KeyStone's facade design, for which it claimed trade dress protection, was not "nonfunctional," had not acquired secondary meaning, and was not likely to be confused with the Stonewall facade design. On December 11, 1991, the court thus dismissed with prejudice KeyStone's claims for violation of its rights under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988). KeyStone moved for a new trial based on alleged errors relating to the trial of its trade dress claim, and the court denied the motion.

KeyStone now appeals the judgment of lack of trade dress infringement which was entered after denying KeyStone's motion for a new trial, the grant of summary judgment of noninfringement of the '463 design patent, and the grant of summary judgment of invalidity of the '876 patent.

DISCUSSION

I. Trade Dress Infringement

KeyStone argues that the court incorrectly instructed the jury regarding the issue of functionality and excluded probative evidence relating to actual confusion and copying. Thus, according to KeyStone, it is entitled to a new trial. In reviewing claims involving trade dress infringement under section 43(a) of the Lanham Act, we look to the law of the regional circuit. Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1439, 223 USPQ 1074, 1087 (Fed.Cir.1984) (in banc) (applying law of regional circuit to "all but The standard of review of jury instructions in the Ninth Circuit is prejudicial error. Smiddy v. Varney, 665 F.2d 261, 265 (9th Cir.1981), cert. denied, 459 U.S. 829, 103 S.Ct. 65, 74 L.Ed.2d 66 (1982). In the Ninth Circuit, no prejudicial error exists if, "considering the charge as a whole, the court's instructions fairly and adequately covered the issues presented, correctly stated the law, and were not misleading." Thorsted v. Kelly, 858 F.2d 571, 573 (9th Cir.1988) (citation omitted). Thus, on appeal, KeyStone must show that the jury instructions as a whole were so incorrect as to mislead the jury.

                the substantive law fields assigned exclusively to this court").   Under Ninth Circuit law, to prevail on a trade dress claim, KeyStone had to show that the asserted trade dress was not functional, had acquired secondary meaning, 3 and was likely to be confused with Westblock's Stonewall blocks.   See Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 842, 4 USPQ2d 1026, 1029 (9th Cir.1987).   On appeal, KeyStone must demonstrate error as to each of the relevant elements of its trade dress claim
                

According to KeyStone, the trial court misled the jury on the issue of functionality by incorrectly defining the issue as to whether the facade of a KeyStone wall was functional. The court instructed the jury as follows:

A product feature is functional if it is essential to the product's use or if it affects the cost or quality of the product. Functional features of a product are not entitled to trade dress protection.

Here you must determine if the design of the facade of a KeyStone wall is functional or nonfunctional.

In making this determination, you must consider the design as a whole and must not focus on isolated elements of the design. Your inquiry is not whether the KeyStone wall unit or walls made up of them have functional elements but rather whether the elements of the design of the facade of a KeyStone wall, taken together, are functional.

Similarly, your inquiry should not stop at the usefulness of a KeyStone wall overall, but rather must focus on the functionality or nonfunctionality of the design of the KeyStone wall's facade.

In assessing the functionality or nonfunctionality of the design you must consider the following factors:

1. The existence of utility patents disclosing utilitarian advantages of the design;

2. The extent of advertising touting utilitarian advantages of the design;

3. The availability of alternative designs;

4. Whether the design results from a comparatively simple or cheap method of manufacture.

Where the appearance of a product is essential to its intended use, the appearance may itself be functional.

(Emphasis added). At trial, KeyStone objected to that part of the instruction stating that "Where the appearance of a product is essential to its intended use, the appearance may itself be functional." KeyStone stated that this instruction was incomplete and misleading, and suggested its own instruction. With the instruction as given, the jury found the KeyStone facade not to be "nonfunctional."

Reading the instruction as a whole, we cannot say that the jury was misled. KeyStone argues that the instruction incorrectly defined the issue concerning whether the KeyStone facade was functional. We disagree. It is certainly true that only non-functional product features may receive trade dress protection, Two Pesos Inc. v. Taco Cabana Inc., --- U.S. ----, ----, 112 S.Ct. 2753, 2758, 120 L.Ed.2d 615, 625, 23 USPQ2d 1081, 1084 (1992), and the jury was instructed that "[a] product feature is functional if it is essential to the product's use or if it affects the cost or quality of the product." That is KeyStone also argues that the disputed statement given...