Sunlighten, Inc. v. Finnmark Designs, LLC

Decision Date31 March 2022
Docket NumberCase No. 2:20-cv-00127-JAD-EJY
Parties SUNLIGHTEN, INC., Plaintiff v. FINNMARK DESIGNS, LLC, Defendant
CourtU.S. District Court — District of Nevada

James J. Kernell, Pro Hac Vice, Kyle D. Donnelly, Pro Hac Vice, Erickson Kernell IP, LLC, Leawood, KS, Jonathan D. Blum, Wiley Petersen, Las Vegas, NV, for Plaintiff.

Ryan Gile, Gile Law Group Ltd., Las Vegas, NV, for Defendant.

Order Granting in Part Defendant's Motions for Summary Judgment and Denying Plaintiff's Motion for Summary Judgment

Jennifer A. Dorsey, United States District Judge Sunlighten, Inc. brings this suit against Finnmark Designs, LLC for the alleged infringement of its infrared-sauna patents and common-law trademarks.1 Finnmark moves for summary judgment on all of Sunlighten's claims, and Sunlighten moves for summary judgment on its patent-infringement claims.2 Finnmark contends that Sunlighten's patents cannot claim priority to the filing date of their first applications and are invalidated by Sunlighten's sale of the patented products prior to their later claim-priority date. Finnmark alternatively argues that even if Sunlighten is entitled to the earlier claim-priority date, one of its patents is anticipated by prior art. Sunlighten also moves for summary judgment on the merits of its patent-infringement claims.

Finnmark separately moves for summary judgment on Sunlighten's trade-dress infringement claim, contending that Sunlighten cannot prove that its sauna design has achieved secondary meaning such that potential customers would associate its features exclusively with Sunlighten. And Finnmark moves for summary judgment on Sunlighten's federal unfair-competition, Nevada deceptive-trade-practices, and Nevada trademark-infringement claims relating to Sunlighten's alleged trademark "Empower" because Sunlighten cannot prove actual damages or Finnmark's willful use of that mark.

I grant Finnmark summary judgment on Sunlighten's patent-infringement claims because Sunlighten is not entitled to the priority filing date of the patents’ parent applications, and Sunlighten sold its saunas one year prior to the filing date of the patent's later-filed applications. Because those patents are invalid, I deny as moot Sunlighten's motion for summary judgment on the merits of its patent-infringement claims. I grant Finnmark's motion as to the trade-dress infringement claim because Sunlighten has failed to produce evidence demonstrating secondary meaning. And I grant Finnmark summary judgment to the extent it precludes a finding of actual damages because there is no evidence to support such damages, but deny it with respect to the remedies of disgorgement of profits and injunctive relief. So this case will proceed only on Sunlighten's trademark-infringement claims related to the Empower mark. But first, I order the parties to a mandatory settlement conference with the magistrate judge.

Background

I. The ‘972 patent

Sunlighten filed patent application 29/356,445 (the ‘445 application or ‘972's parent application) for the design of two of its saunas on February 10, 2010.3 The patent examiner noted that the application initially included two embodiments of the design in violation of 35 U.S.C. § 121, and after a conversation with Sunlighten's attorney, the U.S. Patent and Trademark Office (USPTO) examiner withdrew the second embodiment.4 That second embodiment included the following drawings:5

On June 29, 2012, Sunlighten filed application 29/426,034 (the ‘034 application) to patent that second embodiment.6 But the examiner objected to Sunlighten's characterization of the application as a continuation of the ‘445 application because "it contains matter not disclosed in the prior-filed application," and the examiner required Sunlighten to change the relationship to a "continuation-in-part" of the parent application.7 The examiner explained the differences in these images:8

Sunlighten acquiesced and changed the application to a continuation-in-part while submitting that the ‘034 application "does not include any new matter by including boundary lines that were not included in the parent application."9 The examiner declined to determine claim priority because there was no evidence of prior art necessitating that determination at the time.10 The patent office otherwise accepted the application and issued the ‘972 patent with the following images:11

A. The ‘033 Patent

Sunlighten also filed patent application 29/356,440 (‘440 application or ‘033's parent application) on February 10, 2010.12 The examiner again cancelled one set of drawings because the application included two distinct embodiments of the design.13 Sunlighten then filed application 29/4267,271 (the ‘271 application) on July 16, 2012.14 Again, the examiner objected to Sunlighten's characterization of the ‘271 application as a continuation of ‘440 application, noting that "the application contains matter not disclosed in the prior-filed application" because it "does not disclose changes in appearance of certain areas and additional separated features shown in the instant application."15 The examiner showed the changes in the following images:16

The examiner also objected to the application because it was "indefinite and nonenabling" and required Sunlighten to file new images that corrected the noted deficiencies.17 Sunlighten filed replacement images in response to the examiner's objections, and the USPTO issued the ‘033 patent with the following images:18

II. Sunlighten's alleged common-law trademarks

Sunlighten sells its infrared saunas under the trademark "mPulse."19 Its five-person infrared-sauna model is called the "mPulse Empower."20 Sunlighten has not registered the Empower mark but alleges that it has a common-law trademark for the mark that Finnmark infringed upon by selling three sauna models using the word Empower.21 After Sunlighten filed its complaint on January 21, 2020, it sent Finnmark a letter notifying it that Sunlighten believed Finnmark was infringing on its Empower mark.22 On January 22, 2020, Finnmark stopped using "Empower" in connection with its saunas, has not used the name since, and has declared that it "has no intent to ever use that name in connection with its saunas."23

Discussion

Summary judgment is appropriate when the pleadings and admissible evidence "show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."24 When considering a summary-judgment motion, the court must view all facts and draw all inferences in the light most favorable to the nonmoving party.25 When the moving party does not bear the burden of proof on the dispositive issue at trial, it is not required to produce evidence to negate the opponent's claim—its burden is merely to point out the evidence showing the absence of a genuine material factual issue.26 The movant need only defeat one element of a claim to garner summary judgment on it because "a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial."27

I. Sunlighten's patent-infringement claims

A. Sunlighten's patents are not entitled to claim priority.

Finnmark contends that Sunlighten's patents are not entitled to the claim-priority date of their parent applications.28 "Entitlement to priority under [ 35 U.S.C.] § 120 is a matter of law."29 To show entitlement to a parent application's effective filing date, a continuation application "must comply with the written description requirement of 35 U.S.C. § 112."30 A design patent's written description is provided solely through drawings.31 A design complies with the written description when "the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date."32 "[W]hen an issue of priority arises under § 120 in the context of design patent prosecution, one looks to the drawings of the earlier application for disclosure of the subject matter claimed in the later application."33

Finnmark relies heavily on the Federal Circuit's opinion in In re Owens34 to contend that Sunlighten's patents are not entitled to the filing date of their parent applications.35 Owens addressed a patent application in which the drawing in an inventor's parent application was substantially similar to the drawings in a continuation application, save for the addition of boundary lines intersecting the design and disclaiming some portions of his design.36 The court explained the use of boundary lines in design patents and their effect when added to a continuation application:

[W]hen an unclaimed boundary line divides a previously claimed area, it indicates that the applicant has disclaimed the portion beyond the boundary while claiming the area within it. Where permissible, unclaimed boundary lines allow the patentee to adjust his patent coverage and encompass embodiments that differ slightly but insignificantly from the originally [ ] filed design. However, like all amendments made during prosecution, these lines must comply [with] the written description requirement to receive the benefit of priority under § 120.37

The Federal Circuit reasoned that, while "a design patentee may, under certain circumstances, introduce via amendment a straight broken line without adding new matter," an applicant who has been "granted a claim to a particular design element" may not "proceed to subdivide that element in subsequent continuations however he pleases."38 In that case, the patentee initially applied for a patent relating to the design of a bottle but changed that application to include a boundary line around one specific portion of the bottle.39 The Federal Circuit ruled that, because the parent disclosure did not "distinguish the now-claimed" portion from the rest of the design in any way, it did not fulfill the written-description requirement.40...

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