Justia Federal District Court Opinions

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 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:

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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.

* 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 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 can not be ignored when analyzing functionality.

The district court found that the '081 design was primarily ornamental, and that the patent was not invalid on the ground of functionality. Clear error has not been shown in this ruling, which is affirmed.

Obviousness

A patented design must meet the substantive criteria of patentability, including non-obviousness in accordance with the law of 35 U.S.C. § 103. See 35 U.S.C. § 171 ("The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.").

In applying the law of § 103 to the particular facts pertinent to the patented design, obviousness vel non is reviewed from the viewpoint of a designer of ordinary skill or capability in the field to which the design pertains. In re Nalbandian, 661 F.2d 1214, 1216, 211 USPQ 782, 784 (CCPA 1981). As with utility patents, obviousness is not determined as if the designer had hindsight knowledge of the patented design.

When the patented design is a combination of selected elements in the prior art, a holding of obviousness requires that there be some teaching or suggestion whereby it would have been obvious to a designer of ordinary skill to make the particular selection and combination made by the patentee. In re Cho, 813 F.2d 378, 382, 1 USPQ2d 1662, 1663-64 (Fed.Cir.1987). The first step in the analysis, when the subject is design, is whether there is "a reference to something in existence, the design characteristics of which are basically the same as the claimed design, in order to support a holding of obviousness". In re Rosen, 673 F.2d 388, 391, 213 USPQ 347, 350 (CCPA 1982); In re Jennings, 182 F.2d 207, 208, 86 USPQ 68, 70 (CCPA 1950). Thus not only the individual elements, but the ornamental quality of the combination must be suggested in the prior art. Rosen, id. at 390, 213 USPQ at 349.

Melville offered twenty-two references that were asserted to show or suggest various features of the '081 design, and argues that the '081 design is readily reconstructed from elements found in the prior art. The district court found that all of the elements of the design of the '081 patent were known, but that these particular elements had not previously been combined in a single shoe design. A reconstruction of known elements does not invalidate a design patent, absent some basis whereby a designer of ordinary skill would be led to create this particular design. The district court concluded that there was no teaching or suggestion in the prior art of the appearance of the claimed design as a visual whole. We discern no error in this conclusion or the premises on which it rests. The undisputed commercial success of the patented design, and Appellants' copying thereof, are also relevant to analysis of the obviousness of a design. Rosen, 673 F.2d at 391 n. 6, 213 USPQ at 350 n. 6.

The district court's holding that the '081 design patent is not invalid under 35 U.S.C. § 103 is affirmed.

Infringement

In 35 U.S.C. § 289 infringement is defined as unauthorized manufacture or sale of "the patented design, or any colorable imitation thereof". Design patent infringement is a question of fact, to be proven by a preponderance of the evidence. Braun Inc. v. Dynamics Corp. of America, 975 F.2d 815, 819, 24 USPQ2d 1121, 1124 (Fed.Cir.1992).

Design patent infringement requires a showing that the accused design is substantially the same as the claimed design. The criterion is deception of the ordinary observer, such that one design would be confused with the other:

We hold, therefore, that if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.

Gorham v. White, 81 U.S. (14 Wall.) at 528, 20 L.Ed. 731; Lee v. Dayton-Hudson, 838 F.2d at 1187, 5 USPQ2d at 1626.

In conducting such analysis the patented design is viewed in its entirety, as it is claimed. As for other patented inventions, reference is made to the prior art and the prosecution history in order to give appropriate weight to the factors that contributed to patentability. See Winner International Corp. v. Wolo Manufacturing Corp., 905 F.2d 375, 376, 15 USPQ2d 1076, 1077 (Fed.Cir.1990). While the accused design must appropriate the novelty that distinguished the patented design from the prior art, see Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423, 1444, 221 USPQ 97, 109 (Fed.Cir.1984), the ultimate question requires determining whether "the effect of the whole design [is] substantially the same". Gorham v. White, 81 U.S. at 530, 20 L.Ed. 731. See Shelcore, Inc. v. Durham Industries, Inc., 745 F.2d 621, 628 n. 16, 223 USPQ 584, 590 n. 17 (Fed.Cir.1984) (the requirements of Gorham v. White and Litton v. Whirlpool are conjunctive).

The district court found that the designs of four models of Melville's accused shoes were "almost a direct copy" of the '081 design. Pictured is the BALLOONS model no. 78191:

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