High Point - Appellant Brief

7/28/2019 High Point - Appellant Brief

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2012-1455

IN THE

UNITED STATES COURT OF APPEALS

FORTHE FEDERAL CIRCUIT

HIGH POINT DESIGN LLC,

Plaintiff/Counterclaim Defendant-Appellee,

and

MEIJER,INC.,SEARS HOLDINGS CORPORATION,

AND WAL-MART STORES,INC.,

Third Party Defendants-Appellees,

v.

BUYERS DIRECT,INC.,

Defendant/Counterclaim Plaintiff-Appellant.

Appeal from the United States District Court for the

Southern District of New York in Case No. 11-CV-4530,

Judge Katherine B. Forrest.

BRIEF FOR APPELLANT BUYERS DIRECT, INC.

October 11, 2012

ANDREW M.OLLIS

FRANKJ.WEST

PHILIPPE J.C.SIGNORE

OBLON,SPIVAK,MCCLELLAND,

MAIER&NEUSTADT L.L.P.

1940 Duke Street

Alexandria, VA 22314(703) 413-3000

Attorneys for Appellant


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CERTIFICATE OF INTEREST

Counsel for Appellant, Buyers Direct, Inc., certifies the following:

1. The full name of every party or amicus represented by me is:

Buyers Direct, Inc.

2. The name of the real party in interest (if the party named in the

caption is not the real party in interest) represented by me is:

N/A.

3. All parent corporations and any publicly held companies that own 10

percent or more of the stock of the party or amicus curiae represented by me are:

N/A.

4. The names of all law firms and the partners or associates that

appeared for the party or amicus now represented by me in the trial court or agency

or are expected to appear in this court are:

Andrew M. OllisFrank J. WestPhilippe J.C. SignoreOBLON, SPIVAK, McCLELLAND,

MAIER & NEUSTADT L.L.P.

Anthony F. Lo Cicero

David A. BoagAMSTER, ROTHSTEIN & EBENSTEIN LLC

Dated: October 11, 2012 /s/ Andrew M. OllisAndrew M. Ollis


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TABLE OF CONTENTS

TABLE OF AUTHORITIES...................................................................................iii

STATEMENT OF RELATED CASES.....................................................................1

STATEMENT OF JURISDICTION..........................................................................1

STATEMENT OF THE ISSUES...............................................................................1

STATEMENT OF THE CASE..................................................................................2

STATEMENT OF FACTS........................................................................................4

I. Introduction..................................................................................................4

II. The 183 Design Patent................................................................................6

III. The Woolrich Shoes & the 183 Design Patent...........................................8

IV. The District Courts Decision....................................................................14

SUMMARY OF THE ARGUMENT ......................................................................17

ARGUMENT...........................................................................................................21

I. Standard of Review........................................................................................21

II. The District Courts Legal Errors Require Reversal of the Grantof Summary Judgment of Invalidity of the 183 Design Patent....................22

A. The Law of Obviousness for Design Patents..........................................22

B. The Legal Errors in the District Courts Analysis..................................24

1. The Woolrich shoes cannot be a primary reference...............................24

2. The district court failed to explain why a person ofordinary skill in the art would modify the Woolrich


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shoes to achieve the same overall visual impressionas the 183 design patent.........................................................................29

3. The district court applied the wrong legal tests forobviousness.............................................................................................31

4. The district court failed to consider the secondaryconsiderations of non-obviousness.........................................................33

C. The District Court Committed Legal Error by Applying the WrongLegal Test for Functionality...................................................................35

1. A design patent is invalid as functional if the designis dictated by the use or purpose of the article....................................35

2. The district court erred by failing to determine whetherthe 183 patent design was dictated by function.................................36

3. The 183 patent design is ornamental and notdictated by function.............................................................................38

III.The District Court Abused its Discretion in DismissingBDIs Trade Dress Claim with Prejudice......................................................40

CONCLUSION........................................................................................................43


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TABLE OF AUTHORITIES

CASES

Allergan, Inc. v. Athena Cosmetics, Inc.,

640 F.3d 1377 (Fed. Cir. 2011)................................................................................22

Anderson v. Liberty Lobby, Inc.,477 U.S. 242 (1986).................................................................................................21

Apple, Inc. v. Samsung Elecs. Co.,678 F.3d 1314 (Fed. Cir. 2012)........................................................................ passim

Avia Group Intl., Inc. v. L.A. Gear Cal., Inc.,853 F.2d 1557 (Fed Cir. 1988).......................................................................... 36, 39

Benchcraft, Inc. v. Broyhill Furniture Indus., Inc.,681 F.Supp. 1190 (N.D. Miss. 1988).......................................................................34

Berry Sterling Corp. v. Pescor Plastics, Inc.,122 F.3d 1452 (Fed. Cir. 1997)................................................................................38

Crocs, Inc. v. Intl Trade Commn,598 F.3d 1294 (Fed. Cir. 2010)................................................................................39

Durling v. Spectrum Furniture Co.,101 F.3d 100 (Fed. Cir. 1996).......................................................................... passim

E*Trade Fin. Corp. v. Deutsche Bank AG,420 F. Supp. 2d 273 (S.D.N.Y. 2006) .....................................................................42

E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C.,525 F.3d 1353 (Fed. Cir. 2008)................................................................................22

Egyptian Goddess, Inc. v. Swisa, Inc.,

543 F.3d 665 (Fed. Cir. 2008)..................................................................................23

Ellis v. Chao,336 F.3d 114 (2d Cir. 2003).....................................................................................22

Graham v. J ohn Deere,383 U.S. 1 (1966)........................................................................................ 19, 23, 33


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Hughes v. Anderson,449 Fed. Appx. 49 (2d Cir. 2011)............................................................................41

Ideal Steel Supply Corp. v. Anza,

652 F.3d 310 (2d Cir. 2011).............................................................................. 20, 41

In re Harvey,12 F.3d 1061 (Fed. Cir. 1993)..................................................................................18

In re Rosen,673 F.2d 388 (CCPA 1982).............................................................................. 23, 32

Int'l Seaway Trading Corp. v. Walgreens Corp.,589 F.3d 1233 (Fed. Cir. 2009)................................................................... 23, 32, 39

Iron Grip Barbell Co. v. USA Sports, Inc.,392 F.3d 1317 (Fed. Cir. 2004)................................................................................33

L.A. Gear, Inc. v. Thom McAn Shoe Co.,988 F.2d 1117 (Fed. Cir. 1993)......................................................................... 35, 36

McCarthy v. Dun & Bradstreet Corp.,482 F.3d 184 (2d Cir. 2007).....................................................................................41

Metz v. U.S. Life Ins. Co.,662 F.3d 600 (2d Cir. 2011) (per curiam)................................................................22

Microsoft v. i4i Ltd. Pship,131 S. Ct. 2238 (2011).............................................................................................22

OddzOn Prods., Inc. v. J ust Toys, Inc.,122 F.3d 1396 (Fed. Cir. 1997)................................................................... 19, 21, 27

Payless Shoesource, Inc. v. Reebok Intl, Ltd.,

998 F.2d 985 (Fed. Cir. 1993)..................................................................................39

Perez v. Ortiz,849 F.2d 793 (2d Cir. 1988).....................................................................................41

PHG Techs., LLC v. St. John Cos., Inc.,469 F.3d 1361 (Fed. Cir. 2006)........................................................................ passim


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Power-One, Inc. v. Artesyn Techs., Inc.,599 F.3d 1343 (Fed. Cir. 2010)................................................................................21

Rachman Bag Co. v. Liberty Mut. Ins. Co.,

46 F.3d 230 (2d Cir. 1995).......................................................................................41

Reebok Intl, Ltd. v. J . Baker, Inc.,32 F.3d 1552 (Fed. Cir. 1994)..................................................................................39

Rosco, Inc. v. Mirror Lite Co.,304 F.3d 1373 (Fed. Cir. 2002)................................................................... 35, 36, 38

Stratoflex, Inc. v. Aeroquip Corp.,713 F.2d 1530 (Fed. Cir. 1983)......................................................................... 19, 33

Titan Tire Corp. v. Case New Holland, Inc.,566 F.3d 1372 (Fed. Cir. 2009)................................................................................24

Transmatic, Inc. v. Gulton Indus., Inc.,53 F.3d 1270 (Fed. Cir. 1995)..................................................................................21

STATUTES

15 U.S.C. 1125(a) ...................................................................................................1

28 U.S.C. 1295(a)(1)...............................................................................................1

28 U.S.C. 2201 et seq..............................................................................................1

35 U.S.C. 103..........................................................................................................1

35 U.S.C. 171........................................................................................................35

35 U.S.C. 282........................................................................................................22

35 U.S.C. 1331 and 1338......................................................................................1


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RULES

Fed. R. Civ. P. 12(c)...................................................................................................3

Fed. R. Civ. P. 15(a)..........................................................................................22, 41

Fed. R. Civ. P. 52(a).................................................................................................21


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STATEMENT OF RELATED CASES

There was no previous appeal in or from this civil action before this or any

other appellate court.

Civil action no. 10-CV-00065, Buyers Direct, Inc. v. Belk Inc. and Belk

International, Inc., is currently pending in the United States District Court for the

Southern District of North Carolina and will be directly affected by this Courts

decision in the pending appeal, as the same design patent (D598,183) is at issue in

both cases.

STATEMENT OF J URISDICTION

The jurisdiction of the district court was based upon 35 U.S.C. 1331 and

1338 with respect to the patent claims, 28 U.S.C. 2201 et seq. in relation to the

Declaratory Judgment Act, and 15 U.S.C. 1125(a) in relation to trade dress

infringement. Jurisdiction of this timely appeal of a final judgment is based upon

28 U.S.C. 1295(a)(1).

STATEMENT OF THE ISSUES

1. Did the district court err in granting summary judgment of invalidityof U.S. Design Patent No. D598,183 (the 183 design patent) under 35 U.S.C.

103, when it failed to correctly apply the test for obviousness of a design patent,

and when the Woolrich shoes do not convey the same overall visual impression as

the subject matter of the 183 design patent?

2. Did the district court err in concluding that the 183 design patent is


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invalid as primarily functional, when it did not apply the correct legal test for

determining functionality, and when the 183 design patent covers an ornamental

design?

3. Inasmuch as granting Buyers Direct, Inc. (BDI) leave to amend itspleading would not have prejudiced High Point Design LLC (High Point) or

hindered the district courts schedule, did the district court err in dismissing BDIs

trade dress infringement claim with prejudice?

STATEMENT OF THE CASE

High Point sued BDI on July 1, 2011 seeking a declaratory judgment that

High Point did not infringe the 183 design patent and that the 183 design patent

was invalid and/or unenforceable.

High Point waited nearly 120 days before serving its complaint on October

22, 2012.

BDI filed an answer and counterclaim against High Point on December 29,

2011, asserting that High Point infringed the 183 design patent and

misappropriated the trade dress in BDIs SNOOZIES!slipper-socks. Also on

December 29, 2011, BDI filed a Third-Party Complaint against Meijer, Inc., Sears

Holdings Corporation, and Wal-Mart Stores, Inc., alleging that each retailer had

infringed the 183 design patent and misappropriated the trade dress in BDIs

SNOOZIES!slipper-socks.


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On February 16, 2012, the district court issued a Scheduling Order setting

July 2, 2012 as the close of discovery date.

On February 28, 2012, the district court issued a Stipulation and Schedule

setting March 16, 2012 as the deadline to amend the pleadings.

On March 20, 2012, High Point filed a combined motion for summary

judgment of invalidity and/or non-infringement of the 183 design patent and for

judgment on the pleadings with respect to BDIs trade dress infringement

allegations pursuant to Fed. R. Civ. P. 12(c).

On May 1, 2012, High Point requested a two month extension of all

discovery deadlines. The district court denied High Points requested extension

three days later, noting that it would promptly review High Points summary

judgment motion.

On May 11, 2012, the district court stayed all discovery.

On May 15, 2012, the district court issued an Order granting the motion for

summary judgment of invalidity of the 183 design patent on the grounds that the

183 design patent was obvious over certain Woolrich shoes in view of U.S.

D566,934 and U.S. D540,517 (A15-18; A20), and that the 183 design patent was

purely functional rather than ornamental (A18-19). The district court also

dismissed BDIs trade dress claims with prejudice, stating that at this stage of the

proceedings it would not allow an amended pleading. A10; A21-22.


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BDI timely filed a notice of appeal on June 13, 2012.

STATEMENT OF FACTS

I. IntroductionBDI manufactures and sells highly popular slipper-socks known as

SNOOZIES!. The SNOOZIES!slipper-socks have been hugely successful.

SNOOZIES!were first sold in September 2008, and by 2011, annual sales of

SNOOZIES!slipper-socks were in the millions of dollars. A340; A504, 5.

Sales of SNOOZIES!slipper-socks have continued to grow rapidly in 2012, are

now sold globally, and have been featured on the Today Show and other popular

media.

A representative picture of BDIs SNOOZIES!slipper-socks is shown

below.

SNOOZIES!Slipper-Socks(A504)


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The SNOOZIES!marketing literature explains that SNOOZIES!are not

socks and theyre not slippers - sort of a crossover between the two. A497. The

SNOOZIES!advertising touts the advantages of the slipper-socks, describing

them as soft, comfy, warm, and simply adorable. Id. (emphasis added). The

slipper-socks are soft and squishy with visually pleasing bright colors and designs

and presented outside of packaging, like stuffed animals, encouraging touching.

The fleece-lined curved opening is far larger than a typical sock or slipper opening.

Additionally, the fleece extends up and above the foot opening, but does not

overlie the outer edge of the slipper-sock. A457, 13. As a result, SNOOZIES!

slipper-socks have an overall look and feel that is immediately recognizable and

constitutes protectable trade dress that is an embodiment of the ornamental design

in the 183 design patent (discussed below).

In early 2011, Marshall Bank, the President of BDI and the inventor of the

183 design patent, noticed products in stores that appeared to be direct copies of

the SNOOZIES!slipper-socks. A504, 7-8. These products were distributed by

defendant High Point (A505, 7) and sold by defendants Wal-Mart Stores, Inc.,

Sears Holdings Corporation, and Meijer, Inc. A photo of the infringing High Point

product appears below, which shows its undeniable similarity to the SNOOZIES!

design. A505, 8; compare withA34.


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An Infringing High Point Slipper (A505)

A505. After BDI brought the 183 design patent to High Points attention, the

lawsuit was filed by High Point and discussions between BDI and High Point

ensued. After it was clear that the dispute could not be settled, the Complaint was

eventually served by High Point.

I I .The 183 Design PatentSNOOZIES!slipper-socks are a commercial embodiment protected by the

183 design patent. The 183 design patent was filed and issued in 2009. Two

years after the introduction of the slipper-socks, BDI observed that its

SNOOZIES!design had been copied. A33-37. Representative Figures 1 and 4

from the 183 design patent are reproduced below, showing perspective and side

views of the patented slipper-sock. A34-35.


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The 183 design patent depicts an ornamental design for a slipper-sock having a

distinctive silhouette, important in attracting customers and a primary method of

identifying footwear to consumers. A456, 8. The surface of the 183 design

patent slipper-sock is also smooth and continuous right up to the foot opening.

A456, 10. An important visual feature is the fleece-lined opening to the slipper-

sock. A457, 12. The opening is relatively large, more than half the length of the

slipper-sock (as seen from the side view shown in Fig. 4), and has a gradual curve.

FIG. 1

'I r 1111111111" 1 / f

FIG.4

I 111111111 II


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Id. The fleece material extends up and above the foot opening, and does not

overlie the outer surface of the slipper-sock. A457, 13. Thus, the fleece can be

thought of like the head of beer in a mug that extends above the lip of the mug, but

does not spill down the sides of the mug.

The 183 design patent includes two embodiments with different soles. In

the embodiment shown in Fig. 7 (A36), the sole has a pattern of two groups of

dots. In a second embodiment shown in Fig. 8 (A37), the sole is smooth and has

no dots.

I I I .The Woolrich Shoes & the 183 Design PatentThe district court granted summary judgment of invalidity of obviousness

based primarily over two shoes known as the Laurel Hill and Penta (collectively

the Woolrich shoes). The district court relied secondarily on two design patents

showing various dot patterns on footwear (U.S. D566,934 and U.S. D540,517).

BDI disputes that High Point presented sufficient evidence that the Woolrich shoes

are, in fact, prior art to the 183 patent. SeeA353-54.

Even if prior art, these two Woolrich shoes convey a dramatically different

visual impression than the 183 design patent and are readily distinguishable from

the slipper-socks in the 183 design patent.

BDI explained in great detail the differences between the 183 design patent

and the Woolrich shoes in opposing High Points motion for summary judgment.


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A339; A349-50. BDI supported its opposition with the unrefuted Expert

Declaration of Lance Rake. A455-502.1 In contrast, High Point submitted no

declarations and relied solely on attorney argument in making its invalidity

allegations.

Each of the Woolrich shoes is an indoor/outdoor shoe, which includes a

prominent rolled over collar around the opening of the foot, a raised toe, and a

thick sole made of different material. SeeA455-502; A206 (noting the Penta sole

is designed for inside or outside wear); A226 (noting the Laurel Hill shoe has

indoor/outdoor soles). Together with the overall contour of the shoes, these

features present a distinctly different overall visual impression than the 183 design

patent slipper-sock. Several of these differences are illustrated in relation to the

Laurel Hill shoe in the following drawings:

1 Mr. Rake is an industrial designer with 36 years of experience, includingexperience in footwear design. A455-456.


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183 Design Patent Fig. 4 and Laurel Hill Shoe Side Views

As can be seen from the above comparisons, the Laurel Hill shoe differs

substantially from the 183 design patent. Among other differences, the Laurel

Hill design is for a structured indoor/outdoor shoe that has a:

Prominent rolled collar that extends over the sides of the shoe thatdoes not exist in the 183 design patent, A460, 24;

Substantially different curved silhouette (A456-57, 9-12) due to its:

'183DesignPatent

Fleece projects-above foot

opening and doesnot overlie sides

Longer foot openingGently curvedopening

Flattoe ~ 1 1 I ( ( ( ( ( ( ( ( / r ( 1 1p o r t i o n ~ ~ ' ' ~ ' I ~ " I ~ , , ~ , , ~ , , ~. : : : ! i : ! : h : t t i ~ ~ ; : = = = : t , : ! ' ~ ' : : ' : l : ' = : : = ~ ' '' , , ~ , , ~ , , ~ , WNo thick sale line FIG,4 Higher sidewall

Raised toeportion

Shorter foot opening Rolled collar offleece overlapssides of shoe

LaurelHill

Thick sale lineFIG.4 Lower

sidewall


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o Raised toe and heel;o More pronounced vertical curve at the front of the foot opening;o Prominent seam on the sidewall with visible stitching;o Distinct contour around the toe; ando Shorter foot opening relative to the length of the shoe;

Lower sidewall, A460, 24; A494 and Thick sole edge, A460, 25; A494-95.

The prominent rolled collar by itselfdistinguishes the Laurel Hill shoe from the

soft-bodied slipper-socks of the 183 design patent. Mr. Rake identified other

differences that further distinguish the two designs. A456-57, 9-12; A460-61,

24-26; A494-95.

A comparison between the 183 design patent and the Penta indoor/outdoor

structured shoe leads to the same conclusion.


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183 Design Patent Fig. 4 and Penta Shoe Side Views

As can be seen from the above comparisons, the Penta shoe differs substantially

from the 183 design patent. Among other differences, the Penta indoor/outdoor

structured shoe has a:

Prominent rolled collar that extends over the sides of the shoe thatdoes not exist in the 183 design patent, A460, 24;

Flat toeportion

T hinner f ronts li p pe r b o dy

'1111111111

Longer foot openingFleece projectsabove footopening and doesnot overlie sides

'183DesignPatentI , I J II'" /I

No weltNo thick s ol e l in e FIG. 4 Higher sidewall

Shorter foot opening

Fatter f ront (oe body

Raised toeportion

l .FIG.4T hi c k s ol e line T h I C ~ e ~ t a r t

Lowersidewall

Rolled collar o ffleece overlapssides of shoe

Penta


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Thick two part welt that juts out prominently around the base of theentire shoe with visible stiching, A457, 11; A460, 25; and

Substantially different curved silhouette (A456-57, 9-12) due to

o Raised toe and heel;o Fatter contour around the front of the shoe;o Prominent seam on the sidewall with visible stitching;o Shorter foot opening relative to the length of the shoe, ando Lower sidewall, A460, 24; A494-95.

Mr. Rake identified additional differences that further distinguish the two designs.

A456-57, 9-12; A460-61, 24-26; A494-95.

These and other distinctions between the slipper-sock of the 183 design

patent and the Woolrich shoes were identified in BDIs brief opposing High

Points motion for summary judgment and Mr. Rakes Declaration. A339; A349-

50. Mr. Rake pointed out that, unlike the slipper design in the 183 design patent,

the Woolrich shoes include (1) fleece which substantially overlapped the top of the

shoe (a rolled collar), (2) substantial welts or a thick sole line, (3) an overall

different contour, and (4) a low sidewall. A456, 8-12; A460-61, 24-26.

For these and other reasons, Mr. Rake concluded that the Woolrich shoes do

not convey the same overall visual impression as the 183 design patent. A461,

27. Ultimately, Mr. Rake concluded that an ordinary observer, familiar with the


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prior art and given such attention as a purchaser usually gives, would not find the

prior art designs substantially similar in overall appearance. A463, 34

(emphasis added).

IV.The District Courts DecisionDespite the detailed evidence offered by BDI illustrating the differences

between the design of the 183 design patent and the alleged prior art, and the

explicit ornamental features of the slipper-sock of the 183 design patent, the

district court granted summary judgment of invalidity. The district court found

that the design was (1) obvious over the Woolrich shoes in view of U.S. D566,934

and U.S. D540,517, and (2) merely functional. A8-23.

The district court summarily dismissed the 183 design patent, stating that it

is a rather run-of-the-mill fuzzy slipper (A9) that it looks like many slippers I

purchased and wore throughout my youth some time ago - - and certainly before

2009.2 A11. Despite the footnoted comment that the adverse decision was not

influenced by anecdotal memories, the statement and summary manner in which

the court ruled on the various issues is striking. More importantly, the district

courts decision lacked any discussion, or even mention, of the multiple, readily

2 The district court added a footnote, stating, [a]s discussed below, the criticallegal basis for disposing of this matter rests not on the Courts anecdotal memoriesand assumptions of common sense obviousness, but rather on the facts relating toprior art available in the marketplace prior to the time that Buyers Direct evenapplied for the 183 patent. A11.


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apparent features that contribute to a very different overall visual impression

provided by the 183 design patent as compared to the Woolrich shoes. Nowhere

did the district court acknowledge the prominent rolled collar, thick welts, or

different shoe contours of the Woolrich shoes as compared to the 183 design

patent. Instead, the district court concluded, without explanation, that this Penta

slipper looks indistinguishablefrom the drawing shown in the 183 patent and

[t]o an ordinary observer, they arethe same slippers. A12; A18 (emphasis

added).

The district court also wrongly ignored the Rake declaration as merely the

opinion of an expert rather than an ordinary observer. A20. Mr. Rake pointed out

numerous differences between the 183 design patent and the Woolrich shoes.

A455-502. Regardless of his status as an expert, the numerous differences

observed are highly relevant to the overall appearance of the Woolrich shoes. In

fact, Mr. Rake concluded that an ordinary observer, familiar with the prior art

and given such attention as a purchaser usually gives, would not find the prior art

designs substantially similar in overall appearance. A463, 34.

In evaluating functionality, the district court summarily concluded that the

183 design patents features are merely functional and that [t]he face of the

patent itself leaves no doubt that there is nothing ornamental about the slippers.

A10. Most importantly, the district court never found that the 183 design was


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dictated by function and, indeed, the district court even acknowledged that at

least the fuzz overflow can be characterized as ornamental. A19.

Last, the district court dismissed BDIs trade dress claim with prejudice

based on an alleged insufficiency of the trade dress pleadings. A21-22.3 The

district court dismissed the trade dress claim with prejudice due to what was

asserted to be the late stage of the proceedings (A10) and thus refused to

consider the amended counterclaim offered by BDI. The dismissal with prejudice

was made despite the fact that substantial discovery remained to be taken at the

time of the decision.4 Just prior to the district courts ruling on the summary

judgment motion, High Point had requested an extension of the discovery dates, so

clearly there would be no prejudice to High Point. In contrast, the prejudice to

BDI is clear in light of the district courts recognition that there are some trade

dress characteristicssharedbetween High Points slipper and the embodiment

provided to the Court. A22 (emphasis added).

3 BDI does not concede that the originally filed trade dress was insufficient, A359-60,but focuses on the dismissal with prejudice aspect of the district courtsdecision for the purpose of narrowing the issues on appeal.4 Prior to the decision, the parties had taken only one fact deposition of a thirdparty and noticed several others. Not a single deposition of any party had takenplace. BDI and High Point had each produced limited discovery. No expertreports had been exchanged.


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SUMMARY OF THE ARGUMENT

The decision below should be reversed and remanded because the district

court wrongly held that (1) on summary judgment the 183 design patent was

obvious primarily in view of the quite distinct Woolrich shoes, (2) on summary

judgment the ornamental 183 design patent was purely functional, and (3) BDIs

trade dress infringement claim should be dismissed with prejudice even

though substantial discovery remained and BDI promptly offered an amended

pleading.

The district courts legal conclusion that the 183 design patent was obvious

contained a series of reversible errors. The district court committed clear error in

deciding that a designer of ordinary skill in the art would have found the Woolrich

shoes to be substantially the same design as the 183 design patent and thus

suitable as a primary reference -- without even addressing BDIs arguments and

ignoring the unrefuted Rake Declaration. This conclusion was reached despite the

many substantial differences, including the significant rolled collar, thick welts and

sole line, smaller foot opening, raised toes, and overall differences in contour and

stitching that readily distinguish the Woolrich shoes from the 183 design patent.

See Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1328-32 (Fed. Cir. 2012)

(finding error where the patented design for a tablet and the prior art created

substantial differences in overall appearance).


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Indeed, the facts in this case are remarkably similar to those inApple v.

Samsung. In Apple, this Court overruled a district court decision that focused on

the broad similarities between the patented design for an iPadand the prior art,

rather than the substantial differences that distinguished the two. The prior art in

Applehad a frame around the perimeter of the tablets screen. 678 F.3d at 1330-

31. This Court found that the prior art frame created a different visual impression

than the unbroken slab of glass extending across the front of the Apple design. Id.

Similarly, in this case, the Woolrich shoe collar overlays the surface of the shoe,

breaking the smooth continuity of the shoe body, whereas the 183 design patent

has a continuous upper body up to the foot opening. As with the frame in the

Appleprior art, the Woolrich collar creates a substantial difference in visual

impression in comparison to the 183 design patent. Thus, the Woolrich shoes

cannot qualify as a primary reference.

The district court further erred by concluding, without explanation or

evidentiary support, that an ordinarydesigner would be motivated to perform

major modifications to the Woolrich shoes to be substantially the same as the

slipper-sock of the 183 design patent. SeeIn re Harvey, 12 F.3d 1061, 1063 (Fed.

Cir. 1993). Similarly, the district court made a clear error in determining that an

ordinaryobserver would have found that the hypothetical prior art combination of

Woolrich shoes, with the dot patterns of U.S. D566,934 and U.S. D540,517,


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conveyed substantially the same overall visual impression as the slipper-sock of

the 183 design patent.

The district courts summary and dismissive conclusion that the Woolrich

shoes are the same as the slipper-sock of the 183 design patent (A18)

constituted a failure to carry out the second step of the obviousness analysis

articulated in the Supreme CourtsGrahamtest, which requires a court tocompare

the prior art with the patented features. Graham v. John Deere, 383 U.S. 1, 17-18

(1966). These errors were particularly significant in view of the procedural

posture of the case, where all factual inferences must be drawn in favor of BDI,

and the differences between the Woolrich shoes and the 183 design patent raised

numerous genuine issues of material fact. See, e.g., OddzOn Prods., Inc. v. J ust

Toys, Inc., 122 F.3d 1396, 1401 (Fed. Cir. 1997). Finally, the district court

improperly failed to consider BDIs evidence of secondary considerations of

copying by High Point and BDIs own commercial success. See, e.g., Stratoflex,

Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983).

The district courts conclusion that the 183 design patent was invalid as

purely functional must also be reversed. To be invalid as primarily functional, a

design must be dictated by function. PHG Techs., LLC v. St. John Cos., Inc.,

469 F.3d 1361, 1366 (Fed. Cir. 2006). The district court never applied this

central legal test and failed to consider whether the 183 patent design was


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dictated by function. This failure alone constitutes reversible legal

error. Moreover, common sense shows that the 183 design patent is not dictated

by function. There are countless alternative distinct designs that perform the

same functions of warmly and comfortably covering a foot. The non-functional

differences between these designs are ornamental. Thus, even if the correct legal

test had been applied, the district courts functionality conclusion

constituted clear and reversible error.

Finally, the district court abused its discretion by dismissing BDIs trade

dress claim with prejudice due to the late stage of the proceedings.

A10. In fact, not one deposition of a party had been taken and substantial

discovery remainedand High Point had requested an extension of the discovery

period days before the decision on High Points summary judgment motion issued.

Consequently, granting leave to amend BDIs counterclaim with a more detailed

recitation of its trade dress would have prejudiced neither High Point nor the

district courts schedule. In these circumstances, the Second Circuit has held that

leave to amend should be liberally granted, see, e.g., Ideal Steel Supply Corp. v.

Anza, 652 F.3d 310, 325 (2d Cir. 2011), and the district courts dismissal with

prejudice was an abuse of discretion.


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ARGUMENT

I. Standard of ReviewThis Court reviews a district courts grant of summary judgmentde novo.

OddzOn Prods., 122 F.3d at 1401. Summary judgment is appropriate where there

is no genuine issue as to any material fact and the moving party is entitled to

judgment as a matter of law. Id. Thus, summary judgment may be granted when

no reasonable jury could return a verdict for the nonmoving party. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there is a

genuine issue of material fact, the evidence must be viewed in a light most

favorable to the party opposing the motion, with doubts resolved in favor of the

opponent. OddzOn Prods., 122 F.3d at 1401;Transmatic, Inc. v. Gulton Indus.,

Inc., 53 F.3d 1270, 1274 (Fed. Cir. 1995).

A determination of obviousness under 35 U.S.C. 103(a) is a legal question

based on underlying questions of fact. Power-One, Inc. v. Artesyn Techs., Inc.,

599 F.3d 1343, 1351 (Fed. Cir. 2010). This Court reviews the ultimate

determination of obviousness by a district court de novoand the underlying factual

inquiries for clear error. Id. (internal citations omitted).

Furthermore, [w]hether a patented design is functional or ornamental is a

question of fact. PHG Techs., 469 F.3d at 1365. Thus, this Court reviews the

determination of functionality for clear error. Fed. R. Civ. P. 52(a). This Court


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also review[s] the district courts legal conclusions de novo. E.I. du Pont de

Nemours & Co. v. MacDermid Printing Solutions, L.L.C., 525 F.3d 1353, 1358

(Fed. Cir. 2008). Thus, the district courts legal test for determining functionality

must also be reviewedde novo.

As a purely procedural issue, an appeal from an order granting a motion for

judgment on the pleadings is reviewed under the law of the regional circuit. See,

e.g., Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir.

2011). Under Second Circuit law, a district courts decision to dismiss a complaint

with prejudice, thereby implicitly denying a partys request for leave to amend

under Fed. R. Civ. P. 15(a), is reviewed for an abuse of discretion. SeeMetz v.

U.S. Life Ins. Co., 662 F.3d 600, 603 (2d Cir. 2011) (per curiam). See also Ellis v.

Chao, 336 F.3d 114, 127 (2d Cir. 2003) (stating that a denial of leave to amend is

reviewed for an abuse of discretion).

I I .The District Courts Legal Errors Require Reversal of the Grant ofSummary J udgment of Invalidity of the 183 Design Patent

A.The Law of Obviousness for Design PatentsPatents are presumed valid. 35 U.S.C. 282. An accused infringer

asserting invalidity of a patent must prove invalidity under the clear and

convincing evidentiary standard. Microsoft v. i4i Ltd. Pship, 131 S. Ct. 2238,

2245-47 (2011).

The fact finder employs a two step process in making the determination of


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obviousness for a design patent.5 Apple, 678 F.3d at 1329-30;Durling v. Spectrum

Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996), distinguished on other grounds

byEgyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008). First,

one must find a single [primary] reference, a something in existence, the design

characteristics of which are basically the same as the claimed design. Durling,

101 F.3d at 103 (quoting In re Rosen, 673 F.2d 388, 391 (CCPA 1982). Second,

other references may be used to modify [the primary reference] to create a design

that has the same overall visual appearance as the claimed design. Durling, 101

F.3d at 103. Without a primary reference having the same overall visual

impression as the claimed design, there can be no finding of obviousness under 35

U.S.C. 103(a). SeeApple, 678 F.3d at 1331-32.

If a single reference is identified (or a hypothetical piece of art is created

through combination by an ordinary designer), it must then be analyzed from the

point of view of the ordinary observer. Int'l Seaway Trading Corp. v. Walgreens

Corp., 589 F.3d 1233, 1240-41 (Fed. Cir. 2009). The ordinary observer test looks

at whether the primary or hypothetical piece of combined prior art and the claimed

design are substantially the same such that an ordinary observer, giving such

attention as an ordinary observer usually gives, would be deceived into purchasing

5 These steps are required in order to follow the Supreme Courts guidance inGraham. 383 U.S. at 17-18 (the scope and content of the prior art are determined; differences between the prior art and the claims at issue are ascertained).


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one supposing it to be the other. Titan Tire Corp. v. Case New Holland, Inc., 566

F.3d 1372, 1384 (Fed. Cir. 2009).

B.The Legal Errors in the District Courts Analysis1.The Woolrich shoes cannot be a primary referencePrior art must create basically the same visual impression as the patented

design to serve as a primary reference. Durling, 101 F.3d at 103. The basically

the same test requires consideration of the visual impression created by the

patented design as a whole.6 Id. A reference does not convey basically the

same visual impression as a patented design when there are significant

differences between the two. Id. at 104.

Neither of the Woolrich shoes meet this standard.

Each of the Woolrich shoes is a structured indoor/outdoor shoe including a

prominent rolled over collar around the opening of the foot, a distinctly different

structured shoe body contour, and a thick sole and/or welt. A456, 8-12; A460-

61, 24-26. These and other features present a distinctly different overall visual

impression than the 183 design patent for a slipper-sock. These differences are

6 Notably, the district court completely failed to carry out the first step of this

analysis, i.e., discerning the correct visual impression created by the patenteddesign as a whole,Durling, 101 F.3d at 103, even though both parties presentedversions of the overall visual impression of the 183 patent in their briefing. A88;A346-47. The district court merely provided a statement of the concept of fuzzyslippers, and a description of a general concept in place of describing the overallvisual impression of the patent in question has been held to be erroneous. SeeDurling, 101 F.3d at 104.


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illustrated in relation to the Laurel Hill shoe in the following drawings:

The prominent rolled collar by itselfdistinguishes the Laurel Hill shoe from the

183 patented design. The other substantial differences in the shape of the shoes

and the sole of the shoes in relation to the 183 slipper-sock design further

distinguish the Laurel Hill shoe to the ordinary designer.

A comparison of the design for a slipper-sock in the 183 design patent in

relation to the Penta shoe leads to the same conclusion.

'183DesignPatent

Fleece projects- a b o v e foot

opening and doesnot overlie sides

Longer foot opening

Flat to e ~ 1 1 I ( ( f ( ( ( ( f ! r ( 1 1p o r t i o n - ~ ' ~ " , ~ , , ~ , , ~ , , ~. : : ~ ! i : i . m f : : : ; ; : = = = : t , !':i':;::, , ~ = = ~ : ; ; : , b , ~ , , ~ , ~ , , ! , , ~ , 1 f JNo thick sale line FIG,4 Higher sidewall

Raised toeportion

Shorter foot opening Rolled collar offleece overlapssides of shoe

LaurelHill

T hi c k s al e lineFIG.4 Lower

sidewall


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These and other distinctions between the slipper-sock of the 183 design

patent and the Woolrich shoes were provided in BDIs brief opposing High Points

motion for summary judgment and in the Declaration of Mr. Rake. A339; A349-

50. Mr. Rake pointed out that, unlike the slipper-sock design in the 183 design

patent, the Woolrich shoes include (1) fleece which substantially overlapped the

top of the shoe (a rolled collar), (2) substantial welts or a thick sole line, (3) an

Flat toeportion

T hinner f ronts li p pe r b o dy

'1111111111

Longer foot openingFleece projectsabove footopening and doesnot overlie sides

'183DesignPatentI , I J II'" /I

No weltNo thick s ol e l in e FIG. 4 Higher sidewall

Shorter foot opening

Fatter f ront (oe body

Raised toeportion

l .FIG.4T hi c k s ol e line T h I C ~ e ~ t a r t

Lowersidewall

Rolled collar o ffleece overlapssides of shoe

Penta


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overall different contour, and (4) a low sidewall. A456, 8-10; A460-61, 24-

26. For these and other reasons, Mr. Rake concluded that the Woolrich shoes do

not convey the same overall visual impression as the 183 design patent. A461,

27. In view of these substantial differences, neither Woolrich shoe could be

considered the primary reference in carrying out an obviousness analysis for the

slipper-sock of the 183 design patent. SeeDurling, 101 F.3d at 104;Apple, 678

F.3d at 1331-32.

Nowhere did the district court acknowledge or take into consideration the

prominent rolled collar, thick welts, or different shoe contours of the Woolrich

shoes as compared to the slipper-sock of the 183 design patent. Importantly, at

the summary judgment stage, all of these differences must be viewed in the light

most favorable to BDI. See, e.g., OddzOn Prods., 122 F.3d at 1401. Therefore, it

was error for the district court to summarily determine that the Woolrich shoes

created substantially the same visual impression as the 183 design patent and

could be used as the primary reference when the unrefuted evidence of record

concluded the exact opposite.

In fact, this case is analogous to this Courts recent decision inApple v.

Samsung. 678 F.3d 1314. In bothAppleand the present case, elegant, simple, and

highly successful products covered by design patents were compared to prior art

inappropriate as primary references. Id. at 1330. InApple, the district court found


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that Apples design patent covering the iPadwas invalid based on prior art that

included the 1994 Fidler reference. In fact, the alleged prior art reference inApple

was closer to the iPaddesign than the Woolrich shoes are to the 183 patent

design. The comparison presented by this Court showing the Apple patented

design and the 1994 Fidler reference is shown below:

Id. at 1330. The primary difference noted by this Court was that the Fidler tablet

includes a frame surrounding the screen that contrasted with the screen itself,

breaking the continuity of the glass surface. Id. at 1330-31. This difference was

sufficient for the Court to find that the Fidler tablet could not be used as a primary

reference. Id. at 1331 (stating that the D889 design creates the visual impression

of an unbroken slab of glass extending from edge to edge on the front side of the

tablet. The Fidler reference does not create such an impression). The Fidler

0504,889

/

1994 Fidler


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tablets frame is directly analogous to the rolled collar of the Woolrich shoes: the

collar overlays the surface of the shoe, breaking the smooth continuity of the shoe

body. On the other hand, the design of the 183 design patent has a continuous

outer body up to the foot opening, analogous to the surface of the iPad.

Furthermore, as explained above, this is just one of the differences between the

183 design patent and the Woolrich shoes. As in Apple, this Court should find

that the district court committed reversible error in relying on the Woolrich shoes

as the base reference in its prior art analysis.

2.The district court failed to explain whya person of ordinary skill in theart would modify the Woolrich shoes to achieve the same overall visualimpression as the 183 design patent

The district court also failed to address the many modifications of the

Woolrich shoes necessary to achieve the same overall visual impression as the

183 design patent either on its own or in combination with secondary references to

arrive at a hypothetical piece of prior art. SeeDurling, 101 F.3d at 103 (stating

that other references may be used to modify [the primary reference] to create a

design that has the same overall visual appearance as the claimed design). In its

opinion, the district court found that the Woolrich shoes were the same as the

183 design patent and that the only differences related to the soles. A18. In

reaching this conclusion, the district court summarily characterized the 183 design

patent as a generic piece of footwear, ignoring all constituent elements of the


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design that distinguish the 183 design patent from the Woolrich shoes. This broad

and conclusory approach is contrary to the law. As explained in theApplecase,

modifications mustnotbe considered from a broad or general concept (in that case,

a tablet, akin to footwear in this case). Apple, 678 F.3d at 1332.

For example, the district court never explained why an ordinary designer

would completely remove the visually prominent rolled collar on the Woolrich

shoes so that the fleece matched the interior fluff of the slipper-sock of the 183

design patent, creating a smooth outer surface. Notably, the analogous

modification of extending a sheet of glass over the frame at the edge of the Fidler

tablet (to arrive at a design with an overall visual impression that is basically the

same as the iPad) was precisely the modification that this Court rejected in

Apple, even in combination with a secondary reference having a flat glass front.

Id. at 1331.

Furthermore, the district court never explained why an ordinary designer

would remove the substantial welts and sole thicknesses in the Woolrich shoes to

appear more like the 183 design patent. These changes would make the Woolrich

shoes less functional. Considering the indoor/outdoor intended use of the

Woolrich shoes, these design changes would make no sense. SeeA206 (noting the

Penta sole is designed for inside or outside wear); A226 (noting the Laurel Hill

shoe has indoor/outdoor soles). Removing the welt and thick sole of the


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Woolrich shoes would make themlesssuitable for their intended purpose, and the

district court provided no reasons as to why an ordinary designer would make such

a modification.

In addition, the district court never explained why an ordinary designer

would expand the size and modify the contours of the foot opening of the Woolrich

shoes to more closely match the 183 design patent. Finally, the district court

never explained why an ordinary designer would modify the overall contours of

the Woolrich shoes, such as by lowering the raised toe of the Laurel Hill shoe and

reducing the thickness of the front of the Penta shoe, to be more similar to the

design in the 183 design patent. In fact, the district court never even discussed

why an ordinary designer would combine the dots on the soles of the prior art

patents, the only difference noted by the court, with the Woolrich shoes.7 Absent

some explanation accounting for these significant differences, the district court

failed to carry out the second step of the obviousness analysis, and its legal

conclusion of obviousness must be reversed. See Durling, 101 F.3d at 103.

3.The district court applied the wrong legal tests for obviousnessNot only did the district court come to the wrong conclusion for the reasons

explained above, the district court arrived at the wrong conclusion in a legally

7 Notably, Mr. Rake found no reason for an ordinary designer to combine the soledesigns of prior art patents U.S. D566,934 and U.S. D540,517 with the Woolrichshoes. A461-62, 28-29.


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erroneous manner in at least two distinct ways.

First, the district courts conclusion (i.e., that to an ordinary observer, they

are the same slippers, (A18) is contrary to the law, which requires an ordinary

designer to determine the primary reference, not the ordinary observer. Intl

Seaway, 589 F.3d at 1240. This difference is significant because adesigner in the

art would have a more discriminating eye than an ordinary observer,who may be

an ordinary purchaser of the shoes at issue. Applying the wrong standard

constitutes legal error.

Second, the law requires a district court to explain its reasoning in

comparing references. Although the trial court judge may determine almost

instinctively whether the two designs create basically the same visual

impressionthe judge must communicate the reasoning behind the decision. This

explanation affords the parties a basis upon which to challenge, and also aids the

appellate court in reviewing, the judge's ultimate decision. Durling101 F.3d at

103 (emphasis added). The district court failed to provide any legal explanation

underlying the conclusion that the Woolrich shoes and the slipper-sock of the 183

design patent have the same overall visual impression and that either of the

Woolrich shoes could qualify as the primary reference to one skilled in the art. See

Rosen, 363 F.2d at 391; Intl Seaway, 589 F.3d at 1240. In fact, it is even unclear


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whichWoolrich shoe the district court considered to be the primary reference.8

4.The district court failed to consider the secondary considerations ofnon-obviousness

An obviousness analysis requires a determination of secondary

considerations that may indicate non-obviousness. Graham, 383 U.S. at 17-18; see

alsoStratoflex,713 F.2d at 1538 (stating that it is jurisprudentially inappropriate

to disregard any relevant evidence relating to secondary considerations). Thus, it

was legal error for the district court to disregard BDIs secondary considerations of

non-obviousness.

a. Copying

Important secondary evidence of non-obviousness offered to the district

court by BDI included High Points copying of the SNOOZIES!slipper-socks

(embodiments of the 183 design patent). A353; A505. High Point never denied

that it copied the SNOOZIES!slipper-socks in its reply brief (A513) and the

similarity between SNOOZIES!and the High Point slipper is striking. Copying

by others is highly persuasive evidence of non-obviousness. Iron Grip Barbell Co.

v. USA Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2004) (stating that [t]his court

has previously identified, inter alia, commercial success, satisfaction of a long-felt

need, and copying to be relevant factors regarding secondary evidence of non-

obviousness);see alsoBenchcraft, Inc. v. Broyhill Furniture Indus., Inc., 681

8Seeopinion at A18, line 3, referring to the Woolrich prior art in general.


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F.Supp. 1190, 1217 (N.D. Miss. 1988) (stating that copying by others, including

the infringer, is perhaps one of the most probative and compelling arguments that

the design is novel and unique).

SNOOZIES!, a commercial embodiment of the 183 design patent, were

copied by High Point, as illustrated in the photographs below:

SNOOZIES! (A504) An Infringing High Point Slipper (A505)

b. Commercial successBDI also offered evidence of the commercial success of SNOOZIES!

.

A353; A504, 4-5. Common sense tells one that the overall visual impression of

any footwear is an important component of whether or not the footwear is

successful. The SNOOZIES!slipper-sock had sales of millions of dollars in 2011

alone. A340; A504, 5. Furthermore, sales have continued to expand worldwide.

In contrast, the record indicates that the Woolrich shoes were far less successful

than SNOOZIES!, with sales two orders of magnitude lower ranging from

$24,000 to $30,000 per year from 2005 to 2007 as compared to the millions of


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dollars in sales in a single year for SNOOZIES!. A512; A522-23, 5-7 (see also

underlying exhibits on A525, A527, and A529); A504. Indeed, it appears that the

commercial success of SNOOZIES!enticed High Point to copy SNOOZIES! in

the first place.

C.The District Court Committed Legal Error by Applying the WrongLegal Test for Functionality

1. A design patent is invalid as functional if the design is dictatedby the use or purpose of the article

A design patent is directed towards the ornamental design of an article of

manufacture. 35 U.S.C. 171. Invalidity due to functionality must be proven by

the party asserting the defense by clear and convincing evidence. L.A. Gear, Inc.

v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993). This Court applies

a stringent standard for invalidating a design patent on grounds of functionality.

Rosco, Inc. v. Mirror Lite Co., 304 F.3d 1373, 1378 (Fed. Cir. 2002). With respect

to the test for functionality, this Court has explained,

An article of manufacture necessarily serves a utilitarianpurpose, and the design of a useful article is deemed to befunctional when the appearance of the claimed design is

dictated by the use or purpose of the article

*****In determining whether a design is primarily functional orprimarily ornamental the claimed design is viewed in its entirety,for the ultimate question is not the functional or decorativeaspect of each separate feature, but the overall appearance of the


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article, in determiningwhether the claimed design is dictated bythe utilitarian purposeof the article.

L.A. Gear, 988 F.2d at 1123 (Fed. Cir. 1993) (emphasis added; internal citations

omitted). Thus, whether a design is primarily functional requires consideration

of whether the claimed design is dictated by a utilitarian purpose or functional

considerations. See PHG Techs., 469 F.3d at 1366;Rosco,304 F.3d at 1378;Avia

Group Intl., Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1563 (Fed Cir. 1988).

2.The district court erred by failing to determine whether the 183patent design was dictated by function

Despite the fact that the 183 design patent depicts a slipper-sock which, as

an article of footwear, inherently creates a particular visual impression and has

important ornamental aspects, the district court summarily concluded there is little

doubt that all major characteristics of this slipper are functional, A17; see also

A10-11; A18-19. In reaching this conclusion, the district court misunderstood the

applicable law of functionality.

By definition, a design patent covers the ornamental design of a useful (i.e.,

functional) article and thus the features at issue are often primarily functional.

The prohibition on functionality of a design patent does not mean that the design

cannot contain functional elements. See, e.g., Avia Group, 853 F.2d at 1563

(stating that a distinction exists between the functionality of an article or features

thereof and the functionality of the particular design of such article or features


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thereof that perform a function. Were that not true, it would not be possible to

obtain a design patent on a utilitarian article of manufacture). Indeed, the district

courts application of the primarily functional test would destroy the validity of

countless design patents.

The district court stated that when a design patentsprimaryfeatures are

functional rather than ornamental, it may be declared invalid citing PHG Techs.,

469 F.3d at 1366 (emphasis added). However, this CourtsPHG decision states

[t]he 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. 469 F.3d at

1366 (internal citations omitted).Critically, the district court never found that the

183 design was dictated by function and the district court even acknowledged

that at least the fuzz extending out of the slipper-sock was ornamental.

This CourtsPHG decision identifies various factors to consider in

determining whether the overall appearance of an article is dictated by function.

These include (1) whether the protected design represents the best design, (2)

whether alternative designs would adversely affect the utility of the article, (3)

whether advertising touts particular features of the design as having specific utility,

(4) whether there are concomitant utility patents, (5) whether there are elements in

the design not dictated by function, and especially (6) whether there are alternative

designs. PHG Techs., 469 F.3d at 1366 (quotingBerry Sterling Corp. v. Pescor


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Plastics, Inc., 122 F.3d 1452, 1456 (Fed. Cir. 1997)). With respect to factor (6) in

particular, [w]hen 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. PHG Techs.,469 F.3d at 1367 (quotingRosco, 304 F.3d at

1378). Not one of these factors is discussed in the district courts decision. It thus

appears that the district court failed to recognize that it was required to determine

whether the 183 design patent was dictated by function before it could find the

patent invalid on this basis. For all of the above reasons, the district court

committed reversible legal error in its functionality analysis.

3.The 183 patent design is ornamental and notdictated byfunction

Many of thePHG factors strongly support the conclusion that the 183

design patent isornamental. For example, alternative designs would not adversely

affect the utility of the article, there are no concomitant utility patents covering the

slipper-sock embodied in the 183 design patent, many elements of the 183 design

patent are not dictated by function, and there are alternative designs that could

accomplish the goals of comfortably and warmly covering the foot. As just one

example, the Woolrich catalog excerpts attached to High Points motion for

summary judgment depict numerous different slippers and shoes all designed to

comfortably and warmly cover the foot. A205-06; A209-10; A221-22; A225-26;

A229-30; A233-34. Similarly, a number of the prior art patents of record during


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prosecution of the 183 design patent show other designs of slippers designed to

comfortably and warmly cover the foot. A417; A420; A422; A425; A427-29.9

Finally, and as previously pointed out, it defies common sense to state that

the overall appearance of any footwear article does not have an important

ornamental aspect to it.10 BDI offered unrebutted testimony from Mr. Rake that

while a slipper must conform to a human foot, the foot only determines minimum

size and shape. A462. For example, the size, shape, and design of the foot

opening can vary substantially and still perform the necessary functions. Id.

Similarly, seams and stitch pattern placement and design perform a function, but

their placement and design can vary considerably and have a significant effect on

the overall appearance of the product. Id. In fact, there isno evidence in the

present record that the 183 design patent is dictated by function. Viewing the

evidence in the light most favorable to BDI, there can be no question that the 183

design patent is not dictated by function.

For all of the above reasons, the district court committed clear error in

determining that the 183 design patent is functional, and its holding of invalidity

9 The record further indicates that there may be thousands of design patents on

slippers. A339, footnote 2.10 Indeed, the importance of the ornamental appearance of footwear is reinforcedby this Courts numerous decisions addressing design patents on footwear. See,e.g., Crocs, Inc. v. Intl Trade Commn, 598 F.3d 1294 (Fed. Cir. 2010); Int'lSeaway, 589 F.3d 1233; Reebok Intl, Ltd. v. J . Baker, Inc., 32 F.3d 1552 (Fed. Cir.1994); Payless Shoesource, Inc. v. Reebok Intl, Ltd., 998 F.2d 985 (Fed. Cir.1993); Avia Group, Inc., 853 F.2d 1557.


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on this basis must also be reversed.

I I I.The District Court Abused its Discretion in Dismissing BDIs TradeDress Claim with Prejudice

The district court dismissed BDIs trade dress infringement claim with

prejudice even though substantial discovery remained to be taken, no prejudice

was found to High Point, and BDI offered an amended complaint within 30 days of

High Points motion. A339-40; A360-61; A431-50; see particularlyA437

(specifying at least six elements of trade dress in the SNOOZIES!slipper-socks).

High Points motion was also granted despite the district courts agreement that

High Points products shared some of the characteristics alleged to be

SNOOZIES!trade dress. A22. Nonetheless, the district court dismissed BDIs

trade dress infringement claim with prejudice, finding that the allegations pled in

BDIs original counterclaim were insufficient to state a cause of action and that it

was not inclined to permit amendment of the pleadings at this stage of the

litigation. A22. The dismissal with prejudice was improper and an abuse of

discretion.

BDI proposed and submitted an amended counterclaim as an exhibit to its

opposition to High Points Rule 12(c) motion. A361; A437-39; A448-49. The

proposed amended counterclaim alleged additional details with respect to

SNOOZIES! trade dress (A437), some of which the district court found to be

embodied in the accused products (A22). This request was treated as a motion for


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leave to amend. A22. BDI had not previously amended its counterclaims, and

leave to amend is to be liberally granted. SeeFed. R. Civ. P. 15(a)(2). See also

Ideal Steel, 652 F.3d at 325 (stating that [p]rior to trial, after the time to amend as

of right has passed, [t]he court should freely give leave [to amend] when justice so

requires.) (interpolation in original) (citingRachman Bag Co. v. Liberty Mut. Ins.

Co., 46 F.3d 230, 234-35 (2d Cir. 1995)). Indeed, the March 16, 2012 deadline for

amending pleadings in the case had passed only four days before High Point filed

its Rule 12(c) motion on March 20, 2012. A646-50; A68-69.

Under well settled Second Circuit law, it is improper for a district court to

dismiss a complaint [or counterclaim] with prejudice for failure to state a claim

without giving the plaintiff notice and an opportunity to be heard and to offer an

amended pleading. Hughes v. Anderson, 449 Fed. Appx. 49, 51 (2d Cir. 2011)

(non-precedential) (interpolation added) (citingPerez v. Ortiz, 849 F.2d 793, 797

(2d Cir. 1988)); A690-91. The Second Circuit has denied leave to amend only in

circumstances that are inapplicable to this case, e.g., futility, undue prejudice, or

delay of the courts schedule. See, e.g., McCarthy v. Dun & Bradstreet Corp., 482

F.3d 184, 200-01 (2d Cir. 2007).

High Point did not raise any issues regarding the specificity of BDIs trade

dress counterclaim until four days after the March 16, 2012 deadline to amend the

pleadings. Under the circumstances presented here, when a Rule 15(a) motion for


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42

leave to amend is filed in response to a dispositive motion under Rule 12(b) or

12(c) based solely on the pleadings, the motion for leave to amend will be granted

unless the amendment would be futile. E*Trade Fin. Corp. v. Deutsche Bank

AG, 420 F. Supp. 2d 273, 283 (S.D.N.Y . 2006) (citations omitted). As to this

point, the amendment to the trade dress counterclaim would not have been futile as

the district court itself noted that SNOOZIES! trade dress shared characteristics

with the accused products. A22.

Moreover, granting BDIs requested leave to amend would not have resulted

in undue prejudice, or delay of the district courts schedule. First, High Point was

on notice of the trade dress claim and the accused products from the filing of the

original counterclaim. Accordingly, there would have been no prejudice in

defending against the claim. Second, the amendment would not have caused delay

of the district courts schedule as there was sufficient time remaining in discovery

to serve and obtain responses to discovery regarding trade dress. Furthermore,

High Point itself had requested that the court extend the discovery dates prior to

the courts ruling on High Points motion for summary judgment. In contrast, the

dismissal with prejudice severely impairs BDI. For all of the above reasons, the

district courts extraordinary step of dismissing BDIs counterclaim with prejudice

constituted an abuse of discretion and should be reversed.


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43

CONCLUSION

For the foregoing reasons, BDI asks that this Court reverse the district

courts judgment that design patent D598,183 is invalid and reverse the district

courts dismissal of BDIs trade dress infringement claim with prejudice.

Respectfully submitted,

BUYERS DIRECT, INC.

Dated: October 11, 2012 /s/ Andrew M. Ollis

Andrew M. OllisOBLON, SPIVAK, McCLELLAND,MAIER & NEUSTADT L.L.P.

1940 Duke StreetAlexandria, Virginia 22314Attorney for Appellant


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CERTIFICATE OF COMPLIANCE WITH FED. R. APP. P. 32(a)(7)(B)

Counsel for Buyers Direct, Inc. certifies that the body of this brief,

beginning with the Statement of Related Cases on page 1 and ending with the

last line of the Conclusion on page 43, contains 8667 words, in compliance with

Rule 32(a)(7)(B)(i) of the Federal Rules of Appellate Procedure.

October 11, 2012 /s/ Andrew M. OllisAndrew M. Ollis

Counsel for Buyers Direct, Inc.


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ADDENDUM


54/77A 1

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------------XHIGH POINT DESIGN LLC,

Plaintiff,-against-

BUYER'S DIRECT, INC.,Defendant.

------------------------------------------------------------XBUYER'S DIRECT, INC.,Counterclaim Plaintiff/Third Party Plaintiff,-against-MEIJER, INC., SEARS HOLDINGS

CORPORATION, AND WAL-MARTSSTORES, INC., Third Party Defendants.-------------------------------------------------------------X

11 CIVIL 4530 (KBF)JUDGMENT

USOCSONYDOCUMENTELECfRONICALLY FILEDDOC 1: ,, .. -..rDATE FILED: ~ ' " I t ~

Plaint iff and third party defendants (collectively referred to herein as "Movants") havingmoved for summary judgment, Movants contend that Buyer's Direct' s design for fuzzy slippers isinvalid as a matter oflaw-i.e . that the design is both obvious and merely functional, and separately,Movants having moved for judgment on the pleadings as to Buyer's Direct's trade dresscounterclaim, and the matter having come before the Honorable Katherine B. Forrest, United StatesDistrict Judge, and the Court, on May 15, 2012, having rendered its Memorandum and Ordergranting plaintiffs and third party defendants' motion for summary judgment as to invalidity;granting plaintiff's and third party defendants' motion for judgment on the pleadings with respectto defendant's trade dress claim, and directing the Clerk of the Court to enter judgment in favor ofplaintiff High Point Design LLC and third party defendants Meijer, Inc., Sears HoldingsCorporation, and Wal-Mart Stores, Inc. Declaring the '183 patent invalid and thus, not infringed byHigh Point Design LLC or Meijer, Inc., sears Holdings Corporation, and Wal-Mart Stores, Inc., it


55/77A 2

is,ORDERED, ADJUDGED AND DECREED: That for the reasons stated in the

Court's Memorandum and Order dated May 15, 2012, plaint iffs and third party defendants' motionfor summary judgment as to the invalidity is granted; plainti ffs and third party defendants' motionfor judgment on the pleadings with respect to defendant's trade dress claim is also granted, andjudgment is hereby entered in favor ofplaintiff High Point design LLC and third party defendants'Meijer, Inc., Sears Holdings Corporation, and Wal-Mart stores, Inc. Declaring the '183 patentinvalid and thus, not infringed by High Point Design LLC or Meijer, Inc., Sears HoldingsCorporation, and Wal-Mart Stores, Inc.Dated: New York, New YorkMay 16,2012

RUBY J. KRAJICK

B

TI fJS DOCUMENT WAS ENTEREDONTHEDOCKETON ________


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Case 1:11-cv-04530-KBF Document 48-1 Filed 05/16/12 Page 1 of 5

A 3

.

United States Disbict ur tSouthern District of New orkOffice of the CleekU.S. CourthouseSOO Pearl Street, New York, N.Y. 0007-1213

Date:InRe:

Case#:

Dear Litigant,Enclosed is 'a copy of he judgment entered in your case.Your.attention is directed to Rule 4(a)(l) of the F

requires1ha.ti fyouwish to appeal the judgment in yo m case, youoftbe date ofeil.1ry of he judgment (60 days i f he United Statesis a party).

-v-

( )

Rules of Appellate Procedure, whichust file a notice ofappealwithin 30daysan officer or agency of he United States

I fyou wish to appeal the judgmentbut for any reason Y' are unable to file your notice of appealwithin the required time, you may make a motion for an extensi of ime in accordance with the provisionof Fed. l l App. P. 4(a)(5). That rule requires you to show "exc le neglect" or "good cause" for yourfailure to file your notice ofappeal within the time allowed. Any h motion must first be serVedupon theother patties and then filed with the Pro Se Office no later 60.days from the date of entry of thejudgm.ent (90 days i f he United States or an officer or agency o the United States is a party).

The enclosed Forms 1, 2 and 3 cover some common sithem if ppropriate to your circl.JJI1Stimces.

The Filing fee for a notice ofappeal is $5.00 and thethe "Clerk of he Court, USDC, SDNY" by certified check, maecepted.

APPEAL FORKSU.S.D.C. S.D.N.Y. CMIECF SupportUnit

11ate docketing fee is $450.00 payable toorder or cash. No personal checks are

. . - , Deputy Clerk

Revised: May4, 2010


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A 4

United States District C urtSouthern District ofNew orkOffiee of the ClerkU.S. Courthouse500 Pearl Street, New York, N.Y. 0007-1213

- - ~ - - - - - - - - _ . . _ __________ .... ---------XIII-"- IIIl- - - - - - - - - - - - - - - - - - - - - - - - -X

INOTICE OF APPEALI

I civ. ( )

Notice is hereby given that ---------+------------(party)hereby p p e a l s to the United States Court ofAppeals for the d Circuit from the Judgment [desenoe it ]

entered in this action on the ---- day of ------1---(day) (mo ) (year)(Signature)

(Address)

(City, State and Zip Code)Date:--------- ( (Telephone Number)

Note: You may use this form to take an appeal provided that it received by the office of he Clerk of heDistrict Court within 30 days of he date on which the judgment was entered (60 days i f he United Statesor an officer or agency of he United States is a party).APJ?EAL f01!MS

IT!::: nc . S.D.N.Y. CM/ECF'SUDDort Unit 7.


58/77


A 5

FORM 1United States District Ct ur tSouthern District of New ork

Office of the ClerkU.S. Courthouse500 Pearl Street, New York, N.Y. 0007-1213

____________________________________X I: M O T i l N F O R E ~ O N O F ~I TO ~ E ANOTICE OF APPEAL

-V- II1 civ. ( )I---------------------------XPursuant to Fed. R. App. P. 4(a)(5), _ _ _ _ _ ,If --------- respectfully(party)

(party)_ __,1-------- but failed to file a

requests leave to file the wjtl:rin notice of appeal out of time.desires to appeal the judgment in this action entered onnotice ofappeal within the required number of days because: (day)

[Expla:in here the "excusable neg lect '' or "good cause" which led to Y' fitilure to file a notice of appeal witlrin therequired number of days.]

(Signature)

(Address)

(City, State and Zip Code)

Date:-------- ( }_______I (Telephone Nmnber)1. : You may u8e this :form, together with a copy of Form 1, . you are seeking to appeal a judgment anddid not file a copy of Form 1 within the required time. I fyou llow this procedure, these forms must bereceived in the office of he Clerkof he District Courtno later 60 days of he date which the judgmentwas entered{90 days i f he United States or an officer or agen of the United States is a party).

APl?BAI.o FORMSU.S.D.C. S.D.N.Y. CM/BCF Support Unit 3 R-evised: May 4. 2010


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A 6

r ,.

D i s t r - i ~ Court will receive it within the 30 days of thedare onf u e u r ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - -FORM 3

United States DistrictSouthern District of New York

~ - -

-V-

Office of the Clerku.s. Courthouse500 Pearl Street, New York, N.Y.

---- --XIIIIIII------------------------------X

AFFIRMATION OF SERVICE

Iciv. ( )

I ,--------------- ' ~ l a r e u n d e r penalty ofperjury that I have

s ~ ~ a c o p y o f i l i e a ~ h e d - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - - - -

upon

~ ~ ~ i s - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - ~ - - ~ - - - - -

Date:----------NewYorlc, NewYodc

APPEAL FQRMSU.SD.C. S.D.N.Y.CMIECF Support Unit 5

(Signature)(Address}

(City, State and Zip Code)

Revised: May4, 2010


60/77


A 7

...'United States District Co

Southern District of New orkOffice of the ClerkU.S. CourthouseSOO Pearl Street, NeW York, N . Y ~ 1 -1213

- - - - - - - - - - - - --- XII OTICE OF APPEAL

------- - - - -

-V- IIIANDFOREXTENSIONOFTJME

II----------------------------X

( )

l. Notice is hereby given that - - - - - - - - - - 1 - - - - - - - hereby appeals to(party)the United States Court of Appeals for the Second Circuit :from e judgment entered on - - - - - [Give a description of he jud ent]

2. In the event that this form was not received in the Clerk office within the required time- - - - - - ~ - - - - - - respectfully requests comt to grant an extension of ime in(party}accordance with Fed. R App. P. 4(a)(5).

a. In support of his request, - - - - - - -+--- - - - - - - states that(party)this Court's judgment was received on - - - - - - - - - 1 - - - and that 1his form was mailed to the(date)comton --------date)

(Signature)

(Address)

(City, State and Zip Code)Date:------- ( ) (Telephone Number)Note: You may use this form i f you are mailing your notice oi appeal and are not sme the Clerk of theAPP.Jii:AL PORMSU.S.D.C. S.D.N.Y. CMIBCF Support Unit 4 Revised: May 4, 2010


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Case 1:11-cv-04530-KBF Document 47 Filed 05/15/12 Page 1 of 16

A 8

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK-----------------------------------XHIGH POINT DESIGN LLC,

P l a i n t i f f ,-v -

BUYER'S DIRECT, INC., Defendant .----- -----X

BUYER'S DIRECT, INC.,Counterclaim P l a i n t i f f /Thi rd Par ty P l a i n t i f f ,-v -

HIGH POINT DESIGN LLC,Counterclaim Defendant ,

MEIJER, INC., SEARS HOLDINGSCORPORATION, AND WAL-MART STORES,INC. I

Third Par ty Defendants .-----------------------------------XKATHERINE B. FORREST, D is t r i c t Judge:

USDCSDNYDOCUMENTELECTRONICALLY FILEDDOC#:D A T E F ~ I L ~ E = D ~ : ~ ~ ~ r . ~ - 1 1

11 Civ. 4530 (KBF)MEMORANDUM & ORDER

This i s a case about whether a des ign pa ten t fo r fuzzys l i ppe r s i s va l id and enforceable - -and t he re fo re whetherp l a i n t i f f High Poin t Design LLC ("High Point") and t h i r d par tydefendants Meijer , Inc . , Sears Holding Corporat ion, and Wal-MartStores , Inc. ( the " th i rd par ty defendants") may be held l i ab l e

1


62/77


A 9

fo r infr ingement . As se t for th below, the answer to bothquestions i s "no."

On July 1, 2011, High Point brought a two-count act ionagains t defendant Buyer 's Direct , Inc. ("Buyer 's Direct") fordeclarat ions that High Point ' s par t i cu la r version of fuzzys l ippers do not infringe the design patent owned by defendantsand tha t such patent i s , in any event , inval id andunenforceable. (Dkt. No. 1.) Buyer's Direct responded with atwo-count counterclaim for pa tent and t rade dress infringement,and joined as th i rd party defendants three re ta i lers--Mei jer ,Inc. , Sears Holdings Corporation and Wal-Mart Stores, Inc . - - to(and through) whom p la in t i f f i s al leged to se l l i t s s l ippers(Dkt. No. 13.}

After a period of discovery, p la in t i f f and th i rd partydefendants (col lect ively referred to herein as "Movants"} havenow moved fo r summary judgment. Movants contend tha t Buyer 'sDirec t ' s design for fuzzy s l ippers i s inval id as a matter ofl aw-- i .e . , tha t the design i s both obvious and merelyfunct ional . Separately, Movants seek judgment on the pleadingsas to Buyer 's Direc t ' s t rade dress counterclaim.

This Court has careful ly examined Buyer's Direc t ' s paten t - Patent No. D598,183S (the " '183 patent"}--and f inds tha t it i sboth obvious as against the pr io r a r t - - a t the end of the day iti s a ra ther run-of- the-mil l fuzzy s l ipper--and in a l l events ,

2


63/77


A 10

its f ea tu res a re merely funct ional . The face of the pa ten ti t s e l f l eaves no doubt t ha t there i s nothing ornamental aboutthe s l i ppe r s .

Accordingly, p l a i n t i f f and t h i r d - pa r ty defendants ' motionfo r summary judgment i s GRANTED.

In addi t ion , th i s Cour t f inds t ha t defendant 1 S counterclaimand t h i rd par ty claim for t rade dress in f r ingement i s conclusoryand f a i l s to meet the minimal r equi rements fo r claims of t h i sso r t . Given the l a t e s tage of these proceedings , th i s Courtdismisses t ha t claim with pre jud ice .

On the ba s i s t ha t Buyer ' s Di r e c t ' s o ther counterclaim i sfo r a dec la ra t ion of in f r ingement of the '183 pa ten t by HighPoin t and the Court f inds th e '183 pa ten t inva l id , Buyer ' sDi r e c t ' s remaining counterclaim i s r endered moot. This ac t ioni s t he re fo re dismissed in i t s e n t i r e t y .I . FACTS

No one can se r ious ly doubt t ha t s l i ppe r s with an openingfo r a foo t t ha t conta in a fuzzy (f leece} l i n ing and have asmooth ou te r sur face have been around fo r years . Indeed, theCourt assumes t h a t many readers of t h i s opin ion have had theexper ience of having placed t h e i r own foo t in such a s

Documents

High Point - Appellant Brief