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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.
REPLY BRIEF FOR APPELLANT BUYERS DIRECT, INC.
January 14, 2013
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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TABLE OF CONTENTS
INTRODUCTION .....................................................................................................1
ARGUMENT.............................................................................................................3
I. Legal Errors Require Reversal of the Grant of Summary Judgment of
Obviousness of the 183 Design Patent ...........................................................3
A. The burden of proof at the summary judgment stage is high and genuine
issues of material fact remain ...................................................................3
B. The district court committed legal error by failing to compare the 183
design patent to the prior art .....................................................................7
C. High Point and the district court avoid any direct visual comparisons
between the Woolrich shoes and the 183 design patent..........................9
D. High Point emphasizes the district courts improper reliance on personal
recollections of unspecified slippers not of record...................................9
E. The Apple v. Samsungcase is an apt comparison ..................................10
F. High Point misstates the law with respect to copying............................11
II. The District Courts Misapplication of the Law Requires Reversal of the
Grant of Summary Judgment of Functionality of the 183 Design Patent ....13
III.The District Court Abused Its Discretion in Dismissing BDIs Trade Dress
Claim with Prejudice......................................................................................20
A. High Points reliance on good cause case law is misplaced. ..............22
CONCLUSION........................................................................................................25
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TABLE OF AUTHORITIES
CASES
Advanced Display Sys., Inc. v. Kent State Univ.,212 F.3d 1272 (Fed. Cir. 2000) ................................................................... 11, 12
Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc.,344 F.3d 1186 (Fed. Cir. 2003) ......................................................................... 12
Apple Inc. v. Samsung Elecs., Co.,678 F.3d 1314 (Fed. Cir. 2012) ................................................ 3, 4, 9, 10, 11, 14
Avia Group Intl, Inc. v. L.A. Gear of California, Inc.,
853 F.2d 1557 (Fed. Cir. 1988) ........................................................................ 15
Berry Sterling Corp. v. Prescor Plastics, Inc.,122 F.3d 1452 (Fed. Cir. 1997) ......................................................................... 18
Durling v. Spectrum Furniture Co.,101 F.3d 100 (Fed. Cir. 1996) ................................................................ 3, 4, 8, 9
Egyptian Goddess, Inc. v. Swisa, Inc.,543 F.3d 665 (Fed. Cir. 2008) ............................................................................. 3
Graham v. John Deere,383 U.S. 1 (1966) .............................................................................................. 11
Holmes v. Grubman,568 F.3d 329 (2d Cir. 2009) .............................................................................. 22
Holmes v. Grubman(In re WorldCom, Inc. Sec. Litig.),456 F. Supp. 2d 508 (S.D.N.Y. 2006) ......................................................... 22, 23
Hughes v. Anderson,449 Fed. Appx. 49 (2d Cir. 2011) .............................................................. 20, 21
In re Rosen,673 F.2d 388 (C.C.P.A. 1982) ............................................................................ 4
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Int'l Seaway Trading Corp. v. Walgreens Corp.,589 F.3d 1233 (Fed. Cir. 2009) ......................................................................... 4
Iron Grip Barbell Co., Inc. v. USA Sports, Inc.,392 F.3d 1317 (Fed. Cir. 2004) ................................................................... 12, 13
Kassner v. 2nd Avenue Delicatessen Inc.,496 F.3d 229 (2d Cir. 2007) .............................................................................. 24
L.A. Gear, Inc. v. Thom McAn Shoe Co.,988 F.2d 1117 (Fed. Cir. 1993) ................................................................... 15, 18
Microsoft Corp. v. i4i Ltd. Pship,564 U.S. ___, 131 S.Ct. 2238 (2011) .................................................................. 7
OddzOn Prods., Inc. v. J ust Toys, Inc.,122 F.3d 1396 (Fed. Cir. 1997) .......................................................................... 3
Parker v. Sony Pictures Enmt, Inc.,19 F. Supp. 2d 141 (S.D.N.Y. 1998) ........................................................... 23, 24
Perez v. Ortiz,849 F.2d 793 (2d Cir. 1988) .............................................................................. 21
PHG Techs., LLC v. St. John Cos.,469 F.3d 1361 (Fed. Cir. 2006) ................................................................... 18, 19
Red Sea Tanker Fund v. Chase Manhattan Bank, N.A.,No. 97-7864, 1998 U.S. App. LEXIS 2950 (2d Cir. Feb. 24, 1998) ................. 10
Richardson v. Stanley Works, Inc.,597 F.3d 1288 (Fed. Cir. 2009) ......................................................................... 19
Stratoflex, Inc. v. Aeroquip Corp.,713 F.2d 1530 (Fed. Cir. 1983) ......................................................................... 12
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OTHER AUTHORITIES
2DONALD S.CHISUM,CHISUM ON PATENTS 5.05[5][a] (Matthew Bender) ....... 12
Fed. R. Civ. P. 15(a) ............................................................................................... 22
Fed. R. Civ. P. 16(b)(4) .......................................................................................... 20
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INTRODUCTION
This case involves a design patent and trade dress for the SNOOZIES!
slipper-sock. SNOOZIES!
has been incredibly successful, with the product now
offered in thousands of stores throughout the United States and around the world.
That success stems in great measure from the distinctive visual design of the
SNOOZIES!
product, a design captured by U.S. design patent no. D598,183 (the
183 design patent).
The patent side of this case comes before this Court on summary judgment
where all material facts must be viewed in the light most favorable to Buyers
Direct, Inc. (BDI). Despite High Point Design LLCs (High Point) arguments
to the contrary, genuine issues of material fact exist that preclude summary
judgment on the basis of obviousness. The district court ignored at least the
absence of a prominent rolled collar, the absence of a prominent welt around the
sole, and the many features contributing to a contour that readily differentiate the
Woolrich shoes from the 183 design patent.
The district court also failed to correctly apply this Courts law of
obviousness. Instead, it offered conclusory statements without actually comparing
the Woolrich shoes to the 183 design patent as required in the first step of an
obviousness analysis. These substantial errors require a reversal of the district
courts decision.
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Similarly, the district court failed to correctly apply the law of functionality.
It never addressed whether the 183 patent design was dictated by function and
never addressed the many factors this Court has found relevant to the issue. High
Point justifies these failures by alleging that particular features in the 183 design
patent are functional. Yet there is no factual support in the record for any of High
Points assertions, and High Point ignores the ornamental aspects of each feature.
These errors preclude a finding that the 183 design patent is invalid as functional,
and at the very least genuine issues of material fact preclude summary judgment.
Finally, in response to the unwarranted, severe sanction of the dismissal of
BDIs trade dress claim with prejudice, High Point reframes the issue. It now
argues that BDI needed a motion to amend the scheduling order to allow an
amended BDI counterclaim, and that such a motion was properly denied. This
argument attempts to obscure the fact that neither the district court nor High Point
cite any authority justifying the dismissal of BDIs trade dress claim with
prejudice. In this case, High Point waited to first raise the sufficiency of BDIs
trade dress claim until four days after the deadline to amend pleadings had passed.
BDI responded promptly and submitted an amended pleading to the district court
within 30 days when substantial discovery remained to be taken. Under these
facts, the dismissal of BDIs trade dress claim with prejudicewas an abuse of
discretion.
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ARGUMENT
I. Legal Errors Require Reversal of the Grant of Summary J udgment ofObviousness of the 183 Design Patent
The decision below should be reversed and remanded. The district
court improperly held, on summary judgment, that the 183 design patent was
obvious, primarily in view of the Woolrich shoes. The district court committed
clear error in holding that a designer of ordinary skill in the art would have found
the Woolrich shoes to be basically the same design as the 183 design patent, and
thus, suitable as a primary reference without considering unrebutted evidence to
the contrary. Genuine issues of material fact preclude this finding.
A.The burden of proof at the summary judgment stage is high andgenuine issues of material fact remain
Summary judgment is only appropriate where there is no genuine issue as to
any material fact, and all doubts must be resolved in favor of the non-moving
party. OddzOn Prods., Inc. v. Just Toys, Inc.,122 F.3d 1396, 1401 (Fed. Cir.
1997).
An obviousness analysis for a design patent requires a two step process.
Apple Inc. v. Samsung Elecs., Co.,678 F.3d 1314, 132930 (Fed. Cir. 2012);
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
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as the claimed design. Durling, 101 F.3d at 103 (quoting In re Rosen, 673 F.2d
388, 391 (C.C.P.A. 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. Once the piece of prior art has
been constructed, the ordinary observer test is required, not the view of one
skilled in the art. Int'l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233,
1240 (Fed. Cir. 2009).1
The central material facts in dispute in the obviousness analysis here revolve
around whether the Woolrich shoes have basically the same design or create the
same visual impression as the 183 design patent.
High Points implausible defense of the district courts invalidity decision is
that any differences between the Woolrich shoes2
and the 183 design patent are
minute (HP Br. at 12) or not significant enough to warrant mentioning (HP Br.
1 BDI notes, however, that this Courts recent decision in Applestates thatthe ultimate inquiry ... is whether the claimed design would have been obvious to
a designer of ordinary skill who design articles of the type involved. 678 F.3d at1329 (internal citations omitted, emphasis added).
2Contrary to High Points assertions on pages 1112 of its brief, BDI does
not concede that High Point made an adequate showing that the Woolrich shoes
constitute prior art. SeeA35354; seealsoBDIs opening brief at 8 (stating[e]ven ifprior art, these two Woolrich shoes convey a dramatically differentvisual impression than the 183 design patent and are readily distinguishable from
the slipper-socks in the 183 design patent) (emphasis added). It also remains
unclear whether the district court was relying, for example, simply on the catalogs
showing a small picture of the Woolrich shoes, the physical samples of the
Woolrich shoes, or both.
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A comparison between the 183 design patent and the Penta indoor/outdoor
structured shoe leads to the same conclusion. The Penta indoor/outdoor shoe has a
prominent rolled collar and thick sole and welt, all of which are completely absent
from the 183 design patent. A460, 24; A457, 11; A460, 25. The Penta shoe
also has a substantially different curved silhouette due to its raised toe and heel,
fatter contour around the front of the shoe, prominent seam on the sidewall with
visible stitching, shorter foot opening relative to the length of the shoe, and lower
sidewall. A460, 2426; A49495; A45657, 912. These features once
again present a very different overall visual impression than the 183 design patent.
Genuine issues of material fact exist as to whether the Penta shoe design is
basically the same as the 183 design patent. A349A350.
For these and other reasons, Mr. Rake, BDIs industrial design expert,
concluded that the Woolrich shoes do not convey the same overall visual
impression as the 183 design patent. A461, 27. Specifically, Mr. Rake opined
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 (emphasis added). It was error for the district
court to summarily determine that the Woolrich shoes created basically the same
visual impression as the 183 design patent and could be used as the primary
reference when the unrebutted evidence of record shows the exact opposite.
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High Point claims that because the Woolrich shoes were not before the
Patent Office the presumption of validity is severely weakened, citing Microsoft
Corp. v. i4i Ltd. Partnership, 564 U.S. ___, 131 S.Ct. 2238, 2251 (2011). HP Br.
at 12. This statement of the law is wrong. Microsoftsays nothing about severely
weakening the presumption of a patents validity. At best, the Supreme Court
noted that the challengers burden of proving invalidity by clear and convincing
evidence maybe easier to sustain, but further held that the existence of new prior
art did not lower the standard of proof from clear and convincing evidence to a
preponderance of the evidence. Id. at 225152. The Microsoftcase also did not in
any way lessen the burden for succeeding on summary judgment.
B.The district court committed legal error by failing to compare the 183design patent to the prior art
High Point correctly states that the district court had the opportunity to
examine the Woolrich shoes and compare them to the 183 design patent. HP Br.
at 13. The district court, however, failed to make any meaningful comparison in its
opinion. Instead, the entirety of the district courts obviousness discussion
involving the Woolrich shoes is found in a mere three sentences:
The overall visual effect created by the Woolrich prior art is
the same overall visual effect created by the 183 patent. To an
ordinary observer, they are same slippers. The only difference
between the slippers relates to the sole of the slippers, which is
quite minor in the context of the overall slipper.
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A18. High Point defends this conclusory discussion by pointing to this Courts
comment in Durling that in some instances a court may determine whether a prior
art reference creates the same overall visual effect as a patented design almost
instinctively. HP Br. at 13. High Point ignores the next sentencesin Durling
which state, Nonetheless, the judge mustcommunicate the reasoningbehind the
decision. This explanation affords the parties a basis upon which to challenge, and
also aids the appellate court in reviewing. Durling, Inc., 101 F.3d at 103. As the
conclusory discussion repeated above plainly shows, the district court failed to
communicate any reasoning as to why it determined that the Woolrich shoes were
basically the same as the 183 design patent.
Indeed, the district court omitted another step in the obviousness analysis,
which is to determine the correct visual impression created by the patented design
as a whole.4 Id. Even to the extent that the district courts comment about slippers
with a foot opening that contains a fuzzy (fleece) lining and has a smooth outer
surface (A10) could be considered such a description, that description would be far
too general to adequately capture the claimed design. Durling, 101 F.3dat 104
(invalidity decision reversed where the district court reduced the claimed design to
the general concept of a sectional sofa with integrated end tables which did not
4Appellant described the visual impression provided by the 183 design patent in
its brief to the Court below at A34647.
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evoke a visual image consonant with the claimed design).
C.High Point and the district court avoid any direct visual comparisonsbetween the Woolrich shoes and the 183 design patent
Strikingly absent from all of High Points briefing before the district court is
anydirect visual comparison between the 183 design patent and the Woolrich
shoes. On appeal, High Point continues to rely only on attorney argument, without
showing any visual comparison of the images available in the record in its brief.
SeeBDIs opening brief at 1012; 2526. The complete absence of a visual
comparison is astonishing, as such a comparison of the two designs is the heart of
the invalidity analysis. See e.g., Apple, 678 F.3d at 1330 (this Court relying on [a]
side-by-side comparison of the two designs [to show] substantial differences in the
overall visual appearance between the patented design and the Fidler reference).
Equally remarkable is the absence of any direct visual comparison between the
Woolrich shoes and the 183 design patent in the district courts opinion.
D.High Point emphasizes the district courts improper reliance onpersonal recollections of unspecified slippers not of record
In its introduction, High Point points out the district courts numerous
gratuitous and unsupported statements alleging ubiquitous similar fuzzy slippers
in retail stores (A11), that the patented design appears to look like many slippers
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that are widely available (A10), and what High Point characterized as a factual
finding that the slippers purportedly look like unspecified slippers the Court wore
in her youth (A11). HP Br. at 3, 7. These unspecified and unsupported
recollections by the district court are not of record and cannot be identified or
challenged by Appellant. High Point relies upon the district courts personal
recollections of unspecified slippers to argue that the district courts decision
finding the 183 design patent obvious should be affirmed. This reliance is
improper. SeeRed Sea Tanker Fund v. Chase Manhattan Bank, N.A., No. 97-
7864, 1998 U.S. App. LEXIS 2950, at *89 (2d Cir. Feb. 24, 1998) (A trial judge
may not make findings that are unsupported by the evidence, and based solely on
the judge's personal experience. If the rule were otherwise, the results of legal
proceedings would depend on the particular judges experience in commerce,
rather than on the evidence put forth by the parties.) (unpublished). A695.
E.TheApple v. Samsungcase is an apt comparisonHigh Points attempts to distinguish the Apple v. Samsungdecision actually
underscore the remarkable similarities between the facts in this case and those in
Apple v. Samsung. 678 F.3d 1314 (Fed. Cir. 2012).
High Point emphasizes that, in Apple, the absence of the frame or border
in the iPad
design patent was a significant difference from the prominent frame in
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the prior art, and thus the prior art design did not qualify as a primary reference.
678 F.3d at 1331; HP Br. at 25. As with the frame in the prior art reference in
Apple, the rolled collars of the Laurel Hill and Penta shoes are absent from the
design of the 183 design patent and contrast sharply with the smooth outer surface
of the shoe. The design of the 183 design patent instead has a continuous outer
body up to the foot opening (i.e., no rolled collar), analogous to the surface of the
iPad
which lacks a frame around the screen. Furthermore, the thick sole and/or
welt in the Laurel Hill and Penta shoes is a secondmajor element that is simply
absent from the design in the 183 patent.
Thus, as admitted by High Point in relation to Apple, HP Br. at 25, the
absence of such distinguishing features from the 183 design patent are sufficient
to prevent either Woolrich shoe from serving as a primary reference. 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 obviousness analysis.
F.High Point misstates the law with respect to copyingAn obviousness analysis requires a determination of secondary
considerations that may indicate non-obviousness. Graham v. J ohn Deere, 383
U.S. 1, 1718 (1966). Copying is particularly relevant evidence. Advanced
Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1285 (Fed. Cir. 2000)
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(Objective considerations such as failure by others to solve the problem and
copying, may often be the most probative and cogent evidence of
nonobviousness.) (citations omitted). It was legal error for the district court to
disregard BDIs secondary considerations of non-obviousness.
High Point does not deny that it copied the SNOOZIES!
product. Instead,
High Point contends that it is not copying by the accused infringeralone, but
copying by others that must be weighed in this analysis, HP Br. at 22 (emphasis in
original). High Points statement of the law is wrong. As stated inCHISUM ON
PATENTS, [i]n a number of cases, the courts have considered deliberate copying of
the patent holders device by the defendant in an infringement suit as evidence
tending to support patentability. 5.05[5][a], emphasis added, A699.5
In
addition, nowhere does the Iron Grip Barbell case relied on by High Pointsuggest
that copying by the accused infringer is irrelevant as a secondary consideration of
non-obviousness. Iron Grip Barbell Co., Inc. v. USA Sports, Inc., 392 F.3d 1317
(Fed. Cir. 2004).
High Point further argues that it is inappropriate to examine whether a
specific product was copied, but only whether the patent itself was copied. High
5See also Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc., 344 F.3d
1186, 1193, 1196 (Fed. Cir. 2003); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d1530, 1541 (Fed. Cir. 1983) ([A] finding that a claimed invention has or has not
been appropriated by the alleged infringer may carry substantial weight in a courts
analysis of all the evidence bearing on the obvious-nonobvious issue.).
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Point misunderstands the law. The relevant question is indeed whether a product
that is an embodiment of the patent has been copied. Specifically, the quotation
relied upon by High Point from Iron Grip Barbell (HP Br. at 22) explains,
[n]ot every competing product that arguably falls within the
scope of a patent is evidence of copying. Otherwise every
infringement suit would automatically confirm the
nonobviousness of the patent. Rather, copying requires the
replication of a specific product. This may be demonstrated through access to, and substantial similarity to, the patentedproduct (as opposed to the patent).
392 F.3d at 1325 (emphasis added). Therefore, High Points argument that
comparisons with BDIs commercial product, an embodiment of the 183 design
patent, is inappropriate and should also be disregarded.6
I I .The District Courts Misapplication of the Law Requires Reversal of theGrant of Summary J udgment of Functionality of the 183 Design Patent
The 183 design patent covers the ornamental design of a slipper, including
the commercial slipper sock embodied by SNOOZIES!. The ornamental aspects
of the design include the distinctive fleece which extends slightly out of the foot
opening, the smooth outer surface surrounding the foot, a thin connection between
the upper and the lower portions, a larger than usual foot opening, and particular
6HP questions whether the SNOOZIES
products are embodiments of the 183
design patent. HP Br. at 22, fn4. BDI submits that SNOOZIES
certainly are an
embodiment of the 183 patent, though it agrees with High Point that the district
court did not rule on this issue. At the very least this issue presents yet another
genuine issue of material fact that precludes a finding of summary judgment.
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curves at the front and the back that collectively give the design a distinctive
contour. Some aspects of the design are distinctive in their simplicity. But as
Applehas shown repeatedly, simple design features may be highly distinctive.
High Point first argues that because the district court represents that it
carefully reviewed the record, and the representation must be taken at face value,
this Court is precluded from finding clear error. HP Br. at 28. Not surprisingly, no
authority is supported for this novel proposition. Under this test, the mere
statement that any district court carefully considered the record would render
every decision unappealable, a clearly unsupportable conclusion.
High Point quotes the district courts statements that the patented design
completely covers the foot; that is a functional design to provide complete foot
warmth and protection The slipper at issue has a fuzzy interior for comfort
(A19) as a sufficient basis for the district courts functionality determination. HP
Br. at 27. But this logic cannot withstand scrutiny. If all that were required to be
functional is that a slipper cover the foot and provide warmth and protection, it
would be impossible to obtain design patent protection for any slipper fully
covering the foot, no matter how different the slipper looks from what came
before. Such a result defies logic.
By definition, a design patent covers the ornamental design of an article of
manufacture (i.e., a functional article). Thus, the prohibition on functionality of a
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design patent does not mean that features in a patented design may not also
perform a function. See, e.g., Avia Group Intl, Inc. v. L.A. Gear of California,
Inc., 853 F.2d 1557, 1563 (Fed. Cir. 1988) (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 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 overbroad application of the
functional test would destroy the validity of countless design patents.
High Point also asserts that various aspects of the design are defined by
functional elements. HP Br. at 17, 29. These listings of features are akin to
blindly throwing darts at the 183 design patent and hoping that somehow enough
of them will stick to invalidate the patent. High Points allegations of functional
features are also nothing more than attorney argument with no support in, or
citation to, the factual record. Regardless, these arguments fail as a matter of law.
L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993).
In support of its functionality argument, High Point first points to the seam
between the body and sole as functional because it connects the two components
together. Id. But the seam could have been located elsewhere, or there could have
been more than one seam, or the seam could have could have looked different.
Indeed, BDIs expert, Mr. Rake, offered expert testimony that choosing the shapes
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of the fabric pieces and connecting them as shown in the 183 design patent is an
ornamental decision, one of countless ornamental ways of achieving the function
of connection. A462, 30.
Second, High Point asserts that the curved front of the patented design is
functional because it comfortably accommodates the users foot. HP Br. at 29.
The fact that a design is comfortable can hardly be a fatal flaw in a footwear
design, or else almost every successful design would be unpatentable. Presumably
the Woolrich shoes are also designed to be comfortable, and yet Woolrich chose to
design the curves in the front of the shoe to be distinctly different than the 183
design patents. Further, Mr. Rake offered testimony declaring that while the body
shape must conform to the shape of the foot, foot shape only determines minimum
size and shape, not the final size and shape. A462, 30.
Third, High Point asserts that the oversized foot opening facilitates ingress
and egress of the foot. HP Br. at 17, 29. Once again, there is absolutely no
evidence in the record that this attorney speculation is accurate and indeed seems
to be inconsistent with High Points earlier assertion that the 183 design patent is
functional because it completely covers the foot. A larger opening also creates a
different visual look in the design, and there is no suggestion anywhere in the
record that the foot opening size is dictated by function.
Fourth, High Point argues that the forward lean at the heel of the design
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keeps the slipper in place. HP Br. at 29. Once again, this is mere attorney
speculation without any basis in the record. As with the other features cited above,
the forward leaning (and slightly S curved) heel is an ornamental element and is
even non-functional because it creates extra unused space at the base of the heel.
Fifth, High Point argues that the flat toe portion better conforms to the shape
of the users foot at rest as compared to the prior art. HP Br. at 17. Again, this is
attorney argument unsupported by any evidence.
Sixth, High Point speculates that the higher sidewall in the patented design
as compared to the Woolrich prior art undoubtedly provides better support for
the users foot. HP Br. at 17. This unsupported statement is facially unreasonable,
especially when considering the commercial slipper-sock embodiment of the 183
design patent, which uses a material for the body that is not sufficiently rigid to
meaningfully support the side of the foot.7
Finally, High Point complains that the protrusion of fleece along the foot
opening provides warmth and insulation (HP Br. at 29) or provides a reduction in
manufacturing cost as compared to the Woolrich slippers (HP Br. at 17). As a
practical matter, there is no evidence in the record that reduction in manufacturing
cost as compared to the Woolrich prior art played any role in determining the
extent of the fleece protrusion. Even the district court found that the protruding
7The 183 design patent does not specify particular materials.
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fleece was an ornamental aspect of the design. A19. Indeed, the district courts
statement that the overflowing fleece can be characterized as both ornamental and
as functional (A19) indicates the courts misunderstanding of the applicable law
which requires the design to be dictated byfunction, rather than both ornamental
and functional. L.A. Gear, 988 F.2d at 1123. The district courts recognition that
this central design feature of the protruding fleece is ornamental is alone sufficient
to preclude a finding that the patented design is functional.
High Point also points to BDIs advertising as supporting its functionality
arguments. HP Br. at 29. However, advertising is only relevant to the extent it
touts particular features of the patented design. PHG Techs., LLC v. St. John Cos.,
469 F.3d 1361, 1366 (Fed. Cir. 2006) (citing Berry Sterling Corp. v. Prescor
Plastics, Inc., 122 F.3d 1452, 1455 (Fed. Cir. 1997)). Some of the features High
Point points to are not even features of the design patent. For example, the design
patent obviously does not require that a slipper sock be made with Sherpa fleece
inside. Further, many of the advertising features pointed to are so general that
they apply to countless slippers (e.g., soft, comfy, warm) and are not particular to
the ornamental elements in the patented 183 design patent.
For these reasons, even the two PHG factors High Point alleges support
functionality, namely inclusion in the patented design of material elements that
are dictated by function, [and] advertising that touts particular utilitarian
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features (HP Br. at 30), do not actually do so. More importantly, High Point does
not deny that most of the PHG factors do not support the district courts
functionality determination (i.e., the absence of a concurrent utility patent, the fact
that there are elements of the design not dictated by function, and the fact of
numerous alternative designs) and instead support the existence of an ornamental
design.
Finally, High Point takes a quote from this Courts Richardsondecision out
of context and asserts that any functional element must be factored out. HP Br.
at 17 (citing Richardson v. Stanley Works, Inc., 597 F.3d 1288, 129394 (Fed. Cir.
2009)). However, in Richardson, the features at issue in the claimed multi-
function tool were found to be dictatedby their functional purpose. Id. at 1294
(the handle, the hammer-head, the jaw, and the crowbar are dictatedby their
functional purpose) (emphasis added). Here, the district court did not find even
one of the features of the 183 design patent to be dictated bya functional
purpose,8
and thus the Richardson analysis is not applicable. A18A19.
In short, there is no 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 district court committed clear error in finding the
design invalid as functional.
8High Point effectively admits as much, acknowledging that the words dictated
by function are not used verbatim. HP Br. at 27 (emphasis in original).
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I I I .The District Court Abused Its Discretion in Dismissing BDIs Trade DressClaim with Prejudice
High Point appears to misunderstand BDIs first objection to the dismissal
of its trade dress claim. The abuse of discretion displayed by the district court lies
in (1) dismissing the trade dress claims withprejudiceand (2) also failing to
provide BDI an opportunity to amend its trade dress claim. High Point simply
does not address the fact that the dismissal of the trade dress claim was with
prejudice, and fails to cite any authority supporting the district courts dismissal of
the claim with prejudice.
Instead, High Point re-frames the issue to be simply whether or not a
modification of the district courts scheduling order was appropriate. HP Br. at
3233. In so doing, High Point attempts to refocus the question to be whether or
not good cause existed for a modification of the scheduling order. HP Br. at 33
34 (citing Fed. R. Civ. P. 16(b)(4)). Reliance on case law requiring demonstration
of good cause is inapposite, as none of the cases cited by High Point address the
issue of whether any dismissal should have been with prejudice. In addition, the
cases cited by High Point are so distinguishable from the facts at issue here that
they underscore the district courts abuse of discretion.
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
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amended pleading. Hughes v. Anderson, 449 Fed. Appx. 49, 51 (2d Cir. 2011)
(non-precedential) (interpolation added) (citing Perez v. Ortiz, 849 F.2d 793, 797
(2d Cir. 1988)); A69091.
The district court dismissed BDIs trade dress infringement claim with
prejudiceeven though substantial discovery remained to be taken, no prejudice
was found to High Point, and BDI offered an amended complaint soon after the
deadline for amending pleadings. A33940; A36061; A43150; see particularly
A437 (specifying at least six elements of trade dress in the SNOOZIES! slipper-
socks; A648). High Points motion to dismiss was granted withprejudicedespite
the district courts agreement that High Points products shared some of the
characteristics alleged to be SNOOZIES!
trade dress, and therefore the
amendment would not have been futile. A22. As such, the dismissal with
prejudicewas improper and an abuse of discretion.
High Point argues that BDI presented its amended trade dress counterclaim
too late by offering it about a month after the deadline for amending the pleadings.
HP Br. at 3536. High Point ignores the fact that it ambushed BDI and did not
even raise the issue of the sufficiency of the trade dress claim until four days after
the deadline for amending the pleadings had passed. Once notified, BDI
responded promptly and offered an amended pleading. A43140.
High Point also argues that BDI ignores the fact that significant written
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discovery had taken place. HP Br. at 36. Yet High Point had served only a single
interrogatory that simply asked for an identification of a person knowledgeable
about various subjects. A70509. High Point had not served any written
discovery that would have been impacted by an amended BDI counterclaim.
A.High Points reliance on good cause case law is misplaced.Even the Holmescase on which High Point relies does not rely on the good
cause standard alone, but balances the good cause standard against the more
lenient leave shall be freely given standard for amending a complaint under Fed.
R. Civ. P. 15(a). Holmes v. Grubman, 568 F.3d 329, 33435 (2d Cir. 2009)
(Where, as here, a scheduling order governs amendments to the complaint the
lenient standard under Rule 15(a), which provides leave to amend shall be freely
given, must be balanced against the requirement under Rule 16(b) that the Courts
scheduling order shall not be modified except upon a showing of good cause.)
(internal citations omitted, emphasis added). Thus, even the question of whether
leave should have been given to amend is not governed solely by the good cause
standard. Regardless, the cases High Point cites addressing good cause are
dramatically different than, and easily distinguishable from, the present case.
In Holmes v. Grubman, the plaintiffs amended their complaint within the
allotted period and were given permission to amend the complaint again after the
date set forth in the scheduling order. Holmes v. Grubman(In re WorldCom, Inc.
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Sec. Litig.), 456 F. Supp. 2d 508, 513 (S.D.N.Y. 2006). Subsequently, the
plaintiffs were given sua spontepermission to file a third amended complaint,
which defendants moved to dismiss for failure to state a claim upon which relief
can be granted. Holmes, 568 F.3d at 333. In denying leave to file a fourth
amended complaint, the district court and appeal court agreed that requiring a fifth
attempt (i.e., the fourth amended complaint and the original) to properly plead
claims, twice after the allotted period in the scheduling order, showed that the
plaintiffs had not been diligent in setting forth claims, and thus could not show the
requisite good cause. In contrast, BDI attempted to amend its pleadings at the
first indication that its counterclaim may be inadequate (when it received High
Points opposition, only four days after the deadline for amending pleadings, A68
70; A64849). This was also BDIs first attempt to amend its pleadings (in
contrast to the Holmesplaintiffs repeated failures).
In Parker v. Sony Pictures Entertainment, Inc., the plaintiff filed a motion
for leave to amend his complaint seven months after the deadline established by the
scheduling order. 19 F. Supp. 2d 141, 156 (S.D.N.Y. 1998). In contrast, BDI
sought leave to amend its pleadings approximately one month after the deadline
had passed. Furthermore, the court in Parker noted that the plaintiff had all the
information to be included in the amended complaint well before the deadline and
cited cases holding that where plaintiffs had notice of inadequacies in their
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complaints long before the pleading deadline, denial of leave to amend may be
proper. Parker, 204 F.3d at 34042. In contrast, BDI had no notice of any alleged
inadequacy until High Point filed its motion to dismiss (four days after the deadline
to amend pleadings) and diligently submitted a proposed amended counterclaim in
response. A44250.
Kassner v. 2nd Avenue Delicatessen Inc. merely sets forth the factors to be
considered in whether or not good cause has been met, noting that diligence is
the primary consideration. 496 F.3d 229, 244 (2d Cir. 2007). As noted above,
BDI diligently put forward an amended complaint in response to its opposition to
High Points motion to dismiss, which was the first indication of any alleged
inadequacies in its complaint as filed. A6870; A36061; A44250. Kassner also
states that prejudice to defendants may also be considered. Kassner, 496 F.3d at
244. As such, High Points assertion that BDIs contention that granting its
requested leave to amend would not have resulted in undue prejudice is completely
beside the point is directly contrary to the case law cited by High Point itself.
High Point also fails to make any argument that it would be prejudiced in any way
by amending the claims. High Point was already on notice that it was accused of
infringing BDIs trade dress in SNOOZIES!, and the amended counterclaim
merely provided additional details of the trade dress. Accordingly, there would
have been no prejudice to High Point in defending against the claim. Second, the
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amendment would not have caused delay of the district courts schedule as there
was sufficient time remaining in discovery to serve and responded to discovery
regarding trade dress.
In contrast, the dismissal with prejudice severely impaired BDI and forever
dismissed its trade dress claim against defendants. 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.
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: January 14, 2013 /s/ Andrew M. Ollis .
Andrew M. Ollis
Philippe J.C. Signore
Frank J. West
OBLON, SPIVAK, McCLELLAND,
MAIER & NEUSTADT, L.L.P.
1940 Duke Street
Alexandria, Virginia 22314
Attorneys 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 Introduction on page 1 and ending with the last line of the
Conclusion on page 25, contains 5,897 words, in compliance with Rule
32(a)(7)(B)(ii) of the Federal Rules of Appellate Procedure.
January 14, 2013 /s/ Andrew M. Ollis .
Andrew M. Ollis
Counsel for Buyers Direct, Inc.
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CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing REPLY BRIEF FOR
APPELLANT BUYERS DIRECT, INC. were served by email (per agreement),
this 14th day of January, 2013 on counsel for appellees High Point Design LLC as
follows:
Jeffrey Mark Kaden, Esq.
Steven Stern, Esq.
David S. Kashman, Esq.Ariel Samuel Peikes, Esq.
GOTTL IEB RACKMAN &REISMAN, P.C.270 Madison Avenue
8th
Floor
New York, New York 10016
jkaden@grr.com
sstern@grr.com
dkashman@grr.comapeikes@grr.com
Tel: (212) 684-3900
Fax: (212) 684-3999
By: /s/ Andrew M. Ollis
___________________________________
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