Design Patents and False Marking

The false marking statute (35 U.S.C. § 292) expressly authorizes members of the public to bring an action on behalf of the U.S. government (i.e., a qui tam action) for a product falsely marked with a patent number with the intent of deceiving the public.  Theoretically, the penalty for falsely marking a product can be a hefty one as the false marking statute allows the court to assess a sanction of up to $500 for every offense.  The Federal Circuit in Bon Tool held in late 2009 that “offense” means on a per article basis.  Ever since the Bon Tool decision, the number of false-marking lawsuits has surged because of the economic windfall that might result from mass-produced, falsely marked products.  Products marked with design patent numbers are not exempt from such actions. 

One recent complaint filed by Main Hastings against the Village Company in the Eastern District of Texas alleges the Village Company violated § 292 by marking a Mr. Bubble bottle with design patent no. D-408,290 (“the ‘290 patent).  Specifically, Main Hastings alleges that the Village Company marked the Mr. Bubble bottle knowing that that the ‘290 patent does not cover the ornamental design of the Mr. Bubble bottle.  In Exhibit B of the complaint, Main Hastings sets forth a comparative analysis between two Mr. Bubble bottles and Figure 2 of the ‘290 patent to demonstrate the alleged false marking.  Included below are images from the second comparison of Exhibit B of Main Hastings’ complaint.

Main Hastings, LLC v. The Village Company, LLC is not an isolated case.  A recent search has shown that, in 2010 alone, 674 false-marking lawsuits were filed in federal district court, which is a dramatic increase over previous years.  This surge in false marking cases largely involves trolling plaintiffs who initiate lawsuits based on products labeled with expired patent numbers, but can also involve the more traditional false marking case where the marked product is allegedly not covered by the patent listed in the mark, like the Main Hastings case discussed above.  See Simonian v. Weber-Stephen Products Co. for an example of a case involving products allegedly marked with expired design patent numbers.

A legal remedy to address this recent barrage of false-marking cases may be on the horizon.  On February 23, 2011, Federal District Court Judge Dan Aaron Polster of the Northern District of Ohio found the qui tam provision of § 292 to be unconstitutional.  In the opinion, Judge Polster held that, because “the government lacks sufficient control to enable the President to ‘take Care that the Laws be faithfully executed,’ . . . the False Marking statute lacks any of the statutory controls necessary to pass Article II Take Care Clause muster.”  However, it remains to be seen whether Judge Polster’s opinion will be upheld on appeal, as other district court precedent has found the qui tam provision of § 292 to be constitutional based on a number of factors including the legislative history of qui tam statutes in the U.S. and the U.S. government’s ability to intervene as of right.

Congress has also taken up the issue.  The U.S. Senate is now debating the Patent Reform Act of 2011 (S.23.RS) and the U.S. House of Representatives recently conducted a hearing on the issue of comprehensive patent reform and a bill corresponding to S.23.RS will likely be introduced in the House soon.  S.23.RS specifically amends the qui tam provision of § 292 to require that plaintiffs show competitive injury caused by the false marking.  For plaintiffs other than the U.S. government, the level of damages would change from the current “$500 per article” standard to a level that is “adequate to compensate for the injury.”  S.23.RS also includes a statute of limitations provision that limits false marking cases to the earlier of 10 years after the alleged misconduct or one year after the plaintiff in such a case is informed of the misconduct.  In addition to the above-noted legislation, the Patent Lawsuit Reform Act of 2011 (H.R.243), which is a stand-alone bill and not part of a larger patent reform package, was recently introduced in the U.S. House of Representatives.  H.R.243 also amends the qui tam provision of § 292, but unlike S.23.RS, H.R.243 limits recovery in false-marking lawsuits to a total of $500.

However, given Congress’ inability to pass patent reform legislation in previous sessions (various forms of the Patent Reform Act have been introduced in Congress every year since 2005), it is uncertain whether legislation that addresses the current exploitation of § 292 will pass during this year’s congressional session.  For more information on U.S. patent reform, the following resources from Oblon Spivak are available.  Philippe Signore and Steve Kunin will be presenting on the state of U.S. patent reform at the 5th Annual Patent Law Institute on March 21 and 22, 2011, and an article based on their presentation will be published in Chapter 14 of the Institute’s Course Handbook.  Additionally, updates on the progress of patent reform are frequently published on Patents Post Grant, a blog maintained by Oblon, Spivak’s Reexamination/Reissue Practice Group.

Patentability of Bank of America Corp.’s Design Patent Affirmed

As reported in Oblon Spivak’s Patents Post-Grant blog, the U.S. Court of Appeals for the Federal Circuit affirmed the patentability of Bank of America Corp.’s design patent for a miniature credit card, agreeing that a patent examiner erred in initially rejecting the patent claim as obvious.  The decision was made without explanation. 

A discussion of the inter partes reexamination that led to the Federal Circuit appeal can be found here.

Fashion Design Bill Approved for Consideration by U.S. Senate

New protections for fashion designs may be on the horizon, as the Judiciary Committee has approved a modified version of the Innovative Design Protection and Piracy Prevention Act (the IDPPPA) for consideration by the Senate.  The IDPPPA would amend § 1301 et sec. of the copyright statute (Title 17) to include provisions expressly protecting fashion designs.  Presently, Title 17 is limited to protecting the design of a vessel hull, which is defined as the frame or body of a vessel, including the deck.

The IDPPPA is being advocated as necessary to address the problem of piracy in the fashion design world.  Several well-known fashion designers, the Council of Fashion Designers of America, and the American Apparel and Footwear Association have thrown their weight behind the IDPPPA, with the Council of Fashion Designers hosting a website called www.stopfashionpiracy.com to promote and track its progress.

Some notable protections that the IDPPPA would afford include:

• protecting the appearance as a whole of an article of apparel, including its ornamentation;
• requiring that the fashion design be (i) the result of a designer’s own creative endeavor; and (ii) provide a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles;
• expressly protecting qualifying men’s, women’s, or children’s clothing, including undergarments, outerwear, gloves, footwear, and headgear; handbags, purses, wallets, duffel bags, suitcases, tote bags, and belts; and eyeglass frames;
• establishing an infringement standard by defining the term “substantially identical” as meaning an article of apparel which is so similar in appearance as to be likely to be mistaken for the protected design, and contains only those differences in construction or design which are merely trivial;
• providing a three year statutory bar for public disclosure and a three year protection term;
• providing a “home sewing exception” that allows a person to produce a single copy for personal use or for use of an immediate family member;
• not requiring registration of fashion designs, but instead providing protection once the fashion design is first made public; and
• requiring a claimant who brings an action for infringement to plead certain facts with particularity.

 However, protection appears to extend only to the actual fashion design articles, and not advertisements or illustrations of those articles.

Passage of the IDPPPA would represent a significant change in the U.S. for the protection of fashion designs.  We will keep a close eye on the progress of this proposed legislation.

Johanna Foods, Inc. v. Coca-Cola - D.N.J.

In response to efforts by Coca-Cola to enforce its design patents, Johanna Foods, Inc. filed a declaratory judgment complaint on September 21 in the U.S. District Court for the District of New Jersey against Coca-Cola, d/b/a Simply Orange Juice Company. According to the complaint, in December 2009, Coca-Cola sent Johanna a letter asserting their rights under trade dress law and under seven design patents relating to beverage containers. In that letter, Coca-Cola allegedly stated that it had filed suit against third parties to whom Johanna had previously supplied and/or licensed a carafe-shaped container design and that the third parties had “each agreed to cease use of the accused design in settlement of the action.” The complaint also stated the Coca-Cola sent an August 2010 letter to Johanna customer ALDI asserting federal and state trademark rights as well as design patent rights against the beverage packaging that Johanna sold to ALDI, again citing “previous successful efforts” against other third parties. In September 2010, Coca-Cola then allegedly sent another letter to Johanna, reviewing the previously stated enforcement efforts and threatening suit over Johanna’s supply of beverage containers to ALDI as well as Johanna’s use of its own beverage containers in its own Tree Ripe brand.

Johanna’s complaint asserts that Coca-Cola’s “previous successful efforts” resulted in confidential, out-of-court settlements and not adjudication on the merits of the cases. Johanna also states that Coca-Cola’s litigation threats may significantly harm Johanna’s business relationship with ALDI and its profits from its Tree Ripe brand. The complaint further notes that Johanna itself has design patents on both its Nature’s Nectar Bottle (for which ALDI is a customer) and its Tree Ripe Bottle.

Johanna brings eight causes of declaratory judgment of no infringement: one for no trade dress infringement, and seven for no infringement of design patents, one for each of Coca-Cola’s seven above-mentioned design patents. Johanna first argues that Coca-Cola has no valid trade dress rights in its Simply Orange bottles and that Johanna’s accused bottles do not infringe any valid trade dress rights of Coca-Cola’s because there is no likelihood of confusion. Regarding each of Coca-Cola’s seven design patents, Johanna’s complaint alleges that an ordinary observer would not believe that its bottles are the same as the patented designs, but that such an observer would notice substantial differences between the two. Johanna seeks declaratory judgment, court costs, and reasonable attorney’s fees on each of the eight claims.

Photographs of the accused products together with selected figures from the Johanna and Coca-Cola design patents are shown here.

In re Certain Wind and Solar-Powered Light Posts and Street Lamps - ITC

As reported by Oblon Spivak’s ITC Blog, the ITC has instituted an investigation in response to a complaint asserting design patent rights for a solar-powered light post and street lamp design. The complainants, a set of New York, New York companies referred to as the Duggal companies, assert U.S. Patent No. D610,732 S (“the ‘732 patent”) for a Wind and Solar-Powered Light Post. The respondents are Gus Power Incorporated of Canada; Efston Science Inc. of Canada; King Luminaire, Inc., of Jefferson, OH; and The StressCrete Group of Canada. The complainants allege that the accused products are “substantially similar to,” or “virtually identical to,” the design protected by the ‘732 patent, citing specific incidences of alleged infringement. No other patents are asserted in the complaint.

The statute in 19 U.S.C. § 1337(a)(1)(B)(i)-(ii) makes no distinction between utility and design patents, but gives the ITC jurisdiction over any patent infringement meeting the other requirements of Section 337. In this case, the complainants report in their complaint that they have no other current litigation related to the ‘732 patent, thus resting the enforcement of their design patent rights on their requests to the ITC for an exclusion order and a cease-and-desist order.

Photographs of selected respondents’ and complainants’ products together with a figure from the ‘732 patent can be found here.