A United States Court of Appeals for the Federal Circuit panel ruled in 2020 that a district court should consider whether placement of the Seirus Innovations Accessories logo in its wavy pattern design for cold weather products could l to prevent infringing Columbia’s patented design. On appeal for the second time after Seirus avoided liability, attorneys say the nation’s top patent court must clarify when logos can help alleged infringers avoid liability and what part of the product is important to the calculation of damages.
The dispute has the potential to set a new precedent as courts see more fights over design patents. Oral argument has not yet been scheduled.
Design patents and infringement suits based on them have become more popular over the past decade following a series of disputes between
“Particularly since the Apple-Samsung smartphone design patent cases, there has been an influx of design patent filings and, therefore, litigation,” said Brendan T. O’Dea of Womble Bond Dickinson LLP. “The popularity of design patents has grown to the point where we are in a catch-up period. Questions that some would say are fundamental, things that you think would have been settled before, are now being settled or clarified for the first time.
Even though the initial billion-dollar verdict has been reduced to hundreds of millions, the case still rocked the patent world, said Sarah Burstein, law professor and co-director of the Suffolk Law IP Center.
“The thunderclap that was Apple vs. Samsung continues to reverberate,” Burstein said. “I think people are ready to fight on the federal circuit in a way that they weren’t 10 years ago.”
Calculation of damage
Design patents differ from utility patents, which protect the structure or function of an invention and more often generate infringement litigation.
“The focus has been on the utility side of patents for so long,” O’Dea said. “People are starting to see such large paydays.”
Apple used design patents to protect the look of an older iPhone – the rectangular shape with a reflective black surface and rounded corners, the round home button, and the arrangement of color icons on the screen.
When a design patent is infringed, the patent holder may recover damages from the total profits arising from the use of the design by the infringer. However, the Supreme Court ruled in the Apple case that the end product is not always the relevant tool for calculating damages.
Prior to the High Court ruling, a patent holder with a design patent covering a chair leg, for example, could collect damages based on the total profits of the entire chair sold. The judges ruled that a component or multiple components could instead be used for the calculation, but did not provide further guidance.
Since then, lower courts have used a four-factor test suggested by the Solicitor General, although an appeals court did not weigh.
The Columbia case gives the Federal Circuit a chance to settle this open question. Columbia’s design patent covers a heat-reflecting material used on gloves, shoes, socks, sleeping bags and other cold weather products. For Columbia, greater pay would come if damages were calculated on those end products, while Seirus argues that the heat-reflecting material is the only relevant part of the product.
“The Federal Circuit just hasn’t spoken,” said Perry Saidman of Perry Saidman LLC. ” It’s a big problem. It was triggered on Columbia’s first call, and they dodged it, and it’s on call again.
Columbia sued Seirus in 2015 in U.S. District Court for the District of Oregon. Columbia accused Seirus of design patent infringement for Seirus’ HeatWave products, claiming the wave pattern was too close to Columbia’s D657,093 design patent.
The district court ruled that Seirus infringed the design, using a test established in an 1871 Supreme Court case to conclude that an “ordinary observer” would have difficulty telling the two designs apart if the Seirus logo was removed. The Federal Circuit disagreed, saying the lower court should consider the logo’s effect on the design.
While on remand, a jury found that Seirus did not infringe Columbia’s patent.
Lawyers warned that the patent court’s initial decision could open a “Pandora’s box” of non-infringement arguments, offering an easy way out for alleged infringers. Some said the decision muddied a 1993 Federal Circuit decision, LA Gear, Inc. v. Thom McAn Shoe Co..who found that labeling was no way to escape liability for design patent infringement.
The LA equipment case and first Colombia decision disagree, Saidman said, and the Federal Circuit will now have to thread the needle between those two decisions.
Saidman called the first notice “disastrous” because it would allow counterfeiters to “stick a small surface decoration or logo on their products and avoid counterfeiting by this minor embellishment.” This is another escape route for offenders.
But for Burstein, the Federal Circuit was right. The appeals court was not making new law, she said, but more binding rulings would help settle any outstanding issues.
“The problem is that there’s so little design patent case law that it’s all kind of new,” Burstein said. “We need more precedent decisions.”