High Point Design LLC v. Buyer's Direct, Inc.

Addressing the standards for obviousness and functionality of a design patent, the U.S. Court of Appeals for the Federal Circuit reversed and remanded a district court's grant of summary judgment of invalidity, finding that the lower court's ruling was at too high a level of abstraction and failed to focus on the distinctive visual appearances of the various designs. High Point Design LLC v. Buyer's Direct, Inc., Case No. 12-1455 (Fed. Cir., Sept. 11, 2013) (Schall, J.).

High Point Design filed this declaratory judgment suit in response to a cease and desist letter from Buyer's Direct Inc. (BDI), which alleged that High Point's FUZZY BABA® slippers infringed BDI's design patent for an ornamental slipper. High Point later filed a motion for summary judgment of non-infringement and invalidity of BDI's patent.

The district court granted High Point's motion. The district court held that BDI's patent was invalid as obvious to an ordinary observer in light of two prior art designs. Further, the district court held that the claimed design was "primarily functional." BDI appealed.

Regarding the obviousness holding, the Federal Circuit found that the district court erred in applying the ordinary observer standard, indicating that obviousness must be assessed "from the viewpoint of an ordinary designer." Relying on Durling v. Spectrum Furniture Co., the Court found that a fact finder must follow two steps to assess obviousness of a design. The first step is to find a primary reference having design characteristics that are basically the same as the claimed design. The second step is to determine whether the primary reference may be combined with other references to "create a design that has the same overall visual appearance as the claimed design."

Focusing on the first step, the Federal Circuit found that the district court erred by failing to translate the design of a prior art patent into a verbal description and by failing to provide its reasoning in determining that the prior art created "basically the same visual impression" as the claimed design. The Federal Circuit, guided by Egyptian Goddess, stated that the verbal translation of the design required under Durling's obviousness inquiry serves as "an explanation of a legal ruling"—distinct from the optional elaborate verbal claim construction to guide the finder of fact in conducting the infringement inquiry.

The Federal Circuit concluded that the district court's description was at too high a level of abstraction and failed to focus on the distinctive visual appearances of the reference and the claimed design. The Federal Circuit remanded with instruction to "add sufficient detail to its verbal description of the claimed design to evoke a visual image consonant with that design." Further, the district court was instructed to do a side-by-side comparison of the two designs to determine if they create the same visual impression. Given these errors, the Federal Circuit expressly took no position on whether the patented design was obvious.

The Federal Circuit also reversed the district court's holding that the claimed design was primarily functional. The district court improperly conflated patent law's utility requirement with an analysis of the functionality of the design of the article by analyzing whether the design's primary features could perform functions. Instead, the district court should have analyzed whether the design, as a whole, was dictated by functional considerations.

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