Columbia v. Seirus (Federal Circuit) - Seirus Reply Brief
Columbia v. Seirus (Federal Circuit) - Seirus Reply Brief
Columbia v. Seirus (Federal Circuit) - Seirus Reply Brief
Christopher S. Marchese
Seth M. Sproul
Craig E. Countryman
Oliver J. Richards
Tucker N. Terhufen
Fish & Richardson P.C.
12390 El Camino Real
San Diego, CA 92130
(858) 678-5070
November 2, 2018
CERTIFICATE OF INTEREST
Accessories, 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: Seirus Innovative Accessories,
Inc.
3. All parent corporations and any publicly held companies that own 10
4. The names of all law firms and the partners or associates that appeared
for the party now represented by me in the trial court or agency or are expected to
appear in this Court (and who have not entered an appearance in this Court) are:
Fish & Richardson P.C.: Michael A. Amon, Garrett K. Sakimae; Markowitz Herbold
PC: Renee Rothauge; Troutman Sanders LLC: Eric M. Jaegers, Matthew D.
Murphey, Alison A. Grounds, Paul E. McGowan, Anup M. Shah, Jasmine C. Hites
5. The title and number of any case known to counsel to be pending in this
or any other court or agency that will directly affect or be directly affected by this
Columbia Sportswear North America, Inc., et al. v. Ventex Co., Ltd, et al., Case No. 3:17-cv-
623 (D. Or.); Ventex Co., Ltd. v. Columbia Sportswear North America, Inc., IPR2017-00789
(P.T.A.B.); Ex-Parte Reexamination Control No. 90/014,113.
i
TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................................................................... 1
Argument .................................................................................................................................... 2
I. The Summary Judgment of Infringement Should Be
Reversed. ............................................................................................................. 2
A. A Jury Could Reasonably Find the Ordinary
Observer is More Sophisticated than Columbia
Proposes. ................................................................................................. 2
B. A Jury Could Reasonably Find that Minor
Differences in Overall Appearance Support Non-
infringement Given the Close Prior Art. ............................................ 4
C. A Jury Could Find No Substantial Similarity,
Especially Given the Prior Art and the Ordinary
Observer’s Sophistication. .................................................................... 6
II. The HeatWave Fabric Is The Appropriate Article of
Manufacture. ..................................................................................................... 12
A. The Accused Products All Have Multiple
Components. ......................................................................................... 12
B. The Solicitor General’s Test Shows the Fabric is
the Article. ............................................................................................. 13
C. Columbia Cannot Rely on the Entire Market
Value Rule. ............................................................................................ 15
III. At Minimum, a New Jury Trial is Required on Damages.......................... 17
A. The District Court Misallocated the Burden of
Persuasion Regarding the Article of Manufacture. ......................... 17
B. The Error on the Burden of Persuasion
Prejudiced Seirus. ................................................................................. 22
C. There is a Right to Jury Trial on § 289 Damages. ........................... 25
ii
TABLE OF CONTENTS (continued)
Page
Conclusion ................................................................................................................................ 28
CERTIFICATE OF SERVICE AND FILING .................................................................................. 1
CERTIFICATE OF COMPLIANCE ................................................................................................ 2
iii
TABLE OF AUTHORITIES
Page(s)
Cases
In re AI Realty Mktg. of New York, Inc.,
293 B.R. 586 (Bankr. S.D.N.Y. 2003) ............................................................................. 19
Apple Inc. v. Samsung Elecs. Co. Ltd.,
2017 WL 4776443 (N.D. Cal. Oct. 22, 2017)................................................................ 18
Apple, Inc. v. Samsung Elecs. Co.,
932 F. Supp. 2d 1076 (N.D. Cal. 2013) ....................................................................passim
Arctic Cat Inc. v. Bombardier Recreational Prods., Inc.,
876 F.3d 1350 (Fed. Cir. 2017) ................................................................................. 22, 23
Arminak and Assocs. v. Saint-Gobain Calmar, Inc.,
501 F.3d 1314 (Fed Cir. 2007) .......................................................................................2, 3
Bergstrom v. Sears, Roebuck and Co.,
496 F. Supp. 476 (D. Minn. 1980) .................................................................................. 19
In re Borden,
90 F.3d 1570 (Fed. Cir. 1996) ............................................................................................ 5
Braun Inc. v. Dynamics Corp. of Am.,
975 F.2d 815 (Fed. Cir. 1992) .......................................................................................... 11
Burdell v. Denig,
92 U.S. 716 (1875) ............................................................................................................. 26
Bush & Lane Piano Co. v. Becker Bros.,
222 F. 902 (2d Cir. 1915) .................................................................................................. 24
Chauffeurs v. Terry,
494 U.S. 558 (1990) ...........................................................................................................25
Contessa Food Prods., Inc. v. Conagra, Inc.,
282 F.3d 1370 (Fed. Cir. 2002) .......................................................................................... 6
Crocs, Inc. v. Int’l Trade Comm’n,
598 F.3d 1294 (Fed. Cir. 2010) .......................................................................................... 5
iv
Dairy Queen, Inc. v. Wood,
369 U.S. 469 (1962) ...........................................................................................................27
Egyptian Goddess, Inc. v. Swisa, Inc.,
543 F.3d 665 (Fed. Cir. 2008) (en banc) ............................................................................. 4
Goodyear Tire & Rubber Co. v. Hercules Tire & Rubber Co., Inc.,
162 F.3d 1113 (Fed. Cir. 1998) .......................................................................................... 2
Gordon v. New York City Bd. of Educ.,
232 F.3d 111 (2d Cir. 2000) ............................................................................................. 22
Gorham Co. v. White,
81 U.S. 511 (1871) ...........................................................................................................2, 3
Henry Hanger & Display Fixture Corp. of Am. v. Sel-O-Rak Corp.,
270 F.2d 635 (5th Cir. 1959) ............................................................................................ 18
Kennedy v. Lakso Co., Inc.,
414 F.2d 1249 (3d Cir. 1969) ........................................................................................... 27
L.A. Gear, Inc. v. Thom McAn Shoe Co.,
988 F.2d 1117 (Fed. Cir. 1993) .......................................................................................... 6
Lee v. Dayton-Hudson Corp.,
838 F.2d 1186 (Fed. Cir. 1988) ........................................................................... 13, 14, 17
Markman v. Westview Insts., Inc.,
517 U.S. 370 (1996) ...........................................................................................................25
Mowry v. Whitney,
81 U.S. 620 (1871) ...................................................................................................... 21, 26
Nordock, Inc. v. Systems, Inc.,
2017 WL 5633114 (E.D. Wisc. Nov. 21, 2017) ....................................................... 1, 18
OddzOn Prods., Inc. v. Just Toys, Inc.,
122 F.3d 1396 (Fed. Cir. 1997) .......................................................................................... 6
Packet Co. v. Sickles,
86 U.S. 611 (1874) ............................................................................................................. 26
Petrella v. MGM,
134 S. Ct. 1962 (2014) ................................................................................................ 26, 27
v
Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
904 F.3d 965 (Fed. Cir. 2018) ................................................................................... 16, 17
Reebok Int’l, Ltd. v. Marnatech Enterprises, Inc.,
970 F.2d 552 (9th Cir. 1992) ............................................................................................ 26
Robert Bosch, LLC v. Pylon Mfg. Corp.,
719 F.3d 1305 (Fed. Cir. 2013) (en banc) ......................................................................... 27
Ross v. Plastic Playthings, Inc.,
138 F. Supp. 887 (S.D.N.Y. 1956) ........................................................................... 26, 27
S.E.C. v. Bilzerian,
29 F.3d 689 (D.C. Cir. 1994) ........................................................................................... 20
S.E.C. v. Halek,
537 F. App’x 576 (5th Cir. 2013) .................................................................................... 20
S.E.C. v. Platforms Wireless Int’l Corp.,
617 F.3d 1072 (9th Cir. 2010) .......................................................................................... 20
Samsung Elecs. Co., Ltd. v. Apple Inc.,
137 S. Ct. 429 (2016) .................................................................................................. 16, 19
SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC,
137 S. Ct. 954 (2017) .........................................................................................................26
Sec. & Exch. Comm’n v. Whittemore,
744 F. Supp. 2d 1 (D.D.C. 2010) .................................................................................... 20
SEC v. First City Financial Corp.,
890 F.2d 1215 (D.C. Cir. 1989) ................................................................................ 19, 20
Sid & Marty Krofft Television v. McDonald’s Corp.,
562 F. 2d 1157 (9th Cir. 1977) ......................................................................................... 27
Stevison by Collins v. Enid Health Sys., Inc.,
920 F.2d 710 (10th Cir. 1990) .......................................................................................... 22
Swofford v. B&W, Inc.,
336 F.2d 406 (5th Cir. 1964) ............................................................................................ 27
Tilghman v. Proctor,
125 U.S. 136 (1888) ...........................................................................................................18
vi
Statutes
35 U.S.C. § 74 (1946) .............................................................................................................. 26
16 Stat. 198, 206, § 55 (1870) ................................................................................................. 16
24 Stat. 387, § 1 (1887) ........................................................................................................... 26
Other Authorities
9C Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND
PROCEDURE, § 2312 (3d ed. 2008) .................................................................................. 28
H.R. REP. NO. 49-1966 (1886) .............................................................................................. 18
Jason J. DuMont, The Origins of American Design Patent Protection, 88 IND.
L.J. 837, 854 (2015) ........................................................................................................... 25
RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 4,
Cmt. .............................................................................................................................. 25, 26
RESTATMENT THIRD OF RESTITUTION AND UNJUST ENRICHMENT, § 51,
cmt. i (2011) ........................................................................................................................ 21
S. REP. NO. 49-206 (1886) ...................................................................................................... 18
vii
INTRODUCTION
judgment may be granted only where no material facts are disputed. Here, the parties
disputed multiple material facts: the identity of the ordinary observer, the effect of
the prior art, and whether that ordinary observer would find the two designs
substantially similar. Columbia’s brief tells its side of the story, yet the question is not
whether a jury could credit Columbia’s position but whether the Court should take
infringement away from the jury altogether. A reasonable jury could resolve the
The damages award cannot stand either. The jury’s verdict was tainted by the
erroneous instruction shifting the burden of persuasion for determining the article of
aspects of its case, including the substantive aspects of a profits claim. Seirus’s
opening brief demonstrated that the statutory text, legislative history, and history all
put the burden on the plaintiff. The only other courts to address this issue (Apple and
Nordock) agreed. Columbia does not cite any contrary case, and its discussion of the
burdens for disgorgement law would, at most, support shifting the burden on the
This Court thus should, at the very least, order a new jury trial on damages, and could
also constrain matters further by entering JMOL that the relevant article is the
HeatWave fabric.
1
ARGUMENT
“central” to “every design patent case.” Arminak and Assocs. v. Saint-Gobain Calmar, Inc.,
501 F.3d 1314, 1321 (Fed Cir. 2007). “[T]he focus is on the actual product that is
presented for purchase, and the ordinary purchaser of that product.” Goodyear Tire &
Rubber Co. v. Hercules Tire & Rubber Co., Inc., 162 F.3d 1113, 1117 (Fed. Cir. 1998). A
jury could credit Seirus’s Vice President, who showed ordinary purchasers are
“sophisticated commercial buyers” who are “more discerning than the average retail
consumer,” and that “only a small number” of retail customers buy products directly.
material factual dispute. Columbia does not defend summary judgment under Seirus’s
definition of the ordinary observer, so this dispute alone requires a new trial.
Columbia argues (at 37) that Gorham Co. v. White, 81 U.S. 511 (1871), created a
per se rule the ordinary observer is “not the intervening commercial reseller but the
observers,” who are the “principal purchasers of the articles to which designs have
given novel appearances,” i.e., the people who determine demand for, and thus the
value of, the design. Id. at 528. Their potential confusion is what we’re concerned
2
with. That leaves the factual question of who the “principal purchaser” is in a given
case. Seirus’s evidence permits a jury to infer the “large majority” of purchasers are
engaged in the manufacture or sale of articles,” id. at 527, prohibit using the craftsman
who sells his designs, not commercial customers who are the “principal purchaser.”
Arminak shows the observer isn’t always the retail customer. There, it was an
“industrial buyer for companies that purchase” a component with the design, not
“retail purchasers.” 501 F.3d at 1324. Retail customers didn’t buy the component, so
the industrial purchaser dictated demand. A jury could find the same here—
commercial purchasers buy almost all accused products, so their decisions dictate
demand for the design by controlling the options available to retail customers.
Columbia would (at 38) limit Arminak to situations where the article is a
component neither seen by nor important to retail customers. This misses the point.
is similar to this case. Here, as there, the accused design appears on a component (the
fabric) that retail customers don’t purchase, and, which, in most cases, is not visible.
demand—a Seirus product without the accused design sold 116,720 units, while a
irrelevant whether Seirus markets the fabric’s functionality, as that isn’t infringing.
3
B. A Jury Could Reasonably Find that Minor Differences in Overall
Appearance Support Non-infringement Given the Close Prior Art.
Another disputed material fact is the effect of the prior art. “When the claimed
design is close to the prior art designs, small differences between the accused design
and the claimed design are likely to be important to the eye of the hypothetical
ordinary observer.” Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 676 (Fed. Cir.
2008) (en banc). A jury could find Blauer is “close” to Columbia’s patent—closer than
the accused design—and thus find “small” differences in the accused design show
non-infringement. Columbia has a different spin, but these facts are for a jury.
Blauer underscores that Seirus’s accused design did not take anything novel
from Columbia. Both Blauer (left) and Columbia’s patent (right) show uninterrupted,
horizontal waves of alternating color, where each wave has a uniform thickness:
(Appx4159, Appx11.) The only difference is that Columbia’s thicker waves are black
while Blauer’s thicker waves are light (like the accused products). The Patent Office
observed that “[t]he patterned material shown in FIG. 5 of Blauer et al. shows a
design for material that is substantially the same as the claimed design.” See Ex Parte
10, 2018). A jury could agree and thus find the accused design is quite different.
4
None of Columbia’s arguments justify taking these factual disputes from the
jury. Columbia tries (at 27–28) to exclude Blauer because it supposedly does not use a
“heat reflective material.” A jury could find otherwise. In re Borden, 90 F.3d 1570,
1576 (Fed. Cir. 1996) (“The question of what the prior art teaches is a question of
fact.”). Blauer uses an “acrylic urethane” covering a base layer, which a skilled artisan
constructions” for “gloves and other outer clothing that are designed for protection
against inclement weather,” (Appx4160 at 1:10–15), which are the same products
Columbia says infringe. Columbia’s damages theory assumes the gloves are the
That the Patent Office thinks Blauer anticipates underscores its pertinence.
Considering Blauer is thus consistent with Columbia’s cases at 27–28 & n.3.
Columbia next erroneously compares (at 29–30) its patent with Blauer and a
modified version of the accused design. By altering the accused design to remove the
logo boxes (and add wavy lines in their place), rotate its orientation, and crop the
differences in wave thickness, Columbia violates the requirement that the fact-finder
consider the “overall effect” of the “patented design in its entirety.” Crocs, Inc. v. Int’l
Trade Comm’n, 598 F.3d 1294, 1303 (Fed. Cir. 2010). Regardless, it is for a jury to
compare the designs and resolve fact disputes about the similarities and differences.
5
C. A Jury Could Find No Substantial Similarity, Especially Given the
Prior Art and the Ordinary Observer’s Sophistication.
A jury could find the differences between Columbia’s patent and the accused
design—i.e., the accused design’s interrupted waves, vertical orientation, and varying
the facts above. Columbia’s contrary arguments are, again, factual issues for a jury.
impression of the accused design by repeatedly interrupting the wave pattern, unlike
that change the design’s overall impression. Such a rule would contradict the fact-
finder’s obligation to compare “the overall appearance” of the two designs, OddzOn
Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997), including “all
ornamental features visible at any time during the normal use of a product.” Contessa
Food Prods., Inc. v. Conagra, Inc., 282 F.3d 1370, 1381 (Fed. Cir. 2002).
Columbia relies (at 30–31) on L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d
1117 (Fed. Cir. 1993). But it never responds to our opening brief (at 28–29), which
showed that L.A. Gear’s dicta did not resolve the issue here—whether a fact-finder
can consider logo boxes that are ornamental, change the overall impression, and are
part of a product that is not a copy. A jury could find the first two facts in Seirus’s
favor, and the prior jury already found the third. (Appx5 (not willful); Appx3061.)
6
Columbia’s cited district court cases (at 30–31) fare no better. They all
involved blatant knock-offs where the design was a nearly identical copy, and where
there was no suggestion the logo was ornamental or changed the overall impression of
the design. Some did not even involve an argument that a logo rendered the product
non-infringing, and all discuss the issue only in passing. Anyway, district courts can’t
override this Court’s instructions that the fact-finder must consider every ornamental
Columbia contests (at 31) whether the logo boxes impact the design, suggesting
they are only a “source identifier.” But although this is one reason Seirus includes
them, none of the cited testimony suggests this is their sole purpose, much less that
patent to a modified version of the accused design. But even if the Court believes it is
inappropriate to consider the logo per se, the solution is not to analyze the accused
products by replacing the logo with more of the wavy lines (as Columbia does), but to
analyze the accused products as if the logo boxes were just blacked out rectangles:
7
Those boxes still interrupt the waves and impact the design’s overall impression, even
without the additional design elements in the logo. Columbia’s comparison (at 32)
also rotates the accused design 90 degrees, while obscuring the varying width of each
wave. A jury could reasonably reject these modifications too, as explained next.
because almost all accused products have vertical waves, unlike the patent figures.
images of the vertical orientation as “sophistry,” they accurately show the products’
testimony from Seirus’s Vice President that “approximately 95% of [the accused]
products have Seirus’ accused design (and particularly the wavy lines) running
vertically along the length of the product to give this vertical orientation impression.”
(Appx4296 at ¶ 8.)
The difference is apparent even with a closer look at the images from p. 26 of
8
(Appx12, Appx5820-5821.) The same difference is apparent when comparing Figure
2 of the patent with the accused product that Columbia shows at p. 35 of its brief:
(Appx11; Appx6061.)
Columbia’s contrary arguments (at 32–35) are, at most, factual disputes for a
jury. Columbia says (at 33) that, despite the difference in orientation, the accused
products and the patent were meant to convey the same image of warmth. But
infringement doesn’t turn on the designer’s intent, it turns on the actual overall
impressions they convey. A jury could find that, whatever their origins, the designs
convey different overall impressions, especially given the close prior art. Columbia
9
then points (at 33–35) to marketing materials and accused products that it says have
the same orientation as the patent. But the marketing materials are irrelevant—
Columbia did not accuse them of being infringing “heat reflective materials.”
Columbia’s other images of the accused products (at 34–35) don’t help it either.
The sock (at 34) includes mostly vertical waves (running up the leg and the top of the
foot), with a few horizontal waves on the side of the foot. (Appx5513.) A jury could
find that having multiple waves with different orientations of the same garment
differs from Columbia’s design, where all the waves have a single orientation. One
glove (at 35) has a completely vertical orientation. (Appx6061.) And although the
other glove (at 34) includes horizontal waves, (Appx6045), those waves still have the
opposite orientation as the logos, which a jury could find creates a unique impression.
Moreover, that glove is not representative of most of the accused products, ~95% of
which use the vertical orientation, (Appx4296 at ¶ 8), and thus does not support the
It is no answer for Columbia to cite (at 35–36) testimony that rotating the
comparison above of the patent figures with accused products shows that when the
products are positioned the same way, the waves have a different orientation that
whether a jury might credit Columbia’s rotation argument, it could reasonably credit
Seirus’s view that the two designs differ when compared head-to-head.
10
Finally, Columbia’s reliance on Apple, Inc. v. Samsung Elecs. Co., 932 F. Supp. 2d
1076 (N.D. Cal. 2013), is misplaced. The case doesn’t address infringement. Apple
held a patent showing the design in multiple orientations was not indefinite, because
the figures with “different orientations merely show[] that the particular orientation—
1086. Here, by contrast, the figures always show the same horizontal orientation (or,
at best, a diagonal orientation in part of Fig. 8) up and down the length of the
product, (Appx11–12), and never show a vertical orientation. So a jury could find
that orientation matters here and the accused products are not substantially similar.
patent versus variable width waves in the accused design. Our opening brief (at 26–
27) showed a jury could find this variation significantly changes the design’s overall
impression, by causing the accused products to have silver lines running through them
that are absent from the patented design. (Appx4295.) A jury must consider “the
ornamental aspects of the design as a whole and not merely isolated portions of the
patented design,” Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 820 (Fed. Cir.
1992), and it could find this difference results in a different “design as a whole,”
despite Columbia’s use of modified images of “isolated portions.” The bottom line is
11
II. The HeatWave Fabric Is The Appropriate Article of Manufacture.
Columbia’s damages demand in the new trial on infringement should be limited
by the fact that the relevant “article of manufacture” under § 289 is the HeatWave
fabric. The accused products all have multiple components, and, under the Solicitor
General’s test, the fabric is the relevant article. Columbia’s contrary arguments are all
legally insufficient, including its alternative argument on the entire market value rule.
gloves have multiple parts—our opening brief (at 4–5, 32–34) lists over a dozen,
acknowledges (at 11) the gloves have multiple “pieces.” It does not matter whether
the fabric performs “the overriding function of the glove,” because the glove still has
other, unrelated parts. Nor does it matter that the fabric “cannot be separated”
The accused hats, socks, and liners also have multiple parts. They include not
only fabric but also separate stitching that holds them together. (Appx6221–6222;
12
B. The Solicitor General’s Test Shows the Fabric is the Article.
1. The scope of the claimed design is determinative here and shows the
article is the fabric. The patent’s title and claim refer to a “material,” not an end-
product. (Appx10.) The figures have dotted lines that exclude the parts of the end-
product other than the material from the claim, (Appx11–13), confirming the article is
the material (fabric), not the whole product. The inventor’s testimony underscores
the article is something less than the end-product—he said the claimed article was the
“heat-reflective material” i.e., the “silver” foil attached to the fabric, not even the
entire fabric. (Appx2112–2114.) Columbia’s reference (at 45) to the fabric’s function
Corp., 838 F.2d 1186, 1188 (Fed. Cir. 1988) (“Design patents do not and cannot
insistence that, for damages, the patent covers the end-product contradicts its
infringement argument (at 27–28) that the Court can consider only the material.
accused gloves have many other components with different functions. (Appx2317;
products for many reasons other than the accused design, (Appx1938–1939;
Appx2103.) Customers bought over 240 times more units of a product without the
accused design than the comparable one with it. (Appx2313–2316; Appx3420–3422.)
13
Columbia’s arguments (at 46–50) are all legally insufficient. Columbia cannot
rely on the fabric’s functionality—a design patent can’t cover function, Lee, 838 F.2d
at 1188, and, if anything, the importance of warmth shows the design’s relative
“suggests that the ‘article’ should be the component embodying the design.” See 2016
WL 3194218, at *28. Nothing in § 289 or the Solicitor’s test prohibits using the fact
that non-design features drive demand to limit the article to the component with the
design. Columbia still gets the total profit (without apportionment) on the relevant
why Columbia uses silver, (Appx3627), is irrelevant to the importance of the design in
Seirus’s products. Its inventor’s opinions about the design are, at most, unsupported
objective evidence that a glove without the accused design was 240 times more
fabric’s function, and their direction to “look inside” underscores the fabric with the
design is separate from the rest of the glove, making the fabric the relevant article.
14
Tex, keeps hands dry. Zippers, cinches, bungee cords, and buckles ensure the glove
fits comfortably. Clips on the gloves keep the pair together when not in use. Some
gloves include a feature on the fingers that allows the user to operate her smartphone.
separate from the fabric. Columbia identifies no reason to leverage a design patent on
a “heat reflective material” into a damages claim on unrelated components. That the
fabric is “integrated” with the other components and can’t be separated doesn’t
4. The fabric can physically separate from the rest of the accused products
Appx3854.) Columbia does not dispute these facts. Its discussion (at 54) about
“replac[ing]” the lining is not part of the Solicitor’s test. The fabric is the article, and
the damages award under the entire market value rule even if the relevant article were
the fabric. The jury didn’t find the entire market value rule applies to the design
patent. Columbia never articulated this theory to the jury, the court refused to give
Columbia’s instruction on it, (cf. Appx1523 (alternative 3); Appx4222–4223), and the
final instructions did not reference the rule as a basis for § 289 damages, much less
15
What’s more, the entire market value rule cannot be used under § 289. A § 289
damages analysis involves only “two steps”—(1) identifying the relevant “article of
manufacture,” and (2) “calculat[ing] the infringer’s total profit made on that article of
manufacture.” Samsung Elecs. Co., Ltd. v. Apple Inc., 137 S. Ct. 429, 434 (2016).
Neither the statute nor Samsung let the patentee recover the defendant’s profit on
something more than the relevant article of manufacture. Columbia doesn’t cite any
case applying the entire market value to § 289, and its citations (at 55–56) to old utility
patent cases are inapplicable, because the applicable statute did not tie damages to any
But even if a patentee could theoretically invoke the entire market value rule
for § 289 damages, the rule could not apply to these facts. Columbia would have to
show that the patented design “drove demand,” just as, in a utility patent case, it would
have to show the “patented technology drove demand.” Power Integrations, Inc. v. Fairchild
Semiconductor Int’l, Inc., 904 F.3d 965, 978 (Fed. Cir. 2018). Where, as here, “the
product contains other valuable features, the patentee must prove that those other
features do not cause consumers to purchase the product.” Id. at 979. The patented
feature must be “the sole driver of consumer demand” and “alone motivate[]
consumers to buy the accused products.” Id. at 980. The accused design doesn’t
meet those standards. Customers bought 240 times more units of a product without
the accused design than a comparable product with it, (Appx3420–3422), and a
16
It is no answer for Columbia to argue (at 56–59) that the fabric’s technical
benefits were important to customers. Design patents don’t cover function, Lee, 838
F.2d at 1188, so Columbia can’t rely on it. If anything, Seirus’s extensive marketing of
the products’ functionality underscores that the accused design doesn’t drive demand.
Regardless, Columbia’s evidence is much weaker than in Power Integrations, where the
entire market value rule did not apply to patented technology that was “essential” to
many customers, was featured in marketing materials, and that (unlike here) caused
products with it to outsell those without it. Power Integrations, 904 F.3d at 978–980.
persuasion on the relevant article of manufacture. The plaintiff traditionally bears the
the relevant article is an essential element of that claim. Section 289’s text and
legislative history support putting the burden of persuasion on the plaintiff, especially
when compared with the trademark and copyright statutes, which have explicit
burden-shifting language that § 289 lacks. Section 289 has similar wording to §§ 284
and 287, where the plaintiff has the burden of persuasion on substantive damages
sub-issues (e.g., marking and entire market value rule), so the article of manufacture
17
issue should be treated similarly. The only other cases to analyze the issue put the
burden of persuasion on the patentee. See Apple Inc. v. Samsung Elecs. Co. Ltd., 2017
WL 4776443, at *13 (N.D. Cal. Oct. 22, 2017); Nordock, Inc. v. Systems, Inc., 2017 WL
Columbia ignores these points. Instead, Columbia argues (at 59–66) that § 289
is a disgorgement remedy, and that historical practice requires shifting the burden to
claim for the defendant’s profits. See, e.g., Tilghman v. Proctor, 125 U.S. 136, 151 (1888)
(“The plaintiff has the burden of proving the amount of profits that the defendants
have made by the use of his invention”). Congress applied this rule to design patents.
See H.R. REP. NO. 49-1966, at 3 (1886) (“the patentee recovers the profit actually
made on the infringing article if he can prove that profit, that is what the infringer realized
from the infringing articles minus what they cost him”). Indeed, Congress provided for a
minimum $250 recovery in § 289 to “meet[] the case when the exact profit in dollars
and cents cannot be proved,” S. REP. NO. 49-206 at 2 (1886), which would be
Columbia doesn’t cite any case holding the defendant has the burden of
persuasion on the article of manufacture. Instead, the design patent cases it cites (at
61 n.10) address the mathematical calculation of profits after the relevant article has
been determined and suggest the defendant must prove deductible expenses. See
Henry Hanger & Display Fixture Corp. of Am. v. Sel-O-Rak Corp., 270 F.2d 635, 643 (5th
18
Cir. 1959) (holding the defendant had to prove costs, such as “depreciation,” “taxes,”
and “interest” from loans); In re AI Realty Mktg. of New York, Inc., 293 B.R. 586, 618
(Bankr. S.D.N.Y. 2003) (putting burden on defendant to establish “the nature and
amount of the costs that should be considered” and “their relationship to the
infringing product”); Bergstrom v. Sears, Roebuck and Co., 496 F. Supp. 476, 497 (D.
None of those cases involved a dispute over the article of manufacture, so they
aren’t relevant. That the defendant might have a burden related to the mathematical
calculation of the amount of profits after the relevant article has been determined says
nothing about who has the burden on determining what the article is. Samsung
separated the § 289 analysis into “two steps”—first “identify the ‘article of
manufacture,’” and then “calculate the infringer’s total profit made on that article of
manufacture.” 137 S. Ct. at 434. Columbia’s cases address the burden at step two,
Columbia’s cited cases from other areas of law are even less relevant. Most
involve intentional wrongdoing and none deal with the specific statutory language
here. Even if considered, however, they again focus on shifting the burden on the
mathematical calculation of profits. For example, SEC v. First City Financial Corp., 890
F.2d 1215, 1229 (D.C. Cir. 1989), dealt with disgorgement of profits illegally obtained
through deliberate insider trading. It held the plaintiff “bears the ultimate burden of
persuasion that its disgorgement figure reasonably approximates the amount of unjust
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enrichment” and that, as part of that burden, it must “distinguish between legally and
illegally obtained profits.” Id. at 1231–32. The government met that burden by
proving which trades were “tainted.” Id. at 1232. Applying that rule here would
require Columbia to prove the relevant article of manufacture upon which profits will
be calculated. At that point, the burden shifted to the defendant to show the amount
of profits was not a “reasonable approximation,” id., which here would be analogous
to requiring Seirus to prove deductible expenses after the article had been identified.
persuasion on the substantive damages claim and simply find it met where the
defendant submits “no evidence” to rebut it. See S.E.C. v. Platforms Wireless Int'l Corp.,
617 F.3d 1072, 1096 (9th Cir. 2010) (holding the “SEC bears the ultimate burden of
persuasion that its disgorgement figure reasonably approximates the amount of unjust
enrichment,” at which point the defendant must come forward with evidence
suggesting a lower amount); S.E.C. v. Halek, 537 F. App’x 576, 581 (5th Cir. 2013)
(same); S.E.C. v. Bilzerian, 29 F.3d 689, 697 (D.C. Cir. 1994) (same); Sec. & Exch.
Comm'n v. Whittemore, 744 F. Supp. 2d 1, 8 (D.D.C. 2010) (same). That is not this case.
Columbia’s citations (at 61 nn. 8–9) to the copyright and trademark statutes are
irrelevant, because their text differs markedly from § 289. The copyright and
trademark statutes have explicit burden-shifting language, while § 289 does not. The
copyright and trademark statutes were enacted before § 289—both had burden-
shifting language in 1905, decades before the 1952 Patent Act. So, if Congress had
20
wanted to include burden shifting for design patents, it knew how. It chose not to,
which, along with the legislative history of § 289’s predecessor, confirms that
Columbia’s reliance (at 61–62 & n.11) on the common law is also misplaced.
Its cited source refers to copyright, which is irrelevant, and then proposes a “more
§ 51, cmt. i (2011). Whatever the merits of that proposal, it doesn’t illuminate the text
of § 289 or reflect historical practice. The proposed rule again relates only to the
mathematical calculation of profits, not a substantive aspect of the damages claim (like
the claimant against the conscious wrongdoer.” Id. There was no conscious
wrongdoing here—the jury found Seirus was not willful, as it did not know of the
Columbia’s suggestion (at 60) that the “profits” remedy in § 289 has a different
purpose than other types of damages does not help its argument. The Supreme Court
has long recognized that, “[t]hough called profits, they are really damages,” Mowry v.
Whitney, 81 U.S. 620, 653 (1871). Moreover, the purpose of burden-shifting in other
contexts is (1) to address intentional wrongdoing and (2) require the defendant to
untangle its own finances, which it is better situated to do. The first consideration
doesn’t apply—there was no willful infringement. The second doesn’t apply either:
21
the plaintiff is perfectly capable of proving the relevant article, and any issues about
the burdens regarding calculating the profits on that article are a separate step in the
The bottom line is that Columbia bears the burden on proving the appropriate
article of manufacture. Both the statutory text and legislative history forbid burden
shifting—the text is similar to that in §§ 271 and 284, where the plaintiff bears the
burden, and the legislative history requires the plaintiff to “prove that profit.”
Proving the article of manufacture is a substantive element of the § 289 claim, just like
marking, an issue on which Arctic Cat reaffirmed the plaintiff bears the burden. The
parties’ dispute over the article of manufacture was the key damages issue, and putting
the burden on Seirus to prove the article was something less than the end-products
almost certainly skewed the jury’s deliberation. Arctic Cat Inc. v. Bombardier Recreational
Prods., Inc., 876 F.3d 1350, 1368–69 (Fed. Cir. 2017) (error on burden of persuasion
for marking required new trial); Gordon v. New York City Bd. of Educ., 232 F.3d 111, 116
(2d Cir. 2000) (“If an instruction improperly directs the jury on whether the plaintiff
has satisfied her burden of proof, it is not harmless error because it goes directly to
the plaintiff’s claim, and a new trial is warranted.”); Stevison by Collins v. Enid Health
22
Sys., Inc., 920 F.2d 710, 714 (10th Cir. 1990) (“Jury instructions outlining the
appropriate burdens of proof are almost always crucial to the outcome of the trial”).
Neither of Columbia’s arguments (at 66–70) establishes the error was harmless.
Seirus identified the HeatWave fabric as the proper article of manufacture and
adduced evidence under the Solicitor General’s four factor test. (Appx6230;
expert explained how she calculated the total profits on the fabric. (Appx3480–3492.)
Columbia understood Seirus was contending the fabric was the article. (Appx1798;
Appx3839–3840; Appx3951.) That met any burden of production that Seirus may
have. Cf. Arctic Cat, 876 F.3d at 1368 (defendant’s burden to “articulate the products
Columbia’s comments (at 67–68) about whether the article was “rolls of fabric
‘on the dock’” miss the point. Seirus’s position is that the fabric as incorporated into
the gloves and other end-products is the article of manufacture. That the fabric is
made and sold by Ventex in rolls before incorporation into the end-products simply
shows, under the Solicitor General’s fourth factor, the fabric is the relevant article.
The issue is who had the burden of persuasion on the relevant article (Samsung’s step
1), not anything to do with the mathematical calculation once the article was
established (Samsung’s step 2). Seirus met any burden of production it had on
23
Samsung’s step 1 by identifying the relevant article and submitting evidence relevant to
the Solicitor’s test. Nevertheless, Seirus’s expert also addressed Samsung’s step 2 and
she calculated it. (Appx3480–3492.) Columbia may disagree with her methodology,
Columbia’s criticisms are also wrong on the merits. Samsung did not dictate any
not require including unrelated costs like labor as part of the fabric’s value. Indeed,
precedent suggests that comparing the component’s cost to the overall product’s cost
is appropriate. Bush & Lane Piano Co. v. Becker Bros., 222 F. 902, 904 (2d Cir. 1915) (no
“serious difficulty in computing the profits on the [piano] case alone,” because the
defendant “purchases them from others at a cost of $38 for each case”).
products included material components other than the fabric—the gloves had many
other pieces, while the socks, hats, and liners, included at least the stitching. (See pp.
13-15.) No product was 100% fabric. (Id.) And although Columbia complains (at
69) about the percentages that Seirus’s expert attributed to the fabric in the socks,
hats, and liners, Seirus still met any burden of production it had.
Finally, Columbia’s discovery gripes (at 16–18, 69–70) are erroneous. Seirus
produced all financial information it had, and provided extensive deposition testimony
from its CFO. (Appx6138–6166.) Columbia never moved to compel anything more.
24
C. There is a Right to Jury Trial on § 289 Damages.
Columbia is wrong to say (at 70–73) there is no right to jury trial on § 289
damages. The Seventh Amendment protects the jury right in “suits at common law.”
The Court assesses whether a claim meets that description by analyzing “the nature of
the issues involved and the remedy sought,” where the latter is “more important.”
Chauffeurs v. Terry, 494 U.S. 558, 565 (1990). Both establish a jury right here, and the
brought in the courts of England.” Id. Design patents didn’t exist in England until
1839 (or in America until 1842). See Jason J. DuMont, The Origins of American Design
Patent Protection, 88 IND. L.J. 837, 854 (2015). But today’s design patent cases are like
utility patent cases, which, in 1790, were tried in English law courts to juries.
Markman v. Westview Insts., Inc., 517 U.S. 370, 377 (1996) (“[I]nfringement cases today
must be tried to a jury, as their predecessors were more than two centuries ago.”).
The second factor examines if the remedy is “legal or equitable.” Chauffeurs, 494
U.S. at 565. Disgorgement of profits “is not easily characterized as legal or equitable,
money, without resort to any of the ancillary remedial devices traditionally available in
25
equity but not at law, the remedy is presumptively legal.” Id. at Cmt. c. That
The design patent statute underscores its remedy is legal, at least for Seventh
Amendment purposes, and shows that Congress intended a statutory right to jury.
Section 289’s predecessors provided for recovery of the defendant’s profits “by an
action at law.” See 35 U.S.C. § 74 (1946); 24 Stat. 387, § 1 (1887). Although Congress
removed that reference in § 289, that did not change the remedies’ character. A
complaint seeking the defendant’s profits still “pleads an action at law,” so the parties
have a jury right. Ross v. Plastic Playthings, Inc., 138 F. Supp. 887, 888 (S.D.N.Y. 1956).
Columbia doesn’t cite any case holding that there is no jury right on § 289
damages. Columbia mostly relies (at 71–72) on cases that don’t address the jury right,
but rather laches in copyright or utility patent infringement, Petrella v. MGM, 134 S. Ct.
1962, 1967 n.1 (2014); SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC,
137 S. Ct. 954, 964 (2017), whether a court can freeze a trademark defendant’s assets,
Reebok Int’l, Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 559–60 (9th Cir. 1992), or
cases that mention in passing that equity courts could award profits. Packet Co. v.
Sickles, 86 U.S. 611, 617–618 (1874); Burdell v. Denig, 92 U.S. 716, 720 (1875).
But none of those cases require treating the profits remedy in an infringement
action as purely equitable for Seventh Amendment purposes. It was long established
that “[t]hough called profits, they are really damages,” Mowry v. Whitney, 81 U.S. 620,
653 (1871), and “it has always been recognized that there may be a suit for accounting
26
at law.” Kennedy v. Lakso Co., Inc., 414 F.2d 1249, 1253 (3d Cir. 1969). Juries
calculated profits when the remedy was awarded at law. Id. Although profits were
also available in equity courts, this was only “incidental to an injunction to avoid
multiplicity of suits,” and “not because the jury was considered an inappropriate office
for compensation.” Swofford v. B&W, Inc., 336 F.2d 406, 411 (5th Cir. 1964). It was
“a rule of administration and not of jurisdiction.” Id. So, although Petrella allowed
laches to bar recovery of profits in copyright, as equity courts had historically, this
doesn’t mean there is no jury right, as there was when law courts had awarded profits.
Indeed, courts who have addressed the issue in infringement cases find a jury
right on an accounting for profits. See, e.g., Kennedy, 414 F.2d at 1253–54 (“[N]o
distinction can be drawn which would justify recognition of the right to jury trial for
‘damages’ and its denial in a claim for ‘profits’ on the theory that ‘damages” are
principles which hold the infringer a trust for the patent holder.”); Sid & Marty Krofft
Television v. McDonald's Corp., 562 F. 2d 1157, 1175 (9th Cir. 1977) (finding jury right
on profits in copyright and refusing “to deprive the parties of a jury on what is
336 F.2d at 411 (same for patent infringement); Ross, 137 F. Supp. at 888 (same for
§ 289); Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (jury right on “accounting” for
trademark damages, which included a defendant’s profits); Robert Bosch, LLC v. Pylon
Mfg. Corp., 719 F.3d 1305, 1314 (Fed. Cir. 2013) (en banc) (describing Dairy Queen as
27
holding that “even if a proceeding was, in the traditional sense, an equitable
accounting, a jury trial was nonetheless required”); 9C Charles Alan Wright & Arthur
R. Miller, FEDERAL PRACTICE AND PROCEDURE, § 2312 (3d ed. 2008) (“In terms of
jury trial, there is now no difference between a claim for damages and a claim for
profits. No matter how characterized, there is a right to jury trial.”). This Court
CONCLUSION
For the reasons above, this Court should reverse or vacate the judgment on the
design patent.
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CERTIFICATE OF SERVICE AND FILING
I certify that I electronically filed the foregoing document using the Court’s
CM/ECF filing system on November 2, 2018. Counsel was served via CM/ECF on
November 2, 2018.
limitation set forth in Fed. R. App. P. 27(d)(2)(A). The relevant portions of the brief,