Design patents 101: Lululemon Athletica Canada and Calvin Klein, Inc. settle infringement lawsuit over yoga pants

Posted by Charles Colman

LAW OF FASHION doesn't discuss design patents very often.  So before delving further into this post, LOF suggests that you check out this article from the University of Pittsburgh Law School's Jurist, which discusses the recent case of Lululemon Athletica Canada, Inc. v. Calvin Klein, Inc. (D. Del.), brought over the alleged infringement of three of Lululemon's design patents in multi-waistband yoga pants:

 

The Jurist article, in addition to introducing the Lululemon lawsuit, covers the basics of design patents, which, as the student columnist notes, are properly used to "protect [a] manufactured article's non-functional, [novel and non-obvious] ornamental features, [but] have long been an underutilized source of protection for patentable goods."  But that's just the beginning...

 

A design patent, in contrast to its verbose sibling, the utility patent (probably what most people think of when they hear the word "patent"), consists solely of images representing the protected design.  As the Federal Circuit has explained, "[d]esign patents have almost no scope [in the sense that] in all design cases, [patent protection] is limited to what is shown in the application drawings."  In re Mann, 861 F.2d 1581, 1582 (Fed. Cir. 1988).  Design patents, like trademark protection, (at least theoretically) cannot be used to obtain a monopoly over "functional" features -- to allow them to do so would blur the line between design and utility patents.

 

Any such blurring should concern impartial observers, particularly in light of the USPTO's more lenient approach to design patent applications.  As Professor Dennis Crouch, EIC of the fantastic blog Patently-O, noted in early 2010 (hyperlinks mine):

 

"Most utility patent applications are rejected at least once on either anticipation or obviousness. Design patents are different.... [D]esign patents had an allowance rate of about 90% during the period FY2005–FY2009 as measured by the percentage of disposals that were allowances.... [The data] suggest that the US design patent system is operating as a registration system rather than as one based on a true examination."

 

If the design patent "examination" process is, in fact, functioning as a mere rubber stamp, there is great potential for mischief.  Top design-patent commentator, University of Oklahoma College of Law's Professor Sarah Burstein, explains, in her must-read law review article, "Visual Invention," that "design patents have historically been subject to abuse by patent 'smugglers' who have sought patent protection for minor technical innovations that exhibit minimal, if any, ornamental conception."

 

But this isn't law school, so back to black-letter law.  (How does that make sense, you ask?  Well, it might or it might not; depends on who you ask.) The current test for design patent infringement, as I wrote in my chapter for Navigating Fashion Law: Leading Lawyers on Exploring the Trends, Cases, and Strategies of Fashion Law (West/Aspatore 2012), is "something of a hybrid between copyright law's 'substantial similarity' test . . . and trademark law's 'likelihood of confusion' test."  Until a landmark decision in Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc), there was much uncertainty about the exact parameters of the test -- in part because the U.S. Supreme Court has, unbelievably, failed to meaningfully engage with design patent law since the 19th Century -- but the Federal Circuit has now made (relatively) clear the standard for infringement in design patent cases.  As the SDNY has recounted:

 

"Previously, the Federal Circuit prescribed a two-pronged test. Plaintiffs had to satisfy the hoary 'ordinary observer' test set down in Gorham v. White, 81 U.S. 511, 20 L. Ed. 731 (1871), by proving that the patented design and the accused design would appear substantially similar to 'the eye of the ordinary observer;' and plaintiffs also had to prove that the accused design appropriated the patented design’s 'points of novelty'--the innovative features that distinguished it from the prior art.... Egyptian Goddess struck the 'points of novelty' test from the framework, but incorporated its regard for the prior art into a new, enhanced version of the 'ordinary observer' standard. Now, the test for design patent infringement consists of a single inquiry: 'whether an ordinary observer, familiar with the prior art, would be deceived into thinking that the accused design was the same as the patented design.'..."

 

(Despite this guidance, Professor Burstein argues that design patent law remains "an unusually murky area...")

 

The courts' use of "deceit" language in the test for design patent infringement makes it easy to inadvertently conflate the test with trademark infringement law's central "likelihood of confusion" inquiry... but the Federal Circuit has warned against making this mistake.  In Unette Corp. v. Unit Pack Co., 785 F.2d 1026, 1029 (Fed. Cir. 1986), for example, the appellate court slapped a district court on the wrist for doing just that:

 

"In determining the issue of infringement, the district court concluded that a 'likelihood of confusion' did not exist between Unette’s patented design and Unit Pack’s product. Likelihood of confusion as to the source of the goods is not a necessary or appropriate factor for determining infringement of a design patent. The holder of a valid design patent need not have progressed to the manufacture and distribution of a 'purchasable' product for its design patent to be infringed by another’s product. A determination that the shape of the alleged infringing concentrate package is not visible to the consumer at the time of sale and, therefore, the consumer is unlikely to be confused by the similarity in a competitor’s product is inapposite. Concluding that a purchaser is unlikely to be confused by any similarity in a competitor’s product only serves to blur the otherwise clear line that exists between the test for infringement of a design patent and the 'likelihood of confusion' test for infringement of a trademark."

 

As I discuss at length in my Oxford manuscript, the Federal Circuit in Unette may well have overstated the clarity of the line between the two tests -- at least, as each is actually applied in litigation.  But you'll have to wait for the book to hear more on that...

As for the case as hand, many observers were watching the Lululemon v. Calvin Klein case closely, hoping for fresh guidance from the courts on the application of design patent law to fashion disputes.  It turns out the litigation will bear no such fruit.  Yesterday, Lululemon filed a "Notice of Voluntary Dismissal with Prejudice" -- in other words, it dropped the case -- as the parties have settled the dispute on confidential terms.

Some evidence of the terms of the settlement may be inferred, however, from the Calvin Klein website, which [UPDATE] continues to feature as of 11/23/12, no longer features a pair of yoga pants mentioned in Lululemon's complaint:





 

Did Lululemon and Calvin Klein take a cue from Apple and HTC, and settle the dispute with a license?  Could be... Who knows...  One thing we know for sure: design patent buffs will have to get their kicks somewhere else.

[This post is for entertainment and informational purposes only, and does not constitute legal advice or create an attorney-client relationship among any individuals or entities. Any views expressed in this post or at the linked web pages are those of the relevant writer(s) on a particular date, and should not necessarily be attributed to this writer, his law firm, its agents, or its clients. Neither LAW OF FASHION nor any person or entity associated with it can or will warrant the thoroughness or accuracy of the content here or at the cited sources.]