Lifted Limited, Llc v. Novelty Inc.

MOTION for Partial Summary Judgment

D. Colo.June 5, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO LIFTED LIMITED, LLC, Plaintiff, v. NOVELTY INC., Defendant. ) ) ) ) ) ) ) ) ) C.A. No. 16-cv-03135-PAB JUDGE PHILIP A. BRIMMER MAGISTRATE JUDGE GORDON P. GALLAGHER DEFENDANT NOVELTY, INC’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND MEMORANDUM IN SUPPORT THEREOF Pursuant to Federal Rule of Civil Procedure 56 and Local Rule 56.1, Defendant Novelty, Inc. (“Novelty”) moves for partial summary judgment, specifically that U.S. Design Patent No. D662,655 (the “’655 design patent”) is invalid. Defendant Novelty, Inc. requests that the Court enter an Order holding that the ’655 design patent is invalid. INTRODUCTION This case stems from Plaintiff’s claims of infringement relating to a smoking multi-tool. At the center of this case is a design patent Plaintiff asserts is infringed by Defendant Novelty Inc.’s competing product. Plaintiff’s own admissions, however, clearly and convincingly establish that the patent at issue, U.S. Design Patent No. D662,655 (“the ’655 design patent”), is invalid on its face. Because invalidity is based exclusively on Plaintiff’s admissions, there can be no disputed issue of fact on this issue. Plaintiff’s admissions stem back to February 6, 2012. On that date, Plaintiff filed a provisional application for a utility, i.e., functional, patent on a smoking multi-tool. The tool was depicted in the provisional application as: Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 1 of 16 2 (Sherban Decl. Ex. 2 at 26) (reproduced with highlighting added).1 In that application, Plaintiff repeatedly espoused the various functional aspects of the entirety of the device. For instance, Plaintiff described the left side of the device (highlighted in yellow) as the “poker” and corresponding storage slot. The poker, also referred to as a stoker, functions as a tool to clean a smoking instrument. The poker (number 8 in the figure) is secured by a pivot point so it can be rotated upward (as shown by the large arrow) into a slot (number 9 in the figure) that functions to clean and store the poker. Plaintiff further described the right side of the tool (highlighted in green) as a hammer or “tamper.” This hammer portion functions to push down burning embers. Further, Plaintiff explained that the top section (highlighted in red) is specifically purposed to house a lighter and to avoid damage to the tool during its use. 1 All citations to “Sherban Decl. Ex.” shall refer to exhibits to the Declaration of Michael P. Sherban, Esq. in support of Defendant/Counterclaimant Novelty Inc.’s Motion for Partial Summary Judgment, filed concurrently herewith. Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 2 of 16 3 In sum, Plaintiff’s CEO and his wife asserted that they devised an entirely functional device allegedly worthy of utility patent protection. But just 11 days after filing its provisional utility application, Plaintiff made a troubling representation to the Patent Office. Plaintiff stripped the above figure of all annotations relating to its functionality, including the arrow showing movement of the poker, and filed Application No. 29/413,681 for a design patent. The drawing submitted in the design patent application was otherwise identical. A design patent, of course, is not available to a primarily functional design. This is black letter law. Nevertheless, despite explaining the functionality of the device to the Patent Office less than two weeks prior, Plaintiff separately represented to the Patent Office that the tool was purely ornamental. This was demonstrably false and Plaintiff knew it. The ’655 design patent cannot stand in light of Plaintiff’s clear and unambiguous statements that the claimed design is functional. Based on the evidence already in the record, consisting exclusively of Plaintiff’s admissions, there is no genuine dispute as to material facts that Plaintiff’s design patent is invalid. It is, frankly, a wonder how Plaintiff even brings this action for patent infringement knowing it has misled the Patent Office. Novelty, therefore, respectfully requests that this Court find the ’655 design patent invalid as a matter of law and dismiss Count I of Plaintiff’s Complaint with prejudice. STATEMENT OF UNIDISPUTED FACTS Plaintiff’s February 6, 2012 Provisional Utility Patent Application 1. On February 6, 2012, Plaintiff filed a provisional utility patent application (the “Provisional Application”). (Sherban Decl. Ex. 2 at 1.) 2. In its Provisional Application, Plaintiff represented to the USPTO that there is a need for a “combination multi-tool and lighter holder.” (Id. at 20.) Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 3 of 16 4 3. Plaintiff disclosed its multi-tool: (1) “provides a plastic case to hold a standard lighter,” (2) “has a hammer shaped base on one side to serve as a tobacco stuffer,” and (3) “has a hinged stoker to provide a metal rod to stoke the tobacco and/or clean the pipe.” (Id.) 4. The application also included the following figure to help describe the invention: (Id. at 26.) 5. Plaintiff described the left side of the device as having a “foldable stoker 8” hinged at “pivot point 7” and “recess 10 is provided to allow the user to pry up on section 11 of the stoker 8.” (Id. at 22-23.) 6. The slot 9 depicted in the diagram served to clean and hold the stoker 8 when folded in the “passive mode.” (Id.) 7. The right side was described as “a protrusion 6 which faces down and out from central axis A of the pipe tool 1.” (Id. at 22.) 8. This “protrusion 6 … is used as a tobacco stuffer when loading the pipe.” (Id. at 23.) Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 4 of 16 5 9. The Plaintiff explained that the protrusion was shaped like a hammer to facilitate this functionality. (Id. at 20.) 10. The top portion was described as functional by Plaintiff: “[a] space S is formed between line C and the lower top segment 21. This body shape increases the distance from flame F to the top segment 21 which allows a wide range of tilt angles for the pipe tool to be used without burning the pipe tool 1.” (Id. at 23, describing Figure 7). 11. Further the top portion is sized to hold a standard lighter such as a BIC® lighter. (Id. at 22.) The ’655 Design Patent 12. Less than two weeks after filing its Provisional Application, Plaintiff filed Application No. 29/413,681 for a design patent. (Sherban Decl. Ex. 1 at 1.) 13. Plaintiff’s design patent application included, and therefore claimed, the very same tool it disclosed in its Provisional Application. (Id.) 14. Notably, however, Plaintiff removed the numerical markings in its design patent submission identifying the functional aspects of the device. (Compare Sherban Decl. Ex. 1 at 1 with Ex. 2 at 26.) 15. A side-by-side comparison of the functional multi-tool disclosed in the Provisional Application and the design claimed in the ’655 patent is shown below: Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 5 of 16 6 Fig. 1 of the ’655 design patent Fig. 1 of the Provisional Application 16. The ’655 design patent subsequently issued on June 26, 2012. (Sherban Decl. Ex. 1 at 1.) The Non-Provisional Utility Patent Application 17. Just months after obtaining the ’655 design patent, Plaintiff continued its February 6, 2012, provisional application by filing a related non-provisional utility patent application, Application No. 13/760,442 on February 6, 2013, (the “Non-Provisional Application”). (Sherban Decl. Ex. 3 at 1.) 18. In the Non-Provisional Application, Plaintiff reasserted its representations concerning the functionality of its multi-tool. (Id. at 33-41.) 19. For example, Plaintiff reiterated that protrusion 6 was an herb stuffer, slot 9 holds poker 8 in passive mode, recess 10 is used to pry up the poker, and that the body shape of the top section is designed to allow for a wide range of tile angles for the tool to be used without burning the tool. (Id. at 35-36.) 20. What’s more, the patentee, Matthew Bodenchuk – who also is the CEO and owner of Plaintiff – submitted a declaration under oath to the USPTO as part of the Non- Provisional Application’s prosecution. (Id. at 3-7.) Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 6 of 16 7 21. In his declaration, Mr. Bodenchuk stated that he and his wife came up with their multi-tool while attempting to solve the problem of carrying so many different smoking tools. (Id.) Mr. Bodenchuk stated his multi-tool is “capable of holding a lighter and includes packing and cleaning tools.” (Id. at 3.) 22. Plaintiff, therefore, before and after applying for the ’655 design patent, represented to the patent office that the design at issue was functional. (See generally, Sherban Decl. Exs. 2 and 3.) The Current Litigation 23. On December 20, 2016, Plaintiff filed suit in this Court against Novelty alleging numerous claims. (D.I. 1.) 24. Count I of Plaintiff’s complaint alleged infringement of the ’655 design patent. (Id. at ¶¶ 35-41.) 25. Plaintiff alleged the ’655 design patent is valid and enforceable. (Id. at ¶ 11.) 26. On May 18, 2017, Plaintiff filed its First Amended Complaint alleging the same claims as in its original complaint. (D.I. 19.) STANDARD OF REVIEW Summary judgment is appropriate where, as here, there is no genuine issue as to any material fact such that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Garcia v. Zavaras, No. 08-CV-02780-PAB-KMT, 2010 WL 4853553, at *1 (D. Colo. Nov. 19, 2010). An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Id. Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. Id. If there is no genuine dispute as to any Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 7 of 16 8 material fact, no trial is required. Id. The court then applies the law to the undisputed facts and enters judgment. Id. Early summary judgment is appropriate when, as here, the motion presents a substantial and well-supported argument for significantly reducing the claims or issues in the case. Baker v. Banner Health, No. 12-CV-3029-WJM-CBS, 2015 WL 3413255, at *2 (D. Colo. May 28, 2015). It is well settled that summary judgment of patent invalidity is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Farmer Bros. Co. v. Coca-Cola Co., 384 F.Supp. 595, 599 (C.D. Cal. 1974) (granting summary judgment that patent was invalid when facts concerning the validity of the patent were admitted by the patentee). ARGUMENT The sole question for this Court is whether the claimed design in the ’655 design patent is primarily functional or purely ornamental. The evidence that the design is primarily functional is not just clear and convincing, it is overwhelming because the evidence is Plaintiff’s own statements. Those admissions leave absolutely no doubt that the ’655 design patent is primarily functional. Any claim by Plaintiff to the contrary would simply not be credible and there is no reason for this Court or parties to expend any further resources litigating this issue. Novelty therefore sets forth below in detail how Plaintiff’s own admissions unequivocally establish there is no issue of fact that the ’655 design patent is invalid. I. PLAINTIFF’S UTILITY APPLICATION ADMISSIONS LEAVE NO DOUBT THAT THE ’655 DESIGN PATENT CLAIMS A FUNCTIONAL TOOL. Before applying for the ’655 design patent, Plaintiff filed a utility application on the same design attesting, “[t]he present invention relates to a combination pipe/cigarette lighter holder, a pipe stoking tool, and a tobacco stuffer.” (Sherban Decl. Ex. 2 at 20.) Plaintiff described the Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 8 of 16 9 entire device as functional, specifically describing three distinct areas: (i) the foldable poker with storage slot; (ii) the hammer shaped tamper; (iii) the lighter case with top flame control. The device, based on Plaintiff’s own statements to the USPTO, is functional in its parts and as an aggregate multi-tool. This fact is not and cannot be in dispute. As such, the ’655 design patent is invalid based on the Plaintiff’s own clear and unambiguous statements. “A design patent only protects the novel, ornamental features of the patented design. 35 U.S.C. § 171; see also OddzOn Prod., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997). A design patent cannot, by definition, cover functional aspects of a design; that is the exclusive province of utility patents. See, e.g., Toyo Tire & Rubber Co., Ltd. v. CIA Wheel Group, No. SACV 15-0246, 2016 WL 4992111, at *6 (C.D. Cal. Sept. 5, 2016); Rainworks Ltd. v. Mill-Rose Co., 622 F.Supp.2d 650, 655-56 (N.D. Ohio 2009). A design patent that covers a primarily functional design is invalid on its face. See, e.g., Lee v. Dayton-Hudson Corp., 838 F.2d 1186, 1188 (Fed. Cir. 1988); L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993); Power Controls Corp. v. Hybrinetics, Inc., 806 F.2d 234, 238 (Fed. Cir. 1986); Scovill Mfg. Co. v. Roto Broil Corp., 304 F.Supp. 834, 839 (E.D.N.Y. 1969). The mere fact that the conglomeration of functional aspects may look different is insufficient to warrant a design patent when those components are in fact functional. In re Carletti, 328 F.2d 1020, 1022 (C.C.P.A. 1964). Indeed, “it has been settled that when a configuration is the result of functional considerations only, the resulting design is not patentable as an ornamental design for the simple reason that it is not ‘ornamental’—was not created for the purpose of ornamenting.” Id. (emphasis added.) Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 9 of 16 10 A. The Entire First Side Of The Device Relating To The Poker Is Functional. The first functional element described by the Plaintiff in the patent applications is the “poker.” This element spans the entire longitudinal side of the device and functions as a pipe cleaner with corresponding access and storage points. As explained in the patent application: The poker 8 is preferably a metal rod. Poker 8 folds in direction C into slot 9 in the passive mode. To move the poker 8 to the active mode shown, a recess 10 is provided to allow the user to pry up on section 11 of the poker 8. A ledge 12 at the base section B stopes the poker 8 at about a 90 degree angle to access A. A hole 13 allows the poker 8 to pivot around pivot point 7. (Sherban Decl. Ex. 2 at 22-23.) This description is just one of many, including descriptions of drawings, explanations of the functionality of the poker. (Id.; Sherban Decl. Ex. 3 at 35-37.) The functionality discussed covers the portion of the device highlighted in yellow below: As is illustrated and described, the poker side of the device is rife with functionality. The poker itself is a metal rod that folds out to clean ash and other residue out of a pipe or smoking equipment. (Sherban Decl. Ex. 3 at 34.) It is attached to a pivot point that functions to allow the poker to fold into the device. (Id.) A notch or recess was included above the pivot point – not as Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 10 of 16 11 an ornamental design – but to allow access to the poker so it could be flipped up or down. (Id. at 27-29.) And, a slot is included along the edge of the device, the slot functions to clean the poker when it is flipped up and to store it when it is not in use. (Id. at 18.) Additionally, Plaintiff stated that the design of the slot being open-faced and facing away from the protrusion, again was not made for ornamentation, but rather for the purpose of “distinguishing from the prior art.” (Id. at 29.) As a result of this function design, Plaintiff touted the functional advantage of its poker, namely that it was designed to “not contact and become gummed up or contaminated with pipe bowl herb and ash that may inhibit the movement of Applicant’s poker 8 between its open position … and closed position ….” (Id. at 16-17.) In short, based on Plaintiff’s own descriptions, the poker and the entire poker side of the device from the pivot point to the notch to the cleaning/storage slot is functional, not ornamental. B. The “Hammer” or “Tamper” Functions To Stuff Burning Tobacco Or Herb. Opposite the pivot point of the poker, there is a hammer-shaped protrusion (highlighted in green in the diagram above). Plaintiff explained that this protrusion is not a random ornamental design, but purposely designed in a hammer shape to function as a tool, namely a hammer, for tamping or hammering down tobacco or other herbs when loading and smoking a pipe. As Plaintiff put it when describing this functional component to the USPTO:  “The case has a hammer shaped base on one side to serve as a tobacco stuffer.” (Sherban Decl. Ex. 2 at 2; Ex. 3 at 34.)  “Fig. 4 shows the protrusion 6 which is used as a tobacco stuffer when loading the pipe.” (Sherban Decl. Ex. 2 at 23; Ex. 3 at 36.)  “…use the end 6 to stuff down the tobacco or other herb ….” (Sherban Decl. Ex. 2 at 23; Ex. 3 at 36.) During the prosecution of the Non-Provisional Application Plaintiff further expounded on the detail of the tamper by stating that “the sheath has a protrusion 6 extending outwardly of the Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 11 of 16 12 longitudinal axis on a first side of the sheath sized to function as a pipe bowl herb and ash tamper.” (Sherban Decl. Ex. 3 at 26.) (emphasis added.) Plaintiff added that “sheath can be manually gripped and conveniently manipulated … to use the downwardly and outwardly extending protrusion 6 to tamp down the tobacco or other herb in the pipe bowl.” (Id. at 18.) A hammer’s shape is, of course, guided entirely by its function. Based on Plaintiff’s own representations to the USPTO, the bottom right side of the device was designed as a hammer to provide corresponding functionality. It is not ornamental. C. The Remainder Of The Tool Is Also Functional. The entirely functional poker and hammer portions of the device comprise more than two-thirds of the tool and, alone, are sufficient to invalidate the patent. But the remainder of the device (highlighted in red in the diagram above) described in ’655 design patent is equally functional. As Plaintiff explained, again in an express attempt to obtain a utility patent from the USPTO, the unit itself is designed to function as a BIC® lighter holder with a specifically designed opening that functions to allow manipulation of a flame so as not to interfere with the pipe smoker or damage the multi-tool itself. With this functionality, 100% of the device is functional. As Plaintiff explained to the USPTO (in reference to Figure 1): “A central recess 2 at the top of section T is sized to hold a standard lighter such as a BIC® lighter.” (Sherban Decl. Ex. 2 at 22; Ex. 3 at 35.) Further, Plaintiff stated that “A space S is formed between line C and the lower top segment 21. This body shape increases the distance from the flame F to the top segment 21 which allows a wide range of tilt angles for the pipe tool to be used without burning the pipe tool 1.” (Sherban Decl. Ex. 2 at 23; Ex. 3 at 36.) This shows that the remaining body and top portion, also were designed with specific functionality in mind, not just for appearance sake. As such, the ’655 design patent is a quintessential example of an improper design patent. Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 12 of 16 13 Power Controls Corp., 806 F.2d at 238 (“If the patented design is primarily functional rather than ornamental, the patent is invalid.”). II. PLAINTIFF AFFIRMATIVELY SWORE THAT HIS DESIGN IS FUNCTIONAL, NOT ORNAMENTAL. The above evidence is overwhelming proof of the invalidity of the ’655 design patent. But here, in addition to the Plaintiff’s submissions to the USPTO – statements that are affirmed to be true as part of the application process – Plaintiff’s CEO and one of the inventors of the ’655 design patent, provided a sworn affidavit to the USPTO. (Sherban Decl. Ex. 3 at 3-7.) Plaintiff’s CEO cannot escape from his own sworn statement. His affidavit leaves no doubt that there exists no issue of fact that the design claimed in the ’655 design patent is primarily functional. In an effort to persuade the USPTO to issue a utility patent, Plaintiff’s CEO made clear, in his sworn affidavit, that his motivation was entirely functional, and he was not simply designing an ornament. Mr. Bodenchuk swore that “[i]n an attempt to solve the problem of carrying so many different smoking tools, my wife and I came up with the idea of the Toker Poker.” (Id. at 3.) (emphasis added.) He further swore, “…the Toker Poker is a unique smoking tool capable of holding a lighter and includes packing and cleaning tools.” (Id.) Tellingly, nowhere in the affidavit does Mr. Bodenchuk provide any indication of a non-functional design aspect. To the contrary, Plaintiff repeatedly and vehemently maintains that the design is functional. When a design is driven by functional concerns—as evidenced here by Plaintiff’s numerous admissions—the resulting design is not patentable. Power Controls Corp., 806 F.2d at 238 (“it has been settled that when a configuration is the result of functional considerations only, the resulting design is not patentable as an ornamental design for the simple reason that it is Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 13 of 16 14 not ‘ornamental’ – it was not created for the purposes of ornamenting.”) (quoting In re Carletti, 328 F.2d at 1022). Here, Plaintiff’s CEO provided a sworn affidavit regarding the motivation and purpose behind invention. These statements unambiguously state that he devised a “smoking tool” with “packing and cleaning tools.” In light of the overwhelming record to the contrary, Plaintiff cannot now argue somehow that the design was created purely for the purposes of ornamenting. As the Federal Circuit explained in Power Controls Corp., a design patent for a primarily functional device is invalid even if the aggregate of the functional components may have a unique appearance. 806 F.2d at 240 (“[i]n determining whether a design is primarily functional, the purposes of the particular elements of the design necessarily must be considered.”). The design of a useful article is deemed to be functional when the appearance of the claimed design is dictated by the use or purpose of the article. PHG Tech., LLC v. St. John Cos., Inc., 469 F.3d 1361, 1366 (Fed. Cir. 2006) (setting forth factors that can be considered in determining whether a design patent is valid). Plaintiff time and time again promoted its tool as an entirely functional device from top to bottom. Notably, however, the voluminous record on this score does not include any evidence that the design was not dictated by function. It was not and Plaintiff provided an affidavit to the USPTO testifying to this fact. In sum, the evidence is more than clear and convincing that the ’655 design patent is primarily functional, not merely ornamental. See, e.g., Power Controls Corp., 806 F.2d at 240 (holding strong showing of functionality overcame presumption of validity of design patent). The above cases rested on testimony, observation of the design or inferences regarding functionality. The facts here are even more persuasive. The Plaintiff’s CEO (and inventor) admits repeatedly and under oath that the design is functional. Indeed, the Plaintiff continues to Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 14 of 16 15 actively seek a utility patent on that very functionality. The evidence – Plaintiff’s own statements made under oath and to the Patent Office – overwhelmingly establishes that the ’655 design patent is invalid. CONCLUSION For the foregoing reasons, Defendant Novelty, Inc.’s Motion for Partial Summary Judgment should be granted, and the Court should enter an Order holding that the ’655 design patent is invalid, and dismissing Claim I of Plaintiff Lifted Limited, LLC’s Complaint with prejudice. Dated: June 5, 2017 /s/ Amanda M. Miller Amanda Miller (OH0084488) Kal K. Shah (IL6275895 ) Michael P. Sherban (OH0079950) BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP 200 Public Square, Suite 2300 Cleveland, OH 44114 Telephone: (216) 363-4500 Facsimile: (216) 363-4588 amiller@beneschlaw.com kshah@beneshlaw.com msherban@beneschlaw.com Attorneys for Defendant Novelty, Inc. Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 15 of 16 16 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing was filed electronically this 5th day of June, 2017. Notice of this filing will be sent to all parties by operation of the Court’s electronic filing system. The parties may access this filing through the Court’s system. /s/ Amanda M. Miller Amanda Miller (OH0084488) One of the attorneys for Defendant Novelty, Inc. Case 1:16-cv-03135-PAB-GPG Document 33 Filed 06/05/17 USDC Colorado Page 16 of 16