Crocs Prevails Against the ITC
19 USC Sec 337 allows for exclusion from the United States of articles which infringe a valid and enforceable United States patent, copyright, trademark, or other intellectual property right. A patent owner, for example, may file a complaint with the International Trade Commission (ITC) alleging a violation of Sec. 337 and requesting an investigation. As part of an investigation based on asserted patent rights, the ITC may conduct hearings to determine whether accused imported articles actually infringe the patents recited in a patent holder’s complaint.
In this case, Crocs filed a complaint alleging infringement of its utility (US6993858) and design (D517789) patents related to its foam footwear. The ITC conducted an investigation and determined that Crocs’s patents were either not infringed (design patent) or invalid for obviousness (utility patent). Crocs appealed to the Federal Circuit.
Today, the Federal Circuit reversed the Commission’s determinations regarding both patents (Crocs v ITC), holding that the ITC “erred in finding that the prior art taught all of the claimed elements of the ’858 patent and incorrectly weighed the secondary considerations” and “erred in claim construction for the ’789 patent, in applying the ordinary observer test for infringement.”
The Federal Circuit first reiterated that the proper determination of design patent infringement requires application of the “ordinary observer” test of Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc):
In determining whether an accused product infringes a patented design, this court applies the “ordinary observer” test, without any “point of novelty” perspective. Egyptian Goddess, 543 F.3d at 678. To show infringement under the proper test, an ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design. See id. at 681. When the differences between the claimed and accused designs are viewed in light of the prior art, the attention of the hypothetical ordinary observer may be drawn to those aspects of the claimed design that differ from the prior art. Id. If the claimed design is close to the prior art designs, small differences between the accused design and the claimed design assume more importance to the eye of the hypothetical ordinary observer. Id. The ordinary observer, however, will likely attach importance to those differences depending on the overall effect of those differences on the design. Id. Even if the claimed design simply combines old features in the prior art, it may still create an overall appearance deceptively similar to the accused design. In that case, this court will uphold a finding of infringement. Id. at 677–78. In other words, “the deception that arises is a result of the similarities in the overall design, not of similarities in ornamental features in isolation.” Amini Innovation, 439 F.3d at 1371. The ordinary observer test applies to the patented design in its entirety, as it is claimed. See Braun, Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 820 (Fed. Cir. 1992). “[M]inor differences between a patented design and an accused article’s design cannot, and shall not, prevent a finding of infringement.” Payless Shoesource, 998 F.2d at 991 (quoting Litton Sys. Inc. v. Whirlpool, 728 F.2d 1423, 1444 (Fed. Cir. 1984)).
Thus, regarding design patent infringement, the Federal Circuit noted (gently scolding the ITC):
Turning to this case, the Commission placed undue emphasis on particular details of its written description of the patented design. Those details became a mistaken checklist for infringement. Without a view to the design as a whole, the Commission used minor differences between the patented design and the accused products to prevent a finding of infringement. In other words, the concentration on small differences in isolation distracted from the overall impression of the claimed ornamental features.
The proper comparison requires a side-by-side view of the drawings of the ’789 patent design and the accused products….
Regarding the obviousness determination, Federal Circuit said:
[T]he prior art did not include any hint or suggestion or even common sense reason to include the passive restraint system of the ’858 patent at the time of the invention. The prior art, in fact, taught away from the passive restraint system. Because this claimed feature of the invention yielded more than predictable results, the ’858 patent for this reason also would not have been obvious at the time of invention.
And the Court also found that secondary considerations weighed against a finding of obviousness:
[T]he Commission found, based on substantial evidence, that Crocs shoes practice the ’858 patent and that the Crocs shoes were commercially successful…. This court gives even more credit to the administrative judge’s finding of substantial industry praise for the claimed invention and the products covered by the claimed invention. Still another objective measure tips the scale farther in the direction of non-obviousness, namely the Commission’s finding of copying. Copying may indeed be another form of flattering praise for inventive features.
Because of these errors, the case will go back to the ITC for determinations of infringement.