Opinion
Civ. No. 98-3174 c/w 99-3492 SECTION "N"
March 28, 2000
ORDER AND REASONS
Before the Court are five motions: (1) defendant Charles Shaw's ("Mr. Shaw") Motion for Summary Judgment (C.A. No. 99-3492); (2) plaintiff Superior Merchandise Co., Inc.'s ("Superior") Motion for Summary Judgment against Mardi Gras Trading ("MGT"), Charles Shaw and Gwendlyn Shaw (C.A. No. 99-3492); (3) defendant Gwendlyn Shaw's ("Ms. Shaw") Motion for Summary Judgment (C.A. No. 99-3492); (4) defendants M.G.I. Wholesale, Inc., June L. Berger, Frederick J. Berger, Sr., and Carnival Mart's (collectively, the "MGI defendants") Motion for Reconsideration; and (5) plaintiffs Superior, Alan Philipson and Andre Philipson's (the "Philipsons") Motion to Dismiss Charles Shaw's Counterclaim Under Rule 12(b)(6) or, in the Alternative, for Partial Summary Judgment Under Rule 56 (C.A. No. 99-3492).
For the following reasons, defendant Mr. Shaw's Motion for Summary Judgment is DENIED, plaintiff Superior's Motion for Summary Judgment is GRANTED, defendant Ms. Shaw's Motion for Summary Judgment is DENIED, the MGI defendants' Motion for Reconsideration is DENIED, and plaintiffs Superior and the Philipsons' Motion to Dismiss or alternatively for Summary Judgment is GRANTED.
BACKGROUND
This case arises out of a dispute over a design for a decorative bead patent. Superior is the assignee of record of U.S. Patent No. 398,879 (the "bead patent"). The bead patent was granted to Alan Philipson and his son Andre Philipson on September 29, 1998. The bead patent consists of one claim, "the ornamental design for a `decorative bead,' as shown and described," and three drawing sheets. The claim and illustrative drawing sheets describe the design for a three-dimensional ornamental bead depicting bare human female breasts.
In December, 1998, Superior sued the MGI defendants, alleging infringement of the bead patent. Specifically, plaintiffs' Amended Complaint states two counts: (1) patent infringement; and (2) trade dress infringement under Section 43 of the Lanham Act, 15 U.S.C. § 1125(a). The MGI defendants filed a counterclaim alleging patent invalidity and violation of Louisiana's Unfair Trade Practices and Consumer Protection Law. Defendants moved for summary judgment on the issues of patent invalidity, patent infringement, and violation of the Lanham Act. Superior filed a Cross Motion for Summary Judgment on the same three issues.
On October 26, 1999 this Court entered its Order and Reasons resolving the pending Cross Motions for Summary Judgment. The Court granted summary judgment in favor of plaintiffs on the issues of patent validity and patent infringement. In addition, the Court dismissed plaintiffs' claim of trade dress infringement, and also dismissed defendants' claims of patent invalidity, together with the defense of anticipation, and defendants' counterclaim under Louisiana's Unfair Trade Practices and Consumer Protection Law.
Plaintiffs subsequently filed three additional suits in December, 1999, and January, 2000, alleging additional claims of patent infringement (Civil Actions Nos. 99-3492, 99-3729, and 99-3730). The Court was recently advised that all parties to two of the additional suits have reached a compromise (C.A. Nos. 99-3739 and 99-3730). Thus, MGT, Mr. and Ms. Shaw, and the MGI defendants are the only defendants remaining before this Court.
With regard to the MGI defendants, all issues of liability were decided previously by this Court on summary judgment. Now that defendant Charles Shaw moves for Summary Judgment, submitting prior art that was not previously before this Court and additional documents in support of the defense of anticipation, the MGI defendants seek reconsideration of the Court's October 26, 1999 Order and Reasons on this newly submitted evidence.
In addition, on March 9, 2000, this Court granted Charles Shaw leave to file counterclaims against plaintiffs alleging violation of Louisiana's Unfair Trade Practices Act and claims of patent invalidity pertaining to two design patents — the bead patent at issue and No. 411,967, a design patent for a crawfish-shaped bead. Due to the late addition of these causes of action, the Court severed Mr. Shaw's counterclaims concerning the crawfish-shaped bead. Plaintiffs now move for dismissal of Shaw's counterclaims with regard to the bead patent at issue.
STANDARD OF REVIEW
Summary Judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of fact exists where the evidence is such that a reasonable jury could return a verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The party seeking summary judgment bears the burden of demonstrating an absence of evidence to support the non-movant's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the opposing party bears the burden of proof at trial, the moving party need not submit evidentiary documents to properly support its motion, but need only point out the absence of evidence supporting the essential elements of the opposing party's case. See Saunders v. Michelin Tire Corp., 942 F.2d 299, 301 (5th Cir. 1991). To oppose a motion for summary judgment, the non-movant must set forth specific facts to establish a genuine issue of material fact, and cannot merely rest on allegations and denials. See Celotex, 477 U.S. at 324, 106 S. Ct. at 2552. Factual controversies are to be resolved in favor of the non-moving party. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
LAW AND ANALYSIS
I. Motions for Summary Judgment by Plaintiffs and Defendant Mr. Shaw
Mr. Shaw seeks summary judgment on the grounds that plaintiffs' patent is invalid because of obviousness and/or want of novelty and that his actions do not infringe plaintiffs' patent. Mr. Shaw claims that under 35 U.S.C. § 103, plaintiffs' bead design would be obvious to a designer of ordinary skill who designs articles of the type involved. In support of his claim, Mr. Shaw submits alleged prior art, which he claims embodies teachings that create the same overall visual appearance as the bead patent at issue. Mr. Shaw also argues that plaintiffs' patent is invalid on the ground of anticipation, or that it is not novel under 35 U.S.C. § 102.
Superior moves this Court to enter summary judgment in its favor and against the defendants in Civil Action No. 99-3492 on the ground that the Court has already adjudged its patent valid, and further argues that because defendants' beads are substantially similar to those of MGI and Carnival Mart and no new relevant evidence exists, the Court should merely enter its Order and Reasons of October 26, 1999 against these defendants.
The Court notes that defendants MGT and Mr. and Ms. Shaw are not moving for reconsideration of its October, 1999 Order and Reasons, as the Order is not binding on them because they were not before the Court at that time.
A. Patent Validity
1. IntroductionThe Court recognizes that a patent shall be presumed valid. See 35 U.S.C. § 282. This presumption of validity is rebuttable.See Hobbs v. United States, 451 F.2d 849, 856 (5th Cir. 1971). The party asserting that a patent is invalid bears the burden of establishing a prima facie case of invalidity and also bears the burden of persuasion on the merits of its claim. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 (Fed. Cir. 1983). The opposing party need not prove validity at the outset, but must come forward after establishment of the prima facie case. See id.
Where validity of a patent claim has been upheld on a previous occasion, such earlier litigation is given weight, but not stare decises effect. See Stevenson v. Sears, Roebuck Co., 713 F.2d 705, 711 (Fed. Cir. 1983). The weight given will depend on what additional prior art is produced in the subsequent dispute. See id. at 711 n. 5. In other words, where persons were neither parties nor in privity with any parties in prior litigation in which a patent was determined valid, collateral estoppel is inapplicable to bind such person by a prior decision. See id. at 710-11.
Thus, the Court agrees with Shaw's contention that the Summary Judgment Order entered in Civil Action No. 98-3174 does not bind persons who were not parties to that litigation. The Court notes that where, as here, defendants submitted prior art that had not been considered by the Patent Office, there is "no reason to defer to the [Patent and Trademark Office ("PTO")] so far as its effect on validity is concerned." American Hoist Derrick Co. v. Sowa Sons, Inc., 725 F.2d 1350, 1359 (Fed. Cir. 1984). Deference is eliminated, or at least reduced. See id. at 1360. Still, this situation has no effect on the presumption of validity or on who has the burden of proof. See id. Thus, defendants bear the burden of proving invalidity. See id.
The Patent Act sets forth three conditions of patentability: (1) novelty; (2) utility; and (3) non-obviousness. See 35 U.S.C. § 101, 102 103; Graham v. John Deere Co., 383 U.S. 1, 12, 86 S. Ct. 684, 691, 15 L.Ed.2d 545 (1966). The claim of patent invalidity before the Court concerns only the conditions of novelty and non-obviousness.
2. Non-obviousness
Section 103 of the Patent Act sets forth the test of non-obviousness, stating:
A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.35 U.S.C. § 103(a). In other words:
The determination of the ultimate question of obviousness is made from the viewpoint of a person of ordinary skill in the field of the patented design. The scope of prior art is not the universe of abstract design and artistic creativity, but designs of the same article of manufacture or of articles sufficiently similar that a person of ordinary skill would look to such articles for their designs.Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1462, 43 U.S.P.Q. 2d 1887 (Fed. Cir. 1997) (citations omitted). Here, in the design patent context, the ultimate question is "whether the claimed design [as a whole] would have been obvious to the designer of ordinary skill who designs articles of the type involved . . . the inquiry is whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design." Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996). Even where an invention is new in the sense that it has not been made before, it may not be patentable "if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent." Id.
"The emphasis on non-obviousness is one of inquiry, not quality. . . ." Graham, 383 U.S. at 17, 86 S. Ct. at 693-94. The ultimate question of patent validity is one of law; however, satisfaction of the non-obviousness condition requires several factual inquires: (1) determination of the scope and content of prior art; (2) ascertainment of the differences between the prior art and the claim at issue; (3) resolution of the level of ordinary skill in the pertinent art; and (4) consideration of secondary circumstances such as commercial success, long felt but unresolved needs, and failure of others. See id. at 17-18, 86 S. Ct. at 694. The Court must also consider that the primary responsibility for determining patentability lies in the PTO. See id. at 18, 86 S. Ct. at 694. Also underlying the Court's decision is the general notion that:
To qualify for protection, a design must present an aesthetically pleasing appearance that is not dictated by function alone, and must satisfy the other criteria of patentability . . . Sections 102(a) and (b) operate in tandem to exclude from consideration for patent protection knowledge that is already available to the public. They express a congressional determination that the creation of a monopoly on such information would not only serve no socially useful purpose, but would in fact injure the public by removing existing knowledge from public use.Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 148, 109 S. Ct. 971, 976, 103 L.Ed. 2d 118 (1989). Unpatentable material is not only that which is known to the public, but also that which is readily deducible from publicly available material by a person of ordinary skill in the pertinent field of endeavor.See id. at 150, 109 S. Ct. at 977. While it is undisputed that knowledge of the bare human female breast has always been available to the public, patent protection of the bead design at issue does not remove such existing knowledge from public use. Thus, in this sense, the prior art does not render the patented design obvious. The Court also makes the following findings with respect to the non-obviousness of Superior's bead patent.
a. Prior Art
Prior art is that which is accessible or available to the public. See Kimberly-Clark Corp. v. Johnson Johnson, 745 F.2d 1437, 1453 (Fed. Cir. 1984). It is that which is described in the world's accessible literature, including patents, or has been publicly known or in public use or on sale in this country. See id. The scope of prior art relevant to this Court's inquiry includes that reasonably pertinent to the field of the inventor's endeavor, as well as any analogous arts that a person of ordinary skill reasonably would have consulted. See In re GPAC, Inc., 57 F.3d 1573, 1577-78 (Fed. Cir. 1995) (emphasis added). It has been said that a field of art is analogous "if one seeking the solution to a problem in one art would be likely to look to seek the solution by referring to the other art." Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 620 (Fed. Cir. 1985)
As challengers of the bead patent's validity, defendants bear the burden of establishing a prima fade case of invalidity on the ground of obviousness. In the previous summary judgment determination, both sides demonstrated the scope of prior art by submitting prior patents, the art of record considered during the patent application process.
The prior patents identified designs depicting human figures and body parts. They included a vase, statuettes, a telephone, and various other items depicting bare human female breasts. Neither side contended there existed a genuine issue of fact as to whether the submitted patents were prior art. Nor did either side contend that prior art was found outside the submissions.
Now, defendant alleges that plaintiffs' patent is obvious on the basis of several references to prior art. Mr. Shaw claims that "the definition of prior art is broad enough to include anything described in the world's accessible literature, and includes knowledge that is available and anything that would be obvious from it to a person of ordinary skill in the relevant art." Mr. Shaw submits several books and articles containing pictures and discussions of beads depicting the bare human female breast dating back to early Western civilization ("ancient beads" or "mammiform beads"). Mr. Shaw argues that pictures and descriptions of such ancient mammiform beads clearly constitute prior art. The books and articles include: (1) excerpts from Lois Sherr Dubin, The History of Beads From 30,000 B.C. to the Present 22 329 (1987), featuring Czechoslovakian mammiform beads created circa 28,000 B.C., alleged to be present in the collection of a Czechoslovakian museum; (2) excerpts from Dubin, supra, at 31, featuring mammiform beads from the Jordan River Valley created circa 10,000 to 8,000 B.C., alleged to be present in the collection of the Israel Museum in Jerusalem; (3) excerpts from articles by Robert K. Liu contained in The Art of Personal Ornament, featuring the Jordan River Valley beads and Bronze Age Beads from Crete, alleged to be contained in a collection at the Stanford Museum of Art since at least 1981.
Mr. Shaw submitted recently one additional reference to the Czechoslovakian mammiform beads. The beads are apparently pictured in J. Jelinek, The Pictorial Encyclopedia of the Evolution of Man 406-11 (1975).
Winter 1999, 23(2), at 70-73; Summer 1997, 20(4), at 58-59; and Autumn 1992, 16(1), at 28.
Mr. Shaw contends that it is irrelevant that plaintiffs' search for prior art during its patent application process failed to reveal such items, and "more likely than not, bespeaks a want of creativity in conducting that search." Mr. Shaw also states "[t]o a designer of ordinary skill, with knowledge of prior art, such as someone who had just read The History of Beads, or any of the issues of Ornament Magazine that discussed mammiform beads, or gone to any of the museums where the beads are displayed, the creation of a breast-shaped bead would have been quite obvious." As explained more fully below, the Court finds Shaw's argument fatally flawed in its assumption that a designer of ordinary skill would reasonably have consulted such prior art.
Because prior art and the bead patent present claims that are non-technical in nature and language, the interpretation of the claim and prior art lies within the Court's competency. The teachings of prior art may be discerned without the aid of expert testimony. The prior art reveals designs depicting natural forms. The prior art items appear to be the same types of articles of manufacture, but the designs do not appear sufficiently similar. While the object of the bead is similar, the shapes and representation contained in such prior are not simulated by the breast bead design. Thus, the Court finds that the differences between the patent and prior art do not suggest patent invalidity for obviousness.
Mr. Shaw identifies the Bronze Age beads as the primary reference. Shaw suggests that every design element of plaintiffs' patent is clearly suggested by this ancient bead. The requirement for a "primary reference" has been explained as meaning that "there must be a reference, a something in existence, the design characteristics of which are basically the same as the claimed design in order to support a holding of obviousness." Hupp, 122 F.3d at 1462 (citing In re Rosen, 673 F.2d at 391. In other words, the Court must ascertain whether, when the invention is viewed as a whole,
the same or substantially similar article of manufacture is known to have design characteristics of which the design of the article as shown in the claim is an obvious variant. Obviousness, in turn, is determined by ascertaining whether the applicable prior art contains any suggestion or motivation for making the modifications in the design of the prior art article in order to produce the claimed design.Id. (citations omitted).
Superior argues that the ancient beads are sufficiently different, and that even when viewed as a primary reference, the reference to which Shaw alludes does not reveal that it could be modified in manners suggested by the prior art itself. See In re Harvey, 12 F.3d 1061, 1063 (Fed. Cir. 1993); Durling v. Spectrum Furniture, 101 F.3d 100, 103 (Fed. Cir. 1996). Specifically, plaintiffs argue that Mr. Shaw fails to identify where the space between breasts, realistic droop, or smooth texture differences may be found. Plaintiffs simply ask the Court to apply its previous Order and Reasons resolving summary judgment in favor of plaintiffs on the claims of patent invalidity and infringement. Plaintiffs argue that there is no valid reason for the Court to reconsider its prior ruling, because no new evidence has been presented by the newly added defendants, and further, any new evidence is not relevant as prior art.
Plaintiffs argue that new evidence must be newly discovered to be admissible. See Waltman v. International Paper Co., 875 F.2d 468, 474 (5th Cir. 1989); see also Matador Petroleum Corp. v. St. Paul Surplus Lines Ins. Co., 174 F.3d 653, 658 n. 1 (5th Cir. 1999). In other words, defendants must point to excusable ignorance of the facts at the time of the prior determination despite due diligence to learn about the facts. See Waltman, 875 F.2d at 474. Finally, plaintiffs argue that the evidence of ancient beads is inadmissible as hearsay insofar as that contained in the issues of Ornament Magazine, and further, if admissible, such evidence is irrelevant to the patent at issue. Plaintiffs submitted line drawings of the Bronze Age beads in support of the argument that they are entirely fanciful, such that "unless one has the imagination of an anthropologist (not one of ordinary skill in the art or an ordinary observer), one would never know what they are!" A simple comparison of the line drawings submitted by plaintiffs reveals that plaintiffs' design patent is not obvious over the ancient bead designs. They are no more similar to the bead patent in question than the prior art considered by the PTO.
b. Level of Ordinary Skill
The person of ordinary skill in the relevant art is a hypothetical person who is presumed to know the relevant prior art. See GPAC, 57 F.3d at 1579. Here, the parties do not dispute the level of ordinary skill. It suffices to state that the Court believes that the innovation level in the art is low. A person of ordinary skill in the pertinent art would be one who is familiar with Mardi Gras beads or novelty items. Thus, no level of ordinary skill would require an advanced education, specialized training, scientific or technical experience, or expert knowledge.
c. Secondary Considerations
The Court notes that no argument, let alone evidence, was presented as to secondary considerations — commercial success, long felt but unresolved needs, and failure of others. The Court is aware, nevertheless, of claims of increased sales and high demand, and the overall success of bodacious beads. Such evidence, if credible, certainly lends itself to plaintiffs' argument of non-obviousness.
d. Summary
In sum, the Court finds that the similarity between the ancient mammiform beads and the bead patent at issue does not make the patent obvious in design, as this step "is taken only with the hindsight knowledge of [Superior's] product." Hupp, 122 F.3d at 1463. Thus, although the bare human female breast itself could be found obvious, as a natural form, to a person with ordinary skill in the art, the claimed design as a whole — an ornamental bead — satisfies the non-obvious requirement. The Court finds that defendants failed to show, by clear and convincing evidence, that the bead patent is obvious based on the prior art. The Court is not convinced that it would have been obvious to one of ordinary skill in the pertinent art to take the elements of ancient bead designs and apply them to Mardi Gras bead necklaces. One skilled in the art of making Mardi Gras beads would not have been motivated by such prior art, primarily because the scope of the prior art relevant to this Court's inquiry includes only that which is reasonably pertinent to the field of the Mardi Gras bead inventor's endeavor, as well as any analogous arts that a person of ordinary skill reasonably would have consulted. See GPAC, 57 F.3d at 1577-78. Defense counsel failed to set forth sound reasoning in support of the argument that Mardi Gras bead inventors would find mammiform beads of ancient civilizations reasonably pertinent to the field, or that such ordinary persons reasonably would have consulted the alleged prior art. Thus, while such prior art may well be that which is accessible or available to the public, described in the world's accessible literature, and available for public viewing in at least one museum in the United States, still, it does not support a finding of patent invalidity on the ground of obviousness. Simply, "there is no teaching or suggestion in the prior art whereby one of ordinary skill would look to [ancient mammiform beads] in designing a mold suitable for making a [Mardi Gras bead comprising a three-dimensional simulation of bare human female breast]." Hupp, 122 F.3d at 1462-63. The idea came from the Philipsons, not prior art. See id.
3. Novelty and Anticipation
Mr. Shaw also argues that plaintiffs' patent is invalid because it is not novel under 35 U.S.C. § 102. Mr. Shaw's argument is simple — breast shaped beads were in existence before plaintiffs' patent. The Court agrees that if a single piece of relevant prior art contains each and every element of the patent at issue, the prior art must be found to anticipate the patent.See Structural Rubber Prods, Co. v. Park Rubber Co., 749 F.2d 707 (Fed. Cir. 1984); Knapp v. Morss, 150 U.S. 221, 228, 14 S. Ct. 81, 84, 37 L.Ed. 1059 (1893) (stating "`[t]hat which infringes, if later, would anticipate, if earlier.'") (citation omitted). The art before the Court, however, fails to establish anticipation.
Section 102 of the Patent Act sets forth the test of novelty, stating:
A person shall be entitled to a patent unless —
(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or
(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States . . . .35 U.S.C. § 102. To determine whether a product was "in prior use" under Section 102(a), the Court looks to whether the product was used in such a manner that the public was allowed access to the product. See Kimball Int'l, Inc. v. Allen Organ Co., 1981 WL 40573, 212 U.S.P.Q. 584, 589 (May 1, 1981 S.D. Ind.). Courts use the phrase "reduction to practice" to describe the time when an inventor's conception is capable of practical use and thus "on sale" pursuant to Section 102(b). See Kimball, 212 U.S.P.Q. at 588. Patentability depends on whether there is an identity of invention — whether a prior art reference embodies completely the same product as the claim of the patent in question such that the patent is "anticipated" by the prior art. See Shatterproof Glass, 758 F.2d at 619.
While defendants do not claim that other patent applications were filed prior to the filing of the bead patent application by plaintiffs, defendants do assert that patentability of the bead design is barred because similar beads produced by others were "on sale" prior to the bead design in question. Mr. Shaw asserts that a breast-shaped bead developed by Manuel Peixoto of Gulfport, Mississippi anticipated Superior's patent in that Peixoto's prototype was reduced to practice by November, 1996, nearly a month before plaintiffs' conception date and five months prior to plaintiffs' reduction to practice. In support of this contention, Shaw submits affidavit testimony of Peixoto stating that the beads were conceived in mid-1996 and the first prototype of his beads was shipped from Hong Kong to the United States in August, 1996, but was held at customs. The second shipment was sent in November, 1996. Peixoto then placed an order for the beads on March 12, 1997. Shaw argues that to prevail on his defense of anticipation, he need not show that the Peixoto beads were widely known amongst the public, but only that they were reduced to practice before plaintiffs' patent application was filed, citing 35 U.S.C. § 102 and 171.
Mr. Shaw also asserts that plaintiffs' patent was anticipated by breast-shaped beads designed and sold by Frederick Berger. Shaw argues that Berger requested a manufacturer design the bead during Mardi Gras week of 1996. In support of this contention, Shaw submits affidavit testimony of Roger Wong, who states that a mold of the design was made in March, 1996, and that samples were shipped to Berger in April, 1996, followed by an order in October, 1996. Shaw also asserts that the beads were sold at MGI's retail outlet during Mardi Gras of 1997. Shaw concedes, however, that the beads were not sold on the retail floor, but rather from the office, and offers affidavit testimony in support of these assertions as well.
Finally, Mr. Shaw asserts that a Mardi Gras throw imported by Sam DiMartino anticipated plaintiffs' patent. In the alterative, Shaw argues that the throw should be treated as prior art, alleging that it was imported into the United States in 1995. The Court finds that this throw is nothing other than a pacifier that happens to hang around a person's neck. It is not a bead. As such, in the eye of an ordinary observer, it would not be the same as plaintiffs' design bead.
The throw in question is best described as an oversized novelty pacifier with a nipple in the shape of bare female breasts.
Superior's response points to the insufficiency of evidence to support defendants' claim of anticipation. Superior argues that even if the facts submitted by defendants are true, they suggest a finding of suppression or concealment, as defendants did not publicly advertise the design, offer it for sale, or file a patent application. Plaintiffs rely on Woodland Trust v. Flower Tree Nursery, 148 F.3d 1368, 1373 (Fed. Cir. 1998) to argue that there must be contemporaneous documentation of the Berger or Peixoto beads in order to satisfy the clear and convincing burden imposed on defendants in their case of patent invalidity. Plaintiffs reassert the argument that there is no evidence that the beads were public, nor evidence of what beads were involved in the transactions described by defendants, or whether the beads were in the United States prior to the filing of plaintiffs' patent application on August 15, 1997.
The Court agrees, noting the absence of any physical record to support defendants' factual assertions. Defendants submitted no documentation to support a finding that knowledge or use of the beads was available to the public prior to Superior's invention. The Peixoto declarations do not reveal prior art or support the defense of anticipation, as there is no documentation to support that Peixoto actually had the prototypes to which he refers in his possession in November, 1996. It is not until after the filing date of plaintiffs' patent application that there exists contemporary documentation indicating the existence of the beads in the United States. In light of such evidence, the Court finds that there is no controversy as to the timing and significance of the products asserted to have been on sale to the public prior to plaintiffs' beads. There is simply no contemporaneous documentation to support the conclusion that the Peixoto or Berger beads were complete and placed on sale or in public use prior to plaintiffs' filing of its patent application. "[T]he mere secret practice of a process or the physical presence of a product or manufacture in this country is insufficient as an anticipation unless and until the public acquires, or has opportunity to acquire, therefrom such knowledge as would enable one skilled in the art to practice the invention." Acme Flexible Clasp Co. v. Cary Mfg. Co., 96 F. 344, 347 (S.D.N.Y. 1899), aff'd 101 F. 269 (2d Cir. 1900). Thus, because it is not clear that similar beads existed on sale or available to the public in this country prior to the filing of plaintiffs' patent application, the Court grants summary judgment on This defense in favor of plaintiffs.
Plaintiffs also contend that the defense of anticipation requires that each and every element of a design claim be found in a single prior art reference, which must show the identical invention in as complete detail as the patent claim. See Richardson v. Suzuki, 868 F.2d 1226, 1236, 9 U.S.P.Q. 2d 1913 (Fed. Cir. 1989). In sum, plaintiffs contend that there exist no genuine issues of material fact as to whether the Shaw beads infringe their patent, as the beads are substantially similar to those adjudged on October 26, 1999 to be infringing beads. The Court agrees — under the high standard of proof required to invalidate a patent, defendants failed to establish anticipation by clear and convincing evidence.
B. Patent Infringement
Mr. Shaw's second argument is that plaintiffs cannot prove infringement under the "substantially similar" and "point of novelty" tests. Shaw argues that Court construed plaintiffs' patent claim incorrectly, stating that the claim is limited to what is shown in the application drawings. Shaw argues that this Court's construction is overly broad, and that a correct comparison of the application drawings to Shaw's bead reveals two distinctly different designs. In addition, Shaw argues that the Court failed to apply the "point of novelty" test set forth inSun Hill Indus., Inc. v. Easter Unlimited, Inc., 48 F.3d 1193 (Fed. Cir. 1995).
Pursuant to 35 U.S.C. § 171, a design patent may be obtained by the inventor for "any new, original, and ornamental design for an article of manufacture." Id. Design patents are governed generally by the provisions of the Patent Act relating to patents for inventions. See id. The Court's determination of whether a design patent has been infringed requires two steps: (1) claim construction to determine the scope and meaning of the claim allegedly infringed; and (2) determination of whether the construed design as a whole is substantially similar in appearance to the accused design. See OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1404-05 (Fed. Cir. 1997). Patent infringement is a question of fact; however, construction of a patent claim is a question of law. See Ebeling v. Pak-Mor Mfg. Co., 683 F.2d 909, 911 (5th Cir. 1982). The claimant must prove design patent infringement by a preponderance of the evidence.See OddzOn, 122 F.3d at 1405.
In construing the patent claim, the Court must look to intrinsic evidence — the patent itself, including the claims, written descriptions, drawings, and prosecution history. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996) (stating "[s]uch intrinsic evidence is the most significant source of the legally operative meaning of disputed claim language."). The language of the claim is the starting point. See id. The Court's verbal descriptions should evoke a visual image consonant with the claimed design. See Durling, 101 F.3d at The Court previously construed the claim as "a design for a decorative bead comprising a three-dimensional simulation of bare human female breasts." See Order and Reasons dated October 25, 1999, at 11. The Court found that the written claim required that the construction incorporate the illustrative drawings, assuming that the claim functions to identify the subject matter of the patent, its scope, and the protections afforded by the patent. The Court's construction lies in accord with the principles of claim construction in the context of design patents; that is, the Court fully recognizes that the claim of a design patent is limited to what is shown in the application drawings. See Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1577 (Fed. Cir. 1995); Rockport Co. v. Deer Stags, Inc., 65 F. Supp.2d 129, 192 (S.D.N.Y. 1999).
Plaintiffs and defendants repeatedly misstate the Court's claim construction. The Court did not construe the claim in accordance with plaintiffs' proposed construction of "a decorative necklace bead comprising a three dimensional generally realistic (not entirely fanciful) simulation of the bare human female breast."
In determining whether the construed design as a whole is substantially similar in appearance to the accused design, the overall appearance of the design controls; similarity of specific features is insufficient where the overall appearances are dissimilar. See OddzOn, 122 F.3d at 1405. Moreover, the Court is not to compare the alleged infringing design with the patentee's commercial embodiment of the claimed design. See Sun Hill, 48 F.3d at 1196. Rather, infringement must be measured against the design claim itself See id. at 1197. Unclaimed features are irrelevant; color, size and construction material cannot be the basis of similarity where these features of the commercial embodiment are beyond those described in the patent claim. See id.
To determine infringement, the Court focuses on the illustrative drawings rather than the claim language. See Blumcraft of Pittsburgh v. United States, 372 F.2d 1014, 1016 (Ct.Cl. 1967). The Court applies the standard set forth by the Supreme Court long ago:
Experts . . . are not the persons to be deceived . . . [men of ordinary intelligence] are the principal purchasers of the articles to which designs have given novel appearances, and if they are misled, and induced to purchase what is not the article they supposed it to be . . . the patentees are injured, and that advantage of a market which the patent was granted to secure is destroyed . . . [I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 528, 20 L.Ed. 731 (1871). Under this standard the overall visual impression of the Court governs.
The Court finds that MGT's and the Shaw's beads have sufficient identity of appearance with that of plaintiffs' design patent to constitute infringement. As a whole, the accused beads are within the scope of the construed claim. Size, color and construction material aside, both beads portray bare human female breasts in a somewhat realistic manner. Superior's beads are flat-backed in design, while defendants' design is comprised of back-to-back beads. Still, it is reasonable to conclude that the purchaser of ordinary intelligence could easily be misled by the accused beads. Whether undertaking a desperate search to purchase the bodacious bead for its novel appearance, or encountering the breast bead upon first impression while browsing a bead vendor's wares, the ordinary purchaser is likely to see, quite simply, a three-dimensional simulation of well-endowed bare human female breasts. In addition, considering the amount of attention that is likely to be given during an impulse purchase of the bodacious beads, it must be concluded that the two designs are substantially the same. The accused beads are certainly closer in design to the illustrated design than any prior art submitted by the parties. The Shaw beads appear sufficiently identical to the bead patent.
Shaw also argues that there are very few points of novelty over the prior art. Shaw contends that the point of novelty of plaintiffs' patent is not that it is generally realistic in representation, but does not make a statement as to what point of novelty should be recognized. The "point of novelty test" requires that the accused product appropriate the novelty in the patented device which distinguishes it from prior art. See Sun Hill at 48 F.3d at 1197. The Court finds that the bead patent satisfies the point of novelty test, as well. Thus, in concluding that the construed claim is present in defendants' beads, the Court finds that Superior has established patent infringement by a preponderance of the evidence.
II. Defendant Ms. Shaw's Motion for Summary Judgment
Ms. Shaw moves this Court to enter summary judgment in her favor on the ground that there is no genuine issue of material fact as to whether she has any interest in the business enterprise of Mardi Gras Trading, and thus she is not a direct infringer of Superior's patent as a matter of law. Ms. Shaw asserts that Mardi Gras Trading is a sole proprietorship operated by her ex-husband, Mr. Shaw, and that the business was not an asset of the community property divided upon divorce. While conceding that she spends some time at the business, Ms. Shaw explains that she is not a partner and receives no financial remuneration. She claims that her name is on the business card of Mardi Gras Trading simply to allow her to refer business to Mardi Gras Trading. In support of her motion, Ms. Shaw submits her own affidavit testimony as well as affidavit testimony of Mr. Shaw, in which both parties state that Ms. Shaw has no ownership or proprietary interest in Mardi Gras Trading. In addition, Ms. Shaw submits a Partition of Community Property Agreement resulting from her divorce from Mr. Shaw. Finally, Ms. Shaw submits the deposition testimony of Mr. Shaw, in which Mr. Shaw testifies that Ms. Shaw is not part of his business. He reluctantly admits, however, that she intervened in this dispute by sending a fax to Superior's counsel in an attempt to solve his problems.
The Court recognizes that Mardi Gras Trading was not an asset of the community property estate.
In opposition, Superior argues that under 35 U.S.C. § 271(a), there exist genuine issues of material fact with respect to whether Ms. Shaw's activities infringe its patent. Superior points to the existence of several facts in support of its contention. First, it asserts that Ms. Shaw holds herself out as a principal of Mardi Gras Trading by maintaining her name on its business card. Second, Superior asserts that Ms. Shaw's actions in responding via fax to plaintiffs' "cease-and-desist" letter reveal that Ms. Shaw specifically responded to a charge of infringement. Superior addressed the cease and desist letter to Mr. and Ms. Shaw and Mardi Gras Trading, and Ms. Shaw responded: "In the future we are not selling this kind of merchandise." This statement, Superior argues, indicates that Ms. Shaw represented herself as a person involved in the selling of infringing beads in connection with Mr. Shaw and his business. In sum, Superior argues that while Ms. Shaw may not be a "legal" partner in business with Mr. Shaw, her actions indicate involvement in selling the infringing beads or actively inducing their infringement.
The Court agrees that there exist material facts in dispute such that summary judgment is not appropriate. Section 271(a) provides: "whoever without authority makes, uses; offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." Id. In other words:
Infringement, direct or contributory, is a tort, an invasion of a right of the patentee. Those who participate in the commission of the tort, who aid in bringing about the invasion of the patentee's right, or who have committed acts without which the tort would not have occurred, are infringers.Leesona Corp. v. Cotwool Mfg. Corp., 201 F. Supp. 472, 474 (W.D.S.C. 1962); see also Kinnear-Weed Corp. v. Humble Oil Ref. Co., 324 F. Supp. 1371, 1381 (S.D. Tex. 1969), aff'd, 441 F.2d 631 (5th Cir. 1971). Moreover, where infringement results from participation and combined actions, the participating parties are joint infringers — jointly liable for infringement. See McDermott v. Omid Int'l, 723 F. Supp. 1228, 1236 (S.D. Ohio 1988), aff'd, 883 F.2d 1026 (Fed. Cir. 1989).
Section 271(b) further provides: "Whoever actively induces infringement of a patent shall be liable as an infringer." Id. To satisfy section 271(b), "a party must actually intend to aid and abet another's direct infringement." Ardco, Inc. v. Page, Ricker, Felson Mktg., Inc., 1992 WL 246862, 25 U.S.P.Q. 2d 1382, 1385 (N.D. Ill. 1992); see also Jervis B. Webb Co. v. Southern Sys., 495 F. Supp. 145, 147 (E.D. Mich. 1980). While circumstantial evidence may suffice to prove actual intent, a party who lacks knowledge that his activity involves infringement of a valid patent is likely to be found to lack actual intent to induce infringement. See Ardco, 25 U.S.P.Q. 2d at 1385. Nonetheless, inducement of infringing activities is said to embrace "a wide variety of sales-related activities, including advertising, solicitation, and product instruction." Quantum Group, Inc. v. American Sensor, Inc., 1998 WL 171837, at *7 (N.D. Ill. Apr. 10 1998) at *7.
Here, not only does Superior produce what appears to be a Mardi Gras Trading business card with Ms. Shaw's name and a fax signed by Ms. Shaw on behalf of Mardi Gras Trading, but also deposition testimony of a paralegal who testifies that he purchased the alleged infringing beads from Mardi Gras Trading after inquiring of an older Asian woman behind the counter at the store as to whether the beads were available. When read in conjunction with Mr. Shaw's deposition, in which he indicates that he has only one employee who works at the store other than his young niece, the Court finds that plaintiff submits evidence sufficient to point out genuine issues of material fact as to whether Ms. Shaw was a direct or contributory participant in infringing activities. Whether she directly solicited purchases, participated in sales, or merely promoted activities constituting infringement is still in dispute. The Court notes that Ms. Shaw also submitted supplemental affidavit testimony to the effect that there are frequently other Asian women on the premises at Mardi Gras Trading, and stated that she did not sell, make, use or offer to sell the beads at issue here. Amidst all of the evidence presented to the Court, such a self-serving, conclusory affidavit is insufficient to support the granting of summary judgment in Ms. Shaw's favor. See Alday v. Patterson Truck Lines, Inc., 750 F.2d 375, 378 (5th Cir. 1985). Additionally, failure to make or sell allegedly infringing products does not necessarily relieve a party of liability for contributory infringement. See In-Tech Mktg., Inc. v. Hasbro, Inc., 719 F. Supp. 312, 318 (D. N.J. 1989). The extent of Ms. Shaw's role, if any, in infringing activities is simply not clear. Thus, Ms. Shaw's Motion for Summary Judgment is DENIED.
III. Defendants M.G.I. Wholesale. Inc., June L. Berger, Frederick J. Berger. Sr., and Carnival Mart's Motion for Reconsideration
Defendants MGI, the Bergers, and Carnival Mart move this Court to Reconsider its Order and Reasons dated October 26, 1999, in which the Court granted summary judgment in favor of plaintiffs on the issues of patent validity and infringement. The MGI defendants urge the Court to consider new evidence presented by Charles Shaw in support of his Motion for Summary Judgment in C.A. No. 99-3492 — namely, the ancient mammiform beads submitted as prior art and documents submitted in support of the defense of anticipation.
Defendants seek reconsideration pursuant to Fed.R.Civ.P. 59(e) or, in the alternative, Fed.R.Civ.P. 60(b)(6). Defendants argue that the time to seek reconsideration under Rule 59(e) has yet to run because a Rule 58 judgment has not been entered by the Court. Defendants' argument misses the mark. The ten day time limit imposed by Rule 59(e) applies regardless of whether an actual judgment has been entered in a case. See Green v. Adm'rs of the Tulane Educ. Fund, 1999 WL 622904, at *1 (E.D. La. Aug. 12, 1999) (applying reasoning to motion for reconsideration of summary judgment determination); In re Ford Motor Co. Bronco II Prod. Liab. Litig., 1997 WL 191488, at *2-5 (E.D. La. Apr. 17, 1997) (stating Fifth Circuit recognizes motion to reconsider a dispositive pre-trial ruling as motion under Rule 59(e) or 60(b)). Moreover, such motions cannot be used to raise arguments which could and should have been made previously. See Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990). Thus, defendants Motion for Reconsideration is DENIED as untimely insofar as it seeks relief pursuant to Rule 59(e).
Under Rule 60(b)(6), defendants claim that they must show that any newly submitted evidence establishes a fact "so central to the litigation that it shows the initial judgment to have been manifestly unjust." Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990). Defendants contend that they meet this burden in that the newly submitted evidence goes to the issue of patent validity. This conclusory statement is insufficient to establish a ground for reconsideration. Defendants claim that certain evidence was not discoverable until the Shaw defendants were sued in C.A. No. 99-3492, and further state that "defendants' counsel can hardly be fault[ed] for not finding the ancient beads when plaintiff itself did not cite such obvious prior art to the Patent Office." The Court fails to see how such evidence is so "obvious" if neither plaintiff nor defense counsel found it with ease.
Plaintiffs argue that defendants fail to establish grounds for reconsideration under the Federal Rules of Civil Procedure. Because the Federal Rules do not formally recognize a Motion for Reconsideration, the Court enjoys considerable discretion when determining whether a party satisfies the grounds for reconsideration. See Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990), abrogated on other grounds, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994). The Court finds that defendants fail to establish grounds for reconsideration under Fed.R.Civ.P. 60(b)(1). Under Fifth Circuit jurisprudence, defendants must demonstrate "that a mistake is attributable to special circumstances and not simply an erroneous legal ruling." McMillan v. MBank Fort Worth, N.A., 4 F.3d 362, 367 (5th Cir. 1993). Defendants must show mistake, inadvertence, surprise or excusable neglect. See Lavespere, 910 F.2d at 167. This, defendants fail to do. Defendants provide no new law for the Court to consider. Further, defendants ask the Court to consider evidence that could have been presented at an earlier phase of trial. Pursuant to Rule 60(b)(1), "if the failure of the party to submit the evidentiary materials in question is attributable solely to the negligence or carelessness of the party's attorney," the Court would abuse its discretion by considering the evidence. Lavespere, 910 F.2d at 173. Thus, proper grounds for reconsideration do not exist. The Court also finds that defendants fail to establish grounds for reconsideration under Fed.R.Civ.P. 60(b)(6), as claims for mistake, inadvertence and neglect are assumed under subsection (1). Moreover, claims of legal error are properly considered under Rule 60(b)(1). See McMillan, 4 F.3d at 367.
Because defendants' Motion for Reconsideration was not filed within ten days of the Court's Order and Reasons, Fed.R.Civ.P. 59 is inapplicable to the motion before this Court. See Lavespere, 910 F.2d at 173. Further, while Fed.R.Civ.P. 60(b) may provide grounds for reconsideration, the Court finds that the other subsections are simply inapplicable to this motion.
Plaintiffs oppose defendants' request for reconsideration on several other grounds: (1) an intervening change in law has not occurred; (2) there is no emergence of new evidence not previously available; and (3) there is no need to correct a clear error of law or prevent a manifest injustice from arising. See Winn v. Grand Casinos of Miss., Inc., 1998 WL 185218, at *1 (E.D. La. Apr. 16, 1998). Absent one of these three grounds, plaintiffs contend that reconsideration is inappropriate. Because defendants do not contend that there has been a change in intervening law, ground one is not in dispute. As to ground two, plaintiffs and defendants disagree as to whether the documentation in support of defendants' anticipation defense was readily available in the fall of 1999. Moreover, plaintiffs correctly point out that as the patentee, they had no duty to conduct a prior art search, and thus the fact that it did not submit the ancient mammiform beads to the PTO is of no moment. See American Hoist Derrick Co. v. Sowa Sons, Inc., 725 F.2d 1350, 1362 (Fed. Cir. 1984). The burden of searching prior art lies with the party accused of infringement. Thus, defendants bear the burden of at least explaining to this Court why the prior art evidence it now submits was unavailable. See Matador Petroleum Corp. v. St. Paul, 174 F.3d 653, 658 n. 1 (5th Cir. 1999). Having failed to sustain this burden, defendants have not demonstrated why the evidence for which it seeks reconsideration qualifies as "newly discovered evidence." See id. Defendants fail to argue that a search with due diligence would have revealed the ancient mammiform beads.
For the reasons set forth above, the Court finds that defendants fail to establish that the initial judgment of this Court is manifestly unjust. Thus, defendants' Motion for Reconsideration is also DENIED insofar as it seeks relief pursuant to Rule 60(b).
IV. Plaintiffs Superior. Alan Philipson and Andre Philipson's (the "Philipsons") Motion to Dismiss Charles Shaw's Counterclaim Under Rule 12(b)(6) or, in the Alternative, for Partial Summary Judgment Under Rule 56
Plaintiffs move this Court to dismiss Mr. Shaw's counterclaim or, in the alternative, grant partial summary judgment on the claim of unfair trade practice under Louisiana's Unfair Trade Practices Act, La. Rev. Stat. 51:1401, et seq. Mr. Shaw alleges that Superior filed patent applications, sent "cease-and-desist letters" threatening to file suit to enforce its patents, and filed suit to enforce its patents, and that such actions constitute unfair trade practices because plaintiffs knew or should have known that its patents are invalid. Plaintiffs argue that such allegations are insufficient to set forth a claim for unfair trade practices in that: (1) plaintiffs' assertion of patent infringement is privileged; (2) plaintiffs have possessed at all times a good faith belief regarding the validity of its patents and defendants' infringement activities; and (3) defendants' fail to allege "bad faith," an element required to establish a claim of unfair trade practice.
At the outset, the Court notes that it severed previously all counterclaims of Mr. Shaw that relate to the crawfish-shaped bead. Thus, to the extent the parties' submissions relate facts and argument relative to the patent numbered 411,967, the Court defers ruling on plaintiffs' Motion. Insofar as the parties' submissions relate to the bead patent, however, the Court find that there exists no genuine issue of material fact as to whether plaintiffs violated Louisiana's Unfair Trade Practices Act. Mr. Shaw failed to present argument, let alone submit evidence, in support of the contention that plaintiffs acted in bad faith in seeking to acquire and/or enforce the bead patent. The law clearly holds that "[i]f the complaint [is] sufficient [in alleging that the patentholder was guilty of fraudulent conduct before the PTO or bad faith in publication of a patent] but the proof [is] not to show such conduct, then the claim [will] fail on the merits." Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1336 (Fed. Cir. 1998). Thus, the Court concludes that plaintiffs are entitled to summary judgment as a matter of law on Mr. Shaw's counterclaim of Unfair Trade Practices specific to the bead patent. Moreover, because the Court finds that plaintiffs established Mr. Shaw's activities infringe the bead patent, the counterclaim for patent invalidity regarding the bead patent must also fail. Accordingly,
IT IS ORDERED that:
(1) defendant Mr. Shaw's Motion for Summary Judgment is DENIED;
(2) plaintiff Superior's Motion for Summary Judgment is GRANTED;
(3) defendant Ms. Shaw's Motion for Summary Judgment is DENTED;
(4) the MGI defendants' Motion for Reconsideration is DENIED; and
(5) plaintiffs Superior and the Philipsons' Motion to Dismiss or alternatively for Summary Judgment is GRANTED. To the extent that Mr. Shaw's counterclaims assert claims relative to the bead patent, they are hereby DISMISSED.
New Orleans, Louisiana, this 27 day of March, 2000.