Chalk One Up to the Knock-Off

McDermott Will & Emery

McDermott Will & Emery

Addressing issues of design patent infringement, copyright infringement, trade dress infringement and unfair competition, the US Court of Appeals for the Federal Circuit affirmed a district court’s grant of summary judgment on all claims. Lanard Toys Limited v. Dolgencorp LLC, Ja-Ru, Inc., Toys “R” Us-Delaware, Inc., Case No. 2019-1781 (Fed. Cir. May 14, 2020) (Lourie, J.).

Lanard makes and sells a toy chalk holder designed to look like a pencil, and owns a design patent and copyright on its design. In 2011, Lanard began selling its chalk holder to Dolgencorp, a national distributor, and Toys “R” Us. In 2012, Ja-Ru admittedly used Lanard’s design as a reference in designing its own toy chalk holder. A year later, Dolgencorp and Toys “R” Us stopped purchasing the Lanard product and started purchasing and selling the Ja-Ru product.

In 2014, Lanard sued Ja-Ru, Dolgencorp and Toys “R” Us for design patent infringement, copyright infringement, trade dress infringement and unfair competition under federal and state law. The defendants filed motions for summary judgment, asserting that the Ja-Ru product did not infringe Lanard’s design patent and trade dress, that Lanard’s copyright was invalid, and that Lanard’s unfair competition claims failed because the other claims failed. The district court agreed and granted defendants’ motion related to all claims. Lanard appealed.

On appeal, the Federal Circuit first analyzed the issue of design patent infringement. Applying the two-part “ordinary observer” test in Egyptian Goddess, Inc. v. Swisa, Inc. (2008), which provides that infringement is found if “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.” As the Federal Circuit noted, the comparison is between the accused product and the patented design—not a commercial embodiment.

Lanard Chalk Pencil D167 Patent (Fig. 1) ’458 Copyright (First Image)

Ja Ru Product

Lanard argued that the district court erred in its claim construction by eliminating elements of the design based on functionality and lack of novelty, by conducting an element-by-element comparison, and by rejecting a “point of novelty” test to determine infringement. The Federal Circuit disagreed, finding that the district court followed its guidance “to a tee” by considering the functional features of the design and the functional purpose as a whole in order to define the scope of the protected subject matter. The Court explained that the scope of a design patent depends on how it differs from the prior art. In this case, the lower court found the proportions of the chalk pencil to be the only distinction between Lanard’s design and other designs. The lower court shot down Lanard’s attempts to distinguish its patent from the prior art by importing the chalk holder functions of its design into the construction of the claim. The Federal Circuit agreed with this approach, as well as the district court’s analysis of the design’s functional and ornamental features and how each element would affect the observer’s perception of the overall design. Lastly, the Court noted that Lanard’s contention that the infringement analysis should be between its product and the accused product was misplaced. The test for infringement requires that the accused design be compared to the claimed design.

Turning to copyright infringement, the Federal Circuit agreed with the district court that Lanard’s chalk pencil design contained no non-utilitarian features to make it anything other than a useful article. Since useful articles by themselves are not copyright protectable, the appellate court found that Lanard did not own a valid copyright.

Finally, turning to trade dress infringement and unfair competition, the Federal Circuit rejected Lanard’s claims, finding that Lanard failed to show that when customers see the Lanard chalk pencil, their minds jump to Lanard rather than the product itself.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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