The COVID-19 pandemic has caused sweeping changes to our daily lives and the way we interact with one another. Many of these changes have been rather unwelcome. But one pleasant change I have noticed is a significant increase in driveway chalk art. Children across the country now can rest easy knowing they have not infringed a design patent or a copyright by using plastic chalk holders that look like pencils.

Lanard Toys Ltd. is a toy company with design studios outside Los Angeles. In the early 2010s, Lanard designed and sold chalk holders to distributors such as Dolgencorp and retailers such as Toys ‘R’ Us. The chalk holders were designed to look just like No. 2 pencils. In an attempt to protect the design of its toy, Lanard sought and obtained a design patent (D671,167) and registered a U.S. copyright (Reg. VA 1-794-458).

In 2012, Ja-Ru Inc. designed its own No. 2 pencil-lookalike chalk holder and admitted that it used Lanard’s product as a reference. In 2013, Ja-Ru won Dolgencorp and Toys ‘R’ Us’ business from Lanard.

(Images taken from Federal Circuit opinion.)

Lanard sued Ja-Ru, Dolgencorp, and Toys ‘R’ Us, asserting claims under its design patent and copyright as well as claims for trade dress infringement and unfair competition. The district court for the Middle District of Florida granted summary judgment to the defendants on every claim, including holding the copyright both invalid and not infringed. Lenard appealed.

In May, just in time for prime driveway chalk season, the U.S. Court of Appeals for the Federal Circuit affirmed the district court’s judgment. Lanard Toys Ltd. v. Dolgencorp LLC, ___ F.3d ____ (May 14, 2020).

Analyzing Lanard’s claim for infringement of its design patent (D671,167), the Federal Circuit construed the patent claim and analyzed the accused design for infringement using the “ordinary observer” test set forth in Egyptian Goddess, Inc. v. Swisa, Inc.

Construing the claim, the court rejected Lanard’s assertions regarding functional elements of the design and instead focused only on its ornamental aspects, including the eraser’s shape, the grooves in the ferrule, the taper of the point, and the proportionate sizes of those elements. The court found that the only distinction between Lanard’s design and the prior art was the proportions of the ornamental elements and found that the district court properly construed the claim. Since Ja-Ru’s product was proportioned differently than the design in Lanard’s patent, the court agreed that no infringement had occurred.

Lanard argued that the district court’s focus on features not found in the prior art ran contrary to Federal Circuit precedent rejecting a “point of novelty” test that involves looking only at features absent from the prior art in isolation. The Federal Circuit, however, did not find the district court’s analysis inconsistent with the accepted ordinary observer test. Although the ordinary observer test requires a fact-finder to consider how an observer would “view the overall design,” the Federal Circuit noted that district courts still must perform a balanced analysis, giving new and ornamental elements greater weight than functional elements or those found in the prior art. As the district court and the Egyptian Goddess court had stated, “the attention of the ordinary observer ‘will be drawn to those aspects of the claimed design that differ from the prior art.’”

Turning to Lanard’s copyright claim, the court agreed with the district court that Lanard’s copyright was invalid. The court found that no feature of the design of the depicted chalk holder was capable of “existing independently” from its utilitarian function. “[T]he pencil design does not merely encase or disguise the chalk holder, it is the chalk holder. . . . Lanard is essentially seeking to assert protection over any and all expressions of the idea of a pencil-shaped chalk holder.” The Federal Circuit did not reach the issue of copyright infringement.

Lanard’s trade dress claim was defeated primarily because Lanard made no showing of “secondary meaning,” which is to say that the “primary significance of the product in the minds of the consuming public is not the product itself but the producer.” Lanard contended that for a time it was the only manufacturer in the pencil-shaped chalk holder market, but that alone was not adequate to meet Lanard’s “burden to prove at trial that, when customers [whether intermediaries or end users] see the Lanard Chalk Pencil, their minds jump to the producer of the product rather than the product itself.” Because Lanard had no protectable trade dress, there was nothing for the defendants to infringe.

Lanard’s unfair competition claims were premised entirely on the three infringement claims, so the Federal Circuit affirmed summary judgment on those claims as well.

Thanks to the Federal Circuit, it should be safe for our children to draw on our driveways without fear of a patent infringement lawsuit. Whether their chalk holders will keep their clothes from getting ruined remains an open question.