September 22, 2019 Feature

Columbia Sportswear v. Seirus: Pacesetter for Application of the Government’s “Article of Manufacture” Test in Design Patent Damages Cases

Perry J. Saidman and William P. Gvoth

©2019. Published in Landslide, Vol. 12, No. 1, September/October 2019, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Every so often a legal case is situated to be a pacesetter for application of a new law or test. Columbia Sportswear v. Seirus1 is such a case and is currently pending in the U.S. Court of Appeals for the Federal Circuit. This is the first time that the Federal Circuit will review arguments under a four-factor test for determining the “article of manufacture” for the purpose of calculating design patent damages. The four-factor test was first suggested by the U.S. government via the Department of Justice and the United States Patent and Trademark Office (USPTO) in their amicus curiae brief filed in the U.S. Supreme Court in Samsung v. Apple.2

Open PDF of this article's figures.

Columbia Sportswear North America Inc. and Seirus Innovative Accessories Inc. agreed that the government’s four-factor test is appropriate for determining the “article of manufacture” under 35 U.S.C. § 289. Both parties have filed briefs arguing the different factors as applied to the facts of their case. A coauthor of this article has published a critique of the four-factor test.3 This article will use the Columbia Sportswear case as a way to evaluate the four-factor test, taking into account the critique, and to predict possible outcomes of the case.

Samsung v. Apple and the Government’s Four-Factor Test

In March 2016, the Supreme Court granted Samsung Electronics Co.’s petition for certiorari in a suit between the company and Apple Inc. over infringement of a suite of design patents covering the original iPhone.4 The design patents at issue related to the iPhone’s iconic graphical user interface with rows of colorful icons on a black background, the rounded-corner face plate with home button, and the black touch screen with speaker opening.5

At trial, Apple prevailed on the issue of infringement of all three design patents, whose validity was also upheld, and was awarded damages that were eventually calculated to be $399 million for Samsung’s sale of infringing smartphones.6 The damage award constituted the total profit from the sale of all infringing smartphones by Samsung. This was based on a finding that the entire smartphone that Samsung sold was the relevant “article of manufacture” under 35 U.S.C. § 289 for the purpose of determining total profit damages.7 Section 289 states:

Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.8

The issue raised by Samsung in the Supreme Court was whether the Federal Circuit’s identification of the entire smartphone as the article of manufacture for the purpose of total profit damages under § 289 was appropriate. The Supreme Court found that under § 289 the relevant article of manufacture is not necessarily the entire product when a multicomponent product, like a smartphone, is at issue, but declined to address the narrower question of whether in that case the article of manufacture was the smartphone, or a component of the smartphone, for each design patent at issue. The Court declined to adopt a test for determining the article of manufacture in any given case, leaving the issue to be decided in subsequent litigation in the lower courts.9 Importantly, it did note that for a single component product, such as a dinner plate, the article of manufacture is indeed the infringer’s entire product as sold.10

In Samsung, the government as amicus curiae presented a four-factor test for identifying the relevant “article of manufacture” under § 289.11 The government’s four factors—a specific factual inquiry designed to assess the relationship between the design claimed in the design patent at issue, the infringing product, and components of the infringing product—may be summarized as:

  1. The scope of the design claimed in the plaintiff’s patent, including the drawings and the written description;
  2. The relative prominence of the design within the product as a whole;
  3. Whether the design is conceptually distinct from the product as a whole; and
  4. The physical relationship between the patented design and the rest of the product.12

Under these factors, the factfinder is prompted to consider such things as the scope of the design patent, whether the design is to a minor component of a product or a component that does not affect many other components of the product, the effect of the component on the overall appearance of the product, whether the patented design can be separated from the product, whether the patented design is sold separately from the product, and the like.13

The Supreme Court in Samsung remanded the case to the lower court to determine the article of manufacture for each patented design. Interestingly, in a retrial on damages, the jury in the district court—instructed to use the government’s four-factor test—awarded Apple $539 million (substantially higher than the initial award).14 This suggests that the jury ultimately found Samsung’s entire smartphone to be the article of manufacture for each design patent. It was an ironic result for Samsung, coming after it had won at the Supreme Court.

Columbia Sportswear v. Seirus

Columbia’s design patent covers a material for its Omni-Heat® line of products.15 As shown in figures 1–3 of Columbia’s U.S. Patent No. D657,093 (’093 patent), the patented design comprised a pattern of parallel wavy lines on a heat reflective material. Columbia posited that this design was intended to conjure images of heat rising from a desert floor.16 Figures 4–10 show the material with the patented design applied to various products, such as boots, gloves, socks, and jackets.17 The various products are shown in broken lines in the ’093 patent and thus form no part of the claimed design.

Columbia sued Seirus over the sale of its line of Heatwave™ products that includes hats, gloves, glove liners, and socks.18 As exemplified below, the Heatwave™ line of products included a material with a similar pattern of wavy lines as that shown in Columbia’s design patent. At trial in the U.S. District Court for the District of Oregon, a jury awarded Columbia over $3 million in damages.19 This result implied that the jury found the entire end products of the Heatwave™ line, and not merely the material shown in figures 1–3 of the ’093 patent, to be the relevant article of manufacture for the purpose of assessing total profit under § 289.

Federal Circuit Appeal and Application of the Government’s Four-Factor Test

Both Columbia and Seirus appealed various issues to the Federal Circuit, including determination of the relevant article of manufacture under § 289. The district court had instructed the jury to apply the government’s four-factor test for determining the relevant article of manufacture, should the jury determine that Seirus’s products were multicomponent products.20 Unfortunately, due to the district court’s instructions, followed by both parties, the propriety of the four-factor test is not squarely before the Federal Circuit, which means that the court will not likely evaluate the substance of the government’s formulation of the four-factor test.

This section will examine the arguments presented by Columbia and Seirus, along with the critique of the government’s four-factor test. The critique highlighted some of the more problematic aspects of the four-factor test. First, the court did not make it clear that evaluation of the four factors is only necessary in the case of partial designs, since if the design patent claims essentially the entire product, the article of manufacture will be the end product as sold by the infringer.21 Additionally, the critique noted that in order to be viable, each factor should be able to be evaluated such that either party can prevail.22 However, as will be discussed below, factors 1 and 3 will almost always be resolved in favor of the accused infringer, rendering evaluation of those factors a meaningless exercise.23

Factor 1: Scope of the Design Claimed in the Patent, including Drawings and Written Description

Under this factor, the government suggests that the scope of the claimed design can provide insight into the intent behind the design patent at issue, that is, whether the patent owner intended the design patent to be directed to a product, or merely a component of that product.24 The essential problem with this factor is that, for a partial design, the scope of the design patent will always simply read on the corresponding component of the infringer’s product, resulting in an inevitable finding in favor of the infringer’s assertion that the relevant article of manufacture is the component.25

In line with this, Seirus argues that the infringing article of manufacture is the material per se, rather than an end product that includes the material.26 Specifically, Seirus relies on the title (and hence claim) of the design patent (“Heat Reflective Material”) and the fact that the design patent shows the end products as unclaimed subject matter.27 Conversely, Columbia argues that evidence was presented at trial that the patented design is for an ornamental design of a functional product (i.e., gloves, boots, socks, etc.) that includes the material with the patented design.28

This factor clearly cuts in favor of Seirus. As noted in the critique, factor 1 will almost always favor the accused infringer in multicomponent product cases like this one, since the scope of the claimed partial design is, in fact, the corresponding component(s) of the accused design.29

Chapter 1500 of the Manual of Patent Examining Procedure (MPEP), used by the USPTO to examine design patent applications, allows for a design patent drawing to include broken lines to show “visible environmental structure.”30 Although figures 4–10 of Columbia’s patent show the patented design applied to various products, such as boots, socks, gloves, etc., these products are shown using broken lines. This indicates that the various end products do not form a part of the patented design, and that the patented design is a patterned material that can be incorporated into various other products. Further, the MPEP states that the title of a design patent must “correspond to the name of the article in which the design is embodied or applied.”31 While it is certainly debatable as to how much weight to give to the title of a design patent, particularly in light of practitioners tending toward broad titles, the MPEP does impose this requirement. Seirus argues that Columbia’s selection of “Heat Reflective Material” as the title for its design patent provides incontrovertible evidence that the relevant article of manufacture is the material itself and not the entire product onto which the material is applied,32 and certainly its selection of such a title would at least provide some suggestion that the material is the relevant article of manufacture. As such, factor 1 predictably strongly favors Seirus under the government’s framework.

Factor 2: Prominence of the Design within the Product as a Whole

Under this factor, the government suggests that if a claimed design is a minor component of a product, or if there are many other components that are unaffected by the claimed design, the article of manufacture may be the individual component.33 However, if the claimed design is a significant portion of the appearance of the product, then the article of manufacture may be the entire product that includes the infringing component.34 This factor is not as clear cut as factor 1 and provides an opportunity for a winning argument from either party.35

The arguments presented by Columbia and Seirus reflect this equal opportunity. Seirus argues that the infringing design is of low visual prominence relative to the goods to which it is applied, based on the Heatwave™ products that include many components, such as buckles, straps, pockets, zippers, etc.36 In addition, Seirus argues that the infringing design was applied as an interior material on most products and that the material is not readily visible unless the product is closely inspected.37 Seirus further argues that the infringing products were marketed using functional features unrelated to the infringing design (e.g., to keep a wearer of the product warm, dry, etc.), rather than the aesthetic appearance of the infringing design.38

On the other hand, Columbia argues that this factor allows for consideration of functionality of the component and that its fabric design is applied to a heat reflective material similar to the material on which Seirus uses the claimed design.39 In addition, Columbia argues that the infringing design is a visually prominent aspect of Seirus’s products based on the infringing design providing silver coloring to what are otherwise mostly black colored products and based on the infringing design playing a prominent role in the marketing of Seirus’s products.40 For example, an image of the infringing design is included on tags of the products, and text on the tags encourages customers to inspect the infringing material.41

These arguments are somewhat predictable,42 and highlight likely inquiries for this particular factor. When different multicomponent products are at issue, such as in this case, the relative prominence of the infringing design to the entire product will depend on the type of product being evaluated. If the product is a fairly complex product with many components, the infringing design may seem less prominent than a product with substantially fewer or simpler components. In addition, whether the infringing design is visible on the exterior of a product will impact the relative prominence of the infringing design to the rest of a product. In this case, we are dealing with several different products, each with different types, amounts, and complexities of components, and where the infringing design is applied in different manners across these different products. Thus, while the evaluation of factor 2 will vary based on the product being analyzed, it is likely to be a close call for each of the several different products.

Factor 3: Whether the Design Is Conceptually Distinct from the Product as a Whole

Under this factor, the government suggests that if a product includes other components with “conceptually distinct innovations,” the relevant article of manufacture may be the component rather than the entire product.43 As noted in the critique, this factor will almost always favor the infringer.44 Virtually any multicomponent product can be argued to include “conceptually distinct innovations” while providing little room for the owner of the claimed design to rebut this assertion.45 The arguments presented by Columbia and Seirus match these predictions. Moreover, the “conceptually distinct” formulation parallels the test for copyrightability of designs, and brings to mind the uncertainty that has vexed the courts for decades in evaluating conceptual separability, an uncertainty that unfortunately has remained in spite of the recent Star Athletica case.46

In this case, Seirus describes the products that include the infringing design as including dozens of components.47 For example, Seirus describes a pair of gloves as including “insulation, a waterproof membrane, inner liner soft shell fabric, back panels, a waterproof zipper, a cinch, a bungee cord, a buckle, and a palm portion,” all of which are unrelated to the infringing design.48 Columbia’s response focuses on the function of the infringing products. For example, with respect to a pair of gloves, Columbia argues that the component with the infringing material (a heat-management material) is indistinguishable from the overall function of the gloves, which is to keep a wearer’s hand warm.49 As such, Columbia is contending that because the infringing material contributes to the overall function of the product, the infringing material is indistinguishable from the product.

This seems like a tenuous argument for Columbia. First, the little guidance provided by the government seems to indicate that focusing on the functioning of the product is not the proper inquiry. The government suggests examining whether different components of a product include distinct innovations.50 Here, the infringing design is applied to a larger multicomponent product. A quick search reveals that both Columbia and Seirus have obtained patents for various aspects of glove design,51 implying that gloves typically contain many distinct innovations. In addition, a given product may have many different uses, some of which may have nothing to do with the claimed design. Going down the path of trying to identify an appropriate function for a product seems to stray too far from the guidance provided by the government, which is to focus on the appearance of the components included in the product with the infringing design.52

But once again, the fact pattern presented by this case highlights pitfalls of the government’s four-factor test. Gloves are not the only type of product that include the infringing design. Other products such as socks and skull caps are part of the Heatwave™ line and include the infringing design as well.53 For some of these products, it is easy to imagine the claimed design as conceptually distinct from the product as a whole, since such products include multiple layers of material, different sections of different materials, and the like. As such, the patented design is likely to be found to be conceptually distinct from these components. The facts in this case show how easily the analysis under this factor favors the accused infringer. Based on our analysis, factor 3 favors Seirus under the government’s framework, as might be expected.

Factor 4: Physical Relationship between the Patented Design and the Rest of the Product

Under this factor, the government suggests that if an individual “can physically separate [the component] from the product as a whole,” or if the component is manufactured or sold separately from the product, the relevant article of manufacture may be the component rather than the product that includes the component.54 Although some aspects of this factor are workable, namely the inquiry into whether the component is sold separately, there are several issues with this factor that make it difficult to apply.55

Seirus argues that this factor is in its favor. For example, with respect to gloves, Seirus argues that the inner liners with the infringing design are physically separable from the outer shell, that the supplier of the material with the infringing design sells the material to other companies, and that the material is manufactured separately from the other components of the glove.56 Columbia, on the other hand, argues that this factor is in its favor based on the notion that the material with the infringing design is produced for Seirus in rolls, which are then remanufactured into the glove inner liners and integrated into the outer shell of the gloves, and that the liner material with the infringing design cannot be separated from the outer shell without the use of tools or without destroying the gloves.57

In this case, the fact that the infringing design is applied to a material that is remanufactured into different components of different products makes this factor challenging to evaluate with respect to whether the component is sold separately. Columbia argues that there is no evidence, with respect to gloves, for example, that anyone has ever replaced a liner with the infringing design, implying that the infringing component of the gloves is not really sold separately.58 But this argument ignores the fact that the material with the infringing design is incorporated into many products. As such, the material itself could be the appropriate article of manufacture, which is both manufactured and sold separately from products that include the infringing design, despite not being sold separately in a form that would allow for easy replacement of the component that includes the infringing design. Based on this, the manufacturing inquiry of factor 4 tends to favor Seirus, while the sold separately inquiry would favor Columbia.

The government’s vague guidance with respect to physical separability is highlighted by the facts in this case.59 While it seems unlikely that the government intended a component that can only be physically separated from the larger product by destroying both the component and the larger product to be considered the relevant article of manufacture, the argument presented by Columbia fails to consider possible scenarios that might not result in the destruction of the component or the larger product. For example, its argument fails to consider whether someone skilled in garment making or repair could replace the liner without destroying the gloves or the liners. This shows how problematic the analysis can become under the government’s four-factor test. In addition, as noted in the critique, the manufacturing inquiry subsumes this inquiry: if two components are manufactured separately, then in most cases the two components are physically separable.60 As such, and without further guidance, this inquiry favors Seirus under the government’s framework.

Conclusion

The Columbia Sportswear case, even as just a single example, shows that arguments presented under the government’s four-factor test are likely to follow predictable patterns. In addition, the facts of this case highlight potential pitfalls of the four-factor test that can complicate factual inquiries under the test or that are likely to favor a finding of a component as the article of manufacture, thus favoring an infringer. Based on this, there is a likely chance that the Federal Circuit will find the relevant article of manufacture to be the material bearing the patterned design rather than the products to which the patented design is applied.

Alternative factors have been proposed by other commentators that may be better suited to the task at hand.61 One such factor looks at the intent of the infringer in adopting its infringing design, suggesting that if the design was adopted without knowledge of the patent or the product, and the infringement was therefore innocent, it favored a finding that the component was the relevant article of manufacture.62 On the other hand, an infringer who simply copies the patented design, with the intent of capitalizing on the goodwill and market created by the design patentee in order to sell its infringing product, would favor the end product as being the article of manufacture.63 Another alternative factor evaluates the difficulty of calculating the total profit of a component, suggesting that the total profit of the relevant article of manufacture ought to be susceptible to a straightforward, objective calculation.64

The Columbia Sportswear case highlights the challenges litigants face if use of the four-factor test continues to gain traction in the courts. While providing some useful insights into the relevant article of manufacture, courts and parties should be mindful of the potential pitfalls.

What may be of far greater consequence of the Samsung v. Apple case is the fact that a multifactor factual inquiry even exists, requiring additional significant expense that must now be incurred by a winning design patentee in order to obtain just compensation—disgorgement of the infringer’s ill-gotten gains—for having its design patent infringed. This will also create a disadvantage for the design patentee in settlement negotiations, especially when a small company is up against a larger opponent, e.g., a big box retailer that has copied its design.

The Supreme Court decision in Samsung has thus inserted a substantial obstacle for design patent owners in enforcing their rights. This, in turn, could well have a chilling effect on the acquisition of design patents, to the detriment of the system as a whole.

Endnotes

1. Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc., Nos. 18-1329, -1331, -1728 (Fed. Cir. filed Dec. 22, 2017).

2. Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016).

3. Perry J. Saidman, Design Patent Damages: A Critique of the Government’s Proposed 4-Factor Test for Determining the “Article of Manufacture, 8 IP Theory, no. 1 (2019), https://www.repository.law.indiana.edu/ipt/vol8/iss1/3.

4. Lawrence Hurley & Andrew Chung, U.S. Top Court Agrees to Hear Samsung-Apple Patent Fight, Reuters (Mar. 21, 2016), https://www.reuters.com/article/us-usa-court-apple-idUSKCN0WN1GF.

5. Samsung, 137 S. Ct. at 433 (referring to U.S. Patent Nos. D593,087; D604,305; and D618,677).

6. Joel Rosenblatt & Mark Gurman, Apple’s $539 Million in Damages Is a “Big Win” over Samsung, Bloomberg (May 24, 2018), https://www.bloomberg.com/news/articles/2018-05-24/apple-wins-539-million-from-samsung-in-damages-retrial.

7. Samsung, 137 S. Ct. at 433–34.

8. 35 U.S.C. § 289 (emphasis added).

9. Samsung, 137 S. Ct. at 436 (“The United States as amicus curiae suggested a test, but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the § 289 damages inquiry in the absence of adequate briefing by the parties.” (citation omitted)).

10. Id. at 432.

11. Brief for the United States as Amicus Curiae Supporting Neither Party at 27, Samsung, 137 S. Ct. 429 (No. 15-777).

12. Id. at 27–29.

13. Id.

14. Rosenblatt & Gurman, supra note 6.

15. Corrected Opening Brief of Plaintiff-Appellant Columbia Sportswear North America, Inc. at 10, Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc., Nos. 18-1329, -1331, -1728 (Fed. Cir. May 31, 2018).

16. Id.

17. See U.S. Patent No. D657,093 (filed Nov. 5, 2009).

18. Response and Reply Brief of Appellant Columbia Sportswear North America at 44, 49, Columbia Sportswear, Nos. 18-1329, -1331, -1728 (Fed. Cir. Sept. 18, 2018).

19. Cross-Appellant’s Opening Brief at 18, Columbia Sportswear, Nos. 18-1329, -1331, -1728 (Fed. Cir. Aug. 9, 2018).

20. Response and Reply Brief of Appellant, supra note 18, at 44–45. Note that Seirus characterizes the four-factor test as being used by the parties at the district court. Cross-Appellant’s Opening Brief, supra note 19, at 18 (“The Solicitor General had proposed a four-factor test for determining the article. The parties used those factors.” (citation omitted)).

21. Saidman, supra note 3, at 92.

22. Id. at 92, 99.

23. Id. at 92, 96.

24. Brief for the United States, supra note 11, at 27.

25. Saidman, supra note 3, at 92–95.

26. Cross-Appellant’s Opening Brief, supra note 19, at 31.

27. Id.

28. Response and Reply Brief of Appellant, supra note 18, at 45.

29. Saidman, supra note 3, at 92.

30. U.S. Patent & Trademark Office, Manual of Patent Examining Procedure (MPEP) § 1503.02 (9th ed. Rev. 08.2018, Jan. 2018).

31. Id. § 1503.01, ¶ 15.05.01 (emphasis added).

32. Cross-Appellant’s Opening Brief, supra note 19, at 2–3, 31.

33. Brief for the United States, supra note 11, at 28.

34. Id.

35. Saidman, supra note 3, at 95.

36. Cross-Appellant’s Opening Brief, supra note 19, at 32.

37. Id. at 4, 7, 33.

38. Id. at 33.

39. Response and Reply Brief of Appellant, supra note 18, at 46.

40. Id. at 49.

41. Id. at 48.

42. Saidman, supra note 3, at 95.

43. Brief for the United States, supra note 11, at 28–29.

44. Saidman, supra note 3, at 96.

45. Id.

46. Star Athletica, LLC v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017).

47. Cross-Appellant’s Opening Brief, supra note 19, at 34.

48. Id.

49. Response and Reply Brief of Appellant, supra note 18, at 50–51.

50. Brief for the United States, supra note 11, at 29.

51. See, e.g., U.S. Patent Nos. 7,086,093 (filed Dec. 6, 2002); 7,451,496 (filed Jan. 27, 2006); D644,818 (filed Oct. 21, 2010).

52. Brief for the United States, supra note 11, at 29.

53. Cross-Appellant’s Opening Brief, supra note 19, at 7–8; see also Response and Reply Brief of Appellant, supra note 18, at 7–8.

54. Brief for the United States, supra note 11, at 29.

55. Saidman, supra note 3, at 96–97.

56. Cross-Appellant’s Opening Brief, supra note 19, at 35.

57. Response and Reply Brief of Appellant, supra note 18, at 52–53.

58. Id. at 54.

59. Saidman, supra note 3, at 96–97.

60. Id. at 97.

61. See Perry Saidman et al., Determining the “Article of Manufacture” under 35 U.S.C. § 289, 99 J. Pat. & Trademark Off. Soc’y 349 (2017).

62. Id. at 357.

63. Id.

64. Id.

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Perry J. Saidman is the founder of Saidman DesignLaw Group LLC in Silver Spring, Maryland. He is a recognized pioneer in design law, now focusing on enforcement of design patents, trade dress (3D product configurations), and design copyrights.

William P. Gvoth is a patent attorney practicing in the Washington, D.C., metro area. He specializes in preparing and prosecuting design and utility patent applications in the electrical, software, and mechanical technology areas.