high point- reply brief

7/28/2019 High Point- Reply Brief

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2012-1455

IN THE

UNITED STATES COURT OF APPEALS

FORTHE FEDERAL CIRCUIT

HIGH POINT DESIGN LLC,

Plaintiff/Counterclaim Defendant-Appellee,

and

MEIJER,INC.,SEARS HOLDINGS CORPORATION,

AND WAL-MART STORES,INC.,

Third Party Defendants-Appellees,

v.

BUYERS DIRECT,INC.,

Defendant/Counterclaim Plaintiff-Appellant.

Appeal from the United States District Court for the

Southern District of New York in Case No. 11-CV-4530,

Judge Katherine B. Forrest.

REPLY BRIEF FOR APPELLANT BUYERS DIRECT, INC.

January 14, 2013

ANDREW M.OLLIS

FRANKJ.WEST

PHILIPPE J.C.SIGNORE

OBLON,SPIVAK,MCCLELLAND,

MAIER&NEUSTADT L.L.P.

1940 Duke Street

Alexandria, VA 22314(703) 413-3000

Attorneys for Appellant


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TABLE OF CONTENTS

INTRODUCTION .....................................................................................................1

ARGUMENT.............................................................................................................3

I. Legal Errors Require Reversal of the Grant of Summary Judgment of

Obviousness of the 183 Design Patent ...........................................................3

A. The burden of proof at the summary judgment stage is high and genuine

issues of material fact remain ...................................................................3

B. The district court committed legal error by failing to compare the 183

design patent to the prior art .....................................................................7

C. High Point and the district court avoid any direct visual comparisons

between the Woolrich shoes and the 183 design patent..........................9

D. High Point emphasizes the district courts improper reliance on personal

recollections of unspecified slippers not of record...................................9

E. The Apple v. Samsungcase is an apt comparison ..................................10

F. High Point misstates the law with respect to copying............................11

II. The District Courts Misapplication of the Law Requires Reversal of the

Grant of Summary Judgment of Functionality of the 183 Design Patent ....13

III.The District Court Abused Its Discretion in Dismissing BDIs Trade Dress

Claim with Prejudice......................................................................................20

A. High Points reliance on good cause case law is misplaced. ..............22

CONCLUSION........................................................................................................25


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TABLE OF AUTHORITIES

CASES

Advanced Display Sys., Inc. v. Kent State Univ.,212 F.3d 1272 (Fed. Cir. 2000) ................................................................... 11, 12

Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc.,344 F.3d 1186 (Fed. Cir. 2003) ......................................................................... 12

Apple Inc. v. Samsung Elecs., Co.,678 F.3d 1314 (Fed. Cir. 2012) ................................................ 3, 4, 9, 10, 11, 14

Avia Group Intl, Inc. v. L.A. Gear of California, Inc.,

853 F.2d 1557 (Fed. Cir. 1988) ........................................................................ 15

Berry Sterling Corp. v. Prescor Plastics, Inc.,122 F.3d 1452 (Fed. Cir. 1997) ......................................................................... 18

Durling v. Spectrum Furniture Co.,101 F.3d 100 (Fed. Cir. 1996) ................................................................ 3, 4, 8, 9

Egyptian Goddess, Inc. v. Swisa, Inc.,543 F.3d 665 (Fed. Cir. 2008) ............................................................................. 3

Graham v. John Deere,383 U.S. 1 (1966) .............................................................................................. 11

Holmes v. Grubman,568 F.3d 329 (2d Cir. 2009) .............................................................................. 22

Holmes v. Grubman(In re WorldCom, Inc. Sec. Litig.),456 F. Supp. 2d 508 (S.D.N.Y. 2006) ......................................................... 22, 23

Hughes v. Anderson,449 Fed. Appx. 49 (2d Cir. 2011) .............................................................. 20, 21

In re Rosen,673 F.2d 388 (C.C.P.A. 1982) ............................................................................ 4


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Int'l Seaway Trading Corp. v. Walgreens Corp.,589 F.3d 1233 (Fed. Cir. 2009) ......................................................................... 4

Iron Grip Barbell Co., Inc. v. USA Sports, Inc.,392 F.3d 1317 (Fed. Cir. 2004) ................................................................... 12, 13

Kassner v. 2nd Avenue Delicatessen Inc.,496 F.3d 229 (2d Cir. 2007) .............................................................................. 24

L.A. Gear, Inc. v. Thom McAn Shoe Co.,988 F.2d 1117 (Fed. Cir. 1993) ................................................................... 15, 18

Microsoft Corp. v. i4i Ltd. Pship,564 U.S. ___, 131 S.Ct. 2238 (2011) .................................................................. 7

OddzOn Prods., Inc. v. J ust Toys, Inc.,122 F.3d 1396 (Fed. Cir. 1997) .......................................................................... 3

Parker v. Sony Pictures Enmt, Inc.,19 F. Supp. 2d 141 (S.D.N.Y. 1998) ........................................................... 23, 24

Perez v. Ortiz,849 F.2d 793 (2d Cir. 1988) .............................................................................. 21

PHG Techs., LLC v. St. John Cos.,469 F.3d 1361 (Fed. Cir. 2006) ................................................................... 18, 19

Red Sea Tanker Fund v. Chase Manhattan Bank, N.A.,No. 97-7864, 1998 U.S. App. LEXIS 2950 (2d Cir. Feb. 24, 1998) ................. 10

Richardson v. Stanley Works, Inc.,597 F.3d 1288 (Fed. Cir. 2009) ......................................................................... 19

Stratoflex, Inc. v. Aeroquip Corp.,713 F.2d 1530 (Fed. Cir. 1983) ......................................................................... 12


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OTHER AUTHORITIES

2DONALD S.CHISUM,CHISUM ON PATENTS 5.05[5][a] (Matthew Bender) ....... 12

Fed. R. Civ. P. 15(a) ............................................................................................... 22

Fed. R. Civ. P. 16(b)(4) .......................................................................................... 20


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INTRODUCTION

This case involves a design patent and trade dress for the SNOOZIES!

slipper-sock. SNOOZIES!

has been incredibly successful, with the product now

offered in thousands of stores throughout the United States and around the world.

That success stems in great measure from the distinctive visual design of the

SNOOZIES!

product, a design captured by U.S. design patent no. D598,183 (the

183 design patent).

The patent side of this case comes before this Court on summary judgment

where all material facts must be viewed in the light most favorable to Buyers

Direct, Inc. (BDI). Despite High Point Design LLCs (High Point) arguments

to the contrary, genuine issues of material fact exist that preclude summary

judgment on the basis of obviousness. The district court ignored at least the

absence of a prominent rolled collar, the absence of a prominent welt around the

sole, and the many features contributing to a contour that readily differentiate the

Woolrich shoes from the 183 design patent.

The district court also failed to correctly apply this Courts law of

obviousness. Instead, it offered conclusory statements without actually comparing

the Woolrich shoes to the 183 design patent as required in the first step of an

obviousness analysis. These substantial errors require a reversal of the district

courts decision.


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Similarly, the district court failed to correctly apply the law of functionality.

It never addressed whether the 183 patent design was dictated by function and

never addressed the many factors this Court has found relevant to the issue. High

Point justifies these failures by alleging that particular features in the 183 design

patent are functional. Yet there is no factual support in the record for any of High

Points assertions, and High Point ignores the ornamental aspects of each feature.

These errors preclude a finding that the 183 design patent is invalid as functional,

and at the very least genuine issues of material fact preclude summary judgment.

Finally, in response to the unwarranted, severe sanction of the dismissal of

BDIs trade dress claim with prejudice, High Point reframes the issue. It now

argues that BDI needed a motion to amend the scheduling order to allow an

amended BDI counterclaim, and that such a motion was properly denied. This

argument attempts to obscure the fact that neither the district court nor High Point

cite any authority justifying the dismissal of BDIs trade dress claim with

prejudice. In this case, High Point waited to first raise the sufficiency of BDIs

trade dress claim until four days after the deadline to amend pleadings had passed.

BDI responded promptly and submitted an amended pleading to the district court

within 30 days when substantial discovery remained to be taken. Under these

facts, the dismissal of BDIs trade dress claim with prejudicewas an abuse of

discretion.


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ARGUMENT

I. Legal Errors Require Reversal of the Grant of Summary J udgment ofObviousness of the 183 Design Patent

The decision below should be reversed and remanded. The district

court improperly held, on summary judgment, that the 183 design patent was

obvious, primarily in view of the Woolrich shoes. The district court committed

clear error in holding that a designer of ordinary skill in the art would have found

the Woolrich shoes to be basically the same design as the 183 design patent, and

thus, suitable as a primary reference without considering unrebutted evidence to

the contrary. Genuine issues of material fact preclude this finding.

A.The burden of proof at the summary judgment stage is high andgenuine issues of material fact remain

Summary judgment is only appropriate where there is no genuine issue as to

any material fact, and all doubts must be resolved in favor of the non-moving

party. OddzOn Prods., Inc. v. Just Toys, Inc.,122 F.3d 1396, 1401 (Fed. Cir.

1997).

An obviousness analysis for a design patent requires a two step process.

Apple Inc. v. Samsung Elecs., Co.,678 F.3d 1314, 132930 (Fed. Cir. 2012);

Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996),

distinguished on other grounds byEgyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d

665, 679 (Fed. Cir. 2008). First, one must find a single [primary] reference, a

something in existence, the design characteristics of which are basically the same


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as the claimed design. Durling, 101 F.3d at 103 (quoting In re Rosen, 673 F.2d

388, 391 (C.C.P.A. 1982). Second, other references may be used to modify [the

primary reference] to create a design that has the same overall visual appearance as

the claimed design. Durling, 101 F.3d at 103. Once the piece of prior art has

been constructed, the ordinary observer test is required, not the view of one

skilled in the art. Int'l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233,

1240 (Fed. Cir. 2009).1

The central material facts in dispute in the obviousness analysis here revolve

around whether the Woolrich shoes have basically the same design or create the

same visual impression as the 183 design patent.

High Points implausible defense of the district courts invalidity decision is

that any differences between the Woolrich shoes2

and the 183 design patent are

minute (HP Br. at 12) or not significant enough to warrant mentioning (HP Br.

1 BDI notes, however, that this Courts recent decision in Applestates thatthe ultimate inquiry ... is whether the claimed design would have been obvious to

a designer of ordinary skill who design articles of the type involved. 678 F.3d at1329 (internal citations omitted, emphasis added).

2Contrary to High Points assertions on pages 1112 of its brief, BDI does

not concede that High Point made an adequate showing that the Woolrich shoes

constitute prior art. SeeA35354; seealsoBDIs opening brief at 8 (stating[e]ven ifprior art, these two Woolrich shoes convey a dramatically differentvisual impression than the 183 design patent and are readily distinguishable from

the slipper-socks in the 183 design patent) (emphasis added). It also remains

unclear whether the district court was relying, for example, simply on the catalogs

showing a small picture of the Woolrich shoes, the physical samples of the

Woolrich shoes, or both.


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A comparison between the 183 design patent and the Penta indoor/outdoor

structured shoe leads to the same conclusion. The Penta indoor/outdoor shoe has a

prominent rolled collar and thick sole and welt, all of which are completely absent

from the 183 design patent. A460, 24; A457, 11; A460, 25. The Penta shoe

also has a substantially different curved silhouette due to its raised toe and heel,

fatter contour around the front of the shoe, prominent seam on the sidewall with

visible stitching, shorter foot opening relative to the length of the shoe, and lower

sidewall. A460, 2426; A49495; A45657, 912. These features once

again present a very different overall visual impression than the 183 design patent.

Genuine issues of material fact exist as to whether the Penta shoe design is

basically the same as the 183 design patent. A349A350.

For these and other reasons, Mr. Rake, BDIs industrial design expert,

concluded that the Woolrich shoes do not convey the same overall visual

impression as the 183 design patent. A461, 27. Specifically, Mr. Rake opined

that an ordinary observer, familiar with the prior art and given such attention as a

purchaser usually gives, would not find the prior art designs substantially similar in

overall appearance. A463, 34 (emphasis added). It was error for the district

court to summarily determine that the Woolrich shoes created basically the same

visual impression as the 183 design patent and could be used as the primary

reference when the unrebutted evidence of record shows the exact opposite.


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High Point claims that because the Woolrich shoes were not before the

Patent Office the presumption of validity is severely weakened, citing Microsoft

Corp. v. i4i Ltd. Partnership, 564 U.S. ___, 131 S.Ct. 2238, 2251 (2011). HP Br.

at 12. This statement of the law is wrong. Microsoftsays nothing about severely

weakening the presumption of a patents validity. At best, the Supreme Court

noted that the challengers burden of proving invalidity by clear and convincing

evidence maybe easier to sustain, but further held that the existence of new prior

art did not lower the standard of proof from clear and convincing evidence to a

preponderance of the evidence. Id. at 225152. The Microsoftcase also did not in

any way lessen the burden for succeeding on summary judgment.

B.The district court committed legal error by failing to compare the 183design patent to the prior art

High Point correctly states that the district court had the opportunity to

examine the Woolrich shoes and compare them to the 183 design patent. HP Br.

at 13. The district court, however, failed to make any meaningful comparison in its

opinion. Instead, the entirety of the district courts obviousness discussion

involving the Woolrich shoes is found in a mere three sentences:

The overall visual effect created by the Woolrich prior art is

the same overall visual effect created by the 183 patent. To an

ordinary observer, they are same slippers. The only difference

between the slippers relates to the sole of the slippers, which is

quite minor in the context of the overall slipper.


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A18. High Point defends this conclusory discussion by pointing to this Courts

comment in Durling that in some instances a court may determine whether a prior

art reference creates the same overall visual effect as a patented design almost

instinctively. HP Br. at 13. High Point ignores the next sentencesin Durling

which state, Nonetheless, the judge mustcommunicate the reasoningbehind the

decision. This explanation affords the parties a basis upon which to challenge, and

also aids the appellate court in reviewing. Durling, Inc., 101 F.3d at 103. As the

conclusory discussion repeated above plainly shows, the district court failed to

communicate any reasoning as to why it determined that the Woolrich shoes were

basically the same as the 183 design patent.

Indeed, the district court omitted another step in the obviousness analysis,

which is to determine the correct visual impression created by the patented design

as a whole.4 Id. Even to the extent that the district courts comment about slippers

with a foot opening that contains a fuzzy (fleece) lining and has a smooth outer

surface (A10) could be considered such a description, that description would be far

too general to adequately capture the claimed design. Durling, 101 F.3dat 104

(invalidity decision reversed where the district court reduced the claimed design to

the general concept of a sectional sofa with integrated end tables which did not

4Appellant described the visual impression provided by the 183 design patent in

its brief to the Court below at A34647.


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evoke a visual image consonant with the claimed design).

C.High Point and the district court avoid any direct visual comparisonsbetween the Woolrich shoes and the 183 design patent

Strikingly absent from all of High Points briefing before the district court is

anydirect visual comparison between the 183 design patent and the Woolrich

shoes. On appeal, High Point continues to rely only on attorney argument, without

showing any visual comparison of the images available in the record in its brief.

SeeBDIs opening brief at 1012; 2526. The complete absence of a visual

comparison is astonishing, as such a comparison of the two designs is the heart of

the invalidity analysis. See e.g., Apple, 678 F.3d at 1330 (this Court relying on [a]

side-by-side comparison of the two designs [to show] substantial differences in the

overall visual appearance between the patented design and the Fidler reference).

Equally remarkable is the absence of any direct visual comparison between the

Woolrich shoes and the 183 design patent in the district courts opinion.

D.High Point emphasizes the district courts improper reliance onpersonal recollections of unspecified slippers not of record

In its introduction, High Point points out the district courts numerous

gratuitous and unsupported statements alleging ubiquitous similar fuzzy slippers

in retail stores (A11), that the patented design appears to look like many slippers


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that are widely available (A10), and what High Point characterized as a factual

finding that the slippers purportedly look like unspecified slippers the Court wore

in her youth (A11). HP Br. at 3, 7. These unspecified and unsupported

recollections by the district court are not of record and cannot be identified or

challenged by Appellant. High Point relies upon the district courts personal

recollections of unspecified slippers to argue that the district courts decision

finding the 183 design patent obvious should be affirmed. This reliance is

improper. SeeRed Sea Tanker Fund v. Chase Manhattan Bank, N.A., No. 97-

7864, 1998 U.S. App. LEXIS 2950, at *89 (2d Cir. Feb. 24, 1998) (A trial judge

may not make findings that are unsupported by the evidence, and based solely on

the judge's personal experience. If the rule were otherwise, the results of legal

proceedings would depend on the particular judges experience in commerce,

rather than on the evidence put forth by the parties.) (unpublished). A695.

E.TheApple v. Samsungcase is an apt comparisonHigh Points attempts to distinguish the Apple v. Samsungdecision actually

underscore the remarkable similarities between the facts in this case and those in

Apple v. Samsung. 678 F.3d 1314 (Fed. Cir. 2012).

High Point emphasizes that, in Apple, the absence of the frame or border

in the iPad

design patent was a significant difference from the prominent frame in


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the prior art, and thus the prior art design did not qualify as a primary reference.

678 F.3d at 1331; HP Br. at 25. As with the frame in the prior art reference in

Apple, the rolled collars of the Laurel Hill and Penta shoes are absent from the

design of the 183 design patent and contrast sharply with the smooth outer surface

of the shoe. The design of the 183 design patent instead has a continuous outer

body up to the foot opening (i.e., no rolled collar), analogous to the surface of the

iPad

which lacks a frame around the screen. Furthermore, the thick sole and/or

welt in the Laurel Hill and Penta shoes is a secondmajor element that is simply

absent from the design in the 183 patent.

Thus, as admitted by High Point in relation to Apple, HP Br. at 25, the

absence of such distinguishing features from the 183 design patent are sufficient

to prevent either Woolrich shoe from serving as a primary reference. As in Apple,

this Court should find that the district court committed reversible error in relying

on the Woolrich shoes as the base reference in its obviousness analysis.

F.High Point misstates the law with respect to copyingAn obviousness analysis requires a determination of secondary

considerations that may indicate non-obviousness. Graham v. J ohn Deere, 383

U.S. 1, 1718 (1966). Copying is particularly relevant evidence. Advanced

Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1285 (Fed. Cir. 2000)


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(Objective considerations such as failure by others to solve the problem and

copying, may often be the most probative and cogent evidence of

nonobviousness.) (citations omitted). It was legal error for the district court to

disregard BDIs secondary considerations of non-obviousness.

High Point does not deny that it copied the SNOOZIES!

product. Instead,

High Point contends that it is not copying by the accused infringeralone, but

copying by others that must be weighed in this analysis, HP Br. at 22 (emphasis in

original). High Points statement of the law is wrong. As stated inCHISUM ON

PATENTS, [i]n a number of cases, the courts have considered deliberate copying of

the patent holders device by the defendant in an infringement suit as evidence

tending to support patentability. 5.05[5][a], emphasis added, A699.5

In

addition, nowhere does the Iron Grip Barbell case relied on by High Pointsuggest

that copying by the accused infringer is irrelevant as a secondary consideration of

non-obviousness. Iron Grip Barbell Co., Inc. v. USA Sports, Inc., 392 F.3d 1317

(Fed. Cir. 2004).

High Point further argues that it is inappropriate to examine whether a

specific product was copied, but only whether the patent itself was copied. High

5See also Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc., 344 F.3d

1186, 1193, 1196 (Fed. Cir. 2003); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d1530, 1541 (Fed. Cir. 1983) ([A] finding that a claimed invention has or has not

been appropriated by the alleged infringer may carry substantial weight in a courts

analysis of all the evidence bearing on the obvious-nonobvious issue.).


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Point misunderstands the law. The relevant question is indeed whether a product

that is an embodiment of the patent has been copied. Specifically, the quotation

relied upon by High Point from Iron Grip Barbell (HP Br. at 22) explains,

[n]ot every competing product that arguably falls within the

scope of a patent is evidence of copying. Otherwise every

infringement suit would automatically confirm the

nonobviousness of the patent. Rather, copying requires the

replication of a specific product. This may be demonstrated through access to, and substantial similarity to, the patentedproduct (as opposed to the patent).

392 F.3d at 1325 (emphasis added). Therefore, High Points argument that

comparisons with BDIs commercial product, an embodiment of the 183 design

patent, is inappropriate and should also be disregarded.6

I I .The District Courts Misapplication of the Law Requires Reversal of theGrant of Summary J udgment of Functionality of the 183 Design Patent

The 183 design patent covers the ornamental design of a slipper, including

the commercial slipper sock embodied by SNOOZIES!. The ornamental aspects

of the design include the distinctive fleece which extends slightly out of the foot

opening, the smooth outer surface surrounding the foot, a thin connection between

the upper and the lower portions, a larger than usual foot opening, and particular

6HP questions whether the SNOOZIES

products are embodiments of the 183

design patent. HP Br. at 22, fn4. BDI submits that SNOOZIES

certainly are an

embodiment of the 183 patent, though it agrees with High Point that the district

court did not rule on this issue. At the very least this issue presents yet another

genuine issue of material fact that precludes a finding of summary judgment.


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curves at the front and the back that collectively give the design a distinctive

contour. Some aspects of the design are distinctive in their simplicity. But as

Applehas shown repeatedly, simple design features may be highly distinctive.

High Point first argues that because the district court represents that it

carefully reviewed the record, and the representation must be taken at face value,

this Court is precluded from finding clear error. HP Br. at 28. Not surprisingly, no

authority is supported for this novel proposition. Under this test, the mere

statement that any district court carefully considered the record would render

every decision unappealable, a clearly unsupportable conclusion.

High Point quotes the district courts statements that the patented design

completely covers the foot; that is a functional design to provide complete foot

warmth and protection The slipper at issue has a fuzzy interior for comfort

(A19) as a sufficient basis for the district courts functionality determination. HP

Br. at 27. But this logic cannot withstand scrutiny. If all that were required to be

functional is that a slipper cover the foot and provide warmth and protection, it

would be impossible to obtain design patent protection for any slipper fully

covering the foot, no matter how different the slipper looks from what came

before. Such a result defies logic.

By definition, a design patent covers the ornamental design of an article of

manufacture (i.e., a functional article). Thus, the prohibition on functionality of a


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design patent does not mean that features in a patented design may not also

perform a function. See, e.g., Avia Group Intl, Inc. v. L.A. Gear of California,

Inc., 853 F.2d 1557, 1563 (Fed. Cir. 1988) (stating that a distinction exists

between the functionality of an article or features thereof and the functionality of

the particular design of such article or features thereof that perform a function.

Were that not true, it would not be possible to obtain a design patent on a utilitarian

article of manufacture). Indeed, the district courts overbroad application of the

functional test would destroy the validity of countless design patents.

High Point also asserts that various aspects of the design are defined by

functional elements. HP Br. at 17, 29. These listings of features are akin to

blindly throwing darts at the 183 design patent and hoping that somehow enough

of them will stick to invalidate the patent. High Points allegations of functional

features are also nothing more than attorney argument with no support in, or

citation to, the factual record. Regardless, these arguments fail as a matter of law.

L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993).

In support of its functionality argument, High Point first points to the seam

between the body and sole as functional because it connects the two components

together. Id. But the seam could have been located elsewhere, or there could have

been more than one seam, or the seam could have could have looked different.

Indeed, BDIs expert, Mr. Rake, offered expert testimony that choosing the shapes


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of the fabric pieces and connecting them as shown in the 183 design patent is an

ornamental decision, one of countless ornamental ways of achieving the function

of connection. A462, 30.

Second, High Point asserts that the curved front of the patented design is

functional because it comfortably accommodates the users foot. HP Br. at 29.

The fact that a design is comfortable can hardly be a fatal flaw in a footwear

design, or else almost every successful design would be unpatentable. Presumably

the Woolrich shoes are also designed to be comfortable, and yet Woolrich chose to

design the curves in the front of the shoe to be distinctly different than the 183

design patents. Further, Mr. Rake offered testimony declaring that while the body

shape must conform to the shape of the foot, foot shape only determines minimum

size and shape, not the final size and shape. A462, 30.

Third, High Point asserts that the oversized foot opening facilitates ingress

and egress of the foot. HP Br. at 17, 29. Once again, there is absolutely no

evidence in the record that this attorney speculation is accurate and indeed seems

to be inconsistent with High Points earlier assertion that the 183 design patent is

functional because it completely covers the foot. A larger opening also creates a

different visual look in the design, and there is no suggestion anywhere in the

record that the foot opening size is dictated by function.

Fourth, High Point argues that the forward lean at the heel of the design


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keeps the slipper in place. HP Br. at 29. Once again, this is mere attorney

speculation without any basis in the record. As with the other features cited above,

the forward leaning (and slightly S curved) heel is an ornamental element and is

even non-functional because it creates extra unused space at the base of the heel.

Fifth, High Point argues that the flat toe portion better conforms to the shape

of the users foot at rest as compared to the prior art. HP Br. at 17. Again, this is

attorney argument unsupported by any evidence.

Sixth, High Point speculates that the higher sidewall in the patented design

as compared to the Woolrich prior art undoubtedly provides better support for

the users foot. HP Br. at 17. This unsupported statement is facially unreasonable,

especially when considering the commercial slipper-sock embodiment of the 183

design patent, which uses a material for the body that is not sufficiently rigid to

meaningfully support the side of the foot.7

Finally, High Point complains that the protrusion of fleece along the foot

opening provides warmth and insulation (HP Br. at 29) or provides a reduction in

manufacturing cost as compared to the Woolrich slippers (HP Br. at 17). As a

practical matter, there is no evidence in the record that reduction in manufacturing

cost as compared to the Woolrich prior art played any role in determining the

extent of the fleece protrusion. Even the district court found that the protruding

7The 183 design patent does not specify particular materials.


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fleece was an ornamental aspect of the design. A19. Indeed, the district courts

statement that the overflowing fleece can be characterized as both ornamental and

as functional (A19) indicates the courts misunderstanding of the applicable law

which requires the design to be dictated byfunction, rather than both ornamental

and functional. L.A. Gear, 988 F.2d at 1123. The district courts recognition that

this central design feature of the protruding fleece is ornamental is alone sufficient

to preclude a finding that the patented design is functional.

High Point also points to BDIs advertising as supporting its functionality

arguments. HP Br. at 29. However, advertising is only relevant to the extent it

touts particular features of the patented design. PHG Techs., LLC v. St. John Cos.,

469 F.3d 1361, 1366 (Fed. Cir. 2006) (citing Berry Sterling Corp. v. Prescor

Plastics, Inc., 122 F.3d 1452, 1455 (Fed. Cir. 1997)). Some of the features High

Point points to are not even features of the design patent. For example, the design

patent obviously does not require that a slipper sock be made with Sherpa fleece

inside. Further, many of the advertising features pointed to are so general that

they apply to countless slippers (e.g., soft, comfy, warm) and are not particular to

the ornamental elements in the patented 183 design patent.

For these reasons, even the two PHG factors High Point alleges support

functionality, namely inclusion in the patented design of material elements that

are dictated by function, [and] advertising that touts particular utilitarian


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features (HP Br. at 30), do not actually do so. More importantly, High Point does

not deny that most of the PHG factors do not support the district courts

functionality determination (i.e., the absence of a concurrent utility patent, the fact

that there are elements of the design not dictated by function, and the fact of

numerous alternative designs) and instead support the existence of an ornamental

design.

Finally, High Point takes a quote from this Courts Richardsondecision out

of context and asserts that any functional element must be factored out. HP Br.

at 17 (citing Richardson v. Stanley Works, Inc., 597 F.3d 1288, 129394 (Fed. Cir.

2009)). However, in Richardson, the features at issue in the claimed multi-

function tool were found to be dictatedby their functional purpose. Id. at 1294

(the handle, the hammer-head, the jaw, and the crowbar are dictatedby their

functional purpose) (emphasis added). Here, the district court did not find even

one of the features of the 183 design patent to be dictated bya functional

purpose,8

and thus the Richardson analysis is not applicable. A18A19.

In short, there is no evidence in the present record that the 183 design patent

is dictated by function. Viewing the evidence in the light most favorable to BDI,

there can be no question that the district court committed clear error in finding the

design invalid as functional.

8High Point effectively admits as much, acknowledging that the words dictated

by function are not used verbatim. HP Br. at 27 (emphasis in original).


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I I I .The District Court Abused Its Discretion in Dismissing BDIs Trade DressClaim with Prejudice

High Point appears to misunderstand BDIs first objection to the dismissal

of its trade dress claim. The abuse of discretion displayed by the district court lies

in (1) dismissing the trade dress claims withprejudiceand (2) also failing to

provide BDI an opportunity to amend its trade dress claim. High Point simply

does not address the fact that the dismissal of the trade dress claim was with

prejudice, and fails to cite any authority supporting the district courts dismissal of

the claim with prejudice.

Instead, High Point re-frames the issue to be simply whether or not a

modification of the district courts scheduling order was appropriate. HP Br. at

3233. In so doing, High Point attempts to refocus the question to be whether or

not good cause existed for a modification of the scheduling order. HP Br. at 33

34 (citing Fed. R. Civ. P. 16(b)(4)). Reliance on case law requiring demonstration

of good cause is inapposite, as none of the cases cited by High Point address the

issue of whether any dismissal should have been with prejudice. In addition, the

cases cited by High Point are so distinguishable from the facts at issue here that

they underscore the district courts abuse of discretion.

Under well settled Second Circuit law, it is improper for a district court to

dismiss a complaint [or counterclaim] with prejudice for failure to state a claim

without giving the plaintiff notice and an opportunity to be heard and to offer an


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amended pleading. Hughes v. Anderson, 449 Fed. Appx. 49, 51 (2d Cir. 2011)

(non-precedential) (interpolation added) (citing Perez v. Ortiz, 849 F.2d 793, 797

(2d Cir. 1988)); A69091.

The district court dismissed BDIs trade dress infringement claim with

prejudiceeven though substantial discovery remained to be taken, no prejudice

was found to High Point, and BDI offered an amended complaint soon after the

deadline for amending pleadings. A33940; A36061; A43150; see particularly

A437 (specifying at least six elements of trade dress in the SNOOZIES! slipper-

socks; A648). High Points motion to dismiss was granted withprejudicedespite

the district courts agreement that High Points products shared some of the

characteristics alleged to be SNOOZIES!

trade dress, and therefore the

amendment would not have been futile. A22. As such, the dismissal with

prejudicewas improper and an abuse of discretion.

High Point argues that BDI presented its amended trade dress counterclaim

too late by offering it about a month after the deadline for amending the pleadings.

HP Br. at 3536. High Point ignores the fact that it ambushed BDI and did not

even raise the issue of the sufficiency of the trade dress claim until four days after

the deadline for amending the pleadings had passed. Once notified, BDI

responded promptly and offered an amended pleading. A43140.

High Point also argues that BDI ignores the fact that significant written


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discovery had taken place. HP Br. at 36. Yet High Point had served only a single

interrogatory that simply asked for an identification of a person knowledgeable

about various subjects. A70509. High Point had not served any written

discovery that would have been impacted by an amended BDI counterclaim.

A.High Points reliance on good cause case law is misplaced.Even the Holmescase on which High Point relies does not rely on the good

cause standard alone, but balances the good cause standard against the more

lenient leave shall be freely given standard for amending a complaint under Fed.

R. Civ. P. 15(a). Holmes v. Grubman, 568 F.3d 329, 33435 (2d Cir. 2009)

(Where, as here, a scheduling order governs amendments to the complaint the

lenient standard under Rule 15(a), which provides leave to amend shall be freely

given, must be balanced against the requirement under Rule 16(b) that the Courts

scheduling order shall not be modified except upon a showing of good cause.)

(internal citations omitted, emphasis added). Thus, even the question of whether

leave should have been given to amend is not governed solely by the good cause

standard. Regardless, the cases High Point cites addressing good cause are

dramatically different than, and easily distinguishable from, the present case.

In Holmes v. Grubman, the plaintiffs amended their complaint within the

allotted period and were given permission to amend the complaint again after the

date set forth in the scheduling order. Holmes v. Grubman(In re WorldCom, Inc.


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Sec. Litig.), 456 F. Supp. 2d 508, 513 (S.D.N.Y. 2006). Subsequently, the

plaintiffs were given sua spontepermission to file a third amended complaint,

which defendants moved to dismiss for failure to state a claim upon which relief

can be granted. Holmes, 568 F.3d at 333. In denying leave to file a fourth

amended complaint, the district court and appeal court agreed that requiring a fifth

attempt (i.e., the fourth amended complaint and the original) to properly plead

claims, twice after the allotted period in the scheduling order, showed that the

plaintiffs had not been diligent in setting forth claims, and thus could not show the

requisite good cause. In contrast, BDI attempted to amend its pleadings at the

first indication that its counterclaim may be inadequate (when it received High

Points opposition, only four days after the deadline for amending pleadings, A68

70; A64849). This was also BDIs first attempt to amend its pleadings (in

contrast to the Holmesplaintiffs repeated failures).

In Parker v. Sony Pictures Entertainment, Inc., the plaintiff filed a motion

for leave to amend his complaint seven months after the deadline established by the

scheduling order. 19 F. Supp. 2d 141, 156 (S.D.N.Y. 1998). In contrast, BDI

sought leave to amend its pleadings approximately one month after the deadline

had passed. Furthermore, the court in Parker noted that the plaintiff had all the

information to be included in the amended complaint well before the deadline and

cited cases holding that where plaintiffs had notice of inadequacies in their


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complaints long before the pleading deadline, denial of leave to amend may be

proper. Parker, 204 F.3d at 34042. In contrast, BDI had no notice of any alleged

inadequacy until High Point filed its motion to dismiss (four days after the deadline

to amend pleadings) and diligently submitted a proposed amended counterclaim in

response. A44250.

Kassner v. 2nd Avenue Delicatessen Inc. merely sets forth the factors to be

considered in whether or not good cause has been met, noting that diligence is

the primary consideration. 496 F.3d 229, 244 (2d Cir. 2007). As noted above,

BDI diligently put forward an amended complaint in response to its opposition to

High Points motion to dismiss, which was the first indication of any alleged

inadequacies in its complaint as filed. A6870; A36061; A44250. Kassner also

states that prejudice to defendants may also be considered. Kassner, 496 F.3d at

244. As such, High Points assertion that BDIs contention that granting its

requested leave to amend would not have resulted in undue prejudice is completely

beside the point is directly contrary to the case law cited by High Point itself.

High Point also fails to make any argument that it would be prejudiced in any way

by amending the claims. High Point was already on notice that it was accused of

infringing BDIs trade dress in SNOOZIES!, and the amended counterclaim

merely provided additional details of the trade dress. Accordingly, there would

have been no prejudice to High Point in defending against the claim. Second, the


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amendment would not have caused delay of the district courts schedule as there

was sufficient time remaining in discovery to serve and responded to discovery

regarding trade dress.

In contrast, the dismissal with prejudice severely impaired BDI and forever

dismissed its trade dress claim against defendants. For all of the above reasons, the

district courts extraordinary step of dismissing BDIs counterclaim with prejudice

constituted an abuse of discretion and should be reversed.

CONCLUSION

For the foregoing reasons, BDI asks that this Court reverse the district

courts judgment that design patent D598,183 is invalid and reverse the district

courts dismissal of BDIs trade dress infringement claim with prejudice.

Respectfully submitted,

BUYERS DIRECT, INC.

Dated: January 14, 2013 /s/ Andrew M. Ollis .

Andrew M. Ollis

Philippe J.C. Signore

Frank J. West

OBLON, SPIVAK, McCLELLAND,

MAIER & NEUSTADT, L.L.P.

1940 Duke Street

Alexandria, Virginia 22314

Attorneys for Appellant


31/32

CERTIFICATE OF COMPLIANCE WITH FED. R. APP. P. 32(a)(7)(B)

Counsel for Buyers Direct, Inc. certifies that the body of this brief,

beginning with the Introduction on page 1 and ending with the last line of the

Conclusion on page 25, contains 5,897 words, in compliance with Rule

32(a)(7)(B)(ii) of the Federal Rules of Appellate Procedure.

January 14, 2013 /s/ Andrew M. Ollis .

Andrew M. Ollis

Counsel for Buyers Direct, Inc.


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CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing REPLY BRIEF FOR

APPELLANT BUYERS DIRECT, INC. were served by email (per agreement),

this 14th day of January, 2013 on counsel for appellees High Point Design LLC as

follows:

Jeffrey Mark Kaden, Esq.

Steven Stern, Esq.

David S. Kashman, Esq.Ariel Samuel Peikes, Esq.

GOTTL IEB RACKMAN &REISMAN, P.C.270 Madison Avenue

8th

Floor

New York, New York 10016

[email protected]

[email protected]

[email protected]@grr.com

Tel: (212) 684-3900

Fax: (212) 684-3999

By: /s/ Andrew M. Ollis

___________________________________

high point- reply brief

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