Unique Industries, Inc. v. 965207 Alberta Ltd.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNIQUE INDUSTRIES, INC., :
:
Plaintiff, : Civil Action No.: 08-1095 (RMU)
:
v. : Re Document Nos.: 69, 70, 71, 72
:
965207 ALBERTA LTD., :
:
Defendant. :
:

MEMORANDUM OPINION

DENYING THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

I. INTRODUCTION

This matter comes before the court on the parties’ cross-motions for summary judgment.

The defendant is a company that holds two design patents for numerical and star-shaped

sparklers, a type of firework that throws off sparks when lit. The plaintiff is a company that sells

similar products. The plaintiff commenced this action in pursuit of a declaratory judgment

stating that its products do not infringe upon the defendant’s design patents, and that the

defendant’s patents are invalid. The defendant maintains that its patents are valid, and it has

asserted counterclaims against the plaintiff for patent infringement. Because genuine disputes of

material fact prevent the issuance of summary judgment, the court denies the parties’ motions.

II. BACKGROUND

A. Legal Framework

The primary purpose of the patent system is to advance progress in the arts and sciences

by granting an inventor the exclusive right to profit from the invention for a period of years.
Sinclair & Carroll Co. v. Interchemical Corp., 325 U.S. 327, 330 (1945); In re CFLC, Inc., 89

F.3d 673, 679 (9th Cir. 1996). To preserve this exclusive right, federal law presumes that all

existing patents are valid, 35 U.S.C. § 282 (1994), and this presumption can only be overcome

by clear and convincing evidence to the contrary. See, e.g., WMS Gaming Inc. v. Int’l Game

Tech., 184 F.3d 1339, 1355 (Fed. Cir. 1999).

There are several methods by which a plaintiff may mount an attack on the validity of a

patent. For instance, a plaintiff may show that someone else invented the patented subject

matter. 35 U.S.C. § 102(f). Such a patent is said to have “derived” from another’s invention.

See Polymer Indus. Products Co. v. Bridgestone/Firestone, Inc., 2001 WL 253259, at *4 (Fed.

Cir. Mar. 13, 2001). In addition, a plaintiff may show that the defendant’s patent is invalid

because it was “anticipated” by “prior art” – that is to say, the patented subject matter existed in

the public domain at the time that the patent was obtained. Retractable Technologies, Inc. v.

Becton, Dickinson & Co., 653 F.3d 1296, 1309 (Fed. Cir. 2011).

Should the patent be deemed valid, its owner may bring suit against individuals or

organizations that possess products which “infringe” on the patent. 35 U.S.C. § 271. An

individual infringes on a patent by producing a product that is so similar to the patented material

that an ordinary observer might mistake one for the other. See Egyptian Goddess, Inc. v. Swisa,

Inc., 543 F.3d 665, 678-79 (Fed. Cir. 2008). With this legal framework in mind, the court now

turns to the factual and procedural history of this case.

B. Factual & Procedural Background

The plaintiff manufactures and markets party supplies such as balloons, paper goods,

wrapping paper and novelty products, including sparklers. Compl. ¶ 5. In early 2008, the

defendant contacted the plaintiff, asserting that the plaintiff’s sparklers violated two of the

2
defendan design patents: U.S. Design Pate Nos. D44
nt’s ent 47,207 (“the 207 Patent” and D451,
”) ,164

(“the 164 Patent”). Id. ¶ 6; Def.’ Mot. for Claim Constr
4 I ’s C ruction at 1. The 207 Pa
atent covers a set

of numer
rical sparkler represent by the fig
rs, ted gure below:

Def.’s Mot. for Claim Constructi Ex. A (2 Patent).
M m ion, 207

The 164 Paten is for a sta
T nt ar-shaped sp
parkler repre
esented by th figure belo
he ow:

Def.’s Mot. for Claim Constructi Ex. B (1 Patent).
M m ion, 164

The plaintiff’s numerical sparklers ap
T ppear as follo
ows:

3
See Pl.’s Mot. for Su
umm. J. on Non-Infringem at 3. I addition, t Plaintiff’ star-shape
N ment In the ’s ed

sparkler is shown bel
i low:

Id.

In June 2008, the plaintiff commence this action in pursuit o a declaratory judgmen to
n , ff ed n of nt

the effect that its products do not infringe on the defenda
t t ant’s patents. See genera Compl. In
ally

September 2008, the defendant re
esponded by asserting co
y ounterclaims of patent in
nfringement
t.

See generally Counte
ercl. In July 2009, the co resolved the parties cross-moti
y ourt d s’ ions for claim
m

tion.1 Mem. Op. (July 22, 2009) at 8-17. The co construed the ’207 P
construct . 2 8 ourt Patent and th
he

164 Paten in the foll
nt lowing mann
ner:

The ’207 Pat
T tent is const
trued as the ornamental design of a set of spa
l arklers, as
sh
hown in Fig
gures 1-5 of the patent The pate
t. ented design includes a of the
n all

1
Before ruling on infringeme claims, co
B o ent ourts must firs conduct “cl
st laim construc
ction” to ascer
rtain
th meaning an scope of a patent. Elme v. ICC Fab
he nd er bricating, Inc. 67 F.3d 157 1577 (Fed Cir.
., 71, d.
19
995).

4
sparklers illustrated in the drawings, including the number-shaped sparklers and
the “?”-shaped sparkler. The term “set” encompasses sparklers that belong or are
used together, regardless of whether they are packaged or sold together or
separately.

The ’164 Patent is construed as the ornamental design of a star-shaped sparkler, as
shown in Figures 1-4 of the patent.

Id. at 16-17.

Following the court’s ruling, the parties filed cross-motions for summary judgment in

early 2010. In February 2011, the court denied the parties’ motions and allowed the reopening of

discovery for ninety days. See Mem. Op. (Feb. 17, 2011). Once the extended discovery period

expired, the parties renewed their cross-motions for summary judgment. See generally Pl.’s

Mot. for Summ. J. on Non-Infringement (“Pl.’s Non-Infringement Mot.”); Pl.’s Mot. for Summ.

J. on Invalidity (“Pl.’s Invalidity Mot.”); Def.’s Mot. for Summ. J. on Infringement Regarding

Patent 207 (“Def.’s 207 Mot.”); Def.’s Mot. for Summ. J. on Infringement Regarding Patent 164

(“Def.’s 164 Mot.”). With these motions ripe for adjudication, the court now turns to the

applicable legal standards and the parties’ arguments.

III. ANALYSIS

A. Legal Standard for Summary Judgment

Summary judgment is appropriate when the pleadings and evidence show “that there is

no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” FED. R. CIV. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);

Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C. Cir. 1995). To determine which facts are

“material,” a court must look to the substantive law on which each claim rests. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A “genuine dispute” is one whose resolution

5
could establish an element of a claim or defense and, therefore, affect the outcome of the action.

Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248.

In ruling on a motion for summary judgment, the court must draw all justifiable

inferences in the nonmoving party’s favor and accept the nonmoving party’s evidence as true.

Anderson, 477 U.S. at 255. A nonmoving party, however, must establish more than “the mere

existence of a scintilla of evidence” in support of its position. Id. at 252. To prevail on a motion

for summary judgment, the moving party must show that the nonmoving party “fail[ed] to make

a showing sufficient to establish the existence of an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. By pointing to

the absence of evidence proffered by the nonmoving party, a moving party may succeed on

summary judgment. Id.

The nonmoving party may defeat summary judgment through factual representations

made in a sworn affidavit if he “support[s] his allegations . . . with facts in the record,” Greene v.

Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999) (quoting Harding v. Gray, 9 F.3d 150, 154 (D.C. Cir.

1993)), or provides “direct testimonial evidence,” Arrington v. United States, 473 F.3d 329, 338

(D.C. Cir. 2006). Indeed, for the court to accept anything less “would defeat the central purpose

of the summary judgment device, which is to weed out those cases insufficiently meritorious to

warrant the expense of a jury trial.” Greene, 164 F.3d at 675.

B. The Court Denies the Plaintiff’s Motion for Summary Judgment Regarding Invalidity

1. The Plaintiff Has Not Submitted Sufficient Evidence to Show that the Defendant
Derived Its Patents from the Work of a Third Party Inventor

The plaintiff claims that the defendant’s patents are invalid because they were derived

from the work of another inventor. Pl.’s Invalidity Mot. at 2. More specifically, the plaintiff

6
argues that the defendant’s patents resemble pre-existing designs that were created by Drutep, a

Czech company that manufactures the defendant’s sparklers. Id. at 3. The plaintiff therefore

asks the court to infer that the defendant copied Drutep’s designs when the defendant applied for

its patents. Id.

The defendant counters that its patents can only be rendered invalid on the basis of

“derivation” if the plaintiff shows that Drutep specifically communicated its designs to the

defendant. Def.’s Opp’n to Pl.’s Invalidity Mot. at 6. The defendant argues that the plaintiff has

submitted no evidence of any such communication. See id.

Under 35 U.S.C. § 102(f), a person is not entitled to a patent if “he did not himself invent

the subject matter sought to be patented.” To show that a patent is invalid because it was

“derived” from a third party’s invention, a plaintiff must prove “both prior conception of the

invention by another and communication of that conception to the patentee.” Eaton Corp. v.

Rockwell Intern., 323 F.3d 1332, 1334 (Fed. Cir. 2003) (quoting Gambro Lundia AB v. Baxter

Healthcare Corp., 110 F.3d 1573, 1576 (Fed. Cir. 1997)). The communication must be

sufficient to enable an individual of ordinary skill in the art to make the patented invention.

Eaton, 323 F.3d at 1344. Mere proof of a defendant had access to a third party’s invention is not

sufficient to carry the burden of proving derivation. Hedgewick v. Akers, 497 F.2d 905, 908

(Fed. Cir. 1974).

The plaintiff argues that Drutep was in the business of manufacturing sparklers at some

point before the defendant filed his patent applications. Id. The plaintiff has offered no evidence

to suggest that Drutep specifically communicated its designs to the defendant, however. See

Pl.’s Invalidity Mot. at 3-4. Absent evidence of some communication between those companies,

the plaintiff’s evidence is legally insufficient to support its derivation argument. Hedgewick, 497

7
F.2d at 908. The court cannot conclude, therefore, that the defendant’s patent is invalid under 35

U.S.C. § 102(f). See Creative Compounds, LLC v. Starmark Labs., 651 F.3d 1303, 1313 (Fed.

Cir. 2011) (reaffirming patent validity when the party raising derivation claim failed to present

evidence supporting any specific communication).2 Accordingly, the court denies the plaintiff’s

motion insofar as it argues that the defendant derived its patents from the inventions of a third

party.

2. The Plaintiff Has Not Submitted Sufficient Evidence to Show that the Defendant Based
Its Patents on Materials in the Public Domain

The plaintiff claims that the defendant’s patent was “anticipated” by “prior art.” See Pl.’s

Invalidity Mot. at 5. Stated otherwise, the plaintiff argues that the defendant’s patents are invalid

because they are copied from designs that exist in the public domain. Id. More precisely, the

plaintiff argues that the defendant’s patents are based on the plaintiff’s own products. Id. at 5-7.

The defendant counters that its patents are wholly distinct from the plaintiff’s products,

which are merely a set of non-sparkling candles in the shape of numbers. See Def.’s Opp’n to

Pl.’s Invalidity Mot. at 8.

To prove that a defendant’s patent is anticipated by prior art, the plaintiff must show that

an ordinary observer would deem the patented material to be so similar to the prior art that he or

she might mistake one for the other. See Gorham Co. v. White, 81 U.S. 51 (1871); see

International Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240 (Fed. Cir. 2009).

2
The plaintiff also suggests that the defendant’s employees destroyed or failed to preserve
information necessary to prove communication of the patent, including the drawings of the bent
wires and other patent application records. See Pl.’s Invalidity Mot. at 6. The plaintiff asks the
court to infer that this putative evidence would have supported its claim. Id. The plaintiff’s
entire argument has already been considered and rejected by this court, however. See Mem. Op.
(Feb. 17, 2011) at 15-16. The court will not reiterate its analysis here; suffice it to say that the
court rejects this argument for the same reasons that are more fully explained in this court’s
earlier opinion.

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The plaintiff carries the burden of producing the prior art it alleges to be the basis of anticipation.

See Egyptian Goddess, 543 F. 3d 665, 678-79 (“Where, as here, an accused infringer elects to

rely on the comparison [to] prior art as part of its defense against the claim of infringement [or

anticipation], the burden of production of that prior art is on the accused infringer”).

The plaintiff argues that the defendant’s patents were anticipated by the following

designs:

Pl.’s Non-Infringement Mot., Ex. A. In contrast, the defendant’s patent contains the following

designs:

9
7

Id., Ex. B. Even a cu
B ursory glance reveals sig
e gnificant diff
ferences betw
ween the pla
aintiff’s

purported examples of prior art and the defen
d o a ndant’s paten
nted sparkle In partic
ers. cular, the cou
urt

highlight the fact tha the defend
ts at dant’s candle throw off sparks, whe
es f ereas the pla
aintiff’s

submitted prior art do not. Id. In addition, an ordinary o
d o n a observer cou notice a n
uld number of

differenc between the shapes and relative sizes of the c
ces t a s candles. At best, the pla
aintiff has

10
demonstrated that there is a material issue of fact as to whether a reasonable observer could deem

the defendant’s sparklers to be substantially similar to publically available font types. In this

scenario, summary judgment is inappropriate. See Zenith Elec. Corp. v. PDI Commc’n Sys., Inc.,

522 F.3d 1348 (Fed. Cir. 2008) (“Anticipation may be resolved on summary judgment if there is

no genuine issue of material fact.”). Accordingly, the court denies the plaintiff’s motion insofar

as it argues that the defendant’s patents were anticipated by fonts in the public domain.3

C. The Court Denies the Parties’ Cross-Motions for Summary Judgment on Infringement

The plaintiff seeks summary judgment on the issue of infringement, arguing that no

reasonable juror could conclude that its sparklers infringe upon the defendant’s patents. Pl.’s

Non-Infringement Mot. at 1. The plaintiff emphasizes a number of physical differences that

distinguish its sparklers from the defendant’s patented designs, including the following: (1) the

plaintiff’s sparklers are uniform in height and font, whereas the patented sparklers are not; (2) the

plaintiff’s patented set of sparklers includes a sparkler in the shape of a question mark, whereas

the defendant’s patent does not; and (3) the plaintiff’s star-shaped sparkler has six points,

whereas the defendant’s patents include a star-shaped sparkler with five points. Id. at 4-8.

In contrast, the defendant maintains that the plaintiff’s sparklers are so similar to the

defendant’s patents that any ordinary observer would confuse the two. See generally Def.’s 164

Mot.; Def.’s 207 Mot. The defendant thus concludes that the differences highlighted by the

plaintiff are so minute that they do not create a genuine dispute of triable fact. Def.’s 164 Mot. at

2; Def.’s 207 Mot. at 2.

3
The plaintiff also argues that the defendant’s patents are too conventional to be patented, an issue
that the court has already addressed in its prior decision. See Mem. Op. (Feb. 17, 2011) at 10-13.

11
When determining whether a party infringes upon another’s patent, courts apply the

“ordinary observer” test, which was originally set forth in Gorham Co. v. White, 81 U.S. 51

(1871). See Egyptian Goddess, 543 F.3d at 681. Gorham states that “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, the first one is infringed [or anticipated] by the other.”

Gorham Co., 81 U.S. at 51. Stated otherwise, the patentee must establish that an ordinary

observer would be deceived into believing that the accused product is substantially the same as

the patented design. See Egyptian Goddess, 543 F.3d at 681.

In general, whether or not a product infringes on a patent is a question of fact. Catalina

Lighting v. Lamps Plus, Inc., 295 F.3d 1277, 1287 (Fed. Cir. 2002); L.A. Gear, Inc. v. Thom

McAn Show Co., 988 F.2d 1117, 1124 (Fed. Cir. 1993). Accordingly, if reasonable jurors could

disagree as to whether an ordinary observer would believe the parties’ products to be

substantially similar, summary judgment is unwarranted. Sun-Mate Corp. v. Koolatron Corp.,

2011 WL 3322597 (C.D. Cal., Aug. 1, 2011) (denying cross-motions for summary judgment on

the issue of infringement due to factual disputes regarding the similarity of the parties’ products);

Degelman Industries, Ltd. v. Pro-Tech Welding and Fabrication, Inc., 2011 WL 6754040, at *17

(W.D.N.Y., May 27, 2011) (same).

Here, the parties deploy a number of fact-sensitive arguments in support of their claims.

First, the plaintiff argues that its sparklers are “uniform” in their height and usage of font,

whereas the defendant’s patented sparklers vary in size and shape. Pl.’s Non-Infringement Mot.

at 7, 9. In contrast, the defendant argues that its own sparklers are not truly “uniform” because

their shape varies somewhat. Def.’s Opp’n to Pl.’s Non-Infringement Mot. at 6.

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Second, the plaintiff argues that his star-shaped sparkler differs from the defendant’s

patent because it has six points instead of five. See Pl.’s Non-Infringement Mot. at 5-7. The

defendant counters by arguing that both of the parties’ designs ultimately contain an overall

“visual theme” of a single-line hollow star-shape on a stick. Def.’s 164 Mot. at 4-6. The

defendant thus argues that the plaintiff’s star sparkler is so similar in overall impression to the

defendant’s patented star sparkler that the ordinary fireworks consumer would find the two to be

the same. Id.

Third, the plaintiff highlights the fact that its set of sparklers contains a sparkler in the

shape of a question mark, whereas the defendant’s set of sparklers does not. Pl.’s Non-

Infringement Mot. at 3. The defendant counters that this single difference does not alter the

overall similarity between the parties’ sparklers when viewed as a whole. See Def.’s 207 Mot.,

Ex. 4 at 3-4.

In sum, both parties have marshaled factual evidence in support of their arguments for

summary judgment. The court is mindful, however, that when ruling upon summary judgment, it

may not resolve factual disputes. Anderson, 477 U.S. at 255.; George v. Leavitt, 407 F.3d 405,

413 (D.C. Cir. 2005) (“[A]t the summary judgment stage, a judge may not make credibility

determinations, weigh the evidence, or draw inferences from the facts – these are jury functions,

not those of a judge ruling on a motion for summary judgment.”). Because resolution of this

question is best left for the trier of fact, summary judgment is inappropriate at this juncture. Sun-

Mate Corp., 2011 WL 3322597; Degelman, 2011 WL 6754040, at *17. Accordingly, the court

denies the parties’ cross-motions for summary judgment.

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IV. CONCLUSION

For the foregoing reasons, the court denies the parties’ cross-motions for summary

judgment. An Order consistent with this Memorandum Opinion is separately and

contemporaneously issued this 16th day of February, 2012.

RICARDO M. URBINA
United States District Judge