photo of competitor’s product not false where it’s indistinguishable; also some design patent functionality

Tactical Medical
Solutions, Inc. v. KARL 2019 WL 2435859, No. 14 C 06035 (N.D. Ill. Jun. 11,
2019)
TMS sued Karl and his
sole proprietorship, EMI, for infringement of TMS’s design and utility patents
by selling a “knockoff” version of TMS’s SOF tourniquet. TMS argued that EMI
falsely advertised the knockoff by using images of the SOF tourniquet on its
website and in its product catalogs. EMI counterclaimed for infringement of
EMI’s TACMED trademark and interference with its business relationships with
its distributors by sending them C&D letters. There was a genuine dispute
of material fact exists as to the validity of TMS’s patents on functionality
(design patent) and obviousness (utility patent).
TMS alleged that EMI’s
T.A.T. tourniquet was an inferior, infringing copy of the TMS SOF tourniquet.  As to the design patent, the EMI tourniquet
did have beveled ends, like the design patent; EMI argued that these were primarily
functional because they “allow for easy insertion of the handle ends in the
locking rings to lock the handle in place when the tourniquet has been
deployed.” And indeed, two of TMS’s utility patents for the SOF tourniquet
described the functionality of the beveled handle ends. TMS’s co-founder and
CEO said that, at the time the patent application was filed, he believed the
truncated cones at the ends of the handle “would make [the tourniquet] easier
to use,” and other patents describe the utility of beveled ends to facilitate
insertion.  TMS argued that it didn’t
advertise functional aspects, that the CEO eventually (and conveniently)
realized that he was wrong, and that there were other tourniquets with similar
handles but different handle-end designs. EMI rejoined that none of the other
handle end designs identified were for use with the locking rings that were
disclosed in TMS’s patents-in-suit.  The
court disregarded the CEO’s volte-face on an interesting ground: as long as they
thought the design was functional, then the “question is whether the
design was dictated by function, not … whether it was as effective as it was
initially expected to be for that function after it was designed.”  Still, there was evidence that beveling wasn’t
the only way to fulfill the function, which matters because design patent
functionality is ridiculously restricted (though why it matters if there wasn’t
conscious ornamental design seems like a question worth asking).  An anticipation defense failed because the cited
prior art was for spark plugs and drawer knobs, which weren’t medical
devices.  I feel that this limit on prior
art makes sense if and only if we are confining design patents to truly
ornamental designs—once we’re getting to even semi-functional designs, prior art
on attaching things to one another seems relevant.  But I’m a design patent dabbler.
There were also triable
issues on invalidity (obviousness) and infringement for the utility patents.
TMS also alleged
that EMI used an image of the SOF tourniquet on its website and in its product
catalogs to market the T.A.T. tourniquet, constituting false advertising and
unfair competition:

Although TMS alleged that the EMI tourniquet was inferior to
the TMS tourniquet, it didn’t argue that EMI misrepresented any of its
qualities through images.  EMI argued
that it innocently used the photo from its supplier and that, if they are
nearly identical, then non-high resolution images couldn’t have been false representations
where the product is visually “virtually
indistinguishable.”
The court denied TMS’s
motion for partial summary judgment on false advertising.  There was no evidence of actual consumer
confusion stemming from EMI’s use of the tourniquet image; TMS rested on a
literal falsity theory.  But while
liability can attach from the use of an image of a competitor’s product in
advertising its own, such liability “is not automatic.”  The issue is whether the image is of a
product identical to the one the advertiser is prepared to deliver.  But TMS also argued that the tourniquets were
“virtual twin[s]” and that their appearance was “virtually indistinguishable.” The
alleged inferiorities—lower-quality stitching, coating that chips more easily, a
cap screw that rusts more easily, and lack of pin covers—were “not discernible
from the photo at issue.”
There was also a
material dispute over the TACMED trademark, including over whether the mark was
descriptive or suggestive. Courts don’t understand registration, and this case
offers a frustrating example of that fact. While this case was pending, the PTO
rejected EMI’s application to register TACMED because it found that the mark
was descriptive, and EMI amended to the Supplemental Register.  TMS argued, correctly, that this was a
concession of an absence of inherent distinctiveness, but the court said that
EMI hadn’t said so in as many words so there was no concession and that “the
registration scheme contemplates that a mark registered on the Supplemental
Register may later be registered on the Principal Register on the basis that it
is inherently distinctive,” a surprise to many of us.  [OK, in theory you could let the registration
expire and try to start from scratch with a new application and a new examiner,
but that’s still not the scenario here.] 
The court cited Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S.
189, 212 n.13 (1985), as “describing [a] process whereby applicant may get mark
from Supplemental Register to Principal Register, including by arguing that
mark is inherently distinctive.”  Of
course, that is not what the Park ‘N Fly footnote says at all; it says
that the applicant can argue inherent distinctiveness and the presence of
secondary meaning in the alternative to avoid the Supplemental Register,
citing McCarthy. The court also cited California Cooler, Inc. v. Loretto
Winery, Ltd., 774 F.2d 1451, 1454 (9th Cir. 1985), which stands for a
completely different proposition: registration on the Supplemental Register isn’t
a concession that the mark lacks secondary meaning at the time of registration;
it means only that the secondary meaning hadn’t been shown to the PTO.  So the court’s alternative rationale—that EMI
might be able to show secondary meaning—is correct, and it would’ve been better
to stick to that.
There were also genuine
issues on tortious interference. Interesting: “EMI’s reasonable expectancy of
continuing or entering into valid business relationships with its
distributors—and EMI’s knowledge of those relationships—is evidenced by TMS’s
decision to send its letters to those customers. TMS did not, of course, select
those customers at random ….” TMS argued that it sent the letters in a
good-faith attempt to protect its intellectual property rights, but EMI “provided
evidence that could give rise to a reasonable inference that the letters were
motivated by an unjustified desire to drive EMI out of business.” Specifically,
emails indicating a desire to put EMI out of business.  Very hard to get clients not to send those.

from Blogger http://bit.ly/2X9iZho

Advertisements
This entry was posted in Uncategorized and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s