Ramifications of Federal Circuit Opinion: Proving Irreparable Harm re Design Patent Infringement through Design Dilution?

Did the federal circuit create a new common law theory to prove irreparable harm resulting from infringement of a design patent? Recall that Apple’s original motion for a preliminary injunction against Samsung devices for infringing its design patents presented two new kinds of arguments in its irreparable harm section: design dilution and brand dilution. Dilution is a cause of action in trademark law—whereby the owner of a famous trademark can bring an infringement suit against a defendant on grounds of trademark dilution.  Trademark dilution occurs where defendant’s use either impairs the distinctiveness of the owner’s mark (dilution by blurring) or tarnishes the owner’s reputation or corporate goodwill (dilution by tarnishment). Dilution is a doctrine under trademark law. Can a dilution argument extend to patent design protection?

 
Tucked into Apple’s arguments about likely irreparable harm, Apple also brought forth the novel arguments of design dilution and brand dilution. Apple argued that Samsung’s infringing designs caused design and brand dilution; the design and brand dilution in turn caused Apple to lose consumer goodwill. Under the design theory, Samsung’s infringing products were so substantially similar to Apple’s that the introduction of Samsung’s product to the marketplace impaired the distinctiveness of the design of Apple’s products. Apple called this, “eroding” the design distinctiveness of its products or otherwise phrased design dilution, declaring, “Samsung’s sale of products…threatens to erode the value of the designs and attenuate the hard-won link in the public’s mind between the designs and Apple” (Apple’s Motion for Preliminary Injunction at 26). Apple’s brand dilution argument was tied to the fact that its brand was inextricably tied to product design. When Samsung sold its infringing products, it also harmed and weakened the value of the Apple brand itself.
 
The district court rejected Apple’s arguments about design and brand dilution. According to the court’s opinion, it rejected the design dilution idea because Apple had not presented sufficient evidence to explain how design dilution (“erosion of ‘design distinctiveness’”) had actually caused irreparable harm to Apple (for example, Apple had not provided enough proof to show that design dilution harmed its reputation). The district court hesitated in addressing the issue of applicability of the brand dilution theory of harm. The court explained its hesitation as “[i]t is not entirely clearly that irreparable harm in the form of brand dilution should apply to Apple’s claim for design patent infringement. Apple has offered no argument that trademark doctrines are applicable to design patent infringement cases” (Court Order Denying Apple’s Motion for Preliminary Injunction at 30). Nonetheless, it was not necessary for the district court to reach a conclusion on the applicability of the brand dilution doctrine; even if brand dilution was an actionable harm to demonstrate irreparable harm in design patent cases. The court found that Apple had failed to provide sufficient evidence that Samsung’s alleged infringement would actually cause brand dilution.
 
In its opinion pursuant to Apple’s appeal, the federal circuit addressed both design and brand dilution in a fairly nonchalant manner, which is somewhat strange since these theories are so novel to design patent infringement cases. The federal court held that categorical rules precluding these two theories from being used to demonstrate irreparable harm would be “improper.”  The appellate court was explicit in its statement that a categorical rule regarding design dilution would be improper, declaring:
“wholesale rejection of design dilution as a theory of irreparable harm…would have been improper.” federal circuit Opinion at 19.  On the other hand, the federal circuit is ambiguous about the possible application of brand dilution to prove irreparable harm in design patent infringement cases, but it does imply that a categorical rule against brand dilution would also be impermissible: “the district court’s opinion thus makes clear that it did not categorically reject… ‘brand dilution’ theories, but instead rejected those theories for lack of evidence at this stage” (implying that a categorical rejection of brand dilution theories would possibly have been reversed by the federal circuit). Id. at 19-20. It appears that bloggers view the federal circuit opinion as rejecting a categorical rule against brand dilution as a theory to show irreparable harm.
 
What does this mean? The federal circuit provided no guidelines other than prohibiting district courts from implementing categorical rules against the theories of brand and design dilution. Blogger Sarah Burstein also exclaims over the lack of discussion in the opinion about this theory, writing: “The other especially striking portion…is the federal circuit’s unquestioning acceptance of Apple’s ‘design dilution’ theory of irreparable harm. This sort of express equation of the harm caused by design patent infringement with the harm caused by trademark dilution is unprecedented in design patent case law…and Apple’s theory deserves more attention.” 
 
Samsung has filed a petition at the federal circuit for an en-banc rehearing of its earlier decision. Perhaps the en-banc panel will provide further guidance or explanation on this topic (of course, it could also reverse this and find that categorical rules against dilution based theories are perfectly proper).
 
The federal circuit’s decision on these two theories seems utterly baffling, especially without any further guidance or explanations. Burstein notes that while these theories had been mentioned in academic literature, they are completely novel concepts to design patent law. The federal circuit holding seems to collapse trademark (trade dress) law and patent design law, finding an actionable harm infringing under trade dress functions as an actionable harm under patent design law. Under my current understanding of the law, I do not believe that there is any authority to support such an extension of dilution harms, especially given that federal trademark dilution based infringement is currently governed by statute. The Trademark Dilution Revision Act of 2006 could easily have been written to include a short text applying dilution based theories to design patents, especially given the overlap between the subject matter covered by trade dress forms of trademarks and the subject matter of design patents.
 
As of right now, it appears as though holders of design patents (probably those whose designs are particularly distinctive and well known to the public) should try to assert design dilution and brand dilution as theories to support a finding of likely irreparable harm. The patentees should be careful to ensure they provide sufficient evidentiary support to demonstrate how the defendants’ infringing conduct leads to such dilution and how the dilution causes irreparable harm.
 
Please see the previous post: After the federal circuit Opinion: What Happens Now
for more on this topic. For more on emergency business litigation, click here or call 312-223-1699 to speak with one of our Chicago law firm attorneys.
 
**SOURCES**
Apple, Inc. v. Samsung Elec. Co., United States District Court Northern District of California, Apple’s Motion for a Preliminary Injuction, 2011-07-01, Docket No. 86.
Apple, Inc. v. Samsung Elec. Co., United States District Court Northern District of California, Court Order Denying Motion for Preliminary Injunction, 2011-12-02, Docket No. 450.
Apple, Inc. v. Samsung Elec. Co., United States Court of Appeals for the federal circuit, Opinion on Apple’s Appeal re Court Order Denying Motion for Preliminary Injunction, 2012-05-14.
Sarah Burstein, “Apple v. Samsung,” PatentlyO: The Nation’s Leading Patent Blog, 2012-05-18, http://www.patentlyo.com/patent/2012/05/guest-post-by-sarah-burstein-apple-v-samsung.html.
Rebecca Tushnet, “Brand Dilution as a Design Patent Theory of Harm,” Rebecca Tushnet’s 43(B)log, 2912-05-16, http://tushnet.blogspot.com/2012/05/brand-dilution-as-design-patent-theory.html.
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