CAFC Finds Columbia Patent Claims Invalid, Reverses Infringement Verdict

On November 13, the Court of Appeals for the Federal Circuit (CAFC) heard an appeal from the U.S. District Court for the Southern District of California in the case of Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc. (Seirus). Columbia appealed the judgment from a jury trial holding claims 2 and 23 of U.S. Patent 8,453,270 (the ‘270 patent) invalid as anticipated and obvious. Seirus cross-appealed from a grant of summary judgment by the U.S. District Court for the District of Oregon, holding that Seirus infringed U.S. Design Patent No. D657,093 (the ‘093 patent). The CAFC affirmed that claims 2 and 23 of the ‘270 patent were invalid, reversed the summary judgment decision against Seirus for infringement of the ‘093 patent, and remanded for further proceedings on the design patent.

The Disputed Patents

The ‘270 patent is directed to materials using heat-directing elements coupled to a base fabric to manage heat through reflection or conductivity. This material could be used in clothing and camping gear meant for use in cold environments. Claim 2 is a dependent claim, depending on the language of claim 1:

1. A heat management material adapted for use with body gear, comprising:

a base material having a transfer property that is adapted to allow, impede, and/or restrict passage of a natural element through the base material; and

a discontinuous array of discrete heat-directing elements, each independently coupled to a first side of a base material, the heat directing elements being positioned to direct heat in a desired direction, wherein a surface area ratio of heat-directing elements to base material is from about 7:3 to about 3:7 and wherein the placement and spacing of the heat-directing elements permits the base material to retain partial performance of the transfer property.

Claim 2 goes further, requiring that “the base material comprises an innermost layer of the body gear having an innermost surface, and wherein the heat-directing elements are positioned on the innermost surface to direct heat towards the body of a body gear user.”

The ‘093 patent, on the other hand, is a design patent covering the ornamental design of the heat reflective material described in the ‘270 patent.

In 2015, Columbia filed suit in the District of Oregon accusing Seirus of infringement of both patents. The district court denied Seirus’s motion to dismiss for improper venue and subsequent motion to transfer the case to the Southern District of California.  The court also granted summary judgment on the ‘093 patent, holding that Seirus’s gloves and products infringed the patent because “even the most discerning customer would be hard pressed to notice the differences between Seirus’s HeatWave design and Columbia’s patented design.” Eventually the case was transferred to California where the jury found claims 2 and 23 of the ‘270 patent invalid but awarded more than $3 million in damages to Columbia for Seirus’ infringement of the ‘093 patent. Both parties appealed the decision.

CAFC Affirms-in-part, Reverses-in-part

The CAFC applied Ninth Circuit law in determining if the court’s denial of a new trial was contrary to the clear weight of the evidence, based upon false or perjurious evidence, or prevented a miscarriage of justice. In reviewing the invalidity findings of the ‘270 patent, the court turned to the prior art, U.K. Patent Application GB 2,073,613A (the Fottinger application). Fottinger claims a coating for textiles that is discontinuous and coats 5%-40% of the surface area of the coated face of the product and describes its use as suitable for use in lining fabrics and clothing. The court also reviewed U.S. Patent Application 2002/0197924 (the Halley application). Halley discloses a water-resistant, impermeable, and flexible substrate that has fabric secured to one side and abrasion-resisting polymeric dots on the other, where the dots cover 30%-70% of the flexible substrate. Lastly, the court reviewed U.K. Patent Application GB 2,350,073 (the Vaughn application), U.S. Patent 5,626,949 (the Blauer patent), and U.S. Patent 7,135,424 (the Worley patent). Vaughn discloses a water-resistant, permeable material with a polymer coating that improves abrasion resistance, Blauer describes a breathable outerwear shell with a high tensile strength stratum covering 10%-90% of the shell, and Worley covers a substrate coated discontinuously with a polymeric material for use in clothing, footwear and medical supplies.

Columbia argued that the district court should have granted its motion for judgment as a matter of law because the claims were not anticipated by the prior art, nor were they obvious. The CAFC disagreed, holding that substantial evidence had been offered to the jury to support a verdict of obviousness. Regarding the prior art, Columbia argued that Fottinger failed to disclose specific claim limitations and Seirus’s expert testimony was “deficient.” Columbia said that Fottinger’s disclosure that its patented subject matter could be used as interlining and lining for fabrics is not prior art, because interlinings are different than the “innermost surface” of garments, as described in the ‘270 patent. Columbia also argued that Fottinger does not disclose the same heat-directing elements, because the heat directing particles in the Fottinger patent are not independently coupled to the base material. Additionally, Columbia contended that a person of ordinary skill in the art (POSITA) would not believe 30%-70% coverage to be successful in view of Fottinger, which discloses only 40% coverage. Regarding Seirus’s expert, Columbia argued that the expert did not apply the correct legal standard for obviousness.

The CAFC disagreed. The jury, argued the CAFC, was entitled to rely on Fottinger’s disclosed “discontinuous coating comprising a binder and metal powder” as the discrete heat-directing element, and was additionally allowed to find that the range of coverage in Fottinger overlapped that of the claims in the ‘270 patent. Regarding Seirus’s expert, the CAFC stated that the technology of the patent (coated materials for cold weather and outdoor products) was easily understandable by the jury devoid of expert testimony. Additionally, argued the CAFC, Columbia had ample opportunity to cross-examine the expert on his misunderstanding of Fottinger but decided not to do this. Thus, because Columbia failed to clear up this misunderstanding and the expert testimony had no real bearing on the verdict, the CAFC found that Columbia was not entitled to judgment as a matter of law or a new trial on the matter. Additionally, because a finding of obviousness had been made, the court decided not to review Columbia’s anticipation arguments. Ultimately, said the court:

In light of the foregoing and considering the record before the district court, the jury’s verdict that the claims of the ’270 patent would have been obvious is certainly supported by substantial evidence, and judgment as a matter of law was properly denied.

Cross-Appeal on the ‘093 Patent

In its cross-appeal, Seirus argued that the district court erred in granting summary judgment that its products infringe the ‘093 patent because significant factual disputes exist. The CAFC explained that design patent infringement is a question of fact, which the patentee must prove by a preponderance of the evidence under the Gorham “ordinary observer” test. Under this test, “when differences between the claimed and accused designs are viewed in light of the prior art, the attention of the hypothetical ordinary observer may be drawn to those aspects of the claimed design that differ from the prior art. When considering the designs, the district court found that customers would be hard-pressed to find differences between the designs. The district court declined to consider Seirus’s logo placement and design orientation and did not find significant differences in wave spacing and size. Seirus suggested that the parties disagreed on what constituted the identity of an ordinary observer in this situation, and also contended that it was a mistake for the court to ignore integral parts of its designs when determining infringement. The CAFC found that the district court improperly declined to consider the effect of Seirus’s logo in its infringement analysis. It also found that the district court improperly resolved issues of fact that should have been tried to a jury, such as whether an element of the Seirus design had a similar visual effect as Columbia’s design.

California Venue Is Proper

Lastly, Columbia argued that venue transfer to California was improper because Seirus waived its improper venue defense. However, in the wake of the intervening TC Heartland decision, the CAFC found that the district court did not abuse its discretion in excusing Seirus’s waiver of its venue defense, and thus there was no need to retransfer the case back to the District of Oregon.

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