Opposition Brief — Vornado Air Circulation Systems, Inc. v. Duracraft Corp.

No. 95-524

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

VORNADO AIR CIRCULATION SYSTEMS, INC.,

Petitioner,

DURACRAFT CORPORATION,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

BRIEF IN OPPOSITION

JAMES W. DABNEY

Counsel for Respondent

KELLY D. TALCOTT

CAROL M. WILHELM

CAROLINE R. CLARK

Pennie & Edmonds

GERALD SAWATZKY 1155 Avenue of the Americas

Jim H. GOERING New York, New York 10036

Foulston & Siefkin (2!2) 790-9090

Wichita, Kansas

Of Counsel

QUESTION PRESENTED

Petitioner was issued a U.S. utility patent on "a new and

improved front grill and duct structure which increases the fan’s

capacity and efficiency while decreasing its sound over the prior

art grills or no grills at all." The Petitioner’s patent expressly

claimed “a circular grill having . . . a series of arcuate shaped

ribs” whose design, Petitioner represented, "provides an optimum

flow of air at a standard power usage.”

In the litigation below, the Petitioner attempted to

characterize the “arcuate shaped ribs" disclosed and claimed in

Petitioner’s patent as “trade dress” whose use assertedly could be

controlled and enjoined under 15 U.S.C. § 1125(a), regardless of

the scope or duration of the claims in the Petitioner’s patent. The

Court of Appeals entered judgment dismissing Petitioner’s “trade

dress" claim, holding that the vane structure disclosed and claimed

in Petitioner’s utility patent was not a type of “nonfunctional

configuration of goods" that could properly receive “trade dress"

protection under applicable decisions of this Court.

The question presented is whether the Court of Appeals

was correct in its holding that: “where a disputed product

configuration is part of a claim in a utility patent, and the

configuration is a described, significant inventive aspect of the

invention, see 35 U.S.C. § 112, so that without it the invention

could not fairly be said to be the same invention, patent law

prevents its protection as trade dress, even if the configuration is

nonfunctional” (58 F.3d at 1510).

STATEMENT PURSUANT TO RULE 29,6

Duracraft Corporation ("Duracraft") has no parent

companies or nonwholly owned subsidiaries.

Page

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STATEMENT PURSUANT TO RULE 29.6........... ii

Use pb ccc cccseeicecee 2

STATEMENT OF THECASE ................... 2

The Vornado Improvement Patents ............ 5

The Patented AirTensity™ Grill............... 7

Vornado’s Shift of Positions ................ 9

Vornado’s Inexcusable and

EE I 10

The District Court’s Decision................ 12

pO re 13

The Decision of the

ES 14

REASONS FOR DENYING THE PETITION .......... 19

I. . THE DECISION BELOW FOLLOWS

I. THE DECISION BELOW DOES NOT

cea eb es ose 5 ee 24

Page(s)

CASES

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PPE SD eS get Is Ge ROA Bd SLATS 17, 19, 21,

os RES ES ROUSE ORES he een 22, 23, 25, 26

B ick C Spinit Reel C

See re ee Ge Se er 26

870 F.2d 512 (9th Cir.),

cert. denied, 493 U.S. 872 (1989) .............. 25, 26

C C Dav-Brite Lishtins Joc.

SAG UE, Pee. sis ico nba oboe; ty 14, 17, 20, 22

Duraco Products, Inc, v. Joy Plastic

Enterprises, Lid., 40 F.3d

oR 18, 19

G7 P26 ri Oe Gee OO) ok is HOS SS Se 24

Fabrica Inc, v, El] Dorado Corp.,

Gi Psa eat Hee ss ee 23

944 F.2d 1235 (th Cir. 1991),

cert. denied, 112 S. Ct. 3028 (1992) ............... 25

Interpart Corp, v. Italia,

771 Ble Ge Oak: Ce OD) foie. od ke. e 16

Jeffrey Milstein. | G

Lawlor, Roth, Inc., 58 F.3d 27 (2d Cir. 1995) ........ 24

Kellogg Co. v, National Biscuit Co.,

SS SS ee reer re 14, 21

1995 U.S. App. LEXIS 31942

cise cawdcccear 18

Kohler Co, v, Moen Inc.,

ere Oe Oe cee ewes 24, 25

115 S. Ct. 1300 (1995) ......... Mamie a esas 18, 25

CO Paner 0 VMiarcCailus anufacturine C: .

i ck ee ee ee 8% 21

Sears, Roebuck & Co. v. Stiffel Co.,

A 8. | AREER 14, 16, 17, 20

Singer Manufacturing C june Mfg. Co..

5 EE A ae 14, 22

Thomas & Betts Corp. v. Panduit Corp.,

65 F.3d 654 (7th Cir. 1995) .............. 18, 24, 25, 27

Versa Products Co. v. Bifold Co,, 50 F.3d 189

(3d Cir.), cert, denied, US.__,

Sie ee Gs ck ee eI a Se te 24

STATUTES

ee 25

Se ee ee ee 23

15 U.S.C. § 1094 ...... 0 2 ikea delle & wee: eae 23

IS USC. E Te oo. ccs 10, 12, 13, 14, 17, 21, 24, 25

USL. $109 41 0c cds cvdPeu ee 5

MISCELLANEOUS

Dabney, State Law Protection of

Intellectual Creations: Priv:

and Preemption, 38 S

L. SOO, GE, Oe es hvac ove eee 20

No. 95-524

VORNADO AIR CIRCULATION SYSTEMS, INC.,

Petitioner,

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

LA TL LE Ra LT TE ACT LS I TERE AAT SN) se

BRIEF IN OPPOSITION

LA LT TL TT aN TTR: S CN SNE TIER ei

The Respondent, Duracraft Corporation (“Duracraft"),

respectfully requests that this Court deny the petition for writ of

certiorari seeking review of the Tenth Circuit’s decision in this case.

Duracraft has already been put to unconscionable burden and expense

defending this meritless lawsuit in which the Petitioner seeks to

overturn a century’s worth of this Court's decisions.

OPINIONS BELOW

The Tenth Circuit's opinion is reported at 58 F.3d 1498

(1995). The District Court’s unreported opinions were issued June

20, 1994 (R.1600)' and March 4, 1994 (R.1221). The petition for

certiorari fails to mention or include the District Court’s June 20,

1994 opinion which found that Petitioner had “made inconsistent

representations concerning the spiral grill" (R.1605).

STATEMENT OF THE CASE

Duracraft manufactures and sells electric fans and other

DURACRAFT® brand household products (R. 1616). Duracraft is the

owner of U.S. Reg. No. 1,619,729 for the trademark

DURACRAFT®, U.S. Reg. No. 1,648,066 for the trademark IDEAS

BUILT TO LAST®, U.S. Reg. No. 1,755,135 for the trademark AIR

DURACRAFT®, and numerous other trademark registrations and

applications covering consumer household products (R.2111-25).

Since August 1990 (R.241-42), Duracraft has sold a

household fan known as the DURACRAFT® Model DT-7 "Turbo

Fan" (R.2395-2406). The DT-7 “Turbo Fan" incorporates an original

and innovative design on which Duracraft was awarded U.S. Design

Patent No. 323,708 (the "708 Patent"), Figure 1 of which is

reprinted below (R. 1675-8): |

US. Patent Fen 4 0m Seer tot) Des. 323,708

: As used in this Brief, references in the form "R.----" are to

the record filed with the Court of Appeals.

In the four-year period ending June 15, 1994, Duracraft sold

more than 2.2 million DURACRAFT® “Turbo Fan" units yielding net

sales revenues of some $14.55 million (R.1610), not one dollar of

which was proved at trial to have resulted from any supposed

“confusion” of purchasers.? The fans were sold under Duracraft

registered trademarks (R.2111-13, R.2395) and in packaging which

the District Court found “bears little or no similarity to" that used by

the Petitioner (R.1190; compare R.2391-94 with R.2395-99).

The complaint in this case concerns Duracraft’s use of an 80-

year-old technology (see 58 F.3d at 1500), exemplified by expired

U.S. Patent No. 1,062,258 issued May 20, 1913, to G.A. Schlotter

(R.1358), depicted below:

. Petitioner's repeated suggestions that the DURACRAFT® Model DT-

7 “Turbo Fan" was proved to have “confused” purchasers (e.g., Pet.

at i) are unsupported and untrue.

Axial flow fans’ have a well-known tendency to waste energy

by causing air to move, not just axially in the desired direction, but

also tangentially or perpendicular to the axis of rotation (R.2199-2004,

R.991-94, R.1002-03). Designers of axial flow fans have thus long

used ducts and fixed vane structures to capture energy in air moving

away from an axial flow fan's axis and to convert that energy into

useful axial air flow (R.2199-2204, R.2133-43, R.1003-05).

It has long been known that curved or “arcuate” vanes add

energy to the low velocity core of a jet produced by an axial flow

propeller, and thereby provide a more compact jet with higher axial

velocity and lower rotation than conventional straight vanes (R.1358,

R.2004). This technology was applied to a household fan guard by

not later than 1936 (see 58 F.3d at 1500), as shown in expired U.S.

Patent No. 2,110,994 to J.H. Cohen, depicted below (R.2137):

Nov. 30, 1937. 3. COMEN 2,100,994

Fam Guaae

Filed fee. 6. iSh.

. An “axial flow” fan is one that propels air in the direction of the axis

around which the propeller is rotating. See R. Wallis, Axial Flow

Fans and Ducts (1993). Axial flow fans may be contrasted with

“centrifugal” or “cross flow” fans in which air is propelled in a

direction perpendicular to the fan's axis.

The Vornado Improvement Patents

In or about 1987, assignors of the Petitioner ("Vornado"y

developed “a new and improved front grill and duct structure which

increases the fan’s capacity and efficiency while decreasing its sound

over the prior art grills or no grills at all” (R.1241). Petitioner’s

assignors applied for and received two U.S. utility patents on

this invention, U.S. Pat. No. 4,927,324 issued May 22, 1990 (the

""324 Patent"; R.1714-22), and U.S. Patent No. Re. 34,551 issued

February 22, 1994 (the "’551 Patent"; R.1231-43). The latter patent

contains “additional and broader claims concerning the grill than were

Stated in the "324 Patent" (R.1605; see 58 F.3d at 1510).

Figure 3 of the °324 Patent (R.1716) sets forth “the best

mode contemplated by the inventor of carrying out his invention,”

35 U.S.C. § 112 4 1, as follows:

US. Patent May 22, 1990 Sheet 2 of 5 4,927,324

’ The Petitioner is unrelated to the original user of the VORNADO

name, O.A. Sutton Corp. ("O.A. Sutton”), which made and sold

VORNADO fans between 1945 and 1959 (R.1882).

With reference specifically to the “curved ribs 84," depicted

above, the °324 Patent recites:

The longer length curved ribs 84, as compared with

a conventional straight rib, provides a less rigid grill

structure which can be desirable under certain

circumstances such as impact shocks. In viewing

Fig. 5, the fan blades not shown move in a

clockwise direction from left to right, while the grill

ribs 84 curve to the left from the center in the

Opposite direction which provides an optimum flow

of air at a standard power usage (R.1721 col. 3, Il.

21-30).

Petitioner’s contribution to the stator vane art lies not in the

use of curved vanes per se, but in moving the point of maximum

lateral spacing between curved vanes inboard from the outer radius of

a grill structure, so that the point of maximum spacing between vanes

was located at the impeller blade’s point of maximum power (see 58

F.3d at 1500). The °324 Patent explains (R.1721, col. 3, ll. 15-21):

The maximum lateral spacing between any pair of

ribs 84 is inwardly from the outer radius 86 of the

grill at a point approximate dimension X, as shown

in FIG. 5. The impeller blade’s point of maximum

power is located at approximately 0.6 times its

radius. This places the maximum power in a region

of the grill wherein the rib spacing is at its

maximum.

Because prior art vane structures, such as those disclosed in

the Cohen and Schlotter patents depicted above, taught that use of

arcuate vanes improved the efficiency of axial flow fans, Petitioner

was required to “limit” its patent claims so as to leave the public —

including Duracraft — free to practice the technology taught in the

prior art. Each of the claims in Vornado’s "324 and '551 Patents

drawn to “arcuate shaped ribs" was accordingly “limited” to vane

structures whose “maximum lateral spacing is inboard from said outer

radius” (R.1721, col. 4, ll. 3-4; R.1722, col. 5 ll. 26-28).

Claim 11 of Petitioner’s "551 Patent is representative and

recites, in very precise language, the extent of Vornado’s rights in the

vane structure disclosed in that patent:

a circular grill having an outer radius attached to the

discharge end of the inner cowling, the grill

including a center hub and a series of arcuate shaped

ribs extending outwardly from the hub and curving

in the opposite direction of rotation from said blades

to said outer radius, and each rib being equally

spaced from each other around the hub, the

maximuan lateral spacing between the ribs is inboard

from said outer radius (R.1243 col. 5, ll. 27-36)

(emphasis added).

The Patented AirTensity™ Grill

Since late 1988, Petitioner has manufactured and sold

VORNADO® brand fans which precisely embody the invention of

Petitioner’s "324 and '551 Patents (compare R.1234 with R.2844).

The front grill structure of VORNADO® fans has been heavily

advertised as being the "Patented AirTensity™ Grill" (e.g., R.2390),

as being “[a] true achievement in aerodynamic efficiency" (R.1977),

as being “the result of determinant ergonomic design” (R.1831), and

as being “[u)niquely functional" (R. 1838).

Following are typical advertising statements which Petitioner

made prior to this litigation concerning the “Patented AirTensity™

Grill":

impede the flow of air. Vornado’s engineers took

the time and effort to solve that design problem.

Their patent-pending AirTensity grill doesn’t just

meet safety standards, it actually amplifies the vortex

for better, more efficient operation (R. 1936).

While the deep pitch propeller forces large volumes

of air, the patented AirTensity grill precisely focuses

the air stream. A true achievement in aerodynamic

efficiency, the AirTensity grill is specifically designed

to amplify and enhance the naturally occurring

vortex created by the propeller (R. 1977).

* a *

This unique design is intended to meet all applicable

Safety requirements while minimizing the negative

effect of placing a restriction over the air outlet.

The grill is designed to amplify and reinforce the

naturally occurring vortex created by the propeller,

sO no energy is lost in “redirecting air." Again, the

purpose is to circulate air, so Vornado engineered a

way to enhance what in other designs is a built-in

performance flaw. The result is a powerful, smooth,

quiet vortex (R. 1967).

* * +

Perhaps one of the most unique elements of the

Vornado is the patented Air Tensity™ grill. This

Jeature is not “window dressing". NVornado’s anti-

clockwise grill design, (relative to propeller spin),

slows the rotation of the vortex created by the

propeller. This allows for deeper penetration of the

air stream into the room and, ultimately, thorough

circulation of room air (R.1804, 796-98).

The AirTensity Grill accomplishes a high degree of

vortex action of the Vornado by slowing rotation of

the vortex. The result is a deep penetrating ‘beam’

of air which excites all the room air into motion and

creates complete air circulation" (R.1825).

An integral part of the total air circulation system

and the result of determinate ergonomic design, the

AirTensity Grill accomplishes a high degree of safety

and functionality without introducing aerodynamic

drag (R.2003).

Vornado’s Shift of Positions

Petitioner commenced this action on November 6, 1992,

complaining that Duracraft had “intentionally copied plaintiff's grill

design” (R.6), and that the arcuate vanes used in the DURACRAFT®

Model DT-7 “Turbo Fan” assertedly constituted “plaintiffs grill

design" (R.4). Petitioner knew, however, that the accused vane

structure did not infringe any patents held by Vornado on the

"Patented AirTensity™ Grill." The DURACRAFT® Model DT-7

“Turbo Fan" does not incorporate Vornado’s inboard lateral spacing

idea, and in fact, had been specifically designed around that limitation

(R.223, R.227-28) — conduct which the District Court found was both

“reasonable” (R.1188) and “good faith” (R.1155).°

To overcome the limitations in its utility patents on the

“Patented AirTensity™ Grill,” the Petitioner simply, in the District

. In addition to its utility patents on the functional features of

VORNADO® fans, Vornado also hoids a design patent on the overall

configuration of VORNADO® fans (R.1723). Vornado made no

claim of design patent infringement in the District Court — which is

not surprising, since “[t}he overall configuration of the DT-7 differs

from any Vornado fan" (R.1190).

9

Court’s words, “changed its position" for purposes of this litigation

(R.1184). Petitioner’s complaint asserted that the curved vanes used

in the "Patented AirTensity Grill" were “nonfunctional” “trade dress"

(R.5) whose use assertedly could be enjoined under 15 U.S.C.

§ 1125(a), regardless of the scope or duration of the claims in

Vornado’s utility patents directed to the exact same subject matter.

The District Court frankly acknowledged that Petitioner’s

“trade dress” claim was questionable and unusual:

Clearly, Vornado formerly claimed that the spiral

grill was functional but has now changed its position

and is claiming that the grill is non-functional

(R.1184).

The °551 patent reinforces the cour’s finding that

Vornado has made inconsistent representations

concerning the spiral grill... . It is enough to say

that in the court’s view Vornado has represented -

and continues to represent - in connection with its

characteristics that are superior to prior art grills.

Such representations are inconsistent with Vornado’s

position in this case; indeed, they are inimical to the

assertion that the spiral grill is nonfunctional for

purposes of trade dress protection (R.1605)

(emphasis in original).

The unusual character of Petitioner’s “trade dress” claim was

underscored by its conduct prior to and during this litigation.

Vornado’s Inexcusable

and Inequitable Conduct

The District Court found that: “Vornado learned of the

existence of the DT-7 in January of 1991" (R.1200). “Despite this

knowledge, Vornado took no steps to notify Duracraft that the DT-7

infringed on Vornado’s alleged trade dress until this suit was filed on

10

November 6, 1992” (R.1200). "This delay was inexcusable"

(R. 1200).

Between January 1991 and November 1992, Duracraft

successfully marketed” the “Turbo Fan" to major U.S. retailers

including K-Mart, Sears, Target, Payless, Walgreen’s, Menard’s,

Lowe’s, Builder’s Square, Service Merchandise, and numerous others

(R.1707-13). During this period Duracraft had "no notice whatsoever

of Vornado’s contention that the spiral grill could not be freely

copied" (R.1202).*

The District Court continued: “By the time Vornado got

around to notifying Duracraft that it was claiming the spiral grill as

a protected trade dress, Duracraft had sold nearly one million DT-7

model fans in the United States" (R.1200). Vornado then let another

full selling season go by, 1992-93, without seeking any interlocutory

relief. By August 31, 1993, Duracraft had sold more than 1.7 million

“Turbo Fan" units producing net sales revenues of more than $11.53

million (R.2132).

On September 8, 1993, the day before a scheduled settlement

conference, Vornado moved for a preliminary injunction against any

further sales of the “Turbo Fan" during the 1993-94 season. That

motion was not granted; instead, the District Court advanced and held

a plenary bench trial between October 18 and 22, 1993. The parties

submitted proposed findings of fact and conclusions of law in

November and December 1993, and made closing arguments to the

District Court on January 24, 1994.

. During the period of its delay in instituting this suit, Vornado quietly

applied for (R.1843) and obtained U.S. trademark registration of a

two-dimensional symbol (R.1840) that Vornado had started printing

on shipping cartons in 1991 (¢.g., R.1845, R.2362). Vornado's

principal claim in the District Court was that the accused vane

structure infringed this registered trademark (R.2-4). The District

Court not only rejected this claim on the merits (R.1165-68), but

found that Vornado’s trademark application “suffered from a lack of

candor” (R.1168). Vornado did not appeal from the dismissal of its

registered trademark claim.

11

The District Court’s Decision

On March 4, 1994, the District Court rendered a 71-page

Memorandum and Order which concluded, after extended analysis,

that Vornado was entitled to certain prospective injunctive relief under

15 U.S.C. § 1125(@). The District Court repeatedly acknowledged,

however, that the plaintiff's right to relief was not clear, and that

“even after the institution of suit, . . . because of Vornado’s claims .

in the "324 Patent it was reasonable for Duracraft to continue using

the spiral grill until such time as this court could make a

determination as to whether or not the grill was a protected trade

dress" (R. 1202).

The District Court found that Duracraft had at all times acted

in “good faith” (R.1203). "It is clear," the District Court found, “that

in the "324 Patent Vornado claimed that the spiral configuration of the

grill was functional" (R.1212). The District Court found that

Duracraft designed the DT-7 “based on a good faith belief that the

grill design was, as a matter of law, part of the public domain"

(R.1155). The District Court found that Duracraft "did indeed rely

on the "324 Patent and . . . that it was reasonable to do so” (R.1188).

“Duracraft,” the District Court found, “cannot be said to have acted

with a bad or wrongful motive when it adopted the spiral grill"

(R.1192).

The District Court further found that Vornado was "guilty of

laches" (R.1200) and had otherwise acted inequitably (R.1168). The

District Court rejected all of Vornado’s prayers for monetary relief or

costs. The District Court further ordered that all 1.7 million "Turbo

Fans" sold through the time of trial could remain in the field and that

Duracraft was entitled to continue selling the “Turbo Fan" in its

current form through at least June 15, 1994. The District Court, in

short, let stand an environment in which, over a period of four years,

some 2.2 million "Turbo Fan" units had been sold and delivered —

many times the mimber of VORNADO® “Air Circulator" products

12

so-called “trade dress” in suit (R.1714-22, R.1231-43).

The District Court appeared to assume that 15 U.S.C.

(R.1596, R.1598). On July 5, 1994, Duracraft moved for a stay

pending appeal, which motion the Court of Appeals granted by Order

entered July 12, 1994. The stay remained in effect throughout the

pendency of Duracraft’s appeal.

bed

The Tenth Circuit considers “functionality” to be in the nature of an

affirmative defense to infringement (58 F.3d at 1503 & n.10).

The DURACRAFT® Model DT-7 “Turbo Fan" is not competitive

with any VORNADO® “Air Circulator” product sold by Petitioner.

The District Court found that the products are "sold predominantly in

different outlets" and “there is a large price disparity between the

DT-7 and even the least expensive Vornado fan” (R.1193, 1190).

13

The Decision of the Court of Appeals

On July 5, 1995, the Tenth Circuit reversed the District

Court’s judgment and entered judgment for Duracraft, with costs.

The Tenth Circuit held that, while “certain nonfunctional

configurations of goods" could receive “trade dress" protection under

15 U.S.C. § 1125(a), the particular configuration claimed by this

Petitioner was ineligible for such protection.

The Tenth Circuit began by observing that the so-called

“trade dress" claimed by Petitioner was a “significant inventive

component of an invention covered by a utility patent" (58 F.3d at

1500), and moreover, "was not patentable by itself because a spiral

grill per se was already in the public domain" under long-expired

patents (id.). Duracraft had designed around the Petitioner's patents

and was using the accused vane structure for one of its designed

purposes: a fan grill.

The Petitioner’s “trade dress" claim thus collided head-on

with a century's worth of this Court’s decisions holding that:

It is self evident that on the expiration of a patent

the monopoly created by it ceases to exist, and the

right to make the thing formerly covered by the

patent becomes public property. \t is upon this

condition that the patent is granted. It follows, as

a matter of course, that on the termination of the

patent there passes to the public the right to make

the machine in the form in which it was constructed

during the patent.

Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 185 (1896)

emphasis added); accord Bonito Boats, Inc. v. Thunder Craft Boats,

, 489 U.S. 141, 152 (1989); Sears, Roebuck & Co. v. Stiffel Co.

Inc.

376 U.S. 225, 231 (1964); Compco Corp. v. Day-Brite Lighting,

Inc.

305

-_-_~

, 376 U.S. 234, 237 (1964); Kellogg Co. v. National Biscuit Co.,

U.S. 111, 119-20 (1938).

14

The Tenth Circuit cited “expired U.S. Patent No. 1,062,258,

a utility patent issued May 20, 1913, to G.A. Schlotter” (58 F.3d at

1500), Figure 1 of which is depicted below:

Under federal patent iaw, the right to make and sell vane

structures having the design depicted above, and obvious variations

thereof, “passe{d] to the free use of the public” more than 60 years

ago. Bonito Boats, 489 U.S. at 152. It did so, not because some

litigant proved that the design was “functional,” but automatically by

operation of federal patent law, the “ultimate goal" of which is "to

bring new designs and technologies into the public domain through

disclosure." Jd. at 151. Knowledge taught in an expired patent

“‘enures to the people, who are thus enabled without restriction to

practice it and profit by its use." Jd. (quoting United States v.

Dubilier Condenser Corp., 289 U.S. 178, 187 (1933) (emphasis

added)).

: The Tenth Circuit aptly observed, “[T}he inventor's supply of ideas

itself and freedom to experiment with them might diminish if the

inventor had to do a competitive market analysis before adopting

useful features from others’ inventions once their patents expired”

(58 F.3d at 1508).

15

This Court in Bonito Boats specifically rejected the view of

federal patent law put forward by Petitioner here, and held, with

emphasis, that:

[flor almost 100 years it has been well established

that in the case of an expired patent, the federal

patent laws do create a federal right to “copy and to

use.” Sears and Compco extended that rule to

potentially patentable ideas which are fully exposed

to the public.

489 U.S. at 165 (emphasis in original).

Petitioner's assertion that “‘the public policy involved in this

area of the law [is], not the right to slavishly copy articles which are

not protected by patent or copyright, but the need to copy those

articles,’" (Pet. at 23-24 (quoting Jn re Morton-Norwich Prods., Inc..,

671 F.2d 1332, 1339 (C.C.P.A. 1982) (emphasis in original), is

directly contrary to this Court’s holding in Bonito Boats quoted

above, and is based in case law which Bonito Boats expressly

discredited.”

Bonito Boats was merely the latest in a series of this Court’s

decisions rejecting claims very similar to Vornado’s. In Sears, the

plaintiff had “secured design and mechanical patents on a ‘pole lamp’"

and had then sought “trade dress” protection for the exact same

mechanical configuration after the patents were held invalid. 376

U.S. at 225-26. The Court in Sears rejected this claim, holding:

“An unpatentable article, like an article on which the patent has

" Prior to Bonito Boats, the C.C.P.A.’s successor court had held that

“the patent laws ‘say nothing about the right to copy or the right to

use, they speak only in terms of the right to exclude."" Interpart

Corp. v. ltalia, TT7 F.2d 678, 685 (Fed. Cir. 1985) (citation

omitted), overruled by Bonito Boats, 489 U.S. at 163-65. This

Court characterized the Federal Circuit's view as “puzzling” and

expressly rejected it. 489 U.S. at 165. Vornado’s petition rests on

the same erroncous interpretation of federal patent law which this

Court rejected in Bonito Boats.

16

flow fans had “passe{d] to the public,” Sears, 376 U.S. at 230, under

long-expired patents. All that Vornado could claim was the use of

arcuate vanes whose “maximum lateral spacing between the ribs is

inboard from said outer radius” (R.1243, col. 5, ll. 33-35).

“The federal patent scheme provides a basis for the public to

ascertain the status of the intellectual property embodied in any article

in general circulation." Bonito Boats, 489 U.S. at 161. The system

here worked precisely as intended: Duracraft ascertained the status

of the intellectual property embodied in the “Patented AirTensity™

Grill" as set forth in Vornado’s °324 Patent, and designed the accused

vane structure in “reasonable” and “good faith" patience on the claims

in that patent (R.1188, R.1155).

By its “trade dress" complaint in this case, Vornado

to repudiate the terms of its own patents (R.1192-94, R.1212,

R.1605) and establish that the “status” of the intellectual property

embodied in the “Patented AirTensity™ Grill” was the opposite of

what Vornado’s utility patents stated. Vornado sought, not just a

“significant restraint,” Bonito Boats, 489 U.S. at 156, but a total and

permanent prohibition on use of a mechanical structure which federal

patent law says “may be made and sold by whoever chooses to do

so,” Sears, 376 U.S. at 231.

The Tenth Circuit carefully considered Petitioner’s

that Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a),

17

authorizes issuance of injunction against making and using structures

disclosed in expired patents, so long as the label “trade dress” is used

to describe the subject matter of the injunction. The Court of Appeals

acknowledged that some ‘nonfunctional configurations of goods’" (58

F.3d 1506) might “act as a symbol that distinguishes a firm’s goods

and identifies their source, without serving any other significant

function,” Qualitex Co. v. Jacobson Products Co., 115 §. Ct. 1300,

1304 (1995) (see 58 F.3d. at 1506-07). However, the court

concluded that whatever value the “Patented AirTensity™ Grill” might

have as a “brand identifier" was outweighed by its value as a product

feature:

(I}f one of the ways to configure the product itself

has been deemed important enough to the advance of

technology for the government to grant a utility

patent, we must find its value as a product feature to

exceed its value as a brand identifier in all but the

most unusual cases (58 F.3d at 1510).

Here the Petitioner presented no evidence, and the District

Court made no finding, that “the primary significance of the design

in the consumer’s mind was as a brand identifier, rather than as a

grill type” (S8 F.3d at 1502 n.7 (emphasis added)). This failure of

proof would have been fatal to the Petitioner’s "trade dress” claim,

even if bona fide trademark subject matter had been involved. See

Knitwaves Inc. v. Lollytogs Lid., 1995 U.S. App. LEXIS 31942, at

*36 (2d Cir. Nov. 13, 1995) (finding that to be eligible for protection

under Section 43(a), product configuration must “‘serve primarily as

a designator of origin’" (citation omitted)); Thomas & Betts Corp. v.

Panduit Corp., 65 F.3d 654, 658 (7th Cir. 1995) (stating that to be

eligible for protection under Section 43(a), a “product feature’s

primary significance to consumers” must be “as an identifier of source

or [] an element which contributes to the inherent appeal of the

product"); Duraco Prods., Inc. v. Joy Plastic Enters., Lid., 40 F.3d

1431, 1451 Gd Cir. 1994) (holding that to be eligible for protection

under Section 43(a), a configuration must be “primarily source-

designating").

18

There was, however, an even more fundamental defect in

Petitioner’s claim: the “Patented AirTensity™ Grill” failed to meet the

basic definition of a “trademark.” The grill structure was not a mere

"symbol" used “on" or “in connection with" goods sold by Petitioner,

see 15 U.S.C. §§ 1125(a), 1127, but was an integral and inseparable

part of the goods, without which "the Vornado fan would not be the

same fan that it is” (58 F.3d at 1503). By definition, a trademark or

"trade dress" used “on” or "in connection with” goods must be

capable of being taken “off” while leaving the goods intact.

“It is for Congress to determine if the present system of

design and utility patents is ineffectual in promoting the useful arts in

the context of industrial design.” Bonito Boats, 489 U.S. at 168.

The Tenth Circuit in this case correctly and properly declined “to

undermine Congress’ repeated determinations not to afford virtually

perpetual protection to product configurations with an expansive

construction of section 43(a)." Duraco, 40 F.3d at 1447.

Duracraft in this case was accused of doing nothing more

than that which this Court, in an unbroken line of decisions dating to

1896, has held is both expressly permitted and indeed is the "ultimate

goal" of federal patent law: making and selling goods which

incorporate a "design" for whose free use, today, the public long ago

paid the price of a patent.

REASONS FOR DENYING THE PETITION

This case involves highly unusual facts which are unlikely

ever to occur again. Duracraft is aware of no prior case, and

Petitioner cites none, in which a patentee attempted to claim "trade

dress" protection for a mechanical structure whose exact shape had

been represented to be “optimum” (R.1721), disclosed (R.1716,

1718), and claimed (e.g., R.1722) in a U.S. utility patent, with the

purported result that the patentee claimed a right to block off use of

the patented structure beyond the scope of its patent, and forever.

The holding of the Tenth Circuit was a narrow one. The

Tenth Circuit expressly declined to rule broadly on whether “every

useful or potentially patentable product configuration is excluded from

19

trade dress protection” (58 F.3d at 1503 (footnote omitted)), or

whether “utility patents should be viewed differently than design

patents” (id. at 1503 n.11).

The decision below deals solely with a patentee’s bad faith

attempt to avoid claim limitations through misuse of federal trademark

law. The Petitioner attempted to enjoin Duracraft’s use of the

accused vane structure on the basis of a federal trademark registration

which Petitioner procured by means which the District Court found

“suffered from a lack of candor” (R. 1168). The Petitioner’s "trade

dress" claim was a back-up to a state law “unfair competition” claim

which even Petitioner concedes was barred by federal patent law.

The decision of the Tenth Circuit does not conflict with that

of any other Court of Appeals and merely applies the decisions of this

Court to the unique facts of the present case.

I. THE DECISION BELOW FOLLOWS AND

CORRECTLY APPLIES THIS COURT’S DECISIONS.

In Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964),

and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964),

this Court announced a “federal policy, found in Art. I, § 8, cl. 8, of

the Constitution and in the implementing federal statutes, of allowing

free access to copy whatever the federal patent and copyright laws

leave in the public domain." Compco, 376 U.S. at 237, quoted in

Bonito Boats, 489 U.S. at 153.

"[T}he operative principle of Sears and Compco is a federal

law concept of ‘public domain.’" Dabney, State Law Protection of

Intellectual Creations: Privacy and Preemption, 38 Syracuse L. Rev.

653, 663 (1987). Product designs in the public domain can be

“copied in every detail by whoever pleases,” Compco, 376 U.S. at

238, and “made and sold by whoever chooses to do so," Sears, 376

U.S. at 231, quoted in Bonito Boats, 489 U.S. at 153.

Prior to Sears and Compco, it had long been the law that a

patentee could not extend its monopoly “by resorting to the trademark

20

law and registering as a trademark any particular descriptive matter

appearing in the specifications, drawings or claims of [an] expired

patent, whether or not such matter describes essential elements of the

invention or claims." Scott Paper Co. v. Marcalus Mfg. Co., 326

U.S. 249, 256 (1945); see Kellogg Co. v. National Biscuit Co., 305

U.S. 111, 117-20 (1938). “Sears and Compco extended that rule to

potentially patentable ideas which are fully exposed to the public."

Bonito Boats, 489 U.S. at 165.

Bonito Boats reaffirmed the "‘strong federal policy favoring

free competition in ideas which do not merit patent protection,’”

489 U.S. at 168 (quoting Lear, Inc. v. Adkins, 395 U.S. 653, 656

(1969)), and restated the Sears-Compco doctrine as follows:

[Fjdeas once placed before the public without the

protection of a valid patent are subject to

appropriation without significant restraint.

At the heart of Sears and Compco is the

conclusion that the efficient operation of the federal

patent system depends upon substantially free trade

in publicly known, unpatented design and utilitarian

conceptions.

489 U.S. at 156 (emphasis added).

Vornado asserted two "unfair competition” claims in the

District Court: one arising under “common law" (R.6) and one

arising under 15 U.S.C. § 1125(a) (R.4). The District Court

concluded that the substance of these two claims was "identical"

(R.1214).

Vornado effectively concedes thai its state law "unfair

competition” claim was and is barred under federal patent law, as

most recently expounded in Bonito Boats. Yet Vornado argues that

the reasoning of Bonito Boats does “not limit" (Pet. at 17) Vornado’s

identical claim, seeking identical relief, arising under Section 43(a),

based on the following passage from Bonito Boats:

21

Congress has thus [in Section 43(a)] given federal

recognition to many of the concerns that underlie the

state tort of unfair competition, and the application of

Sears and Compco to nonfunctional aspects of a

product which have been shown to identify source

must take account of competing federal policies in

this regard.

489 U.S. at 166.

Far from supporting Vornado’s position, the language quoted

above actually confirms the correctness of the decision of the Court

of Appeals in this case. The “federal right to ‘copy and to use,’"

restated in Bonito Boats, 489 U.S. at 165, has always been

accompanied by a duty to refrain from misrepresenting the source of

the “copies.” In Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169

(1896), for example, the Court held:

But it does not follow, as a consequence of a

dedication, that the general power, vested in the

public, to make the machine and use the name

imports that there is no duty imposed, on the one

using it, to adopt such precautions as will protect the

property of others and prevent injury to the public

interest, if by doing do so no substantial restriction

is imposed on the right of freedom of use.

163 U.S. at 186.

The same point was made in Compco, 376 U.S. at 238:

A State of course has power to impose liability upon

those who, knowing that the public is relying upon

an original manufacturer’s reputation for quality and

integrity, deceive the public by palming off their

copies as the original.

The reference to Section 43(a) in Bonito Boats merely

reiterated what this Court has consistently held: “‘{T]he law which

22

FING EPCS AE eR SE Dn, i CR MRM meee “

Ptr tae!

LOE OR tit

permits one to market an identical copy of his competitor’s product

does not give him freedom to imitate the appearance of the package

in which the article is sold." Fabrica Inc. v. El Dorado Corp.,

697 F.2d 890, 895 (9th Cir. 1983) (citation omitted) (emphasis

added); see Bonito Boats, 489 U.S. at 154 (noting that states may

protect “‘distinctive dress in the packaging of goods’") (quoting Sears,

376 U.S. at 232).

No claim is made, or could be made, that the "Patented

AirTensity™ Grill” constitutes “packaging” used “on” or "in

connection with" goods sold by Petitioner, and which could be

removed while leaving the goods intact. It is, rather, a "significant

inventive element of Vornado’s patented fans" (58 F.3d at 1510),

without which “the Vornado fan would not be the same invention that

it is" (id. at 1503). Nothing in the text of Section 43(a) encompasses

such a structure," and the plain meaning of the words “trade dress”

excludes it as well.

n The Congress knows how to enact trademark protection for product

configurations when that is intended. Section 23(c) of the Lanham

Act, 15 U.S.C. § 1091(c), provides that for purpose of registration

on the supplemental register, “a mark may consist of any trade-mark,

symbol, label, package, configuration of goods, . . . or device”

(emphasis added). The supplemental register was established to

facilitate the registration in foreign countries of subject matter, such

as “configuration of goods,” which the United States did not regard

as trademark (as distinct from patent) subject matter. See Hearings

on H.R. 9041 Before the House Comm. on Patents, 75th Cong., 3d

Sess. 180 (1938) ("The primary purpose of this supplemental register

is to get registration abroad."). Registration on the supplemental!

register expressly does not imply any exclusive trademark rights in

the United States. 15 U.S.C. § 1094.

23

ii. THE DECISION BELOW DOES NOT CONFLICT

WITH THAT OF ANY OTHER CIRCUIT.

Contrary to Vornado’s assertion, the Tenth Circuit's decision

is fully in accordance with the reasoning and holdings of the latest

decisions of the Courts of Appeals dealing with product

configurations. It is widely recognized that:

[t]he penumbra of the federal patent laws restricts the

degree to which courts may grant legal recognition

of consumer reliance on product configurations as

source indicators, for their limited scope of

protection impliedly imposes restraint on the

workings of Section 43(a).

Versa Products Co. v. Bifold Co., 50 F.3d 189, 204 (3d Cir.), cert.

denied, _ U.S. __, 116 S. Ct. 54 (1995); accord Elmer v. ICC

Fabricating, Inc., 67 F.3d 1571, 1580 (Fed. Cir. 1995) (holding that

a patentee cannot "bypass the statutory requirements of the patent laws

and obtain broadened patent protection under the guise of trade dress

law"); Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 658

(7th Cir. 1995) ("[T]he penumbra of the patent laws require{s] that

competitors be able to slavishly copy the design of a successful

product."); Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc.,

58 F.3d 27, 32 (2d Cir. 1995) ("[O]verextension of trade dress

protection can undermine restrictions in copyright and patent law.").

The Tenth Circuit’s decision in this case is merely a

particularized application of the principle cited above, and was

occasioned by an egregious attempt by this Petitioner to broaden a

patent monopoly through misuse of federal trademark law. There is

nothing in the assertedly “conflicting” decisions cited by Vornado

which indicates that those other courts would reach a different result

on the facts of this case than the Tenth Circuit reached here.

Kohler Co. v. Moen Inc., 12 F.3d 632 (7th Cir. 1993), did

not arise under 15 U.S.C. § 1125(a), involved no prayer for

injunctive relief, and involved no issued or expired patents. The issue

in Kohler was whether the ornamental shape of a bathroom faucet

24

fixture which allegedly had acquired “secondary meaning” could be

registered as a “trademark” under 15 U.S.C. § 1052. The Kohler

court stated that "a product’s shape is never inherently distinctive,” 12

F.3d at 641 n.11, and the Seventh Circuit has since clarified that

under Section 43(a), courts may not enjoin use of a product

configuration “whose value to consumers is intrinsic and not

exclusively as a signifier of source," Thomas & Betts, 65 F.3d at 657

(emphasis added). The Petitioner’s “trade dress" claim clearly would

have failed under the law of the Seventh Circuit.

Ferrari S.P.A. Esercizio v. Roberts, 944 F.2d 1235 (6th Cir.

1991), cert. denied, 112 S.Ct. 3028 (1992), was a suit to enjoin sales

of exact replicas of Ferrari automobiles whose exterior shape was

found to have “secondary meaning." The Ferrari case involved no

issued or expired patents, but merely an argument by the defendant

that “automobile designs are to be protected from copying pursuant

to the design patent statute." 944 F.2d at 1240 (emphasis added).

The Tenth Circuit in the present case expressly declined “to take a

position on whether utility patents should be viewed differently than

design patents" (58 F.3d at 1503 n.11). This Court in Bonito Boats

observed, "Trade dress is, of course, potentially the subject matter of

design patents." 489 U.S. at 154 (emphasis added).

Nothing in the Ferrari case holds that use of structures

disclosed in an expired utility patent can be enjoined under 15 U.S.C.

§ 1125(a), or that the holder of a u#ility patent can avoid claim

limitations by characterizing claimed structures as “trade dress.”

Further, the conclusion of “secondary meaning” in Ferrari was not

based on the “primary significance” standard which this Court

subsequently endorsed in Qualitex, 115 S. Ct. at 1303.

Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512 (9th Cir.),

cert. denied, 493 U.S. 872 (1989), was a suit to enjoin use of a "C"

clamp. The Ninth Circuit affirmed, as not clearly erroneous, factual

determinations that the design of the “C" clamp in question was

“nonfunctional” and had acquired “secondary meaning.” 870 F.2d at

516-17. The Clamp decision did not cite to Bonito Boats or any of

its predecessors, and “appears to have assumed without discussion that

all nonfunctional product configurations can be used as trademarks or

trade dress" (S58 F.3d at 1509).

The Clamp decision was issued just a few days after this

Court’s Bonito Boats decision and relied on C.C.P.A. authority which

this Court clearly discredited in Bonito Boats. 870 F.2d at 516 (citing

Morton-Norwich). Yet even the Clamp decision required proof of

“secondary meaning" as a condition to “trade dress" protection of a

product configuration. As noted above, the Petitioner here failed to

establish “secondary meaning," i.e., that the “primary significance of

the design in the consumer’s mind was as a brand identifier, rather

than as a grill type” (58 F.3d at 1502 n.7). The Petitioner’s claim

would thus have failed in the Ninth Circuit too.

The Tenth Circuit’s conclusion that “the functionality doctrine

does not eliminate overlap between the Patent Act and the Lanham

Act" (8 F.3d at 1507) in no way conflicts with that of any other

Circuit. The Tenth Circuit has its own judge-made definition of

“functionality” which considers “whether ‘the protection of the

configuration would “hinder competition or impinge upon the rights

of others to compete effectively in the sale of goods.""" Brunswick

Corp. v. Spinit Reel Co., 832 F.2d 513, 519 (10th Cir. 1987)

(quoting dictum from Sno-Wizard Mfg., Inc. v. Eisemann Prods. Co. ,

791 F.2d 423, 426 n. 3 (Sth Cir. 1986) (citation omitted)).

The Tenth Circuit’s definition of “functionality” is largely if

not wholly extraneous to the legal standards governing the grant or

denial of patents (58 F.3d at 1506). Like much of the law cited in

Vornado’s petition, the Brunswick “test” of “functionality” was

announced prior to Bonito Boats and does not even purport to

accommodate the “federal right to ‘copy and to use’ which that

decision reaffirmed, 489 U.S. at 165, and which all of the Courts of

43(a) jurisprudence.

The Seventh Circuit, for example, one of those circuits which

Petitioner claims is in “conflict” with the Tenth Circuit, recently

cited the Tenth Circuit’s decision and held:

Copying is not only good, it is a federal right — a

necessary complement to the patent system’s grant of

limited monopolies.

Thomas & Betts, 65 F.3d at 657.

In short, Petitioner’s claim of “conflict” with other Circuits

is based on the same superficial and erroneous interpretation of

precedents which gave rise to this frivolous lawsuit in the first place.

Duracraft has been put to unconscionable burden and expense in

defending this three-year-old case which should now, finally, come to

an end.

The decision below follows faithfully the decisions of this

Court and is in the mainstream of the latest decisions of the Courts of

Appeals dealing with product configurations.

CONCLUSION

The petition should be denied.

Dated: December 1, 1995

James W. Dabney

Counsel for Respondent

1155 Avenue of the Americas

Kelly D. Talcott New York, New York 10036

Carol M. Wilhelm (212) 790-9090

Caroline R. Clark

Pennie & Edmonds

New York, New York

Gerald Sawatzky

Jim H. Goering

Foulston & Siefkin

Wichita, Kansas

Of Counsel

27