Last week, the Federal Circuit court heard oral argument in Jacki Easlick, LLC v. AccEncyc US, a design patent case we have been tracking because it attracted an amicus brief. In this case, Jacki Easlick, LLC and JE Corporate, LLC appeal a district court’s denial of a motion for a preliminary injunction. Judges Dyk, Schall, and Prost heard the oral argument. This is our argument recap.
Donald Ference argued on behalf of Jacki Easlick. He began by asserting the lower court “applied the wrong legal standard” in evaluating “whether Easlick was likely to succeed in proving design patent infringement.” Ference contended that, under the Federal Circuit’s case law, the proper standard requires consideration of the “overall design of the accused product and the patented design.” Instead, he argued, the lower court “based its decision” on “three minor details where the designs differed,” rather than making a finding “regarding the similarity or difference in the overall design.”
Judge Prost asked how the case had progressed since the order on the motion for a preliminary injunction was “issued two years ago.” In response, Ference explained the dispute “has been resolved against” the original 67 defendants. The case, however, “is sort of stalled” with AccEncyc because the “infringement analysis,” which is the subject of this appeal, “will have [an impact] on the rest of the case on remand.”
After noting that “functionality is part of claim construction,” Judge Dyk asked “why isn’t the 90 degree offset” relied upon by Ference to distinguish the prior art “functional?” Ference answered by arguing the lower court “found that it was ornamental.” Judge Dyk followed up, suggesting the feature could be “functional” if it allowed users to “accommodate many more bags on the rack if it’s at a 90 degree angle.” In response, Ference argued, taken to the extreme, “you could make an argument that anything is functional.”
Pressed further, Ference argued “it’s the size of the hook that dictates the number of bags” the hook can support, and not the angle at which the hook points to. Judge Prost noted that the hook’s angle could affect how easily users can see the hanging bags, and asked “isn’t that functional, as well?” In response, Ference argued that such a scenario was “a hypothetical” and not part of the case.
Judge Dyk then asked whether, setting aside the “90 degree” question, the lower court’s “conclusion would be correct.” In response, Ference argued the lower court “was correct” in concluding “the 90 degree offset is an ornamental feature.” Judge Dyk pressed Ference again. He asked whether there is “anything wrong” with the lower court’s “conclusion that an ordinary observer” would see the products “as being different.” Ference answered by highlighting the relevant “order did not discuss the 90 degree angle” with respect to “substantial similarity.”
Timothy Duffy argued on behalf of AccEncyc. He began by arguing Easlick “failed to demonstrate a likelihood of success on the merits.” Therefore, Duffy contended, the lower court “did not abuse its discretion in denying a preliminary injunction.”
Judge Prost asked Duffy why he was “here on a preliminary injunction” if Accenyc does not “plan on marketing” the relevant products. Duffy answered by acknowledging, “the temporary restraining order” previously in place “took my client out of the business.” Duffy, however, argued “we’re here now because” of the appeal, and affirming the lower court’s decision, he said, “is very helpful to us in the case.”
Judge Prost asked when the the relevant patent expires. In response, Duffy admitted he didn’t know. Judge Prost then asked whether AccEncyc “preserved” the “functionality question” before the lower court. In response, Duffy argued AccEncyc “might not have said that in the argument or in the briefs,” because the case “was all done on a very quick record.” Nonetheless, he argued, the lower court “missed one of the functional elements.”
Judge Prost pressed Duffy on that point, asking whether the lower court “missed it because you didn’t raise it clearly enough.” Duffy offered to “point to the transcript of the argument” where AccEncyc raised the issue. Judge Prost responded she “looked at the pages” cited and “didn’t see it.” In response, Duffy explained his “argument was what it was” function, but, he maintained, the key “question before this court” is whether the lower court “conducted the proper inquiry.”
Judge Dyk then asked whether Duffy believed the lower court “didn’t consider the 90 degree offset as an ornamental feature.” Duffy answered by arguing the lower court “emphasized the dissimilarities” because those differences “supported its conclusion.” He admitted, however, that the lower court “did not list the similarities.”
In his rebuttal, Ference argued AccEnyc’s briefing at the lower court “focused on” certain differences and that explains the lower court’s focus on those alleged differences “as opposed to the overall substantial similarity.” Ference further argued that, applying precedent, the lower court was required to “consider[] both the similarities and differences in assessing the overall similarity” of a design claim. In this case, he said, the lower court “only addressed the differences,” and therefore “didn’t apply the correct standard.”
We will continue monitoring this case and report on developments.