Cornucopia Products LLC v. Dyson Incorporated et al

Filing 58

ORDER granting 33 Dyson's Motion for Preliminary Injunction, conditioned upon Dyson posting a bond in the amount of $500,000.00. Signed by Judge Neil V Wake on 7/27/12.(TLJ)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Cornucopia Products, LLC, Plaintiff, 10 11 CONSOLIDATED WITH: vs. 12 No. CV 12-00234-PHX-NVW Dyson, Inc. and Dyson, Ltd., Defendants. 13 14 No. CV 12-00924-PHX-NVW Dyson Technology Limited; Dyson, Inc., 15 16 17 18 Plaintiffs, ORDER vs. Cornucopia Products, LLC, Defendant. 19 20 Before the Court is Dyson, Inc.’s and Dyson Technology Limited’s Motion for a 21 Preliminary Injunction (Doc. 33) against Cornucopia Products, LLC. 22 comprises the Court’s findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 23 52(a). This order 24 Dyson seeks to enjoin sale of Cornucopia’s bladeless fan. Cornucopia’s fan, from 25 an unknown Chinese manufacturer, is “almost a direct copy” of Dyson’s bladeless fan. 26 L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1125 (Fed. Cir. 1993). There 27 28 1 are a few differences, but the overall appearance is strikingly similar. Intentional copying 2 is both proven and undisputed. 3 Dyson’s U.S. patent estate in its bladeless fan includes four utility patents and two 4 design patents. Yet on this motion Dyson relies only on its design patents. It withdraws 5 two of its utility patents from any claim against Cornucopia and withdraws the other two 6 from consideration in this motion. Cornucopia’s defense is that everything it copied is 7 functional and cannot be monopolized by a design patent. Much of what it copied is 8 functional. But some of Dyson’s design is valid and easily could have been avoided 9 without loss of function to Cornucopia. Instead, Cornucopia strained for the same look. 10 Though Dyson’s motion fails in important respects and is a close call in other respects, on 11 balance preliminary injunctive relief is warranted. A bond of $500,000 will be required. 12 I. BACKGROUND 13 In February of this year, Cornucopia Products, LLC, filed an action in this Court 14 against Dyson Ltd., a United Kingdom company, and its United States subsidiary, Dyson, 15 Inc. Cornucopia’s complaint accused Dyson Ltd. and Dyson, Inc. of violating Section 2 16 of the Sherman Act by illegally monopolizing the “bladeless fan” market through 17 obtaining patents by fraud on the United States Patent and Trademark Office, and 18 enforcing those patents through sham litigation. More specifically, Cornucopia claimed 19 that the Dyson entities failed to provide the Patent Office with a full English translation 20 of a Japanese patent (JP S56-167897), which allegedly was invalidating prior art. 21 Cornucopia further claimed that its bladeless fan product embodied the Japanese patent 22 and sought a declaration that four Dyson-owned utility patents were invalid, 23 unenforceable, and not infringed. 24 On May 2, 2012, Dyson Technology Limited (the actual owner of the Dyson 25 patents) and Dyson, Inc. (collectively, for purposes of this order, “Dyson”), but not 26 Dyson Ltd., filed a separate action in this district against Cornucopia for infringement of 27 four patents — two of which overlapped the four utility patents identified in 28 Cornucopia’s antitrust action. Dyson’s complaint also charged that Cornucopia infringed -2  1 two design patents not identified in Cornucopia’s antitrust complaint, namely U.S. 2 Design Patent Nos. D602,143 (“D143”) and D605,748 (“D748”). The two actions were consolidated by stipulation of the parties on May 24, 2012. 3 4 (Doc. 25.) 5 supporting declarations and evidence. 6 redacted version).) Dyson’s Motion seeks to enjoin Cornucopia from making, using, 7 offering to sell, or selling the bladeless fan it currently offers (model no. D8600-12), on 8 the grounds that it infringes the D143 and D748 patents. Although Dyson’s complaint 9 alleges infringement of both design and utility patents, Dyson seeks a preliminary 10 The next day, Dyson filed this Motion for Preliminary Injunction with (Doc. 32 (sealed version); Doc. 33 (public injunction only on the design patents. On July 11, 2012, the Court took evidence from Dyson by declarations and 11 12 testimony of three witnesses. Cornucopia offered no witnesses at the hearing. 13 II. THE TECHNOLOGY AT ISSUE 14 A. The Japanese Patent 15 In 1981, the Japanese patent office issued patent number S56-167897. All parties 16 agree that this Japanese patent discloses a “bladeless fan,” depicted in the patent through 17 the following three figures: 18 19 20 21 22 23 24 25 26 27 28 -3  1 Figure 1 depicts a cross-section of the entire fan, which is not truly bladeless. The 2 trapezoid shapes towards the bottom of the fan (items 5) are fan blades driven by a motor 3 (item 2). The fan blades draw air from underneath the base, as denoted by the arrowed 4 lines surrounding the number 8, and push it through the fan’s neck (item 1b) into what 5 the patent calls — according to Cornucopia’s translation — the “wind discharge ring” 6 (item 13), where one might expect a traditional fan’s blades to be located. The parties 7 refer to this ring as a “nozzle.” 8 Figure 2 is a cutaway view of the nozzle. As figure 2 shows, the nozzle is a tube 9 with an annular slit (item 14) — as if one had taken a hose, sliced it open lengthwise, 10 rolled it back into a hose shape with one side of the slice slightly overlapping the other 11 side, and then curled the entire thing into the shape of a ring. As the fan inside the base 12 fills the nozzle with air, the air escapes from the nozzle through the slit (and presumably 13 toward the user), as depicted by the two shorter arrowed lines in figure 2 (and the inward- 14 pointing arrows arranged radially over item 13 in figure 1). 15 The four longer arrowed lines in figure 2 appear to depict air from behind the fan 16 being pulled into the open ring and forward. According to Cornucopia’s translation of 17 the Japanese patent, “‘the actual amount of wind [generated by the fan] is much higher 18 than the amount of wind directly discharged from the slit.’” (Doc. 1 ¶ 12 (bracketed 19 material inserted).) 20 How the fan accomplishes this feat is somewhat in question. Cornucopia’s 21 complaint claims that the Japanese fan induces the “Coanda effect.” (See id.) The 22 Coanda effect is “[t]he tendency of a gas or liquid coming out of a jet to travel close to 23 the wall contour even if the wall’s direction of curvature is away from the jet’s axis.” 24 McGraw-Hill Dictionary of Scientific and Technical Terms 416 (6th ed. 2003). The 25 Coanda effect can supposedly “entrain” — grab and pull along — surrounding air, thus 26 increasing the flow of air beyond what is being pushed out of the “jet.” 27 The Coanda effect necessarily requires a curved surface downstream from the 28 “jet” — in this case, downstream from the slit through which air escapes the nozzle. The -4  1 Japanese patent’s figures do not disclose such a surface, nor does Cornucopia quote any 2 text from the Japanese patent regarding the Coanda effect. As far as the figures disclose, 3 it appears that the nozzle and slit are designed to push air both forward and inward, with 4 nothing downstream from the slit. Conceivably, this could create a low-pressure zone 5 within the nozzle, thus pulling air from behind the nozzle forward. However, nothing in 6 the figures discloses the necessary physical shape downstream from the slit to take 7 advantage of the Coanda effect. 8 B. Dyson’s ’449 Patent 9 In April 2011, the Patent Office issued a utility patent to Dyson, numbered 10 7,931,449 (“’449 patent”). Though not directly at issue in these preliminary injunction 11 proceedings, the ’449 patent is relevant to questions of functionality discussed below. 12 The following figures from that patent will assist this discussion: 13 14 15 16 17 18 19 20 21 22 23 Figure 1, although a front view and not a cross-section, roughly corresponds to figure 1 24 of the Japanese patent, showing a base and a ring-shaped nozzle. Like the Japanese 25 patent, a fan (which Dyson calls an impeller) hides within the base of Dyson’s preferred 26 embodiment and pushes air into the nozzle (figs. 1 and 2, item 1), which escapes from an 27 annular slit (fig. 4, item 38; see also fig. 2, items 12 and 14) and can therefore create a 28 -5  1 low-pressure zone by “which air from outside the fan assembly is drawn by the air flow 2 emitted from the mouth [i.e., the slit in the nozzle].” ’449 Patent, col. 9, ll. 7–9. 3 The nozzle is depicted from the outside in figure 2 and in cutaway in figure 4. Its 4 cross-section resembles an inverted airfoil. A part of this airfoil shape — the angles 5 formed by items 38, 46, 48, 50, 52, 54, 56, and 58 in relation to each other and in relation 6 to the nozzle’s axis (fig. 1, item x) — is not only a preferred embodiment but also 7 comprises a “diffuser” claimed as part of the invention. This shape supposedly focuses, 8 smoothes, and accelerates the airflow emerging from the slit (fig. 4, item 38). 9 Cornucopia’s fan does not practice the diffuser shape on the interior of the nozzle as 10 claimed in the ‘449 patent. 11 The ’449 patent’s specification — although not the claims — also discusses the 12 potential for a “Coanda surface” upstream from the “diffuser” but downstream from the 13 slit. Figure 4, item 14, represents such a surface — a curvature sloping away from the 14 direction in which air escaping the slit would most naturally travel. According to the 15 specification: “Through the use of a Coanda surface, an increased amount of air from 16 outside the fan assembly is drawn through the opening by the air emitted from the [slit in 17 the nozzle].” Id., col. 3, ll. 15–18. 18 C. Dyson’s ’166 Patent 19 In January 2012, the Patent Office issued a utility patent to Dyson, numbered 20 8,092,166 (“’166 patent”). The ’166 patent is not directly at issue in these preliminary 21 injunction proceedings, but it too is relevant to questions of functionality discussed 22 below. 23 The figures disclosed in the ’166 patent are almost identical to those in the ’449 24 patent. The most significant difference for present purposes is the addition of “spacers” 25 — tiny tabs that keep the two sides of the nozzle’s slit a uniform distance apart, as 26 depicted in the following figures (fig. 4, items 26, 260, 266; also visible in fig. 2): 27 28 -6  1 2 3 4 5 6 7 8 9 10 Similar to the ’449 patent, the ’166 patent calls for a “nozzle defining an opening 11 through which air from outside the fan assembly is drawn by the air flow emitted from 12 the mouth.” ’166 Patent, col. 10, ll. 32–34. Unlike the ’449 patent, however, the ’166 13 patent makes no claims based on the angles formed by what the ’449 patent calls a 14 “diffuser.” Also unlike the ’449 patent, the ’166 patent contains a claim based on the 15 Coanda effect, calling for “a Coanda surface located adjacent to the [slit] and over which 16 the [slit] is arranged to direct the air flow.” Id., Claim 15. (See also figs. 2 and 4, item 17 14.) 18 D. Dyson’s D143 Patent 19 On October 13, 2009, the Patent Office issued to Dyson a design patent, numbered 20 D602,143 (“D143”). Titled “fan,” the design patent claims the following design through 21 six figures — a perspective view (fig. 1), a front view (fig. 2), a rear view (fig. 3), a side 22 view (fig. 4), a top view (fig. 5), and a bottom view (fig. 6): 23 24 25 26 27 28 -7  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 This design essentially mimics the preferred embodiment of the ’449 and ’166 patents. E. The D748 Patent On December 8, 2009, the Patent Office issued to Dyson a design patent, numbered D605,748 (“D748”). Also titled “fan,” the design patent claims the following design through the same six figures used in the D143 patent, except that all lines representing the cylindrical base were changed from solid to dashed, such as in this perspective view: 28 -8  1 2 3 4 5 6 7 8 9 10 11 In other words, the D748 patent claims the design of the nozzle only, not the design of 12 the entire fan. 13 14 15 F. Dyson’s Fan Dyson claims that its AM01 “Air Multiplier” fan embodies the design disclosed in the D143 and D748 patents. The following is a photograph of the AM01: 16 17 18 19 20 21 22 23 24 25 Dyson began marketing these fans in Australia in October 2009, and first introduced 26 them in the United States in March 2010. 27 28 -9  1 G. 2 In January 2012, Cornucopia began marketing a competing fan. The following 3 Cornucopia’s Fan photographs show perspective, front, and top views of Cornucopia’s fan: 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 III. ANALYSIS A plaintiff seeking a preliminary injunction must establish: (1) likelihood of success on the merits, (2) likelihood of irreparable harm absent preliminary relief, (3) that the balance of equities tips in its favor, and (4) that an injunction is in the public interest. Winter v. Natural Res. Defense Council, 555 U.S. 7, 20 (2008). A full analysis of these four factors is only necessary as to the D143 patent, which claims the design of the entire fan, as opposed to the D748 patent, which claims only the nozzle. There is a substantial question of invalidity of the D748 patent and of the D143 patent as to the nozzle, which will be discussed together in the context of the D143 patent. However, a preliminary injunction is appropriate as to other likely infringement of the D143 patent. A. Likelihood of Infringement 1. Legal Standard 25 With respect to design patents, infringement comes down to whether, “in the eye 26 of an ordinary observer, giving such attention as a purchaser usually gives . . . [the] 27 resemblance [between the claimed design and the accused product] is such as to deceive 28 - 10   1 such an observer, inducing him to purchase one supposing it to be the other.” Gorham 2 Co. v. White, 81 U.S. 511, 528 (1871). This “ordinary observer” test is somewhat 3 artificial. For example, labeling usually may not be considered. The company logo 4 undoubtedly helps ordinary observers distinguish products, but design patent protection 5 would essentially collapse if putting one’s own logo on an otherwise identical product 6 could defeat the ordinary observer test. See L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 7 F.2d 1117, 1126 (Fed. Cir. 1993) (one cannot avoid design patent infringement by 8 labeling). In addition, the ordinary observer is one who compares the accused product to 9 the claimed design “as a whole,” rather than making a feature-by-feature comparison. 10 Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679–80 (Fed. Cir. 2008) (en banc). 11 Finally, the ordinary observer is assumed to be familiar with the prior art — i.e., all 12 relevant preexisting designs for similar products. Id. at 677. 13 2. Claim Construction 14 Before evaluating an accused product, the scope of the patent must first be settled. 15 Questions of functionality often predominate in this analysis because design patents 16 protect only “the novel, ornamental features of the patented design,” not the functional 17 elements. OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997). 18 “Where a design contains both functional and non-functional elements, the scope of the 19 claim must be construed in order to identify the non-functional aspects of the design as 20 shown in the patent.” Egyptian Goddess, 543 F.3d at 680. 21 If a given “configuration is made imperative by the elements which it combines 22 and by the utilitarian purpose of the device,” that configuration is functional and not 23 protected by a design patent. Lee v. Dayton-Hudson Corp., 838 F.2d 1186, 1188 (Fed. 24 Cir. 1988). If, on the other hand, “there are several ways to achieve the function of an 25 article of manufacture, the design of the article is more likely to serve a primarily 26 ornamental purpose.” L.A. Gear, 988 F.2d at 1123. 27 28 Other appropriate considerations [when evaluating the functional/ornamental distinction] might include: whether the - 11   1 2 3 4 5 6 protected design represents the best design; whether alternative designs would adversely affect the utility of the specified article; whether there are any concomitant utility patents; whether the advertising touts particular features of the design as having specific utility; and whether there are any elements in the design or an overall appearance clearly not dictated by function. Berry Sterling Corp. v. Pescor Plastics Inc., 122 F.3d 1452, 1456 (Fed. Cir. 1997). 7 Here, Cornucopia raises a question of functionality as to nearly every aspect of the 8 D143 design. This analysis can be reduced to four categories: (1) the shape of the 9 nozzle’s cross-section, (2) the nozzle’s circularity, (3) the nozzle’s depth, and (4) the 10 11 shape of the base. Each will be discussed in turn. a. The Nozzle’s Cross-Section 12 The first aspect of the nozzle that raises a functionality question is the shape of its 13 cross-section. The following cutaway illustration (based on figure 4 of the ’449 patent) 14 will assist this discussion: 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 12   1 For purposes of this preliminary injunction, the Court finds that the portions 2 labeled here as “Coanda surface” and “diffuser” (the interior surface of the nozzle) are 3 functional for two reasons. First, this configuration is claimed as novel in Dyson’s utility 4 patents. Specifically, the ’449 utility patent claims the diffuser’s general shape (although 5 not the length of the various faces) as follows: “a diffuser portion tapering away from 6 [the nozzle’s] axis, a guide portion downstream from the diffuser portion and angled 7 inwardly relative thereto, and a tapering portion downstream from the guide portion and 8 angled outwardly relative thereto.” ’449 Patent, col. 9, ll. 14–18. A dependent claim 9 calls for an embodiment “wherein the angle subtended [i.e., formed] between the diffuser 10 portion and the [nozzle’s central] axis is in the range from 7º to 20º.” Id., col. 9, ll. 19– 11 21. And the ’166 utility patent claims the Coanda surface. ’166 Patent, claim 16. 12 Second, Peter Gammack, Dyson Technology’s concept design director and one of 13 the named inventors of the D143, D748, and ’449 patents, testified that the shape of the 14 diffuser and Coanda surface are “functional to achieve specifically what we are trying to 15 achieve as a velocity and a flow.” (Doc. 54 at 36.) Accordingly, given the functionality 16 of the diffuser and Coanda surface, Dyson’s D143 and D748 patents do not protect those 17 features. 18 As to the outer surface and outer curve, however, Gammack testified that they are 19 not functional. He stated that, for example, the outer surface could bulge upward (rather 20 than running parallel to the nozzle’s axis), or the outer curve could form a right angle 21 rather than a curve, without affecting the fan’s performance. 22 At this stage of the proceedings and the evidence, the Court is not persuaded that 23 performance would be unaffected by a different design on the outer surface and outer 24 curve. For example, if the outer surface dipped inward (rather than bulged outward), thus 25 creating a “pinch” within the nozzle, undesirable air pressure effects might result. An 26 outer bulge in the surface of the ring would increase the interior volume of the nozzle and 27 the air to be driven through it, which could dissipate some of the fan’s energy in 28 compressing air in dead space rather than driving it through the discharge ring with - 13   1 maximum force. For many customers, a bulkier nozzle would reduce convenience, 2 especially on a surface, like a table or desk, shared with other objects. 3 The outer and inner curves directing airflow to the air discharge slit are also 4 functional. Together, their appearance discloses the function they perform. A competitor 5 need not disguise obvious function, and the design patentee cannot own the look of 6 function. Cf. U.S. Patent & Trademark Office, Manual of Patent Examination Procedure 7 § 1504.01(c) (8th ed. 2001, rev. 2010) (“An ornamental feature or design [worthy of 8 design patent protection] . . . cannot be the result or ‘merely a by-product’ of functional 9 or mechanical considerations.”). Thus, for preliminary injunction purposes, the shape of 10 the outer surface, outer curve, and inner curve is not appropriately claimed in the D143 or 11 D748 patents. 12 b. The Nozzle’s Circularity 13 The second question of functionality arises from the circularity of Dyson’s nozzle. 14 It could be shaped differently, e.g., as a square, which the Japanese patent proposed. But 15 it cannot be disputed that a circle is the only design that will achieve the sort of air 16 discharge pattern and effectiveness normally associated with a table fan. Indeed, none of 17 Dyson’s various bladeless fans has a shape other than a circle or a vertically oriented 18 racetrack shape (mimicking the now-popular “tower fan”). (See Doc. 55 at 15.) It is 19 unworthy of belief to say that this was purely an aesthetic, ornamental choice. 20 In addition, the ’449 utility patent claims circularity in its dependent claims, see 21 ’449 Patent, claims 8–10, as does the ’166 utility patent, see ’166 Patent, claims 7–9, 18, 22 22–24. Whether that claim is valid or invalid, it concedes functionality of the circle and 23 precludes a design patent on the same feature. 24 Finally, even if circularity were not functional, it is anticipated by the Japanese 25 patent, which proposes — like the D143 patent — a circular nozzle sitting on a base that 26 is thinner than the nozzle’s diameter at the point where the nozzle attaches to the base. 27 Thus, Dyson’s claim of ownership of the look of a circle raises substantial questions of 28 invalidity. The D143 and D748 patents thus do not appropriately claim the nozzle’s - 14   1 circularity as such. In the case of the D143 patent, its combination with other elements 2 may nonetheless be protectable, as discussed below. c. 3 The Nozzle’s Depth 4 The D143 and D748 patents disclose a nozzle of a certain depth. On cross 5 examination, Gammack testified that reducing the depth of the nozzle by half “might 6 affect” air flow and velocity. (Doc. 54 at 25.) This point was not explored in any greater 7 detail. 8 discharge slit is certainly functional. It is necessary to Dyson’s claim to have harnessed 9 the Coanda effect to improve airflow. Even if the Coanda effect is illusory, the nozzle’s 10 depth reduces peripheral diffusion in favor of airflow in the axis and the plain of the 11 nozzle. It is likely that a bladeless fan nozzle with little or no depth (as in the Japanese 12 patent) would be less effective than a nozzle with a few inches of depth (as in Dyson’s 13 design). Indeed, the addition of such depth — through a “diffuser” — is one of the ways 14 in which Dyson’s ’449 utility patent claims to differ from the prior art. Thus, the D143 15 and D748 patents do not appropriately claim any nozzle with depth. As discussed below, 16 however, the D143 patent may appropriately claim that depth relative to other 17 proportions disclosed by that patent. 18 19 20 21 22 23 24 25 26 27 28 However, the fact that Dyson’s nozzle has depth downstream from the air d. The Shape of the Base Cornucopia argues that the cylindrical shape of the base, and its height relative to the rest of the fan, is functional. Gammack countered with drawings of various shapes he explored for Dyson’s bladeless fans, including square, cylindrical but bulbous, and cylindrical tapering into a dome shape at the top. Where a taller stand is needed, there could also be a “neck” component — a transition between the base and the nozzle that is narrower. Dyson markets such a model, although it is not at issue here. The function of the base is as a platform for the concealed fan that draws air from around the base and forces it into the nozzle for discharge. Since exposed fan blades are an obvious safety hazard, some sort of housing is necessary. And since the fan blades rotate in circular fashion, any sort of housing will, at a minimum, be cylindrical. - 15   1 The cylindrical shape of such housing is not just one among many equally useful 2 shapes. Rather, function requires cylindrical housing of the fan, or air and pressure 3 would be lost between the blades and the housing. Thus, Gammack was right that 4 numerous designs could accommodate the impeller and ducting inside the base without 5 changing the fan’s performance or stability — but only in the sense that the operating 6 internal cylindrical shape could be hidden with an additional external covering of any 7 shape. The question here is whether Dyson can monopolize the look of a cylindrical 8 form that is functional. The answer in general is no. The look of a cylinder is not 9 arbitrary or decorative; it is the look of operation. Like everyone else, Dyson can 10 monopolize in a design patent only an arbitrary shape. Accordingly, the D143 patent 11 does not appropriately claim all circular bladeless fan bases. e. 12 Specific Proportions 13 “That elements of the [patented] design[ have a utilitarian purpose] does not mean 14 that . . . the combination of these elements into the patented design[] is dictated by 15 primarily functional considerations.” See L.A. Gear, 988 F.2d at 1124. Here, by contrast, 16 each portion of the design and its combination with other portions appears to have a 17 functional purpose. 18 At oral argument, however, Dyson’s counsel relied heavily on the overall 19 proportions disclosed in the D143 design. (See Doc. 54 at 74 (“[t]he dimensions, the 20 proportions, the overall proportions of the width to the height of the fan is worthy of 21 design protection”); id. at 77 (“[T]here are proportions . . . . When you look at the 22 [perspective] view, you see relevant proportions between the diameter of the fan and the 23 width of the nozzle.”); id. at 78 (“[T]he proportions are in the [D143 patent’s] figures. 24 The proportions are relevant.”); id. at 79 (“the patent has perspective views that show all 25 the proportions”).) The Court is persuaded that although a substantial question exists 26 whether the combination of shapes and their orientation to each other is functional, the 27 proportions of the various components in relation to each other is ornamental. 28 - 16   1 3. Comparison to Cornucopia’s Fan 2 The D143 patent appropriately claims a bladeless fan design with a cylindrical 3 base of a certain diameter and height in proportion to a ring-shaped nozzle of a certain 4 diameter and depth. 5 Distinguishing features also exist, but they do not alter the overall impression as 6 compared to the D143 patent. For example, like Dyson’s AM01 fan, Cornucopia’s adds 7 buttons, air intake grilles, and a power cord, all of which are necessary. Also, the foot of 8 Cornucopia’s base flares out to a square pedestal. The D143 patent discloses none of 9 these features. But the Cornucopia fan otherwise mimics the valid design precisely. 10 Indeed, the proportions are mimicked with such exactness that the Cornucopia fan’s 11 nozzle is interchangeable with the Dyson AM01 base. Cornucopia’s fan precisely embodies these limitations. 12 Despite the minor the differences, the overall impression of the Cornucopia fan is 13 deceptively similar to the D143 patent in the eye of the “ordinary observer.” The 14 Cornucopia fan’s pedestal, in particular, does not materially distinguish Cornucopia’s fan 15 from Dyson’s valid design. Rather, the overall impression made by the Cornucopia fan is 16 as if one simply set the Dyson design on a pedestal. On balance, such a difference does 17 not vitiate Dyson’s likelihood of success on the merits. Cf. Crocs, Inc. v. Int’l Trade 18 Comm’n, 598 F.3d 1294, 1303–04 (Fed. Cir. 2010) (reversing ITC’s finding of non- 19 infringement because, among other things, it “concentrate[ed] on small differences in 20 isolation” and was thus “distracted from the overall impression of the claimed ornamental 21 features”); Int’l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1243 (Fed. 22 Cir. 2009) (affirming district court’s conclusion that slight changes and additions to a 23 patented design do not detract from the overall impression); Payless Shoesource, Inc. v. 24 Reebok Int’l Ltd., 998 F.2d 985, 990–91 (Fed. Cir. 1993) (reversing denial of preliminary 25 injunction because district court “focus[ed] on a single difference as opposed to the 26 entirety of the patented design”); Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423, 27 1444 (Fed. Cir. 1984) (“minor differences between a patented design and an accused 28 - 17   1 article’s design cannot, and shall not, prevent a finding of infringement”); E. Am. Trio 2 Prods., Inc. v. Tang Elec. Corp., 97 F. Supp. 2d 395, 407–08 (S.D.N.Y. 2000) 3 (“differences in the detail of the design will not defeat infringement where two designs 4 give substantially the same impression to an ordinary observer”). Dyson is therefore 5 likely to persuade the trier of fact that the “ordinary observer” would consider 6 Cornucopia’s fan materially indistinguishable from the D143 design. 7 therefore satisfied the first element of the preliminary injunction test. Dyson has 8 B. Irreparable Harm 9 Although submitted through declarations and based on hearsay, the Court accepts 10 for purposes of these proceedings Dyson’s evidence regarding consumer response to its 11 AM01 fan. Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) (“A district court 12 may . . . consider hearsay in deciding whether to issue a preliminary injunction.”). The 13 design of the AM01, which substantially embodies the D143 patent, is the single most 14 important driver of consumer demand for that product. 15 Cornucopia’s fan was obviously created to provide consumers with almost exactly the 16 same overall appearance, but at a much lower price. While Dyson’s 12-inch AM01 fan 17 carries a suggested retail price of $329, Cornucopia’s equivalent fan retails at Bed Bath & 18 Beyond — one of Dyson’s top retail distributors — for $79.99. (Doc. 32-3 at 4 (sealed).) 19 Some retailers are reluctant to stock or continue to carry Dyson’s fan due to its 20 high price. Greg Forrest, sales director for Dyson Inc., testified that a retailer in the “DIY 21 channel”1 recently informed Dyson it was considering no longer stocking Dyson fans due 22 to price. (Doc. 54 at 51–52.) Dyson submitted no evidence that the Cornucopia fan had 23 anything to do with this retailer’s deliberations, but it illustrates that retailers, like 24 consumers, can be put off by Dyson’s price — from which it is a persuasive inference 25 that retailers would more readily stock a much less expensive version of the fan with 26 27 1 The Court presumes “DIY channel” refers to do-it-yourself home improvement stores such as Lowe’s and The Home Depot. 28 - 18   1 essentially the same function and design. Indeed, Dyson has photographed a Bed Bath 2 & Beyond store in California where both the Dyson and Cornucopia fans were displayed 3 side-by-side, but only Cornucopia’s fans were available for sale (Doc. 54 at 49–50), 4 suggesting that the store was shifting its focus to marketing Cornucopia’s fan. Bed Bath 5 & Beyond has also recently asked Dyson to lower its price. (Id. at 57.) 6 Cornucopia’s fan and pricing will likely cause price erosion in Dyson’s fan. If 7 retailers become accustomed to stocking and selling an equivalent-appearing fan at a 8 fraction of the price, these retailers may then be able to demand price concessions from 9 Dyson. Likewise, some consumers who would have seriously considered buying a 10 Dyson fan at the original price will choose the much cheaper competitors, or hold out, 11 expecting Dyson to lower its price in response. 12 Cornucopia’s infringing fan is likely to cause Dyson harm. Accordingly, the Court finds that 13 Whether the harm is irreparable is a separate question. Irreparable harm may be 14 found where “[t]he nature of the plaintiff’s loss may make damages very difficult to 15 calculate.” Roland Machinery Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir. 16 1984). In this case, the novelty of bladeless fans — having only been available in the 17 U.S. market since 2010 — creates a volatile market, especially in light of lower-cost 18 competition like Cornucopia’s fan. Thus, it is difficult to predict Dyson’s damages, 19 which would be at least a reasonable royalty, and perhaps compensation for price erosion. 20 The price erosion, in particular, may be irreversible regardless of an ultimately favorable 21 outcome for Dyson — creating a significant uncertainty as to amount of damages and a 22 probability of a large damage award for continuing price erosion. Accordingly, Dyson 23 has established irreparable harm if Cornucopia can continue to market its bladeless fan 24 during the course of this litigation. 25 C. Balance of Equities 26 The balance of equities weighs in favor of Dyson. Even assuming no utility patent 27 protection, as Dyson posits this motion by not moving on its utility patents, Dyson still 28 invested substantial resources in developing its patented design and bringing its AM01 - 19   1 fan to market. (Doc. 32-7 at 3–4 (sealed).) Cornucopia, by contrast, slavishly copied 2 Dyson’s fan, including the infringing design feature. 3 overreach, but the potentially overreaching portions are not the basis for the relief granted 4 here. And Cornucopia may have easily made a fan with the same functions and the same 5 look of those functions that would not infringe the purely design feature of Dyson’s fan. 6 But it did not. 7 prevention. The balance of equities thus tips toward Dyson. Dyson’s design patents may Cornucopia’s overreach remains seriously damaging and warrants 8 D. Public Interest 9 The public interest also favors Dyson. In many cases, as in this one, the factor of 10 public interest tracks the likelihood of success, as the predominant public interest lies in 11 enforcing valid private rights, or freedom to compete, whichever has the better of it. In 12 some cases the public interest has an additional and distinct import. This case is not of 13 that second variety, but the public interest in favor of private property rights is 14 nonetheless sufficient. 15 Cornucopia’s counterargument largely rests on its antitrust claim, asserting that 16 Dyson should fail in its attempt to monopolize the bladeless fan market by sham litigation 17 and by enforcing patents obtained by fraud. By separate order, those claims have been 18 dismissed for failure to state a claim upon which relief can be granted. Thus, they carry 19 no weight in this preliminary injunction inquiry. The public interest therefore favors 20 Dyson. 21 IV. BOND 22 The preliminary injunction must be conditioned on Dyson posting security “in an 23 amount that the court considers proper to pay the costs and damages sustained by any 24 party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). The 25 amount of the bond is within the Court’s discretion. See Save Our Sonoran, Inc. v. 26 Flowers, 408 F.3d 1113, 1126 (9th Cir. 2005). 27 Neither party provided any evidence to support a reasoned bond amount. The 28 Court therefore draws upon its experience in light of the nature of Cornucopia’s single- 20   1 product business and the range of likely harm from suspending that business until this 2 action is concluded. A bond will be required in the amount of $500,000.00. 3 V. FORM OF THE INJUNCTION 4 Dyson’s proposed injunction language is not entirely acceptable. The following 5 reproduces Dyson’s proposed language with the Court’s insertions (underline) and 6 deletions (strikeout): 7 8 9 10 11 12 13 14 15 16 17 18 IT IS THEREFORE ORDERED that Cornucopia Products, LLC, its officers, directors, partners, agents, servants, employees, attorneys, subsidiaries, and those acting in concert other persons who are in active concert or participation with any of them, are enjoined from making, using, offering to sell, or selling within the United States, or importing into the United States, or exporting from the United States, Cornucopia’s 12-inch bladeless fan, which is depicted in Dyson’s moving papers (model no. D8600-12), and any product that is no more than colorably different from that product and embodies any design contained in U.S. Patent nos. D605,748 or D602,143. IT IS FURTHER ORDERED that, within three (3) business days seven (7) calendar days of the entry of this order, Cornucopia shall disclose to Dyson the names of all retailers and/or wholesalers to whom Cornucopia has sold or provided the Cornucopia 12-inch bladeless fan. 19 The model number has been inserted in place of “which is depicted in Dyson’s 20 moving papers” because it is more precise. To the extent Dyson worries that Cornucopia 21 might market the same fan under a different model number, the “no more than colorably 22 different” language would provide relief. See, e.g., Acumed LLC v. Stryker Corp., 525 23 F.3d 1319, 1324 (Fed. Cir. 2008) (“no more than colorably different” satisfied when 24 accused device and new device are “essentially the same”). 25 The “embodies any design” phrase is deleted for two reasons. First, the D748 26 patent is not enforced, and the D143 patent is not enforced in its entirety. Second, the 27 language could be misread to say that the legal status of any Cornucopia fan that comes 28 close to Dyson’s patented designs can be adjudicated through contempt. That is not the - 21   1 case. If (i) Cornucopia begins to market another fan similar to Dyson’s patented designs, 2 (ii) Dyson in good faith believes the fan is no more than colorably different from the 3 D8600-12, (iii) Dyson brings a contempt motion, and (iv) the Court agrees that the new 4 fan is no more than colorably different from the D8600-12, then the status of 5 Cornucopia’s new fan could be adjudicated in contempt proceedings, at which point the 6 Court would reach the question of infringement. TiVo Inc. v. EchoStar Corp., 646 F.3d 7 869, 881–84 (Fed. Cir. 2011) (en banc). But if the Court disagrees, Cornucopia is 8 entitled to have the infringement question adjudicated in a separate lawsuit. Id. Thus, 9 confining the injunction to the currently accused product and those no more than 10 colorably different appropriately expresses the restrictions the injunction will impose on 11 Cornucopia. 12 IT IS THEREFORE ORDERED that Dyson’s Motion for a Preliminary Injunction 13 (Doc. 33) is GRANTED, conditioned upon Dyson posting a bond in the amount of 14 $500,000.00. 15 Dated this 27th day of July, 2012. 16 17 18 19 20 21 22 23 24 25 26 27 28 - 22  

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