Hall v. Bed Bath & Beyond, Inc.
705 F.3d 1357
Fed. Cir.2013Background
- Design patent for Tote Towel (D596,439S) issued July 21, 2009; Tote Towel features binding around edges, dual end zippered pockets, and a middle angled loop.
- Hall filed design patent application Nov 17, 2008 and began production; packaging and towel labeled patent pending.
- In March 2009 Hall approached Bed Bath & Beyond to retail the Tote Towel; BB&B had towels manufactured in Pakistan via West Point Home for sale.
- Hall sued BB&B, West Point Home, and BB&B executives for patent infringement, unfair competition under Lanham Act, and misappropriation under New York law; district court dismissed on pleadings, appeals followed.
- Second Circuit held pleadings adequate to proceed on patent infringement, Lanham Act unfair competition, and New York unfair competition/misappropriation; affirmed some dismissals of individual defendants and counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Design-patent infringement pleading sufficiency | Hall's complaint identifies patent, shows accused towel, and pleads substantial similarity. | Defendants claim lack of detail and required claim construction. | Pleading found plausible; complaint survives Rule 12(b)(6). |
| Personal liability of corporate officer for inducement | Nachemin induced infringement and unfair practices in his role at BB&B. | District court properly dismissed based on patent timing and New York veil principles. | Affirmed dismissal of Nachemin; no reversible error on personal liability given timing and veil principles. |
| Lanham Act § 43(a) unfair competition pleading | BB&B's advertising and labeling misrepresented and confused consumers about Tote Towel. | No viable false advertising or confusion theory as pleaded; claims improperly grounded in puffery. | Reversed: pleaded falsity/misleading advertising and potential injury survive pleadings. |
| New York GBL § 349 deceptive acts and misappropriation | Defendants’ misappropriation and consumer-oriented deception injure Hall's business. | No injury shown or misappropriation under NY law as pleaded. | GBL § 349 claim survives; misappropriation claim revived due to equitable misappropriation theory and bad-faith copying. |
| New York common law unfair competition and preemption | New York unfair competition protects labor/effort and misappropriation even without contract; preemption not applicable. | Federal patent law preempts state claims for design concepts. | Preemption rejected; NY unfair competition/misappropriation viable; remand for further proceedings. |
Key Cases Cited
- Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (design infringement based on the design as a whole, not points of novelty)
- Gorham Co. v. White, 81 U.S. (14 Wall.) 511 (1871) (infringement by visual comparison; designs compared as a whole)
- L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993) (infringement test for design patents; eye of ordinary observer)
- Phonometrics, Inc. v. Hospitality Franchise Systems, Inc., 203 F.3d 790 (Fed. Cir. 2000) (five elements of patent infringement pleading)
- Twombly, 550 U.S. 544 (Supreme Court 2007) (pleading must show plausible claim, not mere possible)