Milo & Gabby LLC v. amazon.com, Inc.
693 F. App'x 879
| Fed. Cir. | 2017Background
- Milo & Gabby designs and sells "Cozy Companion" children’s pillowcases and owns related design patents and copyrights (including product photos).
- Amazon operates a third-party online marketplace and offers "Fulfillment by Amazon" (FBA), where sellers retain title and Amazon stores, packages, and ships inventory on the seller’s behalf.
- Milo & Gabby discovered knock‑off listings on Amazon; Amazon removed listings and suspended sellers after notice; only one of the sellers (FAC System) used FBA.
- Milo & Gabby sued Amazon for patent infringement, copyright infringement, and Lanham Act claims (false designation / trademark counterfeiting); the district court granted summary judgment to Amazon on copyright and Lanham Act claims but denied summary judgment on the patent "offer to sell" theory and brought the issue to trial.
- A jury found facts supporting Amazon; the district court concluded Amazon did not "offer to sell" the accused products; the district court also awarded attorney’s fees to Amazon under the Lanham Act.
- On appeal, Milo & Gabby relied mainly on copyright and trademark law arguments; the Federal Circuit affirmed, holding Milo & Gabby waived or abandoned key patent theories and failed to show Amazon was a "seller" or distributor for copyright or pleaded a palming‑off Lanham Act claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patent liability — "seller" vs "offer to sell" | Amazon is a "seller" of infringing products and thus directly infringing Milo & Gabby’s design patents. | Amazon is not a seller (title never passes) and Milo & Gabby abandoned the "seller" theory at summary judgment; only an "offer to sell" theory was litigated and rejected. | Waiver/abandonment affirmed: Milo & Gabby failed to preserve a "seller" theory and did not pursue its "offer to sell" theory on appeal; patent claims against Amazon affirmed for failure to preserve arguments. |
| Copyright — seller liability under 17 U.S.C. § 106(3) | "Sale" in the Copyright Act should be interpreted broadly (parallel to patent § 271); Amazon’s marketplace and FBA make it a seller. | "Sale"/distribution requires transfer of ownership/title; third‑party sellers retained title; Amazon provided a marketplace and logistics only. | Held that Amazon is not a seller for § 106(3) purposes because title did not pass; Amazon’s marketplace and FBA do not make Amazon the seller. |
| Copyright — "other transfer of ownership" (distributor) | Even if not a seller, Amazon is a distributor because FBA involves transfers that qualify as "other transfer of ownership." | Milo & Gabby made only conclusory appellate assertions and failed to develop or preserve the argument; the phrase also ordinarily implies transfer of ownership/title. | Argument waived for inadequate briefing; court rejects claim absent showing Amazon transferred ownership/title. |
| Lanham Act — palming off / false designation of origin and attorney’s fees | Complaint and pleadings put Amazon on notice of a palming‑off theory; thus Lanham claims should survive and fees should not have been awarded. | Milo & Gabby never pleaded palming off in the complaint and only raised it later; district court properly dismissed that theory and awarded fees where claims lacked evidentiary basis and were improperly advanced. | Affirmed: palming‑off theory was not pleaded (failure under Rule 8), so dismissal and fee award under the Lanham Act stand. |
Key Cases Cited
- Pinter v. Dahl, 486 U.S. 622 (1988) (discussed when considering whether a party without title may be treated as a seller under a statutory scheme)
- Falk v. Brennan, 414 U.S. 190 (1973) (consignee/consignment principles analyzed in the context of seller status)
- NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (treats ordinary meaning of "sale" and looks to dictionaries/U.C.C. for guidance)
- Enercon GmbH v. Int’l Trade Comm’n, 151 F.3d 1376 (Fed. Cir. 1998) (interpreting the plain meaning of "sale")
- Medicines Co. v. Hospira, Inc., 827 F.3d 1363 (Fed. Cir. 2016) (passage of title is a significant indicator of a sale in patent contexts)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (standards for awarding fees in patent-related litigation discussed)
- Highmark Inc. v. Allcare Health Mgmt. Sys., 572 U.S. 559 (2014) (deference standard for appellate review of fee awards)