Lululemon’s lawsuit against Calvin Klein and G-III Apparel, a design patent case that has been raising eyebrows since its filing in August 2012, has recently settled. Lululemon had alleged infringement of its Astro Pant design patents by Calvin Klein and G-III Apparel, the manufacturer and Calvin Klein supplier. Filed in the Delaware federal court, Lululemon claimed Calvin Klein’s “running tights” and “waistband pants” infringed on its patents on the grounds the accused products include “substantially the same design elements” as its own, with “substantially the same waistband design elements and pant style.” As a result, Lululemon sought an injunction barring the sales of the Calvin Klein pants, the recovery of lost profits and royalties, the disgorgement of profits, treble damages, and, of course, attorneys’ fees.

Although the terms of the settlement were not publicly disclosed, Lululemon, the owner of several design patents for its clothing, may not be done pursuing potential infringers. The settlement leaves everyone speculating about Lululemon’s likelihood of success on the merits. Another open question is how Calvin Klein’s yoga pants will be redesigned, if at all.

Design patents have not traditionally been a mechanism for enforcing intellectual property rights in fashion, largely due to the significant time and resources in applying for and receiving a patent for an article of what is often seasonal clothing. Design patents have also been the subject of the widely covered lawsuits between Apple and Samsung regarding tablets and smartphone devices. Also potentially impacting design patents is the recent retirement of David Kappos, the popular director of the U.S. Patent and Trademark Office widely known for reducing the much-criticized backlog of patent applications.

Somewhat of a rarity in the fashion world, design patents have been successfully defended in the past by entities such as L.A. Gear. However, since such claims are rare, the extent to which Lululemon is successful on the merits could serve as a catalyst for a renewed look at the benefits of design patents. The scarcity of patents in fashion is often attributed to the time involved in the process (often a year or longer), rendering them obsolete or out of style by the time of approval. But now, recently inspired by the trademark holding in Louboutin v. YSL, designers may soon be harnessing another tool to protect their designs.

L.A. Gear prevailed in design infringement claims when the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s ruling holding the design patent was not merely functional, but instead was “primarily ornamental.” L.A. Gear v. Thom McAn Shoe Co., 998 F. 2d 1117. 1123-1124. “[T]he ultimate question is not the functional or decorative aspect of each separate feature, but the overall appearance of the article….” Id. at 1123. The court explained, “[A] design patent is directed to the appearance of an article of manufacture … the design of a useful article is deemed to be functional when the appearance of the claimed design is ‘dictated by’ the use or purpose of the article .… If the particular design is essential to the use of the article, it cannot be the subject of a design patent.” Id. at 1124. Since L.A. Gear was able to persuade the court its design served a primarily ornamental purpose, in the face of the “existence of a myriad of athletic shoe designs,” there was no clear error in finding the patent valid on the ground of functionality. Id. at 1123. L.A. Gear prevailed because it successfully demonstrated the validity of its design patent by showing its “primarily ornamental” nature and proving an ordinary observer would be deceived when purchasing the competitor’s shoe. Id. at 1126.

In 2008, the U.S. Court of Appeals for the Federal Circuit threw out the “point-of-novelty” test and reestablished the “ordinary observer” test as the “sole [one] for [determining] whether a design patent has been infringed.” Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 678 (2008). This ordinary observer test, dating back some 150 years, asks: If in the “eyes” of observers, generally, giving the type of attention a consumer usually gives, the two designs are substantially the same, such as to deceive the observer into purchasing one thinking it to be the other, then the first one patented is infringed by the other. Gorman Mfg. Co. v. White, 81 U.S. 511, 528 (1871).

The Lululemon case would have made for interesting arguments and decisions with its focus on the validity of the design patents in light of the ornamental vs. functional analysis, and, of course, whether Calvin Klein’s pants, in fact, fooled the ordinary observer.

“Deciding cases like these has been, and will be, very subjective,” says Evan Kent, head of the transactional patent and trademark practice at Mitchell Silberberg & Knupp. “Calvin Klein likely argued that the design patent should not have been granted in the first place, and also that their own design is sufficiently different enough to be noninfringing.” A design that is essential to the use of the article, where the appearance of the design is dictated by the use or purpose of the article, cannot be the subject of a design patent. If the design is primarily functional, rather than ornamental, the design patent will be invalid. L.A. Gear aptly persuaded its court not to dwell on the individual functional elements of its shoe (delta wings, mesh, cushion for the Achilles, etc.) that indeed served utilitarian purposes, but instead to focus on the ornamental aspect of the shoe as a whole. Lululemon likely followed suit, drawing attention to the complete look of its pants and how the individual elements constitute a bigger overall design.

The patents themselves, displayed below, are quite literally depictions of the pants and their design, form, shape, and look, so the case will require somewhat of an existential exercise. Is the patent invalid since the design is dictated by the use and purpose of the pants? Will an ordinary observer be confused by Calvin Klein’s allegedly infringing pants?  

Click here to see image.

A successful resolution for Lululemon may have inspired designers to take another look at the usefulness of design patents in protecting intellectual property. The fact that it went through the trouble of obtaining a design patent for the Astro Pant signifies Lululemon’s confidence in the product’s timelessness, transcending fashion seasons that often deter other designers from such protections. A success with this case may lead Lululemon and others to go after infringers with renewed confidence. Fashion houses will want to keep in mind that design patents can make sense for many manufacturers in the right circumstances, while how they are going to be enforced is expected to be the focus of much attention in the foreseeable future.