Two previously unrelated topics, Spanx and the Real Housewives television shows, are now connected by a legal dispute that is shaping up to be a real battle of the bulge (or muffin top) with neither party seemingly interested in smoothing things over.
Thanks to recent, and ongoing, design patent litigation between Apple and Samsung in the Northern District of California, design patents are now squarely in the spotlight.
Additional publicity for design patents is now provided by Heather Thomson, president of Times Three Clothier LLC and designer of body shaping brand Yummie Tummie (and Real Housewife of New York). Yummie Tummie alleges that Spanx Inc., has knocked off several of her patented control-top cami designs.
One of the Spanx camis that got Yummie Tummie’s undies in a bunch is shown in Figure 1.
Compare this design with that illustrated in Figure 2, showing one of the design patents, D606,285, Yummie Tummie alleges is infringed by Spanx.
We note that the standard for design patent infringement is now that of an “ordinary observer”. We further make no effort to tease apart the aspects of the design that may, or may not, support the case for infringement or non-infringement.
However, despite the sensational aspects of this case and notwithstanding the infringement issue resolutions, there is an important strategic lesson for those who believe their design patents (or utility patents for that matter) have been infringed.
Spanx, the accused infringer, actually started the litigation following its receipt of a cease-and-desist letter from the New York-based Yummie Tummie’s legal counsel and following subsequent discussions between counsel for the parties. This filing by Spanx allows it some key advantages over Yummie Tummie. In short, Yummie Tummie likely made a key strategic error in allowing Spanx the ability to file a declaratory judgment action in its home state of Georgia.
How did this happen?
On March 5, 2013, Spanx, Inc. (“Spanx”) filed a declaratory judgment complaint in the Northern District of Georgia against Times Three Clothier, LLC d/b/a Yummie Tummie (“Yummie Tummie”), requesting the court to declare that three Spanx products do not infringe seven design patents claimed to be owned by Yummie Tummie.
The complaint alleges that Yummie Tummie’s counsel sent Spanx a cease-and-desist letter on or around January 18, 2013, identifying the accused products as Spanx’s “Total Taming Tank,” the “Top This Tank Style 1847,” and the “Top This Cami Style 1846.” (See Figure 1 above, illustrating two of those products.) Spanx responded to that letter on or around February 14, 2013, according to the complaint, “describing in detail significant differences between the Accused Products and the Patents-in-Suit and stating, among other things, that it does not believe the Accused Products infringe the Patents-in-Suit.”
Here is where the strategic error of Yummie Tummie arises: Counsel for each party then communicated with one another several times but, states the complaint, Yummie Tummie “continued to maintain that the Accused Products infringe the Patents-in-Suit and expressed a willingness to enforce its patents against Spanx.” Thus, Spanx alleges, a real controversy exists and, as a result, it has grounds for seeking a declaratory judgment of non-infringement of the Patents-in-Suit. The complaint requests such declaratory relief plus “costs, expenses, and reasonable attorneys’ fees as provided by law.”
The case is Spanx, Inc. v. Times Three Clothier, LLC d/b/a Yummie Tummie, No. 1:13-cv-0710-WSD, filed 03/05/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge William S. Duffey, Jr.
Why would Spanx be incented to file for declaratory relief when Yummie Tummie hasn’t actually sued them yet?
The answer is found in the issue of setting the jurisdiction and venue for deciding the infringement case. Spanx is located in Georgia, while Yummie Tummie is in New York. Deciding where this case will be handled is likely a key driver in its decision to file the declaratory judgment. In fact, Spanx alleges in its complaint that:
This Court has personal jurisdiction over Yummie Tummie by virtue of Yummie Tummie’s purposeful contact with this district, including, on information and belief, Yummie Tummie’s substantial business conducted with customers residing in this district; and Yummie Tummie’s attempts to enforce design patents purportedly assigned to it against Spanx, an entity having a principal place of business in Georgia, for alleged infringing activity occurring in Georgia.
Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391.
By this preemptive filing, Spanx will potentially be provided with a significant advantage by litigating at home, rather than having to travel to New York. The obverse is of course also true: Yummie Tummie will have to spend time and expense to litigate in Georgia, far from its New York home.
Among other things, it will likely cost Spanx a lot less money to argue whether they infringe the design patents of Yummie Tummie in Georgia. It will also cost Yummie Tummie a lot more money to argue Spanx infringes in Georgia rather than in their home base of New York.
Yummie Tummie could have and should have avoided this issue by filing a Complaint alleging infringement before it placed Spanx in an alleged position where a real controversy had arisen, triggering Spanx to file the Declaratory Judgment.
This appears to be a serious strategic error on the part of Yummie Tummie and one that may not only cost them to contribute a great deal of unnecessary, and apparently unplanned, money to the Georgia economy, but, may also ultimately cost them the “battle of the bulge”.
In summary: It appears that the best way for patent owners to secure a desired forum is to file suit prior to negotiating with potential defendants, but certainly before an allegation of infringement is made or suggested, either in writing or verbally.