Toys R Us escapes IP suit at Fed Circuit

In a victory for toy shop  Toys R Us, the US Court of Appeals for the Federal Circuit has rejected an appeal from toymaker  Lanard Toys, which asked the court to find that Toys R US had infringed its IP.

Yesterday, May 14, in a  precedential decision, the Federal Circuit affirmed a lower court’s decision to grant summary judgment on Lanard’s claims for design patent infringement, copyright infringement, trade dress infringement, and statutory and common law unfair competition.

In 2014, Lanard sued Toys R Us and toy company Ja-Ru, accusing them of infringement of a toy chalk holder designed to look like a pencil. The case was subsequently transferred to the US District Court for the Middle District of Florida.

Two years prior, Lanard had begun selling the chalk pencil to Toys R Us. But, the following year, Ja-Ru designed a toy chalk holder that looks like a pencil. In late 2013, Toys R Us stopped ordering units of the Lanard chalk pencil and instead began ordering and selling the Ja-Ru product.

Both parties filed cross motions for summary judgment, but the Floridian court granted Toys R Us’ motion that Ja-Ru’s product doesn’t infringe.

Lanard appealed against the decision, but yesterday, the Federal Circuit sided with the lower court.

While Lanard argued that the district court had erred in its claim construction by eliminating elements of the design based on functionality and lack of novelty, the Federal Circuit said the lower court had followed its “claim construction directives to a tee”.

“Although Lanard criticises the court for allegedly ‘eliminating’ entire elements of the claimed design, on the contrary, the district court meticulously acknowledged the ornamental aspects of each functional element,” said Circuit Judge Alan Lourie, behalf of the court.

Lanard’s other arguments, that the court erred in its infringement analysis by conducting an element-by-element comparison rather than comparing the overall designs and that the court used a rejected “point of novelty” test to evaluate infringement, were also rejected.

“We ultimately conclude that Lanard’s position is untenable because it seeks to exclude any chalk holder in the shape of a pencil and thus extend the scope of the [design] patent far beyond the statutorily protected ‘new, original and ornamental design’,” said Lourie.

Turning to Lanard’s complaint of copyright infringement, the Federal Circuit again sided with the Floridian court and concluded that Lanard doesn’t own a valid copyright.

Lourie added: “Lanard is essentially seeking to assert protection over any and all expressions of the idea of a pencil-shaped chalk holder. But copyright protection does not extend to an ‘idea’.”

The Federal Circuit also dismissed Lanard’s claims of trade dress infringement and unfair competition.

Yesterday’s decision could have long-ranging implications for companies looking to stop knock-off versions of their goods, with the court affirming that it won’t improperly extend IP rights to help stop counterfeit versions.

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