IP Law Daily, PATENT—Fed. Cir.: $3.5 million award for lost profits and attorney fees to Wallet Ninja design patent owner affirmed, (Sep 12, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The district court correctly found the asserted design patent valid; the competitor's accused products were nearly identical, and its unreasonable litigation conduct made the case exceptional.

In a non-precedential disposition, the U.S. Court of Appeals for the Federal Circuit affirmed in part and dismissed in part a New York federal district court's ruling upholding the validity of a gadget marketer's design patent for the "Wallet Ninja," a wallet-sized multi-tool. The court sustained findings that a promotional products supplier's competing tools infringed, and affirmed over $3.5 million in lost profits and attorney fees. It held that the patent was not invalid for obviousness because no qualifying prior art reference was submitted, and not functional because alternative designs existed. Infringement was confirmed as the accused tools were substantially the same. An inventorship appeal was dismissed after a freelance engineer who had claimed inventorship did not pursue the issue on appeal, and the competing supplier lacked standing (Dynamite Marketing, Inc. v. Wowline, Inc., Nos. 24-1523, 24-1524 (Fed. Cir. Sept. 12, 2025)).

Background. The plaintiff/appellee, Dynamite Marketing, Inc., is the successor to Vante Inc., which developed the Wallet Ninja, a rectangular, credit-card sized multi-tool. The defendants/appellants, Sherman Specialty, Inc. and Sherman Specialty, LLC, are promotional products suppliers operating as The WowLine, which marketed competing wallet-sized multi-tools under the “TOL4” line. Also involved in the consolidated district court proceedings was LaErik Cooper and his company, 4th Dimension Innovations, Inc., a freelance engineer and design entity that assisted in preparing manufacturing drawings for the Wallet Ninja and later claimed co-inventorship of the patent.

The asserted U.S. Patent No. D751,877 S (the ’D877 patent), granted in March 2016, protects the ornamental design of the Wallet Ninja. Conceived by Vante's principal, Alexander Shlaferman, the design incorporates multiple tools such as a ruler, screwdrivers, hex wrenches, and openers, while retaining the size and shape of a credit card. Shlaferman assigned the patent to Dynamite in 2018.

Dynamite filed suit in 2019 in the Eastern District of New York, alleging Sherman’s TOL4 products infringed the D877 patent. Sherman argued the patent was invalid for obviousness and functionality and denied that its products infringed. During discovery, Dynamite's use of freelance engineer LaErik Cooper, who created manufacturing drawings, raised questions of inventorship. Dynamite later sued Cooper in Florida for a declaration of sole ownership. The cases were consolidated, and the district court held a two-phase jury trial on inventorship, infringement, invalidity, and damages.

The jury found Cooper failed to prove co-inventorship, upheld the D877 patent’s validity, determined Sherman willfully infringed, and awarded $1.85 million in lost profits. The court denied Cooper’s post-trial motions, added $1.53 million in attorney fees and prejudgment interest, bringing the total award to $3.53 million. Sherman appealed; Cooper did not.

Inventorship. Sherman argued it could appeal Cooper’s failed correction of inventorship claim under 35 U.S.C. § 256, citing Shum v. Intel Corp., 499 F.3d 1272 (Fed. Cir. 2007). The Federal Circuit dismissed this challenge, citing Marino v. Ortiz, 484 U.S. 301 (1988), which limits appeals to parties or intervenors, and Devlin v. Scardelletti, 536 U.S. 1 (2002), recognizing narrow exceptions. Because Sherman did not intervene or substitute itself in Cooper’s case, and Cooper himself did not appeal, Sherman lacked standing.

Obviousness. Sherman claimed the D877 Patent was obvious under In re Rosen, 673 F.2d 388 (CCPA 1982), and Durling v. Spectrum Furniture Co., 101 F.3d 100 (Fed. Cir. 1996). While LKQ Corp. v. GM Global Tech Operations LLC, 102 F.4th 1280 (Fed. Cir. 2024), later overruled Rosen/Durling, the Federal Circuit held Sherman’s challenge failed under both frameworks. Sherman had not introduced a primary reference into evidence, as required under Rosen, Durling, and LKQ. Moreover, its expert offered hindsight reasoning rather than record-supported motivation to combine references. The court affirmed the denial of Sherman's obviousness motion.

Functionality. Further, Sherman argued that the Wallet Ninja design was purely functional. The Federal Circuit reaffirmed that design patents are invalid only if the overall appearance is dictated by utilitarian function, citing L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993). Because the record showed alternative designs and ornamental arrangements, substantial evidence supported the jury’s verdict that the D877 patent was not invalid for functionality.

Infringement. The court affirmed the jury’s infringement finding. Dynamite’s expert testified that Sherman’s Redesigned TOL4 was “substantially the same” as the patented design. Sherman’s own expert admitted the Original and Redesigned versions were “pretty identical.” Sherman’s executive acknowledged continuing sales of infringing products after cease-and-desist letters. Photographs corroborated infringement. Substantial evidence supported the verdict.

Damages. Dynamite’s damages expert applied the Panduit test (Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978)) to show lost profits. Sherman’s Daubert challenge was rejected. The Federal Circuit held that the expert testimony provided substantial evidence, and Sherman’s failure to undermine it at trial was not grounds for reversal. The $1.85 million award was affirmed.

Attorney fees. The district court awarded attorney fees under 35 U.S.C. § 285, citing Sherman’s unreasonable litigation conduct. The Federal Circuit upheld the award, citing Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), which does not require express use of the term “exceptional.” The appellate court compared Sherman’s conduct to Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 726 F.3d 1359 (Fed. Cir. 2013), where pervasive misconduct justified full fees. The award was compensatory, not punitive.

The Case is Nos. 24-1523 and 24-1524.

Judge: Clevenger, R.

Attorneys: Michael Cukor (McGeary Cukor LLC) for Dynamite Marketing, Inc. Jeffrey Louis Snow (Pryor Cashman LLP) for Wowline, Inc., Sherman Specialty LLC and Sherman Specialty, Inc.

Companies: Dynamite Marketing, Inc.; Wowline, Inc.; Sherman Specialty LLC; Sherman Specialty, Inc.

Cases: Patent NewYorkNews FedCirNews