Deckers v. Last Brand (Quince) — Court Bars Reasonable Royalty Damages Theory and Willful Infringement Evidence in UGG Design Patent Trial

Background

Deckers Outdoor Corporation, the parent company of the UGG brand, sued Last Brand, Inc. — which does business as Quince, a direct-to-consumer fashion startup recently valued at $10 billion — for infringing UGG design patents. As the case headed toward trial, a critical pretrial dispute emerged over damages theories.

Earlier in the litigation, Quince had successfully persuaded the court to prevent Deckers from presenting a reasonable royalty damages calculation under 35 U.S.C. § 284, arguing that Deckers had failed to develop that theory in discovery. Deckers abandoned the reasonable royalty approach. But as trial neared, Quince reversed course and sought to introduce its own reasonable royalty calculation — this time as an alternative damages figure that could undercut whatever Deckers sought under Section 289 (total profits from the article of manufacture).

The Court’s Holding

Judge Martínez-Olguín ruled that neither party may present evidence or argument regarding reasonable royalty damages at trial, for two independent reasons.

First, as a matter of law, a design patent owner must elect between Section 284 and Section 289. Under Catalina Lighting, Inc. v. Lamps Plus, Inc., 295 F.3d 1277 (Fed. Cir. 2002), once Deckers elected to proceed exclusively under Section 289, Section 284 damages theories — including reasonable royalty and lost profits — were no longer available to either side.

Second, the court applied the doctrine of judicial estoppel. Quince had earlier argued that Deckers should be barred from presenting reasonable royalty evidence, and the court accepted that position. Allowing Quince to now present its own reasonable royalty theory would be inequitable: Quince would gain an “unfair advantage” by adopting a directly contradictory position that the court had already accepted.

As a consequence, the court also barred all evidence of willful infringement. Enhanced damages for willfulness are only available under Section 284, and since Section 284 is no longer in the case, willfulness evidence became irrelevant.

Key Takeaways

• Design patent damages are binary — § 284 or § 289, not both. Once a design patent holder elects Section 289 (total profits from the article of manufacture), neither side can introduce Section 284 damages theories, including reasonable royalty.
• Litigation strategy has permanent consequences. Quince’s successful motion to exclude Deckers’ reasonable royalty theory backfired: the court applied judicial estoppel to prevent Quince from later adopting the very theory it had eliminated.
• Willful infringement evidence tracks the damages election. Because enhanced damages are a Section 284 remedy, a Section 289 election effectively removes willfulness from the trial entirely.

Why It Matters

This case illustrates a consequential strategic choice in design patent litigation. The Section 284/289 election can dramatically reshape trial: under Section 289, the damages measure is the infringer’s total profit attributable to the patented design, which can be enormous if the “article of manufacture” is the entire product. By eliminating the reasonable royalty alternative, the court ensured that the jury will decide damages solely on the total-profit theory — a framework that, since the Supreme Court’s 2016 decision in Samsung v. Apple, has focused on identifying the relevant “article of manufacture.” For Quince, facing a trial without the ability to suggest a lower royalty benchmark, the stakes just got higher.