DCT
2:13-cv-05058
Constructive Designs LLC v. Nike USA Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Constructive Designs, LLC (California)
- Defendant: NIKE USA, Inc. (Oregon)
- Plaintiff’s Counsel: Neufeld Marks; Cahill Glazer PLC
- Case Identification: 2:13-cv-05058, C.D. Cal., 07/15/2013
- Venue Allegations: Plaintiff alleges venue is proper in the Central District of California because Defendant is registered to do business in the state, maintains an agent for service in Los Angeles, and a substantial part of the events giving rise to the claim occurred in the district.
- Core Dispute: Plaintiff alleges that Defendant’s online shoe design contests, which allow users to create, submit, and vote on custom designs, infringe a patent related to collectively generating user-created designs over a network.
- Technical Context: The lawsuit concerns online platforms for crowdsourcing product designs, a method used by companies to engage consumers and generate marketing buzz or gather design ideas.
- Key Procedural History: The complaint alleges that Plaintiff's predecessor-in-interest sent a letter to a Nike vice president on June 9, 2009, identifying the patent-in-suit and offering a license. The complaint further alleges that Nike's legal department subsequently declined the offer. The complaint also notes that claims 1-8, 12, and 13 of the patent-in-suit have been disclaimed, which will narrow the scope of any potential infringement analysis to the remaining asserted claims.
Case Timeline
| Date | Event |
|---|---|
| 2000-03-14 | ’355 Patent Priority Date |
| 2004-02-17 | ’355 Patent Issue Date |
| 2009-02-24 | Start of "NIKE iD Royale 32 Design Tournament" |
| 2009-06-09 | Plaintiff's predecessor allegedly sent notice letter to Nike |
| 2009-07-24 | Nike allegedly responded to notice letter |
| 2009-09-01 | Approx. date of "NIKEiD Show Your Colors" contest |
| 2010-03-02 | Start of "Zoom Kobe V iD" shoe design contest |
| 2010-04-01 | Start of "Freshness x NIKEiD Canvas Contest" |
| 2010-07-01 | Approx. date of "NIKE LunarGlide 2 NIKEiD" contest |
| 2011-02-01 | Approx. date of Coppell High School design contest |
| 2011-03-07 | Start of "Twitter KDIII iD" design contest |
| 2011-03-13 | Approx. date of second "NIKE iD Royale Design Contest" |
| 2011-04-01 | Start of first "NIKE Free Run 2 iD Design of the Week" |
| 2011-07-05 | Start of "NIKE LunarGlide + 3 NIKEiD" contest |
| 2011-08-30 | Start of "Twitter Paul Rodriguez 5 iD" contest |
| 2013-01-30 | Start of "#COUNTONKOBEiD" design contest |
| 2013-07-15 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,694,355 - "Method and System for Collectively Generating User-Created Designs of Products and Property Via A Communications Network," issued February 17, 2004
The Invention Explained
- Problem Addressed: The patent describes the traditional methods for developing new product designs—such as hiring professional designers and conducting market research—as costly and potentially inaccurate in reflecting popular taste (’355 Patent, col. 1:28-39). It also notes that it is burdensome for individual consumers to create and submit their own graphical design suggestions to manufacturers (’355 Patent, col. 1:50-64).
- The Patented Solution: The invention is a networked computer system that allows a large number of users to access graphic design software hosted on a remote server (’355 Patent, Fig. 1). Users can select a product, manipulate its components using a "parts catalog" and "editing tools," and submit their final designs back to the remote host system, which collects them (’355 Patent, Abstract; col. 2:53-64). The patent suggests providing an award for winning designs to motivate participation (’355 Patent, col. 2:25-27). An exemplary user interface shows a base product template (a car) with selectable parts and editing tools (’355 Patent, Fig. 3).
- Technical Importance: This approach sought to harness the "collective creativity of users in the general public" to provide manufacturers with a "wealth of design ideas" that could be used to ascertain consumer trends and maximize sales (’355 Patent, col. 2:2-10).
Key Claims at a Glance
- The complaint asserts independent claims 9, 14, 18, 19, and 20 (Compl. ¶25).
- Independent Method Claim 9 requires the steps of:
- Providing graphic design software and product data for at least one product on a remote host system.
- Providing public access to the software via remote user client systems.
- Permitting a plurality of independent users to operate upon the product data.
- Each user selecting at least one target product.
- Each user creating a final design.
- Each user submitting the final design to the remote host system.
- The complaint notes that claims 1-8, 12, and 13 have been disclaimed (Compl. ¶8) and appears to reserve the right to assert dependent claims 10-11 and 15-17.
III. The Accused Instrumentality
Product Identification
The complaint identifies at least fourteen online design contests sponsored or conducted by Nike, including the "NIKE iD Royale 32 Design Tournament," "NIKEiD Show Your Colors," and "#COUNTONKOBEiD" contests (Compl. ¶¶11-23). The accused instrumentalities are the methods and systems used to run these contests, which involve websites such as "nikeid.com", "nikerunning.com", and "nikebasketball.com", as well as associated graphic design tools like the "NIKEiD Shoe Builder" and "Nike iD Design Studio" (Compl. ¶¶13, 16).
Functionality and Market Context
The complaint alleges that these contests allow participants to use Nike's online tools to create a custom graphical design for an athletic shoe in real time (Compl. ¶13). Participants could pick a Nike stock keeping unit (SKU), create a personal design, and submit the entry (Compl. ¶13). The contests allegedly involved public voting, judging by Nike designers or celebrity athletes, and prizes for winners, which ranged from products to unique experiences (Compl. ¶¶12-16). The complaint highlights the scale of these contests, noting one event drew over 2,000 entries and 200,000 votes (Compl. ¶13). A screenshot from the patent's Exhibit 1 shows a sample user interface for designing a product (’355 Patent, Fig. 3). However, the complaint provides no screenshots or visual evidence depicting the actual operation of Nike's accused websites or design tools.
IV. Analysis of Infringement Allegations
The complaint does not contain a claim chart. The following table summarizes the infringement theory for representative Claim 9 based on the narrative allegations.
’355 Patent Infringement Allegations
| Claim Element (from Independent Claim 9) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| providing graphic design software and product data for at least one product on a remote host system connected to said communications network | Defendant provides graphic design tools (e.g., "NIKEiD Shoe Builder," "Nike iD Design Studio") and data for Nike shoe SKUs on its websites (e.g., "nikeid.com"). | ¶¶13, 16, 18 | col. 7:25-28 |
| providing public access to said graphic design software and said product data by remote user client systems connected to said communications network | Participants access the design contests and tools through Defendant's publicly available websites using their own computers. | ¶¶12-23 | col. 7:32-37 |
| permitting a plurality of independent users to independently operate upon said product data with said graphic design software | The contests allow numerous public participants to simultaneously and independently compose and submit designs. | ¶¶13, 15, 16 | col. 7:38-40 |
| each user selecting at least one target product to be designed | Participants are alleged to "pick a Nike SKU" to customize. | ¶13 | col. 7:41-42 |
| each user creating a final design of said at least one target product | Participants use the provided graphic tools to "create a participant's own personal design" for an athletic shoe. | ¶¶13, 15 | col. 7:42-43 |
| and each user submitting the respective user's final design to the remote host system. | Participants submit their created designs, which are posted online for voting or, in some cases, submitted via platforms like Twitter or Facebook. | ¶¶12, 13, 18, 20, 26 | col. 7:44-46 |
- Identified Points of Contention:
- Scope Questions: The patent is titled "Method and System for Collectively Generating User-Created Designs" and the specification emphasizes collecting a "wealth of design ideas" to "ascertain consumer trends" (’355 Patent, col. 2:5-10). A central question may be whether Nike’s platform, which is a commercial customization and sales tool with promotional contests, has the primary purpose of "collectively generating for acquisition" designs in the manner contemplated by the patent, or if its function is fundamentally different.
- Technical Questions: Claim 9 requires "submitting the... final design to the remote host system." The complaint alleges that for some contests, designs were submitted "via Twitter" (Compl. ¶18) or posted to a Facebook page (Compl. ¶26). A technical question will be whether submission to a third-party platform like Twitter constitutes submission "to the remote host system" as required by the claim language.
V. Key Claim Terms for Construction
The Term: "product data"
Context and Importance: This term is critical because the nature of the "data" provided to users for manipulation goes to the heart of the invention. The infringement analysis will depend on whether Nike’s system of offering selectable colors and materials for predefined zones on a shoe model constitutes the "product data" envisioned by the patent.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claims themselves do not narrowly define "product data." A party could argue that any set of digital information representing a customizable product, including color palettes and material options, falls within the plain meaning of the term.
- Evidence for a Narrower Interpretation: The specification provides a specific example where "product data includes various parts images associated with a particular product," such as "original fenders, doors, wheels, seating, etc." for an automobile (’355 Patent, col. 5:22-27). Practitioners may focus on this language to argue that "product data" requires discrete, interchangeable component parts, not just surface-level cosmetic options on a fixed product shape.
The Term: "creating a final design"
Context and Importance: The degree of creative freedom implied by this term will be important. The dispute may turn on whether a user's selection from a constrained set of options provided by Nike (e.g., color, material) amounts to "creating a final design" in the inventive sense, or if the claims require a higher level of user-generated graphic creation.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the system enables users to "individually create product designs" (’355 Patent, col. 5:26-28). An argument could be made that any user-driven modification resulting in a unique configuration is an act of creation.
- Evidence for a Narrower Interpretation: The specification describes a "graphic tool module for creating, editing, and otherwise graphically manipulating and visually affecting graphic images," including "traditional editing features such as cropping, sizing, warping, color, etc." (’355 Patent, col. 5:32-37). A party may argue this implies more free-form graphical manipulation than merely selecting from pre-set options, as alleged of the Nike system.
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Nike is liable for inducing infringement by "inducing one or more third parties to practice a method or make and use a system" claimed by the patent (Compl. ¶25). This allegation appears to be based on Nike providing its online platform and contest rules, which allegedly instruct and encourage users to perform the steps of the patented method.
- Willful Infringement: The complaint alleges that Plaintiff's predecessor gave Nike actual notice of the ’355 patent via a letter on June 9, 2009, which included a copy of the patent and a license offer (Compl. ¶¶28, 31). It is further alleged that Nike’s legal department reviewed the submission and that Nike continued to conduct the accused design contests after receiving this notice (Compl. ¶¶29, 32). Plaintiff asserts this conduct was undertaken with "objective recklessness" and an "objectively high likelihood" of infringement (Compl. ¶¶33-34).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be willfulness and pre-suit knowledge: given the complaint's specific allegations of a 2009 notice letter and license offer, a key focus will be on what Nike knew about the ’355 patent and when, and whether its subsequent operation of its NIKEiD contests rises to the level of objective recklessness required for enhanced damages.
- The case will also involve a question of definitional scope: can the term "product data", which the patent specification exemplifies with distinct, swappable parts like car fenders and doors, be construed to cover the selection of colors and materials for predefined zones on a fixed shoe model?
- Finally, a key question will be one of conceptual purpose and scope: does the patent, which describes a system for the "collective generation" of designs for "acquisition" by a manufacturer as a form of market intelligence, properly read on a commercial platform whose primary purpose is mass customization and direct-to-consumer sales, where design contests are a promotional feature?