DCT
2:20-cv-01689
Goldwell Enterprises Inc v. Down Town Wholesalers Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Goldwell Enterprises, Inc. (California)
- Defendant: Down Town Wholesalers, Inc. (California); Organize.com, Inc. (California)
- Plaintiff’s Counsel: Loza & Loza, LLP
- Case Identification: 2:20-cv-01689, C.D. Cal., 02/20/2020
- Venue Allegations: Venue is alleged to be proper in the Central District of California because Defendants are incorporated in California, maintain their principal places of business within the district, and have allegedly committed acts of patent infringement in the district.
- Core Dispute: Plaintiff alleges that Defendants’ "3-Step" water dispenser stands infringe two patents related to stands that integrate storage for spare water bottles.
- Technical Context: The technology concerns furniture for home and office water dispensers, specifically designs that provide built-in storage for extra water bottles to improve convenience and organization.
- Key Procedural History: The complaint alleges that Defendant Down Town Wholesalers, Inc. was a former customer of the Plaintiff's patented products. Plaintiff alleges that after a decrease in purchases, it discovered Defendants were selling "nearly identical" stands. The complaint further alleges that in a phone call on February 19, 2019, a representative for the Defendant admitted to both selling competing products and being aware of Plaintiff's patents, which may be relevant to the allegations of willful infringement.
Case Timeline
| Date | Event |
|---|---|
| 2001-05-29 | U.S. Patent No. 6,511,027 Priority Date |
| 2003-01-28 | U.S. Patent No. 6,511,027 Issue Date |
| 2003-03-18 | U.S. Patent No. 6,776,378 Priority Date |
| 2004-08-17 | U.S. Patent No. 6,776,378 Issue Date |
| 2012 | Defendant DTW allegedly began purchasing stands from Plaintiff |
| 2017-01 | Plaintiff allegedly noted a decrease in purchases from Defendant DTW |
| 2018-05 | Plaintiff allegedly discovered Defendants' catalogs with accused products |
| 2019-02-19 | Plaintiff allegedly discussed patents with Defendant's representative |
| 2020-02-20 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,511,027 - "Water Dispenser Stand With Storage," Issued Jan. 28, 2003
The Invention Explained
- Problem Addressed: The patent identifies the common problem of storing extra, bulky water bottles for a dispenser. When these bottles are left on the floor, they are often "in the way" (’027 Patent, col. 1:36-39).
- The Patented Solution: The invention is a stand designed to support a water dispenser jar on top while also providing integrated storage for one or more spare water bottles "between its legs" (’027 Patent, col. 1:43-49). A key feature is that the stand is designed to be shipped in a "compact configuration" and assembled by the retailer or end-user, for example, by using removable screws to attach the legs (’027 Patent, col. 2:52-63).
- Technical Importance: The invention provided a practical design that combined the function of a dispenser stand with organized storage, addressing a common household inconvenience.
Key Claims at a Glance
- The complaint asserts independent Claim 4.
- The essential elements of Claim 4 are:
- A top platform sized to support a water jar.
- First, second, and third leg brackets attached to the platform.
- First, second, and third legs "detachably attached" to the leg brackets by "removable leg fasteners."
- An upper bottle holder and a lower bottle holder, each "detachably attached" to the legs.
- The upper and lower bottle holders are positioned between the legs and are "sized and curved to releasably receive a water bottle."
- The complaint reserves the right to assert additional claims (Compl. ¶42).
U.S. Patent No. 6,776,378 - "Water Dispenser Stand With Storage Arrangement," Issued Aug. 17, 2004
The Invention Explained
- Problem Addressed: This patent addresses the need to store water bottles securely within a stand, often in an inclined manner, which can help stabilize the bottle and make efficient use of space (’378 Patent, col. 2:55-59).
- The Patented Solution: The invention discloses a specific "storage arrangement" within the stand. This arrangement consists of three key components: a "front holding bracket" with an arc shape, a "rear stopper arm" positioned below the bracket, and an inclined "guiding body" that extends between them. This structure is designed to guide a water bottle as it slides into the storage chamber until it is stopped by the rear arm and held securely in an inclined position (’378 Patent, Abstract; col. 2:48-60).
- Technical Importance: This patent describes a more specific mechanism than the ’027 Patent for easily loading and securely holding spare bottles in a space-saving, inclined orientation.
Key Claims at a Glance
- The complaint asserts Claims 1-5, with Claim 1 being the independent claim.
- The essential elements of Claim 1 are:
- A floor stand with a "storage chamber" and an opening.
- Means for supporting a water bottle on top of the stand.
- A "storage arrangement" supported within the storage chamber, comprising:
- A front holding bracket with an arc-shape at the opening to retain an upper portion of a stored water bottle.
- A rear stopper arm positioned below the holding bracket.
- A "guiding body" that is "inclinedly extended" from the front bracket to the rear stopper arm, for guiding the bottle to slide into an inclined, stored position.
- The complaint reserves the right to assert additional claims (Compl. ¶54).
III. The Accused Instrumentality
Product Identification
The accused products are "3-Step Metal Floor Stands and 3-Step Metal and Wood Floor Stands," identified by product numbers including STM35BLK, STM35W, STM35GRN, STMW35BLK, STMW35W, and STMW35GRN (collectively "Infringing Products") (Compl. ¶¶22, 29).
Functionality and Market Context
The complaint alleges these products are "identical, or nearly identical," to Plaintiff's own patented stands (Compl. ¶25). A product catalog image shows a stand with a top ring to hold a water dispenser and two lower cradles for storing spare water bottles (Compl. ¶31). The complaint alleges these products were offered for sale by Defendants through their own catalogs and websites, such as organize.com, as well as third-party websites like houzz.com (Compl. ¶¶31, 34-36). It is also alleged that the accused products were offered at a lower price than Plaintiff's stands (Compl. ¶27).
IV. Analysis of Infringement Allegations
’027 Patent Infringement Allegations
| Claim Element (from Independent Claim 4) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a top platform sized to support a water jar; | The accused stands have a top ring structure designed to support a water dispenser jar. | ¶¶29, 31 | col. 4:46-47 |
| first, second and third legs detachably attached to said first, second and third leg brackets...by removable leg fasteners... | The complaint alleges the accused stands are "nearly identical" to Plaintiff's, which are designed for assembly. The catalog image shows a stand with three legs. | ¶¶25, 31 | col. 4:50-54 |
| an upper bottle holder and a lower bottle holder positioned between said first, second and third legs...each being detachably attached to said first, second and third legs... | The catalog screenshot for the accused products clearly depicts two bottle storage cradles located between the stand's legs below the top platform. | ¶31 | col. 4:55-65 |
| said lower bottle holder being sized and curved to releasably receive a water bottle at least partially on its side... | The catalog image shows the lower cradles are curved to hold cylindrical water bottles on their sides. | ¶31 | col. 5:1-4 |
| said upper bottle holder being...sized and curved to releasably receive a water bottle at least partially on its side... | The catalog image shows the upper cradle is also curved to hold a cylindrical water bottle on its side. | ¶31 | col. 5:12-16 |
’378 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a floor stand having a storage chamber and an opening... | The accused stands have a three-legged structure creating an open storage area ("chamber") between the legs. | ¶¶29, 31 | col. 7:30-33 |
| a storage arrangement, which is supported within said storage chamber...comprising: | The complaint alleges the accused stands contain the claimed storage arrangement. The catalog image shows bottle cradles within the legs. | ¶¶29, 31, 54 | col. 7:35-37 |
| a front holding bracket having an arc-shape and supported at said opening... | The complaint alleges infringement but does not provide specific evidence detailing the structure of the front of the storage cradles in the accused products. | ¶54 | col. 7:38-42 |
| a rear stopper arm spaced from and position below said holding bracket; | The complaint does not provide specific textual or visual evidence identifying a distinct "rear stopper arm" in the accused products. | ¶54 | col. 8:13-15 |
| a guiding body inclinedly extended from said holding bracket to said stopper arm for guiding said water bottle to slide... | The complaint does not provide specific evidence showing that the accused products contain a "guiding body" to facilitate sliding a bottle into an inclined position. | ¶54 | col. 8:16-22 |
Identified Points of Contention
- Scope Questions: For the ’027 Patent, a potential issue is whether the components of the accused stands are "detachably attached" using "removable leg fasteners" as required by Claim 4. The complaint does not provide evidence (e.g., assembly instructions) on this specific point.
- Technical Questions: For the ’378 Patent, a central question will be whether the accused stands' storage cradles embody the specific three-part structure of Claim 1 ("front holding bracket", "rear stopper arm", "guiding body"). The complaint's visual evidence shows general-purpose cradles but does not offer sufficient detail to confirm the presence of these specific, functionally-defined claimed elements.
V. Key Claim Terms for Construction
- The Term: "detachably attached" (’027 Patent, Claim 4)
- Context and Importance: This term is critical because infringement of Claim 4 requires that the legs and bottle holders be attached in a non-permanent way. If the accused stands are, for example, fully welded upon sale, they may not meet this limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification suggests the purpose is to allow for shipment in a "compact configuration" and assembly "by the ultimate user or by the retailer," using "fasteners as machine screws or sheet metal screws" (’027 Patent, col. 2:60-63; col. 3:20-22). This may support a construction that covers any non-permanent attachment method allowing for post-manufacture assembly.
- Evidence for a Narrower Interpretation: A party could argue the term should be limited more closely to the specific embodiments shown, such as the "telescopic joint" or the screw-based attachments depicted (’027 Patent, col. 2:53-54; col. 3:3-5).
- The Term: "guiding body inclinedly extended from said holding bracket to said stopper arm" (’378 Patent, Claim 1)
- Context and Importance: This limitation defines the core mechanism of the invention. Infringement will depend on whether the accused product has a structure that actively guides a bottle into a stored position, rather than simply providing a static cradle. Practitioners may focus on this term because it requires a specific functional relationship between three distinct components.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The Abstract and Summary describe the function of guiding the bottle "to slide into the storage chamber." This could support an interpretation where any inclined surface between a front support and a rear stop that performs this function meets the limitation (’378 Patent, Abstract).
- Evidence for a Narrower Interpretation: Claim 5, which depends on Claim 1, states the "guiding body is integrally extended from said holding bracket to said stopper arm to form an integral member." This language could be used to argue that the "guiding body" in Claim 1 must be a distinct structure that connects the other two elements, rather than just an incidental inclined surface (’378 Patent, col. 10:28-31).
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement. The basis for these claims is the allegation that Defendants distribute "product literature and marketing materials" that instruct or encourage end-users to assemble and use the infringing products in their intended, infringing manner (Compl. ¶¶46-48, 58-60). The complaint also asserts the products are not staples of commerce with substantial non-infringing uses (Compl. ¶47, ¶59).
- Willful Infringement: The complaint alleges that Defendants' infringement was willful. This is based on allegations of both constructive knowledge (Plaintiff's patent numbers printed on its product packaging) and actual pre-suit knowledge. Specifically, the complaint alleges that on February 19, 2019, an executive of the Defendant "admitted he was aware of Goldwell's Patents" during a telephone call but continued to sell the accused products (Compl. ¶¶44, 52, 56, 64).
VII. Analyst’s Conclusion: Key Questions for the Case
- A key evidentiary question will be one of technical proof: what is the precise construction of the accused "3-Step Stands"? For the ’378 patent in particular, the case may turn on whether discovery reveals a specific "guiding body" and "rear stopper arm" as claimed, or if the stands use a more generic cradle design that does not meet the claim limitations.
- A central issue for the ’027 patent will be one of claim scope: how will the court construe the term "detachably attached"? The infringement finding for this patent will likely depend on whether the accused products are sold in a state that allows for user or retailer assembly with removable fasteners, as described in the patent.
- A significant question for damages will be willfulness: can the Plaintiff prove its allegations of a pre-suit business relationship and direct communications in which Defendants allegedly admitted knowledge of the patents? A finding of such pre-suit knowledge followed by continued sales could form a strong basis for enhanced damages.