DCT
2:17-cv-02330
Schaub v Orchard Yarn & Thread Company, Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Rene Schaub, an individual, for herself and doing business as Pathfinder Inventions (California)
- Defendant: Orchard Yarn & Thread Co., Inc., a New York corporation, doing business as Lion Brand Yarn Company (New York)
- Plaintiff’s Counsel: Law Offices of Stephen L. Davis
- Case Identification: 2:17-cv-02330, E.D. Cal., 11/07/2017
- Venue Allegations: Venue is alleged to be proper in the Eastern District of California because the Plaintiff resides and does business in the district, and the Defendant transacts business and regularly sells products in the district.
- Core Dispute: Plaintiff alleges that Defendant’s modular loom products infringe a patent related to adjustable hand looms, and further alleges breach of contract and breach of the covenant of good faith and fair dealing stemming from a prior license agreement between the parties.
- Technical Context: The technology relates to modular, adjustable hand looms for crafting, a market segment where versatility and ease of use are key features for hobbyists.
- Key Procedural History: The parties had an exclusive license agreement, executed in 2010, under which Defendant (Orchard) sold Plaintiff’s (Schaub’s) loom designs under the “Martha Stewart Crafts” brand and paid royalties. Plaintiff alleges Defendant developed a competing, unlicensed product line (“DIY Weaver”) and subsequently terminated the license agreement for material breach. The complaint notes that Defendant previously filed a declaratory judgment action in the Southern District of New York, which Plaintiff was moving to dismiss or transfer.
Case Timeline
| Date | Event |
|---|---|
| 2008-10-20 | Schaub and marketing director meet with Vanna White, spokesperson for Orchard |
| 2008-11-25 | Schaub and Orchard enter a Non-Disclosure Agreement |
| 2009-01-01 | Schaub and Orchard enter an initial license agreement (approximate date) |
| 2010-04-16 | A revised Loom License Agreement is executed |
| 2010-04-23 | Priority Date for U.S. Patent No. 8,316,894 |
| 2011-01-01 | Orchard launches "Martha Stewart Crafts Knit & Weave Loom Kit" (approximate date) |
| 2012-11-27 | U.S. Patent No. 8,316,894 Issues |
| 2017-02-26 | Schaub discovers the accused "DIY Weaver" product line for sale (approximate date) |
| 2017-04-06 | Orchard files a declaratory judgment action in S.D.N.Y. (approximate date) |
| 2017-06-08 | Loom License Agreement terminated, per Schaub's notice (approximate date) |
| 2017-11-07 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,316,894 - "Modular Adjustable Frame Hand Loom", Issued November 27, 2012
The Invention Explained
- Problem Addressed: The patent’s background section describes prior art hand looms as being either fixed in size and shape, or if adjustable, employing connection mechanisms that are inconvenient, bulky, or prone to inadvertent separation when stressed during use (’894 Patent, col. 2:50-65). For example, some prior art looms could be disconnected if one section was twisted relative to another (id. at col. 2:57-62).
- The Patented Solution: The invention is a modular loom system composed of various straight and curved "elongate sections." These sections connect to one another using a "tenon type axial tab" on one end that slides into a "mortise type axial channel" on the end of an adjoining section (’894 Patent, col. 4:51-65). The critical feature is that pegs, which also serve to hold the yarn, are inserted through holes that pass through both the tab and the channel when they are mated. This insertion of pegs serves a dual purpose: it provides the posts for knitting/weaving and simultaneously locks the loom sections together, preventing them from pulling apart along the direction of insertion (id. at col. 4:8-14).
- Technical Importance: This design provides a secure yet easily reconfigurable loom frame, allowing users to create varied shapes (rectangular, oval, circular) and sizes without the risk of the frame coming apart during the weaving process (’894 Patent, col. 3:9-13).
Key Claims at a Glance
- The complaint does not specify which claims are asserted but centers its allegations on the core functionality of the patented invention. Independent claim 1 is representative.
- Independent Claim 1, Key Elements:
- A plurality of generally elongate sections, each with an upper surface and opposing first and second ends.
- Connecting means for forming a closed frame, comprising an "axial tab" at each first end and a "mating axial channel" at each second end, which form a "sliding joint" when connected.
- A series of "substantially uniformly intermediate spaced holes or bores" on the upper surface and on the axial tab.
- The holes are arranged to align when the tab is fully inserted into the channel.
- A plurality of pegs or pins that can be inserted into the holes, including the aligned holes at the joint, to "function both to loop yarn during knitting and to lock said axial tabs from inadvertently separating from mating axial channels."
- The complaint does not explicitly reserve the right to assert dependent claims, but this is standard practice.
III. The Accused Instrumentality
Product Identification
The complaint names two product lines sold by the Defendant:
- The "DIY Weaver" and "DIY Weaver Extender" products (Compl. ¶13).
- The "Martha Stewart Crafts Knit & Weave Loom Kit" (the "Licensed Product"), which is accused of infringement for sales occurring after the alleged termination of the license agreement (Compl. ¶40).
Functionality and Market Context
- The complaint alleges the "DIY Weaver" products contain many features invented by Schaub and disclosed to Orchard under a non-disclosure agreement (Compl. ¶14). These features include being a "modular, expandable, adjustable hand-held loom" with a "locking feature that maintains the connections between expandable pieces," "interchangeability of loom parts," and the use of "removable and movable pegs" (Compl. ¶14a, b, e, h).
- The complaint alleges the "DIY Weaver" products directly compete with the Licensed Product, are sold under the same "Martha Stewart Craft brand," and have similar packaging, material, and coloring (Compl. ¶¶13, 15). The introduction of the accused products allegedly caused a decline in royalty payments to Schaub from the Licensed Product (Compl. ¶15).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
The complaint does not provide a formal claim chart. The following table summarizes the infringement allegations for a representative claim based on the complaint's narrative.
'894 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a plurality of generally elongate sections each of which defines an upper surface and opposing first and second ends | The accused products are described as a "modular, expandable, adjustable hand-held loom" with "interchangeability of loom parts." | ¶14a, e | col. 4:42-46 |
| connecting means on said sections for connecting said plurality of sections to form a closed frame...comprising an axial tab at each first end and a mating axial channel at each second end to provide a sliding joint | The accused products are alleged to have an "almost limitless ability to join and connect loom pieces together." | ¶14d | col. 4:51-65 |
| each of said sections being provided...with a series of substantially uniformly intermediate spaced holes or bores...arranged to align endmost holes or bores at said second ends with said end-most holes or bores in said axial tabs | The accused products allegedly have "the ability to place or space removable pegs in any desired holes on the looms." | ¶14h | col. 4:62-65 |
| a plurality of pegs or pins...inserted into said end-most bores or holes...function both to loop yarn during knitting and to lock said axial tabs from inadvertently separating from mating axial channels | The accused products are alleged to include a "locking feature that maintains the connections between expandable pieces" and use "removable and movable pegs." | ¶14b, h | col. 10:8-14 |
- Identified Points of Contention:
- Scope Questions: The complaint alleges the accused products have a "locking feature" (Compl. ¶14b). A central question will be whether the connection mechanism of the accused products is structurally and functionally equivalent to the claimed "axial tab" and "mating axial channel" that form a "sliding joint."
- Technical Questions: A key evidentiary issue will be whether the "removable pegs" of the accused products perform the specific dual function required by Claim 1: serving as a post for looping yarn and physically "locking" the sections together by being inserted through aligned holes in the mated connection joint. The court will need to determine if the accused product's connection relies on this specific peg-based locking mechanism or achieves connection and stability through other means.
V. Key Claim Terms for Construction
The Term: "axial tab" and "mating axial channel"
Context and Importance: These terms define the fundamental connection structure of the invention. The outcome of the infringement analysis may depend on whether these terms are construed narrowly to cover only the specific tenon-and-mortise structure shown in the patent's figures, or more broadly to encompass any male/female sliding connection system used in a modular loom. Practitioners may focus on this term because the complaint does not describe the specific connection mechanism of the accused product, leaving its equivalence to the claimed structure as a central open question.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The Summary of the Invention describes the connector more generally as a "tenon type axial tab" and a "mortise type axial channel" that form a "sliding joint," suggesting the specific geometry is an embodiment of a broader concept (’894 Patent, col. 4:55-59).
- Evidence for a Narrower Interpretation: The detailed description and figures (e.g., Figs. 6, 7a-7b, 8a-8g) consistently depict a specific rectangular tab sliding into a correspondingly shaped channel (’894 Patent, col. 8:13-20). A defendant could argue these consistent depictions limit the scope of the terms to the disclosed embodiment.
The Term: "to lock said axial tabs from inadvertently separating"
Context and Importance: This is a functional limitation describing the purpose of inserting pegs into the joint. Its construction is critical because it defines the required outcome of the connection. The dispute will likely center on what degree of security constitutes "locking."
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent contrasts the invention with prior art where sections could "inadvertently separate" through twisting or pulling, suggesting "to lock" means to prevent such specific failure modes, rather than requiring an absolute, immovable connection (’894 Patent, col. 2:57-62).
- Evidence for a Narrower Interpretation: The patent repeatedly states that the pegs, when inserted into the aligned holes of the tab and channel, serve as a "locking peg" (’894 Patent, col. 8:46-49). This ties the "locking" function directly to the physical act of a peg passing through both parts of the joint, potentially narrowing the term to exclude other forms of securing the connection (e.g., friction fit, snaps, or detents).
VI. Other Allegations
- Indirect Infringement: The complaint does not contain a separate count for indirect infringement. However, the allegations that Defendant sells kits to end-users who would then assemble and use them in an infringing manner could potentially support such a claim in the future (Compl. ¶¶13-14).
- Willful Infringement: The complaint explicitly alleges that Defendant’s infringing conduct is "willful, intentional, and unlawful" (Compl. ¶43). This allegation is based on the parties' pre-existing licensing relationship, which provided Defendant with "actual notice of the Patent, and actual notice that its products infringe the Patent" (Compl. ¶41). The claim of willfulness is further supported by allegations that Defendant continued to sell the accused products even after receiving notice of its alleged breach of the license agreement (Compl. ¶¶18-19, 42).
VII. Analyst’s Conclusion: Key Questions for the Case
This dispute presents a mix of contract and patent law issues. The resolution of the case will likely depend on the answers to the following central questions:
A question of contract and timing: Was the license agreement properly terminated? The answer determines when, or if, the original "Martha Stewart Crafts" kit became an infringing product. Furthermore, does the "DIY Weaver" product line fall within the scope of products for which royalties were owed under the license, making its sale a breach of contract independent of patent law?
A core issue of structural equivalence: Does the connection mechanism of the accused "DIY Weaver" products meet the "axial tab" and "mating axial channel" limitations of the ’894 patent? The case will require a detailed comparison of the physical structures to determine if the accused products use the same or an equivalent means of connection.
A key question of functional infringement: Do the pegs in the accused products perform the specific dual function required by Claim 1—simultaneously serving as yarn posts and "locking" the loom sections by passing through aligned holes in the connection joint? Establishing this dual functionality will be critical to proving literal infringement.