Marketfleet Puerto Rico Inc v. Yardstash Solutions LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Marketfleet Puerto Rico, Inc. (acting derivatively on behalf of Marketfleet, Inc.) (Puerto Rico, Delaware, California)
  • Defendant: Yardstash Solutions, LLC. (California)
  • Plaintiff’s Counsel: Lopez Rodriguez Law Firm
• Case Identification: 3:18-cv-0112, D.P.R., 02/26/2018
• Venue Allegations: Plaintiff alleges venue is proper in the District of Puerto Rico because Defendant conducts business in the district, including selling products embodying the patent-in-suit, and because Defendant's alleged threats against Plaintiff's business arose in Puerto Rico.
• Core Dispute: Plaintiff seeks a declaratory judgment that its "Driftsun® Storage Tent" product does not infringe Defendant's design patent for a storage unit, and further alleges that the patent is invalid and unenforceable due to functionality and inequitable conduct.
• Technical Context: The dispute concerns the ornamental design of portable, tent-like outdoor storage sheds used for items such as bicycles and garden equipment.
• Key Procedural History: The complaint alleges this action follows threatening letters from the Defendant and a prior lawsuit filed by the Defendant against a Plaintiff-affiliate in the Southern District of California. Plaintiff bases its unenforceability claim on an allegation that the inventor intentionally withheld a material prior art reference (a prior design patent on which he was a co-inventor) from the U.S. Patent and Trademark Office (USPTO) during prosecution. An associated Ex Parte Reexamination Certificate, issued after the complaint was filed, confirmed the patentability of the single design claim over prior art but noted that it "may not have resolved all questions" raised by the related litigation.

Case Timeline

II. Technology and Patent(s)-in-Suit Analysis

• Patent Identification: U.S. Design Patent No. D689,579, "Storage Unit," issued September 10, 2013 (’579 Patent).

The Invention Explained

• Problem Addressed: Design patents do not articulate a technical problem in the same manner as utility patents. The implicit goal is to create a new, original, and ornamental design for an article of manufacture—in this case, a portable storage unit (D’579 Patent, Title).
• The Patented Solution: The patent claims the specific ornamental appearance of a storage unit, not its functional characteristics (D’579 Patent, Claim). The design is defined by the visual features depicted in the patent's figures, which show a freestanding, fabric-covered structure with an arched or bowed roofline, a zippered front opening, and a generally rectangular footprint (D’579 Patent, FIG. 1-7). The patent specifies that the broken lines in the drawings represent stitching and are part of the claimed design, which is an important feature of the claimed aesthetic (D’579 Patent, Description).
• Technical Importance: The patent protects a specific aesthetic appearance for a consumer product in the outdoor storage market, seeking to distinguish it visually from other products.

Key Claims at a Glance

• The complaint challenges the single claim of the ’579 Patent.
• Design patents have only one claim, which reads: "The ornamental design for a storage unit, as shown and described" (D’579 Patent, Claim).
• The scope of this claim is defined by the solid-line drawings in Figures 1-7 of the patent.

III. The Accused Instrumentality

Product Identification

• The "Driftsun® Storage Tent," which is also referred to as an "Outdoor Portable, Bike Tent, Garden Equipment, Pool Storage, and Organizer Shed" (Compl. ¶1).

Functionality and Market Context

• The complaint describes the accused product as a "Portable Organizer Shed" that Plaintiff Marketfleet has imported into the United States (Compl. ¶¶14, 20). The complaint asserts that Defendant previously accused the Driftsun® Storage Tent of infringement in threatening communications and in separate litigation filed in California (Compl. ¶¶16, 18, 25).

IV. Analysis of Infringement Allegations

This is a declaratory judgment action where the Plaintiff alleges non-infringement. The complaint does not contain a detailed chart comparing the accused product to the patent claim. Instead, it makes the conclusory statement that "Marketfleet’s product does not infringe the claims of the ‘579 patent because the accused product does not fall within the scope of the patent’s claims" (Compl. ¶31). The complaint also asserts that if the patent claim were interpreted broadly enough to cover the accused product, the claim would be invalid over prior art (Compl. ¶32).

The complaint includes a figure from a prior design patent, U.S. D661,513, to support its allegation that the inventor of the ’579 patent failed to disclose material prior art (Compl. p. 13).

• Identified Points of Contention:
  • Visual Similarity: The central infringement question will be whether, in the eye of an "ordinary observer," the overall ornamental design of the Plaintiff's Driftsun® Storage Tent is substantially the same as the design claimed in the ’579 Patent. The analysis will depend on a visual comparison of the accused product and the patent's figures.
  • Functionality: A key invalidity question is raised by the complaint's allegation that the design's "appearance is dictated by function... and therefore lacks ornamentality" (Compl. ¶35). The court may need to determine if the claimed design is primarily functional, which would render the design patent invalid.

V. Key Claim Terms for Construction

Claim construction for a design patent does not involve defining textual terms but rather describing the overall visual impression of the claimed design as shown in the drawings. The scope of the claim is defined by what is shown in solid lines in the patent figures.

• The Term: The ornamental features of the "storage unit" as a whole.
• Context and Importance: The construction will be a verbal description of the claimed design, against which the accused product and prior art will be compared. A key aspect for construction will be the statement in the patent's description that the broken lines, typically used to show unclaimed environment, "represent stitching, which form a part of the claimed design" (D’579 Patent, Description).
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: A party arguing for a broader scope might focus on the overall shape—the arched roof, vertical sides, and rectangular base—as the dominant visual impression, de-emphasizing minor details.
  • Evidence for a Narrower Interpretation: A party arguing for a narrower scope would emphasize the combination of all specific features shown in the drawings, including the particular curvature of the roof poles, the precise shape of the zippered opening, the presence of a rear window-like feature, and the specific pattern of the claimed stitching (D’57á79 Patent, FIG. 1-7). The unusual inclusion of stitching as a claimed feature may support a narrower interpretation that requires a similar stitching pattern for infringement.

VI. Other Allegations

• Indirect Infringement: The prayer for relief seeks a declaration of non-infringement "whether directly or indirectly" (Compl. p. 18:D). However, the body of the complaint provides no specific factual allegations regarding inducement or contributory infringement.
• Inequitable Conduct: The complaint makes a detailed allegation of inequitable conduct (Compl. ¶¶41-54).
  • It alleges that the inventor of the ’579 Patent, George V. Barker, was also a co-inventor on an earlier, related design patent, U.S. D661,513 ("the ’513 patent") (Compl. ¶49).
  • It alleges that the ’513 patent is material prior art that was not disclosed to the USPTO during the prosecution of the ’579 patent (Compl. ¶¶50-51).
  • The complaint asserts that because the inventor had "first-hand knowledge" of the ’513 patent and its materiality, the "single most reasonable inference" for its non-disclosure is an "intent to deceive the USPTO" (Compl. ¶¶51, 53).

VII. Analyst’s Conclusion: Key Questions for the Case

1. Unenforceability due to Inequitable Conduct: A threshold question will be whether the inventor's failure to disclose his own prior ’513 patent to the USPTO rises to the level of inequitable conduct. This will require the plaintiff to prove by clear and convincing evidence both that the withheld reference was material and that the inventor acted with a specific intent to deceive the patent office.
2. Invalidity based on Functionality and Prior Art: The case will likely examine whether the claimed design is dictated by its function, which would invalidate the patent. Separately, the court will consider if the design is obvious in light of the extensive list of prior art patents cited in the complaint, an issue that may be influenced by the USPTO's confirmation of the claim's patentability during reexamination.
3. The "Ordinary Observer" Test: If the patent is deemed valid and enforceable, the ultimate question of infringement will turn on a visual comparison: is the ornamental design of the Plaintiff’s Driftsun® Storage Tent substantially the same as the design claimed in the ’579 Patent, such that it would deceive an ordinary observer? The interpretation of the claimed "stitching" may play a significant role in this analysis.