DCT
3:23-cv-01690
P2i Ltd v. Favored Tech USA Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: P2i Ltd. (United Kingdom)
- Defendants: Favored Tech USA Corporation (California); Jiangsu Favored Nanotechnology Co., Ltd. (China); and GN Audio USA Inc. (Delaware)
- Plaintiff’s Counsel: Lowry Blixseth APC; Bochner PLLC
- Case Identification: 3:23-cv-01690, N.D. Cal., 02/05/2024
- Venue Allegations: Venue is alleged to be proper in the Northern District of California because each Defendant is alleged to have a principal place of business in Cupertino, California, and to have committed acts of infringement in the District.
- Core Dispute: Plaintiff alleges that Defendants' nano-coating technologies, the machines that perform the coating, and the resulting electronic products (including hearing aids and earbuds) infringe two U.S. patents related to plasma deposition of protective polymeric layers.
- Technical Context: The technology involves applying ultra-thin, water-repellent polymeric coatings to electronic devices using plasma-enhanced chemical vapor deposition, a process designed to protect sensitive components from moisture and corrosion.
- Key Procedural History: The complaint alleges that one defendant, Favored Tech, previously challenged the '070 patent in an inter partes review (IPR) proceeding at the USPTO. It also alleges that another defendant, GN Audio, is a former licensee of the patents-in-suit, having terminated its license agreement with Plaintiff in February 2023.
Case Timeline
| Date | Event |
|---|---|
| 2004-03-18 | ’070 Patent Priority Date |
| 2013-03-05 | ’070 Patent Issue Date |
| 2015-06-09 | ’087 Patent Priority Date |
| 2020-01-XX | Favored Defendants allegedly import/offer for sale products at CES 2020 |
| 2020-XX-XX | FTC initiates IPR proceedings against the '070 Patent (IPR2020-00478) |
| 2021-09-XX | Favored Defendants allegedly disclose operational details in fundraising documents |
| 2021-06-22 | ’087 Patent Issue Date |
| 2023-02-10 | GN Audio’s parent company allegedly terminates license agreement with P2i |
| 2023-03-01 | P2i allegedly sends letter to GN Hearing regarding infringement |
| 2023-10-XX | GN Audio allegedly begins selling the Jabra Elite 8 Active earbuds |
| 2024-01-XX | Defendants allegedly import/offer for sale products at CES 2024 |
| 2024-02-05 | Second Amended Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,389,070 - "Coating of a polymer layer using low power pulsed plasma in a plasma chamber of a large volume," issued March 5, 2013
The Invention Explained
- Problem Addressed: The patent describes the difficulty of scaling up plasma deposition processes for commercial production. It notes that replicating the conditions from small-scale laboratory chambers in larger-volume industrial chambers often fails to produce satisfactory coatings, as higher power levels can damage the monomer material while lower power can result in non-durable films (’070 Patent, col. 2:1-12).
- The Patented Solution: The invention is a method for depositing a uniform, durable polymeric layer onto a substrate within a large-volume plasma chamber (≥ 0.5 m³). The solution involves applying a high-frequency voltage as a pulsed field at a very specific low-power density (0.001 to 500 w/m³), which allows for the controlled polymerization of a monomer gas into a high-quality protective coating without the trade-offs of prior methods (’070 Patent, Abstract; col. 2:13-21).
- Technical Importance: The patented method addressed a key manufacturing challenge by enabling the mass production of consistent, high-quality, water-repellent nano-coatings on commercial-scale equipment (Compl. ¶34).
Key Claims at a Glance
- The complaint asserts at least independent claim 1 (Compl. ¶268).
- Essential elements of independent claim 1 include:
- Introducing a monomeric material in a gaseous state into a plasma deposition chamber.
- The chamber’s plasma zone has a volume of at least 0.5 m³.
- Igniting a glow discharge within the chamber.
- Applying a voltage as a pulsed field at a power of from 0.001 to 500 w/m³.
- Applying the field for a sufficient time to form a polymeric layer.
- The complaint reserves the right to assert other claims (Compl. ¶43, 261).
U.S. Patent No. 11,041,087 - "Coatings," issued June 22, 2021
The Invention Explained
- Problem Addressed: The patent identifies a fundamental trade-off in creating plasma-polymerized coatings: processes that are gentle enough to preserve a monomer’s chemical structure (and thus its liquid-repellent properties) often result in "tacky" or easily smeared coatings. Conversely, higher-energy processes that create more durable, cross-linked coatings tend to fragment the monomer, compromising its repellent function (’087 Patent, col. 1:28-65).
- The Patented Solution: The invention is an electronic device with a novel coating, which is itself formed by a novel process. The coating is created by exposing the device to a plasma that contains not only a monomer (for repellency) but also a separate crosslinking reagent. The inclusion of this crosslinker facilitates the formation of a stable, durable polymer network even under the low-energy plasma conditions needed to preserve the monomer's properties, thereby achieving both durability and high liquid repellency (’087 Patent, Abstract; col. 2:17-41).
- Technical Importance: This approach provided a method to overcome the inherent compromise between durability and repellency in plasma coatings for electronics (Compl. ¶33, 37).
Key Claims at a Glance
- The complaint asserts at least independent claim 1 (Compl. ¶242).
- Essential elements of independent claim 1 include:
- An electronic or electrical device or component.
- Comprising a protective cross-linked polymeric coating on its surface.
- Where the coating is obtainable by exposing the device to a plasma comprising both a monomer compound and a crosslinking reagent.
- The monomer compound has a specific chemical formula.
- The complaint asserts infringement of dependent claims 3, 11, 12, and 14 (Compl. ¶139, 141-143, 119-122).
III. The Accused Instrumentality
Product Identification
- The complaint identifies two sets of accused instrumentalities:
- Favored Defendants: Nano-coating machines (e.g., the "FT-35X" and others), the process of applying nano-coatings ("Infringing Method"), and the resulting coated electronic components (Compl. ¶46, 78, 118).
- GN Audio: A range of consumer electronic products, including ReSound and Beltone hearing aids and Jabra earbuds (e.g., Elite 8 Active, Elite 10) ("GN Audio Products") (Compl. ¶47).
Functionality and Market Context
- The defendants are accused of applying protective, water-repellent polymeric coatings to electronic devices using plasma-enhanced vapor deposition (Compl. ¶5, 43). The complaint alleges that GN Audio uses machines (e.g., the FT-35X) sourced from Favored Defendants to apply these coatings to its products (Compl. ¶57-58). An annotated image of the accused FT-35X machine is provided, identifying the "Loading Bay" where electronic components are placed for coating (Compl. ¶62). The complaint further alleges that Favored Defendants, with the help of former P2i employees and their trade secrets, have copied P2i's technology and that GN Audio, a former licensee, has continued to use the patented technology after terminating its license (Compl. ¶7-11, 132).
IV. Analysis of Infringement Allegations
U.S. Patent No. 8,389,070 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a method for depositing a polymeric material onto a substrate, the method comprising introducing a monomeric material in a gaseous state into a plasma deposition chamber | Defendants' machines, such as the FT-35X, allegedly introduce a monomeric material (identified via NMR as 1H,1H,2H,2H-nonafluorohexyl acrylate) into a plasma deposition chamber in a gaseous state. | ¶73, ¶80 | col. 10:20-22 |
| in which a plasma zone has a volume of at least 0.5 m³ | The FT-35X machine is alleged to have a plasma deposition chamber with a volume of approximately 0.79 m³, based on an estimated height and diameter of 1 meter each. A photo of the chamber is provided. | ¶68, ¶67 | col. 10:23-24 |
| igniting a glow discharge within said chamber | The accused machines are alleged to ignite a glow discharge within the chamber to initiate the coating process. | ¶74, ¶82 | col. 10:25-26 |
| and applying a voltage as a pulsed field, at a power of from 0.001 to 500 w/m³ | The machines allegedly apply a pulsed voltage at a power density calculated to be within the claimed range, based on an alleged voltage of 220V and the chamber's estimated volume. A photo of the SEREN RF Generator is provided. | ¶71, ¶74, ¶75, ¶14 | col. 10:27-28 |
| for a sufficient period of time to allow a polymeric layer to form on the surface of the substrate. | The accused process allegedly applies the pulsed field until a polymeric layer forms on the electronic devices or components placed inside the chamber. | ¶74, ¶82 | col. 10:29-31 |
Identified Points of Contention
- Technical Question: The complaint's calculation of the power density (w/m³) appears to be an estimate based on the machine's external voltage and estimated chamber volume (Compl. ¶71). A key factual dispute may be whether the actual power delivered to the plasma, when accurately measured within the operational chamber, falls within the specific range required by claim 1.
- Scope Question: The claim recites a "plasma zone" with a volume of at least 0.5 m³. The parties may dispute whether "plasma zone" refers to the entire physical volume of the deposition chamber, as the complaint alleges (Compl. ¶68), or a more limited volume where the plasma is actively sustained.
U.S. Patent No. 11,041,087 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| An electronic or electrical device or electronic or electrical component thereof | The accused instrumentalities are identified as GN Audio's earbuds and hearing aids, as well as components coated by Favored Defendants. | ¶47, ¶50, ¶118 | col. 18:1-3 |
| comprising a protective cross-linked polymeric coating on a surface of the device or component | The accused products are alleged to be coated with a protective polymer, citing defendants' own marketing materials (e.g., "iSolate nanotech," "NanoBlock") and promotional diagrams showing a "Patented coating process diagram." | ¶53-55, ¶76 | col. 18:4-6 |
| wherein the protective cross-linked polymeric coating is obtainable by exposing the device or component to a plasma comprising a monomer compound and a crosslinking reagent | The complaint alleges the coatings are created using a plasma process that includes a monomer and a crosslinking reagent, as disclosed in Favored Defendants' fundraising documents. | ¶91, ¶124, ¶245 | col. 18:7-10 |
| wherein the monomer compound has the following formula... | The complaint presents NMR spectroscopy results allegedly identifying the monomer used by Favored Defendants as 1H,1H,2H,2H-nonafluorohexyl acrylate and alleges this compound falls within the scope of the claimed chemical formula. | ¶93, ¶18 | col. 18:11-42 |
Identified Points of Contention
- Technical Question: The complaint asserts that a "crosslinking reagent" is used in the accused process, primarily citing fundraising documents (Compl. ¶91). A central question of fact will be whether the accused process actually uses a distinct chemical that functions as a "crosslinking reagent" as required by the claim, or if the coating's properties are achieved through other means.
- Scope Question: The claim uses the product-by-process format "coating is obtainable by..." The infringement analysis may turn on the evidence presented to show that the accused products are, in fact, made by the specific plasma process involving both a monomer and a crosslinking reagent, not just that they possess a cross-linked coating. The complaint's inclusion of photos showing GN Audio's earbuds submerged in water may be used to argue the products have the properties that result from the claimed invention (Compl. ¶138).
V. Key Claim Terms for Construction
’070 Patent: "power of from 0.001 to 500 w/m³"
- The Term: "at a power of from 0.001 to 500 w/m³"
- Context and Importance: This numerical range is a critical limitation that distinguishes the invention from prior art. The entire infringement case for the '070 patent hinges on proving the accused process operates within this specific power density window. Practitioners may focus on this term because the complaint's allegation of infringement relies on a calculation rather than a direct measurement (Compl. ¶71).
- Intrinsic Evidence for Interpretation: The patent itself does not define how power density should be measured but provides it as a key parameter. The specification states "the power is applied at from 0.001 to 100 w/m³" in a more detailed section, a potentially narrower range than the claim itself ('070 Patent, col. 2:31-33). A defendant could argue this narrower range informs the scope, while a plaintiff would likely argue the claim language governs.
’087 Patent: "crosslinking reagent"
- The Term: "crosslinking reagent"
- Context and Importance: This term is the central point of novelty in the '087 patent, representing the solution to the durability-repellency trade-off. The case will depend on whether any secondary chemical used by the defendants qualifies as a "crosslinking reagent."
- Evidence for a Broader Interpretation: The specification provides a broad definition, stating a basic requirement is the presence of "two or more unsaturated bonds" and lists numerous examples and chemical structures in Table 1, suggesting the term covers a wide class of compounds (’087 Patent, col. 3:40-44; Table 1).
- Evidence for a Narrower Interpretation: A defendant may argue that the term is implicitly limited to compounds that achieve the specific technical effects described, such as the dramatic increase in electrical resistance shown in Figure 5 (’087 Patent, Fig. 5), and that their process does not rely on a reagent for this purpose.
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement. For the '070 process patent, it alleges Favored Defendants sell the FT-35X machines to GN Audio with knowledge of infringement, that the machines are not staple articles of commerce, and that they provide training and support (Compl. ¶100-103, 277-278). For the '087 product patent, it alleges GN Audio induces its customers to infringe by providing instructions and that Favored Defendants contribute by selling coated components (Compl. ¶247, 254).
- Willful Infringement: Willfulness is alleged against all defendants. For Favored Defendants, knowledge is alleged based on prior IPR proceedings they initiated against the '070 patent (Compl. ¶129). For GN Audio, knowledge is alleged based on a prior license agreement for the patents and a specific notice letter sent on March 1, 2023, predating some of the accused product launches (Compl. ¶131, 152, 154).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of process verification: Can the Plaintiff produce sufficient evidence to prove that the accused commercial-scale coating process operates within the specific low-power-density window (0.001 to 500 w/m³) claimed in the ’070 patent, moving beyond the estimates provided in the complaint?
- A key technical question will be one of chemical composition: For the ’087 patent, does the accused coating process in fact use a distinct "crosslinking reagent" as claimed, or do the Defendants achieve the desired coating properties using a single, self-polymerizing monomer under specific plasma conditions not contemplated by the patent?
- A central legal issue will be knowledge and intent: Given the complaint's allegations of a terminated license, prior patent challenges (IPRs), and misappropriation of trade secrets by former employees, a critical question for the court will be whether the defendants can mount a credible defense against the claims of willful infringement.