Steel City Enterprises Inc v. T Schedule A

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Steel City Enterprises Inc (Pennsylvania)
  • Defendant: The Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on the Attached Schedule A (Primarily People's Republic of China)
  • Plaintiff’s Counsel: Bishop Diehl & Lee, LTD.
• Case Identification: 1:23-cv-06993, N.D. Ill., 09/19/2023
• Venue Allegations: Venue is alleged based on Defendants operating interactive e-commerce stores that target and make sales to consumers in Illinois, thereby causing tortious injury within the district.
• Core Dispute: Plaintiff alleges that Defendants’ online sales of plugs for large beverage containers infringe a U.S. design patent covering the ornamental appearance of such a plug.
• Technical Context: The technology at issue is a consumer product—a reusable, non-spill plug for large water cooler-style jugs—sold in a competitive e-commerce environment.
• Key Procedural History: Plaintiff filed an Amended Complaint against a group of defendants alleged to be an "interrelated group of infringers" operating various online storefronts. The complaint asserts that Defendants use fictitious identities and similar product images, a common fact pattern in litigation targeting counterfeit or knock-off goods sold through online marketplaces. Plaintiff markets its own product, the "Jug Plug," which it states embodies the patented design.

Case Timeline

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

U.S. Design Patent No. D977,973 - "Container Plug"

The patent was issued on February 14, 2023. (Compl. ¶¶3-4).

The Invention Explained

• Problem Addressed: Design patents protect ornamental appearance rather than function. The patent does not articulate a functional problem but instead provides a new, original, and ornamental design for an existing type of article. (Compl. ¶6; D’973 Patent, Claim).
• The Patented Solution: The patent claims the specific visual appearance of a container plug. The claimed design consists of a cylindrical lower body intended to fit inside a container opening and a wider, disc-shaped top flange with a distinctly rounded-over edge. (D’973 Patent, FIGS. 1, 5, 6). The design's overall proportions and the smooth transition between the flange and the body are key visual features. (D’973 Patent, FIG. 1). The broken lines in the patent figures, which depict a water bottle and a logo on the plug's top surface, indicate that this subject matter is not part of the claimed design. (D’973 Patent, Description).
• Technical Importance: The design provides a unique product appearance for a consumer good, which can serve as a source identifier and a point of differentiation in a crowded online marketplace. (Compl. ¶7).

Key Claims at a Glance

• The complaint asserts the single claim of the D'973 Patent. (Compl. ¶¶28-29).
• The claim is for "The ornamental design for a container plug, as shown and described." (D’973 Patent, Claim). The essential elements are the visual characteristics of the plug as depicted in solid lines in the patent's drawings, including:
  • The overall configuration and shape of the plug.
  • The proportions of the top flange relative to the lower cylindrical body.
  • The specific curvature of the top flange's outer edge.
  • The visual appearance of the interior cylindrical wall and bottom flange structure.

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are "plug or caps for large water containers" that Defendants offer for sale and sell through online marketplaces, including amazon.com, ebay.com, walmart.com, and aliexpress.com. (Compl. ¶¶6, 10).

Functionality and Market Context

The accused products are designed for use with large beverage containers, such as those used with upright water dispensers. (Compl. ¶6). The complaint alleges that the various named Defendants are part of a coordinated network that sells the "exact same infringing products," often using identical or similar product images and descriptions copied from Plaintiff's own listings. (Compl. ¶¶12-13, 19). The complaint references, but does not include, exhibits with screenshots of the accused product listings. (Compl. ¶13).

IV. Analysis of Infringement Allegations

The complaint references a claim chart in an exhibit that was not provided. (Compl. ¶28). The infringement allegations are therefore summarized below in prose.

The complaint alleges that the products sold by Defendants infringe the D'973 Patent because they incorporate the claimed ornamental design. (Compl. ¶¶28-29). The legal test for design patent infringement is whether, in the eye of an ordinary observer, the resemblance between the patented design and the accused design is such as to deceive that observer into purchasing one supposing it to be the other. The complaint asserts that Defendants sell the same infringing products, using similar images, which suggests the infringement read will be identical across the accused products. (Compl. ¶13). No probative visual evidence provided in complaint.

Identified Points of Contention

• Factual Question: The central dispute will be a factual comparison: Is the overall visual appearance of the Defendants' plugs "substantially the same" as the design claimed in the D'973 Patent? The court's analysis will depend on a side-by-side comparison of the accused products with the patent drawings.
• Scope Question: While the claimed design is defined by the patent drawings, a question may arise regarding the impact of any minor differences between the accused products and the drawings on the "ordinary observer" analysis.

V. Key Claim Terms for Construction

Claim construction is generally not performed for design patents, as the claim is understood to be defined by the drawings rather than by words. The infringement analysis typically proceeds directly to a comparison of the accused product's design with the patent's figures. Practitioners may therefore anticipate that the dispute will focus on the factual application of the "ordinary observer" test rather than the construction of any particular term.

VI. Other Allegations

Indirect Infringement

The complaint alleges that Defendants are an "interrelated group of infringers working in active concert to knowingly and willfully make, use, offer for sale, sell, and/or import" infringing products. (Compl. ¶12). These allegations of acting in concert may support theories of joint liability for direct infringement.

Willful Infringement

The complaint alleges that infringement was and continues to be willful. (Compl. ¶¶24, 33). This allegation is based on the assertion that Defendants operate as a coordinated network, use Plaintiff's own product imagery, and may be connected to Plaintiff's original manufacturer, suggesting pre-suit knowledge of the patent or the patented design. (Compl. ¶¶12, 19).

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

• A core issue will be one of visual identity: From the perspective of an ordinary observer, is the ornamental design of the plugs sold by the Defendants substantially the same as the design depicted in the D'973 Patent, such that a purchaser would be deceived? The case will likely turn on the visual evidence presented at trial or on summary judgment.
• A key procedural question will be one of enforceability: Can the Plaintiff effectively pursue and obtain relief from a large, allegedly coordinated group of foreign-domiciled online sellers who are accused of using fictitious identities to evade enforcement? The court's willingness to treat the defendants as a single, interrelated group will be critical to the case's practical outcome.
• An evidentiary question will be one of damages: Assuming infringement is established, can Plaintiff prove the amount of Defendants' total profits under 35 U.S.C. § 289, a remedy specific to design patents, given the difficulty of obtaining reliable sales data from numerous and potentially uncooperative international sellers?