Shantou Hongkai Technology Industrial Co Ltd v. Chuxuan Chen

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Shantou Hongkai Technology Industrial Co., LTD. (China)
  • Defendant: Chuxuan Chen (China), Mengye Yu (China), and ZGYDS Inc. (Texas)
  • Plaintiff’s Counsel: Bishop Diehl & Lee, LTD.
• Case Identification: 1:24-cv-08851, N.D. Ill., 10/03/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendants target e-commerce sales to Illinois residents via Amazon.com and their patent enforcement action through Amazon's platform has specifically caused Plaintiff commercial harm in the district.
• Core Dispute: Plaintiff seeks a declaratory judgment that its "Arrow Target" toy product does not infringe the Defendants' design patent, and further that the patent is invalid.
• Technical Context: This dispute concerns the ornamental design of a standing toy archery target sold in the consumer e-commerce market.
• Key Procedural History: The action was precipitated by an infringement complaint Defendants filed against Plaintiff under the Amazon Patent Evaluation Express (“APEX”) procedure, which resulted in the removal of Plaintiff's product listings. Plaintiff asserts this action creates a justiciable controversy for non-infringement and invalidity.

Case Timeline

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

U.S. Design Patent No. D979,652 - "ARROW TARGET"

• Patent Identification: U.S. Design Patent No. D979,652, "ARROW TARGET", issued February 28, 2023.

The Invention Explained

• Problem Addressed: As a design patent, the '652 Patent does not articulate a technical problem. Its purpose is to protect the novel, non-obvious ornamental appearance of an article of manufacture—in this case, an arrow target (’972 Patent, Claim).
• The Patented Solution: The patent claims the specific visual appearance of a freestanding arrow target. The claimed design consists of the overall aesthetic impression created by the combination of its constituent parts as shown in the patent figures (’972 Patent, Figs. 1-8). Key visual features include a shield-shaped target backboard with curved upper "shoulders" tapering to a narrower base, supported by two telescoping legs connected to a U-shaped floor stand (’972 Patent, Fig. 1, Fig. 3). The rear view shows a grid-like reinforcement structure on the backboard (’972 Patent, Fig. 4). The broken lines shown in the figures, such as the horizontal slots on the target face, are explicitly disclaimed and do not form part of the protected design (’972 Patent, Description).

Key Claims at a Glance

• Design patents contain a single claim. The asserted claim is: "The ornamental design for an arrow target, as shown and described." (’972 Patent, Claim).
• The "elements" of a design claim are the visual features of the design as a whole. The protected design is defined by the visual impression created by the combination of:
  • The specific silhouette of the target backboard.
  • The use of two telescoping vertical support legs.
  • A U-shaped tubular base structure.
  • The particular proportions and interrelation of these features.

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused products as Plaintiff’s "Arrow Target toy products," sold on Amazon.com under various ASINs, including B0C93VXGMT, B0C93XBG38, B0C9GT54GR, and others (Compl. ¶¶15, 23).

Functionality and Market Context

• The complaint describes the accused products as toys sold through Amazon storefronts (Compl. ¶8). It alleges that these products account for a significant portion of Plaintiff's business and that their removal from the marketplace in response to Defendants' APEX complaint has caused substantial economic harm (Compl. ¶¶14, 46). The complaint does not provide a direct visual of the accused product itself, but rather includes images of alleged prior art products to support its invalidity contentions (Compl. pp. 8-11).

IV. Analysis of Infringement Allegations

The complaint, being an action for declaratory judgment of non-infringement, does not provide a claim chart from the patentee. It asserts that Plaintiff's products do not infringe any valid claim of the ’652 Patent (Compl. ¶29). The primary factual basis offered for this conclusion is the allegation that "Plaintiff sold the Accused Products before the priority date of the ‘652 Patent" (Compl. ¶¶25, 31). This assertion primarily supports a theory of patent invalidity under 35 U.S.C. § 102, rather than a direct, feature-by-feature comparison for non-infringement.

To support its invalidity claims, the complaint provides several visuals of what it purports to be prior art. The complaint includes a screenshot from an Amazon product listing, which shows a customer review with a photograph of a toy arrow target dated May 29, 2022. (Compl. p. 8). This image of an allegedly pre-existing product is presented as evidence that the patented design was not novel at the time of its filing.

• Identified Points of Contention:
  • Validity Question: The central dispute articulated in the complaint is whether the ’652 Patent is invalid as anticipated or obvious in light of prior art. The complaint alleges that "a myriad of same products [were] sold prior to the earliest priority date of the ‘652 Patent," citing online product listings with availability dates as early as 2019 (Compl. ¶¶37, 38, pp. 7-11).
  • Infringement Question: The ultimate infringement question will be whether an "ordinary observer," taking into account the prior art, would be deceived into purchasing Plaintiff's product believing it to be the one shown in the ’652 Patent. The resolution of this issue will require a visual comparison between the design of the actual accused product and the patented design. The complaint does not currently provide sufficient detail for this direct comparison.

V. Key Claim Terms for Construction

In design patent litigation, the claim is understood as the design as a whole, depicted in the drawings. Formal claim construction of verbal terms is uncommon. The central analysis focuses on a visual comparison between the patented design and the accused product from the perspective of an ordinary observer. Therefore, there are no specific claim terms that are likely to require formal construction.

VI. Other Allegations

• Indirect Infringement: The complaint makes a blanket denial of any direct or indirect infringement but does not provide specific facts or arguments related to inducement or contributory infringement (Compl. ¶29).
• Willful Infringement: As a declaratory judgment plaintiff, Shantou Hongkai does not allege willfulness. Instead, it seeks a declaration that the case is "exceptional" under 35 U.S.C. § 285, which could entitle it to attorneys' fees (Compl. ¶33, Prayer for Relief ¶4). The basis for this allegation is that Defendants filed a "baseless" and "anticompetitive" infringement claim with Amazon to disrupt Plaintiff's sales (Compl. ¶40, Prayer for Relief ¶4). The complaint also asserts a separate count for tortious interference based on the same conduct (Compl. ¶¶40-47).

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

1. A central issue will be one of patent validity: does the prior art cited in the complaint, particularly the evidence of similar toy targets allegedly available on Amazon as early as 2019, anticipate or render obvious the ornamental design claimed in the ’652 patent, which has a June 2022 priority date?
2. Should the patent survive the validity challenge, the key question becomes one of infringement: would an ordinary observer, familiar with the prior art, find the overall visual appearance of Plaintiff's "Arrow Target" toy to be substantially the same as the patented design? Answering this will require the presentation of clear evidence depicting the accused product.
3. A third question relates to commercial conduct: did the Defendants' use of the Amazon APEX procedure to de-list Plaintiff's products, based on a patent that may be invalid or not infringed, constitute tortious interference with business relationships or render this an "exceptional case" warranting an award of attorneys' fees?