DCT

1:24-cv-09575

Changsha Jiangli Trading Co Ltd v. He

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:24-cv-09575, N.D. Ill., 10/04/2024
  • Venue Allegations: Venue is based on allegations that Defendants conduct business in the Northern District of Illinois, including selling products to consumers in the district and utilizing Amazon fulfillment centers located there.
  • Core Dispute: Plaintiff, an Amazon seller, seeks a declaratory judgment that its sign holder product does not infringe Defendants' design patent and that the patent is invalid and unenforceable, following an infringement complaint filed by Defendants with Amazon that resulted in the delisting of Plaintiff's product.
  • Technical Context: The dispute concerns the ornamental design of acrylic sign holders, a commodity product widely sold in the e-commerce and retail display market.
  • Key Procedural History: The lawsuit was precipitated by an infringement report submitted by Defendant He to Amazon.com, which led to the removal of Plaintiff's product listing. The complaint alleges that the patent is invalid and, further, that Defendants engaged in inequitable conduct by failing to disclose their own alleged prior art product sales to the U.S. Patent and Trademark Office during prosecution.

Case Timeline

Date Event
2019-12-10 Alleged first sale date of Defendants' allegedly invalidating prior art product (ASIN B07YNP76T7)
2019-12-13 Alleged first sale date of Defendants' second allegedly invalidating prior art product (ASIN B07YNN93X7)
2023-05-15 ’109 Patent application filed
2024-05-28 ’109 Patent issued
2024-10-04 Complaint for Declaratory Judgment filed

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

U.S. Design Patent No. D1,029,109 S - "Sign Holder"

  • Patent Identification: U.S. Design Patent No. D1,029,109 S, "Sign Holder", issued May 28, 2024.

The Invention Explained

  • Problem Addressed: Design patents protect aesthetics rather than solving technical problems. The implicit goal is to provide a new, original, and ornamental appearance for an article of manufacture, in this case, a sign holder.
  • The Patented Solution: The patent claims the specific ornamental design for the corners and base of a sign holder (’109 Patent, CLAIM, DESCRIPTION). The visual appearance of the design is defined by the solid lines in the patent's figures, while the dashed broken lines illustrate the remainder of the sign holder for environmental context and are not part of the claimed design (’109 Patent, DESCRIPTION). The claimed design consists of a particular rounded cut-out at the top corners and the specific flared shape of the base at the bottom corners, as detailed in the patent's figures (’109 Patent, Figs. 1, 11, 12).
  • Technical Importance: In a market with many similar products, a unique ornamental design can serve as a key product differentiator.

Key Claims at a Glance

  • Design patents contain a single claim. The asserted claim is: "The ornamental design for a sign holder, as shown and described." (’109 Patent, CLAIM).
  • The scope of this claim is defined by the drawings. Key features shown in solid lines include:
    • The specific rounded contour of the top corners.
    • The specific shape of the split, angled base at the bottom corners.

III. The Accused Instrumentality

Product Identification

  • Plaintiff's "display stand" sold on Amazon via the "JIANGLI-Direct" store under ASIN B0C1NXG7BB ("Plaintiff's Product") (Compl. ¶12).

Functionality and Market Context

  • The product is a sign holder used for displaying materials (Compl. ¶12). The complaint does not provide a detailed technical description or visual depiction of its design.
  • Plaintiff alleges that as a result of Defendants' infringement complaint to Amazon, its product was removed from sale, causing lost sales, loss of goodwill, and harm to its product ranking on the platform (Compl. ¶¶ 23-24).

IV. Analysis of Infringement Allegations

The complaint seeks a declaratory judgment of non-infringement but does not articulate a specific factual basis or legal theory for this claim. The pleading's substantive focus is on challenging the validity and enforceability of the ’109 Patent. The standard for design patent infringement is the "ordinary observer" test, which asks whether an ordinary observer, familiar with the prior art, would be deceived into purchasing the accused product believing it to be the patented design. Without a description or image of the Plaintiff's Product, an analysis of the non-infringement claim is not possible based on the complaint alone.

Figure 11 of the ’109 Patent, attached as Exhibit A, provides an enlarged view of the claimed top corner design, a central feature in the dispute (Compl. Ex. A, Fig. 11). Figure 12 of the ’109 Patent provides an enlarged view of the claimed design for the bottom corner and base (Compl. Ex. A, Fig. 12). A court would compare the ornamental appearance of Plaintiff's Product to these claimed features.

  • Identified Points of Contention: The complaint raises several core challenges to the patent's validity, which represent the primary points of contention in the case.
    • Scope Questions (Functionality): A central dispute will be whether the claimed design is "primarily functional" and therefore unpatentable under 35 U.S.C. § 171 (Compl. ¶¶ 40, 42). The complaint alleges the curved top portion serves the function of preventing injury to the user's hands and that Defendants' own advertising promotes this utilitarian aspect (Compl. ¶¶ 19, 43). This raises the question of whether the design was dictated by function rather than ornamental considerations.
    • Technical Questions (Prior Art): A key factual question is whether Defendants' own products, allegedly sold on Amazon since December 2019, constitute an invalidating on-sale bar under 35 U.S.C. § 102 (Compl. ¶¶ 20, 29). The resolution will depend on whether Plaintiff can prove (1) that the products sold under the cited ASINs embody the patented design, and (2) that the alleged 2019 sale dates are accurate, placing them more than one year before the patent's May 15, 2023, filing date.

V. Key Claim Terms for Construction

In design patent litigation, the court's "construction" of the claim involves a verbal description of the drawings rather than an interpretation of text. The critical legal determination in this case will be the application of the statutory requirement that a design be "ornamental."

  • The Term: "Ornamental" (as applied to the claimed design).
  • Context and Importance: The validity of the ’109 Patent hinges on this determination. Plaintiff’s Count II for invalidity is based entirely on the theory that the design is primarily functional, not ornamental (Compl. ¶¶ 40-42).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (i.e., Ornamental): The grant of the patent by the USPTO creates a presumption of validity, which includes a presumption that the examiner considered the design ornamental. Defendants may argue that the specific curves and angles chosen are merely one of many possible aesthetic choices for a sign holder's corners and are not dictated by function.
    • Evidence for a Narrower Interpretation (i.e., Functional): The complaint alleges that the "curved top portion... is primarily functional for the prevention of harm to the hand of the person handling the sign holder" (Compl. ¶42). Critically, it points to Defendants' own advertising for their commercial product, which allegedly "promote[s] the utilitarian function of how the rounded corner design will not injure the hands" (Compl. ¶19, 43). The complaint also alleges there is "no alternative design" that could achieve this safety function, a key factor in functionality analysis (Compl. ¶44).

VI. Other Allegations

  • Inequitable Conduct: The complaint includes a count for patent invalidity based on inequitable conduct (Count III). It alleges that Defendant He knew that his own prior products, on sale since 2019, were material prior art that would have precluded patentability (Compl. ¶¶ 52-54). The complaint further alleges that He "intentionally withheld and/or failed to disclose" this information to the USPTO with the intent to deceive the agency into granting the patent (Compl. ¶55).

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

  • A dispositive issue will be one of validity based on functionality: Is the claimed design, particularly its rounded corners, a primarily functional feature dictated by safety considerations—as allegedly promoted in Defendants' own advertising—or is it a non-functional, aesthetic choice protectable by a design patent?
  • A second core issue is evidentiary and factual: Can Plaintiff produce evidence to prove that products embodying the patented design were publicly sold by Defendants in the U.S. starting in 2019, which would constitute an invalidating "on-sale bar" rendering the ’109 Patent invalid from the outset?
  • A third question relates to enforceability and intent: If the 2019 sales are proven to be invalidating prior art, can Plaintiff further demonstrate by clear and convincing evidence that Defendant He knew this information was material and deliberately concealed it from the USPTO with an intent to deceive, which would render the patent unenforceable due to inequitable conduct?