DCT

1:22-cv-00079

Globe Cotyarn Pvt Ltd v. Arun Agarwak

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:22-cv-00079, M.D.N.C., 01/31/2022
  • Venue Allegations: Plaintiff Globe Cotyarn alleges venue is proper in the Middle District of North Carolina because a substantial portion of Defendant AAVN’s patent enforcement activities, including sending enforcement letters and negotiating licenses related to the patents-in-suit, were directed at residents and companies in the district.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its textile products do not infringe five of Defendants’ patents and that a portfolio of nine patents related to high-thread-count fabrics is invalid and/or unenforceable due to inequitable conduct and anticipation by prior art.
  • Technical Context: The dispute centers on technologies for manufacturing woven textiles, such as bedsheets, with a "proliferated" or artificially high thread count by simultaneously inserting multiple weft yarns during a single event in the weaving process.
  • Key Procedural History: The complaint references a history of aggressive enforcement by AAVN, including at least seven lawsuits and an International Trade Commission (ITC) action initiated in 2015 concerning the earliest patent in the portfolio. A central allegation for unenforceability is that AAVN improperly claimed "small entity status" to reduce USPTO fees, despite allegedly licensing the patents to Alok Industries, a multi-billion-dollar corporation.

Case Timeline

Date Event
2012-02-01 Prior art products "Swiss Dots 400" and "Kingston 500" allegedly sold on or before this date
2012-07-16 Prior art product "ALOK 650" allegedly sold on or before this date
2012-10-31 Prior art product "Sterling Manor 620" allegedly sold on or before this date
2013-01-29 Prior art product "Valiant 600" allegedly sold on or before this date
2013-08-15 Earliest Priority Date for '324 and '159 Patents
2014-01-28 Prior art product "ALOK 750" allegedly sold on or before this date
2014-02-21 Priority Date for '790 Patent
2015-09-15 U.S. Patent No. 9,131,790 Issues
2016-03-02 Priority Date for '737 Patent
2016-03-03 Priority Date for '892 Patent
2016-04-12 Priority Date for '950 Patent
2016-09-29 Priority Date for '324 Patent
2016-11-01 U.S. Patent No. 9,481,950 Issues
2016-11-15 U.S. Patent No. 9,493,892 Issues
2017-03-02 Priority Date for '159 Patent
2017-07-17 Priority Date for '744 Patent
2017-07-18 U.S. Patent No. 9,708,737 Issues
2018-08-31 Priority Date for '337 Patent
2018-09-04 U.S. Patent No. 10,066,324 Issues
2019-10-03 Priority Date for '414 Patent
2019-10-15 U.S. Patent No. 10,443,159 Issues
2019-11-12 U.S. Patent No. 10,472,744 Issues
2020-10-20 U.S. Patent No. 10,808,337 Issues
2021-11-09 U.S. Patent No. 11,168,414 Issues
2022-01-31 Complaint for Declaratory Judgment Filed

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

U.S. Patent No. 10,066,324 - "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package"

  • Patent Identification: U.S. Patent No. 10,066,324, "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package," issued September 4, 2018. (Compl. ¶24).

The Invention Explained

  • Problem Addressed: The patent describes a commercial desire for textiles with a high "thread count," which consumers associate with quality and comfort. However, achieving a high thread count by using very fine synthetic yarns is difficult because such yarns are prone to breaking in high-speed looms. A known alternative—twisting multiple fine yarns into a single, stronger yarn—has been deemed a deceptive practice by the U.S. Federal Trade Commission if each constituent strand is counted toward the total thread count. (’324 Patent, col. 2:10-40).
  • The Patented Solution: The invention proposes a method and system to create a high thread count fabric without the breakage or deception problems. The solution involves preparing a special "multi-pick yarn package" where multiple fine yarns are wound together in a "substantially parallel" and adjacent, but untwisted, manner. A loom apparatus then takes this group of parallel yarns and inserts them simultaneously across the warp yarns in a single pass, or "pick insertion event." This technique allows the thread count to be multiplied without using a single, fragile yarn or a twisted yarn. (’324 Patent, col. 2:45-60; Fig. 1, 4).
  • Technical Importance: This approach provides a method for manufacturing textiles that can be marketed with a high thread count, a key indicator of quality for consumers, while potentially avoiding the physical limitations of fine yarns in looms and regulatory scrutiny over how thread count is calculated. (’324 Patent, col. 2:10-16).

Key Claims at a Glance

  • The complaint seeks a declaration of non-infringement for the ’324 Patent generally. (Compl. ¶¶227-232). Independent claim 1 is a method claim.
  • Essential elements of independent claim 1 include:
    • Drawing multiple partially oriented polyester yarns to form oriented yarns.
    • Using a friction twisting unit to twist and detwist filaments within the yarns to provide texture.
    • Applying uniform air pressure to the yarns.
    • Winding the oriented yarns onto a spool to form a "multi-pick yarn package" where the yarns serve as "polyester weft yarns forming adjacent substantially parallel yarns wound together."
    • "Simultaneously inserting the polyester weft yarns during a single pick insertion event" of a loom.
    • Conveying the inserted yarns across a warp shed.
    • Interlacing the warp and weft yarns to produce a woven textile fabric. (’324 Patent, col. 21:55-22:50).

U.S. Patent No. 10,443,159 - "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package"

  • Patent Identification: U.S. Patent No. 10,443,159, "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package," issued October 15, 2019. (Compl. ¶27).

The Invention Explained

  • Problem Addressed: The ’159 Patent addresses the same technical problem as the ’324 Patent: the difficulty in achieving a high thread count in textiles due to the breakage of fine yarns in looms and the deceptive marketing issues associated with twisted multi-ply yarns. (’159 Patent, col. 2:10-40).
  • The Patented Solution: The solution is substantively the same as that disclosed in the ’324 Patent, involving the simultaneous insertion of multiple, parallel, untwisted weft yarns drawn from a specially prepared multi-pick yarn package. This allows for an increased number of picks per inch in the final fabric, thereby "proliferating" the thread count. (’159 Patent, Abstract; col. 2:45-60).
  • Technical Importance: The technical importance is identical to that of the ’324 Patent, as it relates to enabling the production of commercially desirable high-thread-count fabrics while navigating manufacturing and regulatory challenges. (’159 Patent, col. 2:10-16).

Key Claims at a Glance

  • The complaint seeks a declaration of non-infringement for the ’159 Patent generally. (Compl. ¶¶233-238). Independent claim 1 is a product claim.
  • Essential elements of independent claim 1 include:
    • A woven textile fabric comprising from 90 to 235 ends per inch warp yarns and from 100 to 1410 picks per inch multi-filament polyester weft yarns.
    • The picks are woven in groups of at least two multi-filament polyester weft yarns running in a parallel form.
    • A process limitation stating that the weft yarns "are wound in a substantially parallel form to one another and substantially adjacent to one another on a multi-pick yarn package to enable the simultaneous inserting" of the yarns during a single pick insertion event. (’159 Patent, col. 23:3-22).

U.S. Patent No. 10,472,744 - "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package"

  • Patent Identification: U.S. Patent No. 10,472,744, "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package," issued November 12, 2019. (Compl. ¶30).
  • Technology Synopsis: This patent, part of the same family, discloses a method for creating high-thread-count textiles. The technical solution involves preparing polyester yarns and winding them in a parallel, adjacent manner onto a multi-pick yarn package for simultaneous insertion as weft yarns in a weaving loom. (’744 Patent, Abstract).
  • Asserted Claims: The complaint seeks a declaration of non-infringement for Claims 1-8 of the ’744 Patent. (Compl. ¶241, 244).
  • Accused Features: The accused instrumentalities are Globe's cotton-polyester bedsheet products and the supply chain and methods used to manufacture them. (Compl. ¶¶57-58, 242).

U.S. Patent No. 10,808,337 - "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package"

  • Patent Identification: U.S. Patent No. 10,808,337, "Proliferated Thread Count of a Woven Textile by Simultaneous Insertion within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package," issued October 20, 2020. (Compl. ¶33).
  • Technology Synopsis: This patent discloses methods and systems for producing high-thread-count fabrics. The technology centers on creating a "multi-pick yarn package" of parallel, untwisted yarns and using a loom to insert these yarns simultaneously as multiple weft picks in a single pass. (’337 Patent, Abstract).
  • Asserted Claims: The complaint seeks a declaration of non-infringement for the ’337 Patent generally. (Compl. ¶¶245-250).
  • Accused Features: The accused instrumentalities are Globe's cotton-polyester bedsheet products and the supply chain and methods used to manufacture them. (Compl. ¶¶57-58, 248).

U.S. Patent No. 11,168,414 - "Selective Abrading of a Surface of a Woven Textile Fabric with Proliferated Thread Count..."

  • Patent Identification: U.S. Patent No. 11,168,414, "Selective Abrading of a Surface of a Woven Textile Fabric with Proliferated Thread Count...," issued November 9, 2021. (Compl. ¶36).
  • Technology Synopsis: This patent builds on the core technology of simultaneous multi-yarn insertion and adds a final processing step. It discloses methods and systems for making the high-thread-count fabric and then "solely abrading" the surface of the fabric that has a majority of weft picks (the polyester side) to provide for user comfort. (’414 Patent, Abstract).
  • Asserted Claims: The complaint seeks a declaration of non-infringement for the ’414 Patent generally. (Compl. ¶¶251-256).
  • Accused Features: The accused instrumentalities are Globe's cotton-polyester bedsheet products and the supply chain and methods used to manufacture them. (Compl. ¶¶57-58, 254).

III. The Accused Instrumentality

Product Identification

  • The instrumentalities are Plaintiff Globe's "cotton-polyester bedsheet products" and the associated manufacturing processes and supply chain. (Compl. ¶57, 100).

Functionality and Market Context

  • The complaint describes Globe as a manufacturer of "woven textile fabrics, including bedsheets made with high thread count cotton-polyester blends." (Compl. ¶47). These products are sold to importers in the United States, who in turn supply major retailers such as Belk, Macy's, and Walmart. (Compl. ¶3). A central aspect of the accused instrumentality, as described by Globe, is its fragmented manufacturing process. The complaint alleges that "No single entity within Globe's supply chain controls both yarn production and fabric production," forming the basis for its non-infringement defense. (Compl. ¶48, 100).

IV. Analysis of Infringement Allegations

No probative visual evidence provided in complaint.

'324 Patent Infringement Allegations

  • The complaint does not contain a claim chart. The following chart summarizes Globe's non-infringement theory as it would apply to the elements of a potential infringement assertion by AAVN against the method of claim 1.
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
drawing each of multiple partially oriented polyester yarns... to form an oriented polyester yarn; The complaint alleges that the party performing yarn production is a separate and uncontrolled entity from the party performing fabric production. ¶230 col. 21:55-58
through a friction twisting unit, twisting and detwisting filaments... to provide texture thereto...; The complaint alleges that the party performing yarn production is a separate and uncontrolled entity from the party performing fabric production. ¶230 col. 21:59-63
winding all formed oriented polyester yarns onto a spool... to form a multi-pick yarn package... The complaint alleges that the party performing yarn production is a separate and uncontrolled entity from the party performing fabric production. ¶230 col. 21:67-22:6
simultaneously inserting the polyester weft yarns during a single pick insertion event of a pick insertion apparatus of a loom apparatus; The complaint alleges that the party performing fabric production is a separate and uncontrolled entity from the party performing yarn production. ¶230 col. 22:7-10
conveying... the simultaneously inserted polyester weft yarns across a warp shed... and interlacing... to produce an incremental length of a woven textile fabric... The complaint alleges that the party performing fabric production is a separate and uncontrolled entity from the party performing yarn production. ¶230 col. 22:11-19

Identified Points of Contention

  • Legal Question (Divided Infringement): The primary point of contention is legal rather than technical. The complaint's core non-infringement argument is that no single entity performs all the steps of the claimed method. (Compl. ¶100, 230). This raises the question for the court: Does Globe, or any single actor, "control or direct" the performance of the entire claimed method, from initial yarn processing to final weaving, in a manner that would make it liable for direct infringement under 35 U.S.C. § 271(a)?
  • Evidentiary Question: The complaint provides no technical detail about its own manufacturing process beyond stating it makes "high thread count cotton-polyester blends." (Compl. ¶47). An evidentiary question will be whether Globe's actual manufacturing process, or that of its suppliers, practices the specific technical steps recited in the claim, such as using a "friction twisting unit" or winding yarns in a "substantially parallel" form.

'159 Patent Infringement Allegations

  • The complaint does not contain a claim chart. The following chart summarizes Globe's non-infringement theory as it would apply to the elements of a potential infringement assertion by AAVN against the product of claim 1.
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A woven textile fabric comprising: from 90 to 235 ends per inch warp yarns and from 100 to 1410 picks per inch multi-filament polyester weft yarns... Globe's cotton-polyester bedsheet products. ¶57 col. 23:3-7
wherein the picks are woven into the textile fabric in groups of at least two multi-filament polyester weft yarns running in a parallel form to one another... Globe's cotton-polyester bedsheet products. ¶57 col. 23:8-11
wherein the multi-filament polyester weft yarns are wound in a substantially parallel form... on a multi-pick yarn package to enable the simultaneous inserting... Globe's defense is that its products are not made by an infringing process because the manufacturing steps are divided among different entities. ¶236 col. 23:12-22

Identified Points of Contention

  • Scope Question (Product-by-Process): Claim 1 is a product claim that includes limitations describing the process by which the product is made (e.g., "wound... on a multi-pick yarn package"). This raises a key question of claim scope: Are these process limitations given patentable weight? If so, infringement would require proving that Globe's products were made by the claimed process, making Globe's divided infringement defense potentially applicable even to this product claim.
  • Legal Question: The complaint asserts non-infringement of this product claim based on the doctrine of divided infringement. (Compl. ¶237). This presents a legal question: Can a party escape liability for making or selling an otherwise infringing product if that product was manufactured via a process where the steps were divided among multiple uncontrolled entities?

V. Key Claim Terms for Construction

  • The Term: "simultaneously inserting the polyester weft yarns during a single pick insertion event" (’324 Patent, cl. 1)

  • Context and Importance: This phrase is the technological core of the asserted method claims. Its construction is critical to the divided infringement defense. Practitioners may focus on this term because if "inserting" is construed narrowly as only the action of the loom, it may be easier for AAVN to argue that a single party (the weaver) performs that step, whereas if it is construed broadly in the context of the entire claim, it reinforces the link between the yarn-making steps and the weaving steps, strengthening Globe's argument that the overall "method" is divided.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification distinguishes between the yarn package construction process (Fig. 1) and the loom insertion process (Fig. 4), which could support treating them as distinct phases. (’324 Patent, Fig. 1, 4).
    • Evidence for a Narrower Interpretation: The claim structure links the creation of specific "polyester weft yarns" in the initial steps to the "simultaneously inserting" of those same yarns in a later step. This suggests the entire claim describes a single, integrated process that cannot be conceptually severed. (’324 Patent, col. 22:3-10).

  • The Term: "wherein the multi-filament polyester weft yarns are wound in a substantially parallel form... on a multi-pick yarn package to enable the simultaneous inserting" (’159 Patent, cl. 1)

  • Context and Importance: This limitation in a product claim describes the manufacturing process, making it a "product-by-process" claim. The interpretation of this term is central to whether Globe's divided infringement defense is relevant to the product claims. Practitioners may focus on this term because if the claim is interpreted to cover any fabric with the resulting structure, regardless of process, Globe's defense is weakened. If it is interpreted to only cover fabrics made by this specific process, Globe's defense that no single entity performs the process becomes highly relevant.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation (focus on structure): A party could argue that the "are wound" language merely defines the final structure of the yarns in the fabric, meaning they lie in a way consistent with having been wound in parallel.
    • Evidence for a Narrower Interpretation (focus on process): The phrase "to enable the simultaneous inserting" expresses a purpose tied directly to the manufacturing method. Language in the specification explicitly describes the manufacturing process of winding the yarns onto the package as the solution to the stated technical problem, suggesting the process itself is integral to the definition of the claimed invention. (’159 Patent, Abstract; col. 2:54-60).

VI. Other Allegations

Indirect Infringement

  • The complaint preemptively asserts non-infringement "directly or indirectly," and its divided infringement defense is predicated on the argument that no single party performs all the claimed steps. (Compl. ¶231). This is Globe's factual basis for denying that it could be liable for inducing or contributing to the infringement of others within its supply chain.

Unenforceability / Inequitable Conduct

  • The complaint makes extensive allegations of inequitable conduct against AAVN and the inventor, which, if proven, could render the entire patent portfolio unenforceable. (Compl. ¶¶92-99, 146-226). The allegations are based on two distinct theories:
    • Failure to Disclose Prior Art: The complaint alleges that the inventor was aware of material prior art bedsheet products ("ALOK 650 and ALOK 750") before and during prosecution but intentionally concealed these references from the USPTO to deceive the patent examiner. (Compl. ¶93-94, 148-149).
    • Improper Claim of Small Entity Status: The complaint alleges that AAVN licensed the patents-in-suit to Alok Industries, a "multi-billion dollar Indian conglomerate with many thousands of employees," but continued to improperly and intentionally pay reduced "small entity" fees to the USPTO, which constitutes inequitable conduct. (Compl. ¶95-99, 151-153).

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

  • A central issue will be one of divided infringement: Can AAVN establish that Globe, or a single entity it "controls or directs," performs all steps of the asserted method claims, from yarn texturizing to fabric weaving? The outcome will depend on the specific contractual and operational relationships within Globe’s manufacturing supply chain.
  • A second core issue will be inequitable conduct: Can Globe prove with clear and convincing evidence that the patentee intentionally deceived the USPTO, either by knowingly withholding material prior art or by fraudulently claiming small entity status after licensing the patents to a large corporation?
  • A key question for the product claims will be one of claim scope: Will the court interpret the "product-by-process" language as limiting the claims to only cover fabrics made by the specific recited manufacturing method, thereby making the product claims vulnerable to Globe's divided infringement defense?