DCT

1:22-cv-00079

Globe Cotyarn Pvt Ltd v. Arun Agarwak

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:22-cv-00079, M.D.N.C., 05/04/2022
  • Venue Allegations: Plaintiff alleges venue is proper in the Middle District of North Carolina because a substantial portion of Defendants' patent enforcement activities, including sending enforcement letters and negotiating licenses, took place in and were directed at companies in Greensboro and Charlotte, North Carolina.
  • Core Dispute: Plaintiff seeks a declaratory judgment that ten of Defendants’ patents are invalid and/or unenforceable, and that Plaintiff has not infringed six of those patents, which relate to methods of manufacturing high-thread-count woven textiles.
  • Technical Context: The technology concerns methods for creating woven fabrics, such as bedsheets, with a high thread count by simultaneously inserting multiple parallel weft yarns in a single pass of a loom, a technique significant for producing textiles that are both dense and durable.
  • Key Procedural History: The complaint alleges that Defendant AAVN previously sued Plaintiff Globe for infringement of one of the patents-in-suit in 2015, a case that was voluntarily dismissed without prejudice in 2016. The current complaint raises two distinct theories of inequitable conduct: first, that the inventor intentionally withheld material prior art from the U.S. Patent and Trademark Office during prosecution, and second, that the inventor fraudulently claimed small entity status to underpay patent fees despite licensing the patents to a large entity.

Case Timeline

Date Event
2013-08-15 Priority Date for ’790, ’950, ’892, ’737, ’324, ’159, ’744, ’337, ’414, ’733 Patents
2015-09-15 U.S. Patent No. 9,131,790 Issues
2016-07-XX AAVN voluntarily dismisses prior infringement claims against Globe
2016-11-01 U.S. Patent No. 9,481,950 Issues
2016-11-15 U.S. Patent No. 9,493,892 Issues
2017-07-18 U.S. Patent No. 9,708,737 Issues
2018-09-04 U.S. Patent No. 10,066,324 Issues
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
2022-01-18 U.S. Patent No. 11,225,733 Issues
2022-05-04 Complaint for Declaratory Judgment Filed

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

U.S. Patent No. 9,131,790 - 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

The Invention Explained

  • Problem Addressed: The patent’s background section describes a technical challenge in manufacturing high-thread-count textiles. Using fine synthetic yarns to increase thread density can lead to yarn breakage in high-speed looms, while twisting yarns together for strength can be considered deceptive to consumers if each strand is counted toward the total thread count (’790 Patent, col. 2:19-41).
  • The Patented Solution: The invention addresses this by preparing a "multi-pick yarn package" where two or more weft yarns are wound together in a parallel, untwisted configuration on a single bobbin. This package then feeds multiple yarns simultaneously into the loom during a single "pick insertion event," effectively multiplying the number of weft threads inserted in one pass without using fragile, ultra-fine yarns or deceptive twisting (’790 Patent, col. 2:42-59; Fig. 4).
  • Technical Importance: This approach allows for the efficient production of durable, high-thread-count fabrics that combine the feel of cotton warp yarns with the strength of synthetic polyester weft yarns, a desirable combination in the consumer bedding market (’790 Patent, col. 2:4-10).

Key Claims at a Glance

  • The complaint’s invalidity allegations focus on claims 1-10 (Compl. ¶¶ 118, 125). Independent claim 1 is excerpted below.
  • Essential elements of Claim 1:
    • A woven textile fabric comprising from 90 to 235 ends per inch warp yarns and from 100 to 765 picks per inch multi-filament polyester weft yarns.
    • 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.
    • Wherein the multi-filament polyester 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 multi-filament polyester weft yarns during a single pick insertion event of a pick insertion apparatus of a loom apparatus.
    • Wherein the number of the multi-filament polyester weft yarns wound on the weft yarn package...is at least two.
    • Wherein the number of the multi-filament polyester weft yarns conveyed by the pick insertion apparatus...is between two and eight.

U.S. Patent No. 9,481,950 - 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

The Invention Explained

  • Problem Addressed: The ’950 Patent addresses the same technical problem as the ’790 Patent: the difficulty of weaving high-thread-count fabrics using fine synthetic yarns that are prone to breaking in modern looms, and the deceptive marketing practice of counting twisted-together yarns to inflate thread counts (’950 Patent, col. 2:20-41).
  • The Patented Solution: The patent describes a functionally identical solution to the ’790 Patent, involving the creation and use of a "multi-pick yarn package" where multiple yarns are wound in parallel and untwisted. This package allows for the simultaneous insertion of at least two weft yarns in a single pass of a loom, thereby increasing the fabric’s thread count (’950 Patent, col. 2:42-60; Fig. 1).
  • Technical Importance: This method provides a way to achieve the high thread counts desired by consumers for products like bedsheets while maintaining manufacturing efficiency and the durability of the final product (’950 Patent, col. 2:4-10).

Key Claims at a Glance

  • The complaint’s invalidity allegations target claims 1-17 (Compl. ¶ 109). Independent claim 1 is excerpted below.
  • Essential elements of Claim 1:
    • A woven textile fabric comprising from 90 to 235 ends per inch warp yarns and from 100 to 965 picks per inch multi-filament polyester weft yarns.
    • 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.
    • Wherein the multi-filament polyester 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 multi-filament polyester weft yarns during a single pick insertion event of a pick insertion apparatus of a loom apparatus.
    • Wherein the number of the multi-filament polyester weft yarns wound on the weft yarn package...is at least two.
    • Wherein the number of the multi-filament polyester weft yarns conveyed by the pick insertion apparatus...is between one and eight.

U.S. Patent No. 9,493,892 - 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

  • Technology Synopsis: This patent discloses the same fundamental technology as the ’790 and ’950 Patents, addressing the problem of achieving high thread counts with fine yarns by using a multi-pick yarn package to insert multiple parallel weft yarns simultaneously (’892 Patent, col. 2:20-41, 2:42-60).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity for all claims (Compl. ¶ 1, Prayer ¶ 1).
  • Accused Features: The complaint alleges this patent is unenforceable due to inequitable conduct during prosecution relating to withholding prior art and improperly claiming small entity status (Compl. ¶¶ 228-233).

U.S. Patent No. 9,708,737 - 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

  • Technology Synopsis: This patent describes the same core invention as the previously discussed patents: using a multi-pick yarn package of parallel-wound yarns to enable simultaneous insertion of multiple weft yarns, thereby increasing textile thread count without compromising yarn integrity (’737 Patent, col. 2:20-41, 2:42-60).
  • Asserted Claims: The complaint’s invalidity allegations specifically target claims 1-17 based on prior art (Compl. ¶ 109).
  • Accused Features: The complaint alleges invalidity based on the prior art "ALOK 650" product and unenforceability due to inequitable conduct (Compl. ¶¶ 126, 234-242).

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

  • Technology Synopsis: This patent describes claims directed to both the method of producing the multi-pick yarn and the method of producing fabric from that yarn, based on the same technology of simultaneous insertion of parallel weft yarns (’324 Patent, Abstract; Compl. ¶ 280).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity for all claims and non-infringement of claims directed to methods (Compl. ¶¶ 100, 278-283).
  • Accused Features: Plaintiff Globe alleges it does not infringe the method claims under the doctrine of divided infringement, as no single entity in its supply chain performs both the yarn production and fabric production steps (Compl. ¶ 281).

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

  • Technology Synopsis: This patent claims methods for producing both yarn and fabric using the multi-pick, parallel-yarn insertion technology central to the patent portfolio (’159 Patent, Abstract; Compl. ¶ 286).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity for all claims and non-infringement of the method claims (Compl. ¶¶ 284-289).
  • Accused Features: Globe asserts a non-infringement defense of divided infringement, arguing that different entities control the yarn production and fabric production stages (Compl. ¶ 287).

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

  • Technology Synopsis: This patent also contains method claims covering both yarn and fabric production based on the simultaneous insertion of parallel weft yarns (’744 Patent, Abstract; Compl. ¶ 292).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity for all claims and non-infringement of claims 1-8 (Compl. Prayer ¶¶ 1, 3).
  • Accused Features: Globe again raises the defense of divided infringement for the asserted method claims (Compl. ¶ 293).

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

  • Technology Synopsis: This patent contains claims directed to methods and systems covering both yarn and fabric production using the portfolio's core technology (’337 Patent, Abstract; Compl. ¶ 298).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity and non-infringement for all claims (Compl. Prayer ¶¶ 1, 3).
  • Accused Features: The complaint asserts non-infringement based on a divided infringement theory (Compl. ¶ 299).

U.S. Patent No. 11,168,414 - Selective Abrading of a Surface of a Woven Textile Fabric with Proliferated Thread Count Based on Simultaneous Insertion Within a Single Pick Insertion Event of a Loom Apparatus Multiple Adjacent Parallel Yarns Drawn from a Multi-Pick Yarn Package

  • Technology Synopsis: This patent adds a step to the core manufacturing process, claiming methods that include selectively abrading one surface of the woven fabric to improve its feel, a process also known as "peaching" or "sueding" (’414 Patent, Abstract). The claims are directed to systems and methods for both production and subsequent abrading (Compl. ¶ 304).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity and non-infringement for all claims (Compl. Prayer ¶¶ 1, 3).
  • Accused Features: Globe asserts the divided infringement defense, arguing no single entity performs or controls all the claimed steps (Compl. ¶ 305).

U.S. Patent No. 11,225,733 - 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

  • Technology Synopsis: This patent is another continuation in the family, claiming methods and systems for producing textiles using the simultaneous insertion of multiple parallel weft yarns (’733 Patent, Abstract; Compl. ¶ 310).
  • Asserted Claims: The complaint seeks a declaratory judgment of invalidity and non-infringement for all claims (Compl. Prayer ¶¶ 1, 3).
  • Accused Features: The complaint again asserts a divided infringement defense against the method and system claims (Compl. ¶ 311).

III. The Accused Instrumentality

Product Identification

The products at issue are Globe’s woven textile fabrics, specifically high-thread-count cotton-polyester blend bedsheets (Compl. ¶¶ 50-51).

Functionality and Market Context

Globe manufactures and sells a range of bedsheets with thread counts from 500 to 1400 (Compl. ¶ 51). The complaint asserts that these products are the subject of AAVN’s enforcement activities, which have allegedly created "marketing barriers" by causing retailers to direct importers not to purchase Globe's products (Compl. ¶¶ 74, 76). Globe states it sells these products to importers in the U.S., who in turn sell to major retailers, including those in North Carolina (Compl. ¶¶ 3, 68). The complaint frames Globe's business as one that existed prior to the issuance of the patents-in-suit and continues today (Compl. ¶¶ 67-68).

IV. Analysis of Infringement Allegations

The complaint is for a declaratory judgment of non-infringement and does not contain a claim chart alleging infringement. Instead, it outlines Globe’s basis for its belief that it does not infringe certain patents-in-suit.

Globe’s primary non-infringement argument is based on the doctrine of divided infringement (Compl. ¶ 100). This defense applies to the method and system claims asserted in the ’324, ’159, ’744, ’337, ’414, and ’733 Patents. Globe alleges that these patents claim methods and systems for both the production of yarn and the subsequent production of fabric from that yarn (Compl. ¶¶ 280, 286, 292, 298, 304, 310). Globe contends that it does not infringe these claims because neither Globe itself nor any single actor or entity within its supply chain performs or controls all of the claimed steps; specifically, the yarn production and fabric production are performed by separate, uncontrolled entities (Compl. ¶¶ 100, 281, 287, 293, 299, 305, 311). This raises the legal question of whether liability for direct infringement can be established when the steps of a claimed method are performed by more than one party.

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

  • The Term: "substantially parallel form to one another" (from Claim 1 of the ’790 and ’950 Patents)
  • Context and Importance: This term is critical because it defines the core technical distinction of the invention. The patents aim to differentiate themselves from prior art methods that twisted yarns together. The construction of "substantially parallel" will determine whether the claims read on weaving practices that involve any degree of twisting or whether they are strictly limited to untwisted, parallel yarn insertion. Practitioners may focus on this term as it is central to both infringement and validity analyses.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The use of the word "substantially" suggests the claim may tolerate some deviation from perfect mathematical parallelism. The specification does not provide an explicit definition that strictly forbids any incidental contact or crossing of the yarns as they are fed into the loom.
    • Evidence for a Narrower Interpretation: The background section of the patents repeatedly contrasts the invention with the prior art practice of twisting yarns together, framing it as a deceptive practice the invention avoids (’790 Patent, col. 2:25-41). The patent figures, such as Figure 1 in the ’790 Patent, depict the yarns (101) as distinctly separate and parallel as they are wound onto the multi-pick package (100). This repeated distinction could be used to argue for a construction that strictly excludes any intentional twisting or plying of the yarns.

VI. Other Allegations

The complaint makes extensive allegations of unenforceability due to inequitable conduct, based on two separate theories.

Withholding of Material Prior Art

The complaint alleges that the inventor, Arun Agarwal, knew of material prior art—specifically the "ALOK 650" and "ALOK 750" textile products—during the prosecution of at least the ’790, ’950, and ’737 Patents (Compl. ¶¶ 107, 212). It is alleged that Mr. Agarwal was CEO of the U.S. marketing subsidiary that sold these products and was aware of their technical specifications, which allegedly met the limitations of the asserted claims (Compl. ¶¶ 102, 108, 124-126). The complaint alleges that he intentionally withheld this information from the USPTO with an intent to deceive the agency and that the patents would not have issued had the art been disclosed (Compl. ¶¶ 116, 121).

Improper Claim of Small Entity Status

The complaint alleges that Mr. Agarwal and AAVN fraudulently claimed "Small Entity Status" for all of the patents-in-suit, allowing them to pay reduced fees to the USPTO (Compl. ¶¶ 138, 154). This status is alleged to be improper because the patents were licensed to Alok Industries, Ltd., a "multi-billion-dollar Indian conglomerate" that qualifies as a large entity (Compl. ¶¶ 133-134, 136). The complaint alleges this was done with an intent to deceive the USPTO, rendering the patents unenforceable (Compl. ¶¶ 157, 215-218). The complaint includes charts detailing over $30,000 in alleged underpayments resulting from this conduct (Compl. ¶¶ 156, 159).

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

This declaratory judgment action appears to center on three critical, dispositive questions for the court.

  • A primary question will be one of enforceability: Did the patentee commit inequitable conduct before the USPTO, either by intentionally withholding known, material prior art (the "ALOK" products) or by fraudulently claiming small entity status to underpay fees despite licensing the patents to a large entity?
  • A second core issue will be one of validity: Do the prior art "ALOK 650" and related textile products, which the complaint alleges were offered for sale more than one year before the patents' priority date, anticipate or render obvious the claims of the patents-in-suit?
  • For the six patents with asserted method claims, a key legal question will be one of infringement liability: Can the patentee establish direct infringement under the doctrine of divided infringement, where the plaintiff alleges that the claimed steps of yarn production and fabric weaving are performed by separate, uncontrolled entities in its supply chain?