DCT

1:22-cv-06943

Sound Around Inc v. Shenzhen Keenray Innovations Ltd

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:22-cv-06943, E.D.N.Y., 11/14/2022
  • Venue Allegations: Venue is asserted based on Plaintiff's residence and business operations within the district, and because a substantial part of the events giving rise to the claims, including the alleged injury to Plaintiff, occurred there.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its "SA Towel Warmer" product does not infringe Defendant Keenray's design patent and that the patent is invalid and unenforceable, following Defendant's successful request to have the product delisted from Amazon.
  • Technical Context: The dispute concerns the ornamental design of electric towel warmers, a consumer product sold in the competitive e-commerce home goods market.
  • Key Procedural History: The complaint alleges that the patent-in-suit was procured through fraud on the U.S. Patent and Trademark Office (USPTO). Specifically, Plaintiff claims the named inventor is not the true inventor and that Defendants failed to disclose invalidating prior art sales, and then made false statements to the USPTO to overcome a rejection based on those sales. These allegations form the basis for Plaintiff's claims of invalidity, unenforceability, and related business torts.

Case Timeline

Date Event
2018-03-28 Third-party Goldenhot applies for Chinese patents on towel warmer design.
2020-08-03 Goldenhot allegedly first sells redesigned towel warmer to Defendant Keenray.
2020-11-10 Application for U.S. Patent No. D952,810 S filed.
2022-03-19 Named inventor Danxia Wu submits declaration to USPTO to overcome rejection.
2022-05-24 U.S. Patent No. D952,810 S issues.
2022-10-17 Amazon delists Plaintiff's "SA Towel Warmer" product.
2022-11-14 Complaint for Declaratory Judgment filed.

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

U.S. Patent No. D952,810 S - "Blanket Towel Warmer"

  • Patent Identification: U.S. Patent No. D952,810 S, "Blanket Towel Warmer", issued May 24, 2022.

The Invention Explained

  • Problem Addressed: The complaint does not explicitly state a problem addressed by the patent. As a design patent, the implicit goal is to provide a unique and aesthetically pleasing ornamental appearance for a consumer product, in this case, a towel warmer (Compl. ¶19).
  • The Patented Solution: The patent claims the specific ornamental design for a towel warmer as depicted in its figures ('810 Patent, Figs. 1-10). The design features a tall, cylindrical body with a slight taper, a flat lid with a recessed handle, and a distinct ridged base ('810 Patent, Fig. 1, 7). The complaint alleges this design was not created by the named inventor but by a third-party manufacturer, Dongguan Goldenhot Plastic & Hardware Products Co., LTD. (“Goldenhot”) (Compl. ¶20, 27).
  • Technical Importance: The complaint suggests the design's importance lies in its commercial embodiment, which was sold by Goldenhot to both Defendant Keenray and Plaintiff Sound Around for retail in the U.S. consumer market (Compl. ¶24, 26).

Key Claims at a Glance

  • As a design patent, the '810 Patent contains a single claim: "The ornamental design for a blanket towel warmer, as shown and described." ('810 Patent, Claim).
  • The claim's scope is defined by the ten figures included in the patent, which show the design from various perspectives ('810 Patent, Figs. 1-10).

III. The Accused Instrumentality

Product Identification

  • Plaintiff’s "SA Towel Warmer" (Compl. ¶1).

Functionality and Market Context

  • The product is an electric towel warmer intended to heat towels for use after bathing (Compl. ¶19).
  • The complaint alleges that the "SA Towel Warmer" embodies the same design as the product sold by Defendant Keenray, and that both parties source the physical product from the same third-party manufacturer, Goldenhot (Compl. ¶20, 26). The complaint includes a photograph of what it identifies as the hinged towel warmer originated by Goldenhot (Compl. ¶22). This visual depicts a purple, bucket-style warmer with a lid, which is alleged to be the subject of the dispute (Compl. ¶22).
  • Plaintiff sells its products, including the SA Towel Warmer, on e-commerce platforms like Amazon, and alleges that its presence and reputation on Amazon are extremely important to its business (Compl. ¶13, 15). The delisting of this product from Amazon at Keenray's request is the precipitating event for the lawsuit (Compl. ¶40, 43).

IV. Analysis of Infringement Allegations

The complaint seeks a declaratory judgment of non-infringement; therefore, it does not contain allegations of infringement. Instead, it asserts that Plaintiff's product does not infringe the '810 Patent (Compl. ¶57). The factual basis for this assertion is not a detailed comparison of the product's design to the patent's claimed design. Rather, the non-infringement claim is predicated on the argument that the '810 Patent is invalid and unenforceable due to alleged fraud and inequitable conduct (Compl. ¶59, 62, 65). The complaint does not provide sufficient detail for an analysis comparing the visual features of the SA Towel Warmer against the '810 Patent design under the "ordinary observer" test.

Identified Points of Contention

The core of the dispute, as framed by the complaint, raises foundational questions of patent validity and enforceability rather than conventional infringement analysis.

  • Inventorship: A central factual question is whether Defendant Danxia Wu is the true inventor of the claimed design. The complaint alleges the design was originated by a third party, Goldenhot, from which Defendants first learned of the design by purchasing the product (Compl. ¶20, 30).
  • On-Sale Bar / Inequitable Conduct: The complaint alleges that the product embodying the design was sold to Keenray on August 3, 2020, and that public documents showed other offers for sale prior to the patent's November 10, 2020 filing date (Compl. ¶28, 36). It further alleges that to overcome a USPTO rejection based on these sales, Defendant Wu submitted a false declaration claiming she was the inventor and that the prior art disclosures were her own, thereby improperly invoking the one-year grace period (Compl. ¶37). This raises the question of whether an invalidating on-sale bar exists and if the statements to the USPTO constitute inequitable conduct.

V. Key Claim Terms for Construction

In a design patent case, the "claim" is the set of drawings, and traditional claim construction of words is rare. The dispute as framed in the complaint does not appear to turn on the interpretation of any specific term or visual feature in the patent's claim. Instead, it focuses on the factual predicates of patent validity: inventorship and the on-sale bar. Therefore, the complaint does not provide sufficient detail for analysis of claim construction issues.

VI. Other Allegations

  • Indirect Infringement: The complaint does not contain allegations related to indirect infringement.
  • Willful Infringement: The concept of willful infringement by an accused infringer is not at issue. However, the complaint alleges that Defendants have engaged in bad-faith enforcement of the '810 Patent. It claims Defendants knew the patent was procured by fraud but nevertheless asserted it to Amazon to have Plaintiff's competing product delisted (Compl. ¶39, 63, 67). These allegations support Plaintiff's claims for unfair competition under the Lanham Act and tortious interference, as well as its request for a finding that the case is "exceptional" to recover attorney's fees and treble damages (Compl. ¶73; Prayer for Relief H, J).

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

  • A primary issue will be one of inventorship: Can the plaintiff, Sound Around, produce sufficient evidence to establish that the ornamental design of the towel warmer was conceived by the third-party manufacturer, Goldenhot, and not by the patent's named inventor, Danxia Wu?
  • A critical question will concern patent enforceability: Did the defendants commit inequitable conduct before the USPTO? This will depend on whether the plaintiff can prove that the defendants knowingly made material misrepresentations regarding inventorship and the nature of prior sales with a specific intent to deceive the patent examiner.
  • The case also raises a question of competitive conduct: Assuming the patent is found invalid or unenforceable, did the defendants’ act of reporting infringement to Amazon, with alleged knowledge of the patent's defects, constitute bad-faith enforcement actionable as unfair competition under the Lanham Act?