Shenzhen City Sanhu Technology Co Ltd v. Albanese

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Shenzhen City Sanhu Technology Co., Ltd. (China)
  • Defendant: Lindsay Albanese, and Hats On LLC, d.b.a. TopTote (United States)
  • Plaintiff’s Counsel: J. Zhang and Associates, P.C.
• Case Identification: 1:23-cv-07691, E.D.N.Y., 10/16/2023
• Venue Allegations: Plaintiff alleges venue is proper because Defendants market and ship their products to New York, and a substantial part of the events giving rise to the claim occurred in the district.
• Core Dispute: Plaintiff, a seller of "Niveaya" brand hat clips, seeks a declaratory judgment that its products do not infringe a patent owned by the Defendants covering a "hat holder."
• Technical Context: The dispute concerns consumer accessories designed for conveniently and fashionably carrying a hat when not being worn.
• Key Procedural History: The action arises from Defendants repeatedly reporting Plaintiff to Amazon.com, alleging that Plaintiff's products infringe the patent-in-suit. The complaint states these reports led to the temporary removal of Plaintiff's product listings, which were later reinstated by Amazon after Plaintiff submitted a non-infringement analysis. Defendants were subsequently offered an opportunity to participate in Amazon's Neutral Patent Evaluation program.

Case Timeline

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

U.S. Patent No. 10,413,047 - "HAT HOLDER", issued September 17, 2019

The Invention Explained

• Problem Addressed: The patent identifies the inconvenience of carrying or storing a fashion hat when it is not being worn. Conventional solutions like hat boxes are described as cumbersome and portable, while simply carrying a hat by hand is inconvenient and risks damage ('047 Patent, col. 1:20-44).
• The Patented Solution: The invention is a device for holding a hat, comprising two straps that are joined together. The free ends of the straps contain ferromagnetic members, which use magnetic attraction to clamp onto a portion of a hat, such as its brim. A hook is coupled to the strap assembly, allowing the user to attach the holder (and the secured hat) to another object, such as a purse or belt loop, for hands-free carrying ('047 Patent, Abstract; col. 2:6-19). The general configuration is depicted in Figures 1A-1C.
• Technical Importance: The patent describes a solution intended to be small, fashionable, and portable, allowing a hat to be securely retained and easily stored when not in use ('047 Patent, col. 1:47-61).

Key Claims at a Glance

• The complaint asserts non-infringement of independent claims 1 and 16 (Compl. ¶¶30-31).
• Independent Claim 1 recites a system for holding a hat, with the essential elements being:
  • the hat;
  • a first strap having a first end and a second end;
  • a second strap having a first end and a second end, the second strap joined to the first strap;
  • a first ferromagnetic member disposed at the first end of the first strap;
  • a second ferromagnetic member disposed at the first end of the second strap;
  • a hook coupled to the first strap;
  • wherein the straps are configured to be separably joined at their first ends by magnetic attraction between the ferromagnetic members; and
  • wherein the straps are configured to retain a portion of the hat therebetween.
• Independent Claim 16 recites a similar system, but differs in how the straps are joined and the specific nature of the magnetic components:
  • the hat;
  • a first strap and a second strap, joined at their respective second ends;
  • a magnet coupled to the first end of the first strap;
  • a ferromagnetic member coupled to the first end of the second strap;
  • wherein the straps are configured to be separably joined at their first ends by magnetic attraction between the magnet and the ferromagnetic member; and
  • wherein the straps are configured to retain a portion of the hat therebetween.
• The complaint states that the remaining claims are not infringed for similar reasons (Compl. ¶35).

III. The Accused Instrumentality

Product Identification

• The accused products are "Niveaya brand products, including the hat clip under model number HCT-05" (the "Niveaya Products"), sold on Amazon.com (Compl. ¶3).

Functionality and Market Context

• The complaint describes the Niveaya Products as "only clips that can be used to hang various things" (Compl. ¶33). The core of the non-infringement argument is that the product consists of "just one single strap that is folded in half making a first half and a second half," rather than two distinct straps (Compl. ¶34). The complaint includes an exhibit with images of the Niveaya Products to support its non-infringement arguments (Compl. ¶28, Ex. 4). This visual evidence, as presented in the complaint, shows a device made of a single piece of flexible material folded over, with magnetic elements at its two free ends.

IV. Analysis of Infringement Allegations

The plaintiff, Shenzhen City Sanhu, seeks a declaratory judgment of non-infringement. The following table summarizes its primary arguments as presented in the complaint.

'047 Patent Infringement Allegations

• Identified Points of Contention:
  • System Claim Scope: The complaint raises a fundamental question about system claims: Does a claim reciting "a system comprising... the hat" require the accused product to be sold with a hat to directly infringe? Plaintiff's argument suggests it does (Compl. ¶33). A counterargument may be that the claim covers the system in its intended use, and infringement occurs when the end-user combines the clip with a hat.
  • Structural Question: A central dispute will be whether the phrase "a first strap" and "a second strap" can be met by a single piece of material folded in half, as the Niveaya Products are alleged to be structured (Compl. ¶34). The interpretation of "strap" and "joined" will be critical.

V. Key Claim Terms for Construction

• The Term: "a first strap ... a second strap ... joined to the first strap"

  • Context and Importance: This phrase is at the heart of the structural non-infringement argument. The court's construction will determine whether the accused product's alleged "single folded strap" design falls within the scope of the claims. Practitioners may focus on this term because the plaintiff's primary product-based defense relies on it (Compl. ¶34).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification states that "the rear strap 110 and the front strap 120 can be formed from a single piece of material that is folded approximately in half" ('047 Patent, col. 4:36-40). This language may be used to argue that the terms "first strap" and "second strap" were intended to cover a single, folded structure.
    • Evidence for a Narrower Interpretation: The claim language itself separately recites "a first strap" and "a second strap," which may support an interpretation requiring two structurally distinct components, even if they originate from a single piece of material. The use of the term "joined" could also imply the connection of two separate things.

• The Term: "A system for holding a hat, the system comprising: the hat"

  • Context and Importance: Plaintiff's argument that its product does not include "the hat" makes the construction of this preamble and claim element critical for the direct infringement analysis (Compl. ¶33). If construed to require the hat to be part of the accused product as sold, infringement would be difficult to prove.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (favoring infringement): System claims often recite components that are supplied by the end-user. The patent’s title ("HAT HOLDER") and its consistent description of the invention's purpose—to hold a hat—suggest that the claim is meant to cover the device when put to its intended use by a consumer, not necessarily as sold in a package.
    • Evidence for a Narrower Interpretation (favoring non-infringement): The plain language of the claim explicitly lists "the hat" as an element of the "system." An argument could be made that for direct infringement of the system, all recited elements must be present and supplied by the accused infringer.

VI. Other Allegations

• Indirect Infringement: The complaint seeks a declaration that Plaintiff's customers also do not infringe (Compl., Prayer for Relief B). This implicates contributory and induced infringement. However, the complaint does not advance specific arguments regarding knowledge or intent, relying instead on the assertion that because the product does not meet claim limitations, no infringement of any kind can occur by any party (Compl. ¶35).
• Willful Infringement: This is a declaratory judgment action by the accused infringer, so willfulness is not alleged against it. Instead, the Plaintiff requests that the court declare the case "exceptional" under 35 U.S.C. § 285, which would entitle it to attorneys' fees. This request is based on the allegation that Defendants' "false and repeated" infringement complaints to Amazon constitute improper business conduct (Compl. ¶24; Prayer for Relief C).

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

This declaratory judgment action appears to turn on two central questions of claim interpretation:

1. A core issue will be one of structural definition: Can the claim language "a first strap" and "a second strap" that are "joined" be construed to cover a single, continuous piece of material that is folded in half, as the accused Niveaya Products are alleged to be constructed?

2. A key legal question will be one of system claim scope: For purposes of direct infringement, does the claimed "system comprising... the hat" require that the accused product be manufactured or sold with a hat, or is it sufficient that the product is made and sold for the express purpose of being combined with a hat by the end-user?