Molo Design Ltd v. Chanel Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Molo Design, Ltd. (Canadian)
  • Defendant: Chanel, Inc. (New York); Chanel SAS (French); Procedes Chenel Int'l. (French)
  • Plaintiff’s Counsel: Bracewell LLP
• Case Identification: 1:21-cv-01578, S.D.N.Y., 06/20/2024
• Venue Allegations: Venue is alleged as proper in the Southern District of New York because Defendant Chanel, Inc. is incorporated in New York, maintains its principal place of business and registered offices in the district, and has allegedly committed acts of infringement there. Venue over the foreign defendants is based on their status as foreign corporations.
• Core Dispute: Plaintiff alleges that Defendants' window display modules, featuring an expandable cellular structure, infringe patents covering a flexible furniture system and methods of its use.
• Technical Context: The technology relates to lightweight, collapsible, and reconfigurable partitions and furniture made from flexible materials, enabling the creation of temporary and adaptable interior spaces.
• Key Procedural History: The complaint notes that on October 9, 2023, the U.S. Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) issued final written decisions in inter partes review proceedings initiated by Chanel, Inc., upholding the validity of all challenged claims of both patents-in-suit. The complaint also alleges a multi-year history of communication between the parties regarding Plaintiff's products and patents prior to the alleged infringement.

Case Timeline

Date	Event
2005-05-18	Priority Date for ’366 and ’161 Patents
2005-11-25	Canadian Application Priority Date
2007-01-01	Procedes allegedly began reselling Molo products (approx.)
2011-01-12	U.S. Patent No. 7,866,366 Issues
2014-01-01	Chanel allegedly first expressed interest in Molo's products (approx.)
2016-01-01	Chanel executive allegedly visited Molo at a trade fair (approx.)
2017-01-01	Chanel executive allegedly ordered a Molo product sample (approx.)
2017-06-27	U.S. Patent No. 9,689,161 Issues
2020-10-19	Chanel and Procedes allegedly discussed Molo's U.S. patent
2021-02-01	Chanel allegedly began using accused displays in U.S. stores (approx.)
2023-10-09	PTAB upholds validity of asserted patents against Chanel's challenge
2024-06-20	First Amended Complaint Filed

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

U.S. Patent No. 7,866,366, “Flexible Furniture System,” Issued January 12, 2011

The Invention Explained

• Problem Addressed: The patent addresses the limitations of conventional furniture and partitions, which are often rigid, heavy, cumbersome, and difficult to set up, store, or transport, particularly for creating temporary or reconfigurable spaces (’366 Patent, col. 1:20-31). Such partitions are also frequently opaque, which can block natural light (’366 Patent, col. 1:41-45).
• The Patented Solution: The invention is an article of flexible furniture built around a core of inter-connected thin panels ("laminar panels") made of a flexible ("flaccid") material like paper. When expanded, these panels form a honeycomb-like "cellular structure." The core is fitted with self-supporting end pieces that provide rigidity, allow the structure to be folded into shapes (e.g., a tube), and can be fastened to each other or to adjacent articles, enabling dynamic and modular space division (’366 Patent, Abstract; col. 2:2-14).
• Technical Importance: This design allows for the creation of lightweight, collapsible, and highly adaptable structures for use as partitions, displays, or even seating in various environments (’366 Patent, col. 1:46-54).

Key Claims at a Glance

• The complaint asserts independent claim 1 (’366 Patent, col. 7:13-29; Compl. ¶35).
• Essential elements of claim 1 include:
  • An article of flexible furniture having a core formed from a plurality of laminar panels of a flaccid material and each panel having a pair of oppositely directed major faces,
  • adjacent faces of said panels being inter-connected to provide a cellular structure upon movement of abutting faces away from each other,
  • a pair of supports at opposite ends of said core and connected to respective ones of said faces,
  • said supports being self-supporting to provide rigidity to said core,
  • whereby said supports may be moved apart to expand said cellular structure and extend the length of said core and flexible so as to be foldable into a tubular configuration about an axis parallel to said major faces, and
  • a plurality of fasteners on each of said supports to secure said supports in said tubular configuration and to permit connection to an adjacent support of another similar article.

U.S. Patent No. 9,689,161, “Flexible Furniture System,” Issued June 27, 2017

The Invention Explained

• Problem Addressed: As with its parent patent, this invention targets the inflexibility and cumbersomeness of traditional room partitions (’161 Patent, col. 1:30-41).
• The Patented Solution: The ’161 patent claims a method for partitioning a room. The method involves positioning an "extensible wall" with the cellular core structure, placing its base on the floor, and moving its ends apart to expand the structure into "at least a substantially straight freestanding wall configuration" (’161 Patent, Abstract; col. 2:25-34). The claims further specify minimum dimensions for the wall's base width (10 cm) and height (1 meter), ensuring stability for freestanding applications (’161 Patent, col. 17:5-8).
• Technical Importance: This patent protects the act of using the flexible furniture system as a freestanding wall, a primary commercial application for such a product.

Key Claims at a Glance

• The complaint asserts independent claim 2 (’161 Patent, col. 17:1-15; Compl. ¶54).
• Essential elements of claim 2 include:
  • A method for partitioning an area of a room,
  • positioning an extensible wall in the area of said room, said wall having a base, a top, and a core comprising a cellular structure, with the base having a width of at least 10 centimeters and the core having a height of at least 1 meter;
  • placing said base on a floor of said room, and
  • moving opposite ends of said core apart to expand said cellular structure and extend the length of said core and to form at least a substantially straight freestanding wall configuration, whilst maintaining its vertical extent.

III. The Accused Instrumentality

• Product Identification: The accused products are "window décor modules" used in Chanel retail store displays, which the complaint alleges are copies of Molo's "softwall + softblock" products (Compl. ¶¶27, 29).
• Functionality and Market Context: The modules are described as being made of paper and comprising an interconnected core that forms a "cellular structure" when expanded (Compl. ¶37). Photographs in the complaint show these modules used as freestanding decorative partitions and backdrops for merchandise in Chanel store windows (Compl. ¶27). The complaint alleges these displays were part of a global rollout for Chanel's "Spring/Summer 21 Act 1" collection and were installed in numerous U.S. stores, including several in New York City (Compl. ¶¶19, 25, 27). This image shows the accused modules arranged in a curved, freestanding configuration inside a Chanel store window display (Compl. ¶27, p. 10).

IV. Analysis of Infringement Allegations

7,866,366 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
An article of flexible furniture having a core formed from a plurality of laminar panels of a flaccid material...	Defendants' window décor modules are alleged to be articles of flexible furniture with a core made from a plurality of paper panels.	¶37	col. 2:50-60
...adjacent faces of said panels being inter-connected to provide a cellular structure upon movement of abutting faces away from each other...	The paper panels are allegedly interconnected to form a honeycomb-like cellular structure when expanded, as depicted in a provided close-up photograph.	¶37	col. 3:1-15
...a pair of supports at opposite ends of said core and connected to respective ones of said faces, said supports being self-supporting to provide rigidity...	The modules are alleged to have a pair of supports at opposite ends that provide rigidity. An image shows these end structures.	¶¶38-39	col. 3:19-24
...and flexible so as to be foldable into a tubular configuration about an axis parallel to said major faces...	The supports are alleged to be flexible enough to be folded into a tubular or curved shape, as illustrated in an image showing a curved module.	¶39	col. 3:52-58
...and a plurality of fasteners on each of said supports to secure said supports in said tubular configuration...	Defendants allegedly use "at least a plurality of pieces of tape" as fasteners to secure the supports in the folded configuration.	¶40	col. 3:30-32

• Identified Points of Contention:
  • Scope Questions: The central question for the ’366 Patent is one of claim scope. Does the term "fasteners", exemplified in the patent by "Velcro" and "magnets," read on the "pieces of tape" allegedly used on the accused modules? The analysis may turn on whether the term requires a reusable or releasable mechanism, as implied by the examples and the additional function of connecting adjacent articles.
  • Technical Questions: What evidence demonstrates that the accused module's end supports are "self-supporting" and "provide rigidity" in the manner claimed? The complaint asserts this functionality but does not specify the material or construction of the supports, which will be a factual question for the court.

9,689,161 Patent Infringement Allegations

The complaint does not provide a claim chart or detailed narrative for the infringement of the ’161 Patent, instead referring to an infringement chart in "Exhibit E," which was not included with the complaint (Compl. ¶55). The narrative theory alleges that Defendants directly infringe by performing the claimed method of "making, using, offering to sell, selling... and/or importing" the flexible structures (Compl. ¶55). The photographic evidence of the window displays (Compl. ¶27) is presented as evidence of the infringing "use" of the method to partition an area.

• Identified Points of Contention:
  • Scope Questions: Can the curved arrangements shown in the photographs of the accused displays (Compl. ¶27, pp. 10-11) be considered a "substantially straight freestanding wall configuration"? The interpretation of "substantially straight" will be critical, particularly as the patent family documents depict both straight and curved embodiments.

V. Key Claim Terms for Construction

• The Term: "fasteners" (from '’366 Patent, Claim 1)

• Context and Importance: The infringement claim for the '’366 Patent hinges on whether tape constitutes a "fastener." Practitioners may focus on this term because if "fasteners" is construed to require a specific type of mechanism not met by tape (e.g., reusable, mechanical), the infringement argument could fail.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The plain and ordinary meaning of "fastener" is broad and could include adhesive tape. The claim itself does not add explicit limitations beyond the function of securing the support.
  • Evidence for a Narrower Interpretation: The specification provides specific examples of "loop and hook strips" (’366 Patent, col. 3:30-32) and "magnets" (’366 Patent, col. 5:4-13), which are reusable. The claim also requires the fasteners to "permit connection to an adjacent support," a function that may suggest a more robust or purpose-built mechanism than simple tape.

• The Term: "substantially straight" (from '’161 Patent, Claim 2)

• Context and Importance: The accused displays are shown in curved configurations. The viability of the infringement claim for the '’161 Patent depends on whether these curved forms fall within the scope of a "substantially straight" wall.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The term "substantially" provides some latitude, suggesting minor or incidental curvature is permitted. Furthermore, figures in the related '’366 Patent (e.g., FIG. 1) depict open, curved partitions, which could be used to argue that the inventors contemplated non-linear configurations as part of the invention.
  • Evidence for a Narrower Interpretation: The term "straight" has a clear geometric meaning. Defendants may argue that the depicted curved displays are functionally and structurally distinct from a "straight" wall and thus fall outside the claim's scope.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant Chanel SAS actively induced infringement by directing and facilitating Defendant Procedes to manufacture and import the accused products, and by directing Defendant Chanel, Inc. to use and display them, allegedly with knowledge of infringement (Compl. ¶¶47, 62). It further alleges Defendant Procedes induced infringement by encouraging and facilitating Chanel, Inc.'s use of the products (Compl. ¶¶48, 63).
• Willful Infringement: Willfulness is alleged based on extensive pre-suit and post-suit knowledge. The complaint alleges a long history of interactions, including Chanel ordering a sample product that was virtually marked, and cites an email from Procedes to Chanel that allegedly "specifically mention[ed] that Molo has a patent in the United States that protects its softwall + softblock products" (Compl. ¶¶18, 25, 42, 57). The prior PTAB proceedings initiated by Chanel are also cited as evidence of knowledge (Compl. ¶¶33, 52).

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

• A core issue will be one of definitional scope: can the claim term "fasteners", exemplified in the '’366 patent with reusable mechanisms like Velcro and magnets, be construed to cover the alleged use of disposable tape on the accused products? Similarly, can the term "substantially straight freestanding wall configuration" in the '’161 patent read on the visibly curved structures used in the accused displays?
• A second central question will be one of willfulness and intent. Given the complaint’s detailed allegations of pre-suit knowledge—including alleged direct communications about the patents-in-suit and prior unsuccessful validity challenges at the PTAB—the determination of whether the alleged infringement was willful, which could lead to enhanced damages, will likely be a focal point of the litigation.