DCT

1:24-cv-00604

Wuhanqiuzhaokejiyouxiangongsi v. Fushan Shunhe Tongda Network Technology Co Ltd

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 7:24-cv-00604, S.D.N.Y., 01/26/2024
  • Venue Allegations: Venue is based on allegations that Defendants sell their products to consumers in the State of New York.
  • Core Dispute: Plaintiff seeks a declaratory judgment that Defendants' design patent for an electric drill plate cutter is invalid and unenforceable due to multiple alleged acts of inequitable conduct before the U.S. Patent and Trademark Office (USPTO).
  • Technical Context: The technology at issue involves the ornamental design of attachments that convert standard power drills into powered sheet metal cutters.
  • Key Procedural History: The complaint alleges this action arises from a controversy established when Plaintiff sued other parties for infringing its own patent, and Defendant Shunhe responded with a threat to seek reexamination of Plaintiff's patent. The complaint also details the prosecution of the patent-in-suit, alleging that an initial rejection by the USPTO was overcome by submitting a backdated and forged document.

Case Timeline

Date Event
2021-04-08 "CN624 Patent" (alleged material prior art) filing date
2022-09-01 Alleged backdated effective date of Licensing Agreement
2022-10-11 Earliest sale date of prior art ("SARRED") cited by USPTO examiner
2022-12-06 U.S. App. No. 29/862,020 (leading to "’076 Patent") filed
2022-12-07 Date Defendant Jiang allegedly assigned patent rights to Defendant Shunhe
2023-11-28 U.S. Design Patent No. D1,006,076 S issued
2024-01-18 Plaintiff filed a separate patent infringement case in N.D. Illinois
2024-01-26 Present complaint for declaratory judgment filed

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

U.S. Design Patent No. D1,006,076 S - "Metal Nibbler Drill Attachment"

  • Patent Identification: U.S. Design Patent No. D1,006,076 S, "Metal Nibbler Drill Attachment", issued November 28, 2023.

The Invention Explained

  • Problem Addressed: As a design patent, the patent does not articulate a technical problem. It seeks to protect the unique, non-functional, ornamental appearance of an article of manufacture ('076 Patent, Title, Claim).
  • The Patented Solution: The patent claims the specific ornamental design for a "metal nibbler drill attachment" as depicted in the patent's drawings ('076 Patent, Claim, FIG. 1-10). The design consists of the visual characteristics of a tool body housing two cutting wheels, an upper drive shaft for drill connection, and a handle, with specific contours and surface features. The broken lines in the figures indicate elements that do not form part of the claimed design ('076 Patent, Description).
  • Technical Importance: The complaint suggests the commercial importance of the design relates to competition among sellers of such tools on online marketplaces like Amazon.com (Compl. ¶1, ¶29).

Key Claims at a Glance

  • The single asserted claim is: "The ornamental design for a metal nibbler drill attachment, as shown and described" ('076 Patent, Claim).
  • The scope of a design patent claim is defined by its drawings. The essential elements are the visual features shown in solid lines in Figures 1 through 10 of the patent ('076 Patent, FIG. 1-10).

III. The Accused Instrumentality

Product Identification

  • This is a declaratory judgment action, where the Plaintiff seeks a declaration that the Defendants' patent is invalid. The instrumentality at issue is therefore the Plaintiff's own product, identified as an "electronic drill plate cutter" sold on Amazon.com (Compl. ¶1).

Functionality and Market Context

  • The products are attachments for electric drills designed to cut sheet metal (Compl. ¶1; '076 Patent, Title). The complaint alleges that the Plaintiff's product and the design covered by the Defendants' "076 Patent" "both cover the same cutting tools" (Compl. ¶9). The dispute arose in the context of commercial competition and a threat of patent litigation, suggesting the parties are direct competitors in the U.S. market (Compl. ¶9).

IV. Analysis of Invalidity Allegations

As this is a complaint for a declaratory judgment of invalidity, the central allegations concern the patent's validity, not infringement. The complaint alleges the claim of the "076 Patent" was initially rejected by the USPTO as anticipated by or obvious in view of prior art, including several products sold on Amazon before the patent application's filing date (Compl. ¶29). A visual from the complaint shows a side-by-side comparison of the claimed design and a prior art product (Compl. p. 9).

Claim Element ('076 Patent) Alleged Invalidating Prior Art Complaint Citation Patent Citation
The ornamental design for a metal nibbler drill attachment The "Makerfire 2022 New Electrict Drill Plate Cutter Attachment," alleged to have been sold on Amazon as of October 25, 2022 ¶29(1) FIG. 1-10 (defining scope of claimed design)
The ornamental design for a metal nibbler drill attachment The "SARRED Electric Drill Plate Cutter," alleged to have been sold on Amazon as of October 11, 2022 ¶29(2) FIG. 1-10 (defining scope of claimed design)

Identified Points of Contention

  • Scope Questions: The primary question for an anticipation analysis will be whether an ordinary observer, giving such attention as a purchaser usually gives, would find the designs of the prior art products to be substantially the same as the patented design.
  • Technical Questions: A key factual question is whether the documents submitted to overcome the rejection—specifically, a licensing agreement purporting to establish an invention date of September 1, 2022—are authentic and were validly executed on that date (Compl. ¶33). The complaint alleges this document was backdated and forged to antedate the prior art (Compl. ¶33, ¶41).

V. Key Claim Terms for Construction

In design patent cases, the dispute is typically not over the construction of written terms but over the visual impression of the claimed design as a whole. However, this case centers on allegations of inequitable conduct, making the interpretation of evidence submitted to the USPTO critical.

The Term: "Effective Date of September 1, 2022"

  • The Term: The "Effective Date of September 1, 2022" of the Licensing Agreement submitted to the USPTO.
  • Context and Importance: This date is critical because it was allegedly used to antedate, and therefore disqualify, prior art that the USPTO cited in a rejection (Compl. ¶30, ¶32). The patent's validity may hinge on whether this date is legitimate.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (i.e., the date is valid): Defendants submitted a declaration and the licensing agreement to the USPTO, which on their face assert the September 1, 2022, date of invention (Compl. ¶32).
    • Evidence for a Narrower Interpretation (i.e., the date is invalid): The complaint alleges the agreement was backdated, citing evidence that one signatory, Defendant Jiang, had assigned his rights to another entity by December 7, 2022, and therefore could not have signed on its behalf on September 1, 2022 (Compl. ¶34). It further alleges another signatory did not join the relevant company until November 21, 2022 (Compl. ¶34).

The Term: "Inventorship"

  • The Term: "Inventorship."
  • Context and Importance: Practitioners may focus on this issue because improper inventorship with deceptive intent can render a patent unenforceable. The complaint alleges Defendant Huang was a true co-inventor but was intentionally omitted from the application at filing to improperly claim micro-entity status and its associated fee discounts (Compl. ¶18, ¶23).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (i.e., inventorship was proper): The patent was issued and subsequently corrected to add Defendant Huang as a co-inventor, a procedure permitted under USPTO rules.
    • Evidence for a Narrower Interpretation (i.e., inventorship was improper): The complaint alleges a "swap of co-inventorship" between the "076 Patent" and related Chinese patents, which it frames as evidence of a business arrangement rather than a reflection of actual contribution to the invention (Compl. ¶24-25).

VI. Inequitable Conduct and Unenforceability Allegations

The complaint asserts five counts, each arguing the "076 Patent" is invalid and/or unenforceable due to inequitable conduct before the USPTO.

  • Failure to Disclose Material Information: The complaint alleges that Defendants knowingly failed to disclose a material prior art reference, Chinese Patent No. "CN624", with an intent to deceive the USPTO (Compl. ¶12-15).
  • Improper Micro-Entity Status: Plaintiff alleges Defendants deceived the USPTO by improperly claiming micro-entity status. This is based on allegations that a true co-inventor (Defendant Huang) and a licensee (Defendant Hengda) did not meet the gross income requirements for micro-entity status (Compl. ¶3, ¶5, ¶18).
  • Deception on Inventorship: The complaint alleges Defendants intentionally excluded a co-inventor (Defendant Huang) from the initial application to facilitate the improper claim of micro-entity status (Compl. ¶23).
  • Material Misrepresentation and Forgery: The complaint alleges Defendants submitted a backdated and forged licensing agreement to the USPTO to overcome a rejection based on prior art (Compl. ¶33, ¶38, ¶41). To support the forgery allegation, the complaint provides a visual comparison of Defendant Jiang's purported signature on the licensing agreement against his signatures on other documents. This visual highlights inconsistencies between the signatures (Compl. p. 13, ¶41).

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

The resolution of this declaratory judgment action appears to turn on several key questions of fact and intent, rather than traditional claim construction or infringement analysis.

  • A central issue will be one of intent to deceive: can the Plaintiff prove by clear and convincing evidence that the alleged omissions (failure to disclose prior art) and misrepresentations (regarding inventorship, entity status, and document dates) were made with the specific intent to deceive the USPTO, or were they inadvertent errors?
  • Another key question will be but-for materiality: would the USPTO have allowed the "076 patent" to issue if it had been aware of the allegedly concealed prior art or the allegedly true facts concerning the patent's inventorship and the licensing agreement's date?
  • Finally, the case may hinge on a dispositive evidentiary dispute: is the signature on the licensing agreement a forgery, and was the document's September 1, 2022, effective date deliberately backdated? The outcome of this factual question could be determinative of the inequitable conduct claim.