DCT

4:10-cv-00060

Specialty House Of Creation Inc v. Cherokee Nation Entertainment LLC

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:10-cv-00060, N.D. Okla., 06/08/2010
  • Venue Allegations: Plaintiff alleges venue is proper in the district pursuant to 28 U.S.C. §§ 1391 and 1400.
  • Core Dispute: Plaintiff alleges that Defendants manufactured, imported, and sold counterfeit lanyard card holders that infringe its design patent for a "Slot Machine Card Holder."
  • Technical Context: The technology relates to ornamental designs for player loyalty card holders used in the casino and gaming industry.
  • Key Procedural History: The complaint alleges a significant history between the parties, starting with Defendant Cherokee Nation Entertainment's (CNE) purchase of over 200,000 units of the patented product from Plaintiff's distributor between 2006 and 2007. These units were allegedly marked with the patent number. In 2008-2009, CNE allegedly solicited quotes from Plaintiff for new orders, which referenced the patent, before ultimately sourcing what Plaintiff claims are counterfeit, infringing products from the other defendants.

Case Timeline

Date Event
2003-03-05 '531 Patent Priority Date
2004-02-10 '531 Patent Issue Date
2006-05-10 Defendant CNE's first alleged purchase of patented product
2006-09-12 Defendant CNE's second alleged purchase of patented product
2007-01-12 Defendant CNE's third alleged purchase of patented product
2008-11-17 Plaintiff provides 300,000-unit quote to CNE referencing patent
2009-02-13 Plaintiff provides 500,000-unit quote to CNE referencing patent
2009-02-13 CNE allegedly informs Plaintiff of intent to purchase a different product
2009-02-20 CNE allegedly posts procurement request for accused product
2009-03-02 CNE allegedly authorizes purchase order for 500,000 accused products
2009-03-20 CNE allegedly increases purchase order for accused products to 825,000
2010-06-08 Complaint Filing Date

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

  • Patent Identification: U.S. Design Patent No. D486,531, “Slot Machine Card Holder,” issued February 10, 2004.

The Invention Explained

  • Problem Addressed: As a design patent, the '531 patent does not articulate a technical problem in a background section; rather, it protects the novel, non-obvious ornamental appearance of an article of manufacture ('531 Patent, Claim).
  • The Patented Solution: The patent claims the specific visual design of a holder for a slot machine player's card. The ornamental features that constitute the overall design include a main body shaped like a classic slot machine, a front face featuring the word "JACKPOT" above a window with three "7"s, a decorative pull-lever element on the side, a top attachment loop, and a bottom swivel clip ('531 Patent, FIG. 1-6). The design combines functional elements (the clip and loop) with purely ornamental features (the slot machine motif) to create a distinctive aesthetic for a casino accessory.
  • Technical Importance: The complaint alleges that Defendant CNE previously purchased over 200,000 units of products embodying the patented design, suggesting a commercial demand for this specific aesthetic in the casino promotions market (Compl. ¶16-18).

Key Claims at a Glance

  • The single claim of the '531 Patent is asserted: "The ornamental design for a slot machine card holder, as shown and described" ('531 Patent, Claim).
  • The scope of the claim is defined by the visual appearance of the article depicted in the patent's drawings. The essential ornamental elements comprising the claimed design are:
    • A rectilinear main body with features resembling a miniature slot machine.
    • A front face including a display window showing "JACKPOT" and "777."
    • A side projection resembling a slot machine lever.
    • A top loop structure for attachment.
    • A bottom swivel clip assembly.

III. The Accused Instrumentality

Product Identification

  • The accused products are identified as "counterfeit Slot Machine Card Holders" and "Lanyard Players Card Holder w/ Cherokee Star" (Compl. ¶26, 30).

Functionality and Market Context

  • The accused products are card holders for lanyards, intended for distribution to casino patrons (Compl. ¶32). The complaint alleges that Defendant CNE, after purchasing the authentic patented product for years, arranged for the production of 825,000 "counterfeit" units from China through Defendants Meeks and Hammerhead (Compl. ¶27-30). The complaint further alleges these counterfeit products are "identical" to the patented design and are offered to patrons at the same casinos where the authentic products were previously distributed (Compl. ¶33-34). The complaint alleges that a procurement request for the accused products included a photograph of a slot machine card holder previously purchased by Defendant CNE from Plaintiff's distributor (Compl. ¶25).

IV. Analysis of Infringement Allegations

Design patent infringement is determined by the "ordinary observer" test, which asks whether an ordinary observer, familiar with the prior art, would be deceived into purchasing the accused product believing it is the patented design. The complaint alleges the accused product is not merely similar but "identical" to the patented design.

D486,531 Infringement Allegations

Claim Element (from the asserted design) Alleged Infringing Functionality Complaint Citation Patent Citation
The overall ornamental design for a slot machine card holder, as shown and described. The accused products are alleged to be "counterfeit" and "identical to the Slot Machine Card Holder claimed in United States Design Patent No. D486,531." ¶34 FIG. 1-6
The specific combination of visual features including the slot machine body, "JACKPOT/777" face, side lever, top loop, and bottom clip. The accused products are alleged to be "identical to genuine Slot Machine Card Holders produced and sold by Specialty House," which embody the patented design. ¶33 FIG. 1, 2
The design as an article of manufacture marked with the patent number. The accused products are allegedly "stamped 'PATENT #D486531'," the number of the patent-in-suit. ¶35 N/A
  • Identified Points of Contention:
    • Factual Question: The central dispute appears to be factual: is the accused card holder visually "identical" to the drawings in the '531 Patent, as the complaint alleges? Any perceptible differences between the accused product and the patent drawings could become a focal point of the infringement analysis.
    • Scope Questions: In design patent cases, the scope of protection can be limited by the prior art. While not detailed in the complaint, the litigation may explore whether the "ordinary observer" would view the overall design as substantially the same in light of pre-existing designs for similar articles. The complaint's allegation of identity, if proven, would largely neutralize this issue.

V. Key Claim Terms for Construction

In a design patent case, claim construction does not involve interpreting textual terms as in a utility patent. The "claim" is the design itself, and its scope is defined by the patent's drawings as a whole. The analysis will not focus on construing specific words but rather on the overall visual impression of the patented design. The central legal question for the court is the scope of the claimed design in the eyes of an ordinary observer, not the definition of a particular term.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges both contributory and induced infringement (Compl. ¶39). The inducement theory may be supported by allegations that Defendant CNE specified the design for the counterfeit products by providing a photograph of Plaintiff's patented product in its procurement request (Compl. ¶25) and then contracted with Defendants Meeks and Hammerhead to have them produced (Compl. ¶26, 28).
  • Willful Infringement: The complaint makes specific allegations that may support a finding of willfulness (Compl. ¶42). The alleged factual basis includes Defendant CNE's multiple prior purchases of the patented product, which was stamped with the patent number (Compl. ¶16-18), and its receipt of quotes from Plaintiff that explicitly referenced the '531 Patent (Compl. ¶20-21). This history suggests CNE had actual knowledge of the patent before commissioning the accused products.
  • False Marking: The complaint includes a separate count for false marking under 35 U.S.C. § 292 (Compl. ¶43-47). This claim is based on the specific allegation that the 825,000 accused products were stamped "PATENT #D486531" with the intent to counterfeit or deceive the public (Compl. ¶35, 46).

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

  1. Factual Identity: The primary question is one of fact: are the accused products visually identical to the design claimed in the '531 patent? The complaint's repeated assertion of identity, if proven, would present a straightforward case for infringement under the ordinary observer test.
  2. Chain of Culpability and Intent: A key issue will be to parse the specific actions and knowledge of each of the four named defendants. The court will need to determine the liability of the end-customer (CNE), the lithographer/distributor (Meeks), and the supplier (Hammerhead) for direct, induced, and contributory infringement, as well as for the alleged false marking.
  3. Proof of Willfulness: Given the strong allegations of prior knowledge, a central question will be whether Plaintiff can prove by clear and convincing evidence that Defendants' infringement was willful. The outcome will depend on evidence surrounding CNE's decision to source a look-alike product after years of purchasing the patented original, and the degree to which that knowledge and intent can be imputed to the other defendants in the supply chain.