Kortek Industries Pty Ltd v. Shenzhen Gosund Technology Co Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Kortek Industries Pty Ltd. (Australia)
  • Defendant: Shenzhen Gosund Technology Co., Ltd. (P.R. China)
  • Plaintiff’s Counsel: Porter Hedges LLP
• Case Identification: 6:21-cv-01027, W.D. Tex., 10/04/2021
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is a foreign entity not resident in the United States, and under 28 U.S.C. § 1391(c)(3), such a defendant may be sued in any judicial district. The complaint further alleges Defendant conducts substantial business in Texas, including selling products through Amazon, which has an established place of business in the district.
• Core Dispute: Plaintiff alleges that Defendant’s Wi-Fi enabled smart devices, including smart plugs, switches, and bulbs, infringe four U.S. patents related to wireless power and automation control systems.
• Technical Context: The technology at issue resides in the Internet of Things (IoT) and smart home sector, focusing on methods and devices for controlling electrical appliances through direct, peer-to-peer wireless communication with a controller, such as a smartphone, rather than relying solely on a central network access point.
• Key Procedural History: The complaint alleges pre-suit settlement communications were unsuccessful. It also makes a specific allegation that Defendant has known of the ’377 Patent since at least June 16, 2020, a date preceding the complaint by over a year, which may be relevant to the willfulness claim.

Case Timeline

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

U.S. Patent No. 9,465,377 - "`Wireless power, light and automation control,`" issued October 11, 2016

The Invention Explained

• Problem Addressed: The patent describes conventional Wi-Fi-based home automation systems as reliant on a central wireless Access Point (AP). This creates a single point of failure; if the AP is disabled or overloaded, the entire automation system fails (Compl. ¶29; ’377 Patent, col. 1:46-55).
• The Patented Solution: The invention proposes a system that bypasses the central AP by establishing a direct, peer-to-peer wireless communications link between a controller (like a smartphone) and a power control unit (e.g., a smart plug) (’377 Patent, Abstract). To achieve this, the power control unit is configured to either simulate a Wi-Fi access point to connect with legacy Wi-Fi controllers or negotiate a "group owner" role with controllers that support peer-to-peer standards like Wi-Fi Direct (’377 Patent, col. 3:23-33; Fig. 2).
• Technical Importance: This architecture aims to increase the reliability of smart home devices by removing their dependence on a central home router for control functions.

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶36).
• Claim 1 (Method):
  • Opening a secure two-way, peer-to-peer wireless communications link between a wireless controller and a power control device.
  • The opening step includes either assigning a Wi-Fi access point role to the power control device (if the controller uses legacy Wi-Fi) or negotiating which device will assume a Wi-Fi Direct group owner role (if the controller uses Wi-Fi Direct).
  • Displaying a status of the power control device on the controller's user interface.
  • Transmitting a command from the controller to the power control device over the peer-to-peer link to vary the electricity supply.
  • Receiving the command at the power control device and varying the electricity supply accordingly.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 9,590,427 - "`Adaptable wireless power, light and automation system,`" issued March 7, 2017

The Invention Explained

• Problem Addressed: The patent addresses the same technical problem as the ’377 Patent: the limitations of home automation systems that rely exclusively on a central network access point (Compl. ¶29; ’427 Patent, col. 1:18-24).
• The Patented Solution: The invention is a power control device with an adaptable wireless module. The device's microcontroller is configured to operate in two distinct modes: a first "peer-to-peer" mode (e.g., Wi-Fi Direct) for direct communication with a controller, and a second "non-peer-to-peer" mode where it acts as a standard client on a conventional Wi-Fi network (WLAN). Crucially, the microcontroller is configured to change between these modes upon receiving instructions from the controller (’427 Patent, col. 35:1-36, Claim 1).
• Technical Importance: This dual-mode capability provides a single device with the flexibility to offer the reliability of direct peer-to-peer control while also retaining the ability to integrate into a broader, internet-connected smart home ecosystem.

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶48).
• Claim 1 (Apparatus):
  • A controller (device) for controlling a light.
  • A wireless control module operable for wireless communication with a personal controller.
  • The module includes a microcontroller configured to operate in a first mode using a peer-to-peer communications standard.
  • The microcontroller is also configured to operate in a second mode using a non-peer-to-peer communications standard (e.g., connecting to a WLAN access point).
  • The microcontroller is configured to change from the first mode to the second mode upon receiving instructions from the personal controller.
  • A power control circuit to vary the supply of electricity to the light based on instructions.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 10,862,313 - "`Adaptable Wireless Power, Light and Automation System,`" issued December 8, 2020

• Technology Synopsis: As a continuation of the application leading to the ’427 Patent, this patent claims a power control unit designed to communicate with a controller using two alternative communication standards. The device can operate using either a peer-to-peer standard for direct connection or a non-peer-to-peer standard to connect as a client to a network access point, with the ability to switch between modes based on received instructions (’313 Patent, Abstract).
• Asserted Claims: At least Claim 1 (Compl. ¶60).
• Accused Features: Defendant’s Wi-Fi enabled smart devices are accused of embodying the claimed adaptable system (Compl. ¶60).

U.S. Patent No. 10,429,869 - "`Wireless power, light and automation control,`" issued October 1, 2019

• Technology Synopsis: As a continuation of the application leading to the ’377 Patent, this patent claims a power control device that establishes a direct, peer-to-peer wireless link with a controller, thereby avoiding reliance on a central router. The device is configured to always send a "discovery message" to initiate contact and can operate by "simulating a network access point" to establish the link with the controller (’869 Patent, Abstract; col. 30:57-65).
• Asserted Claims: At least Claim 1 (Compl. p. 18, ¶2).
• Accused Features: Defendant’s Wi-Fi enabled smart devices are accused of infringing by making, using, and selling devices that practice the claimed invention (Compl. p. 18, ¶2).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are "wi-fi enabled smart devices" sold by Defendant Gosund, including products marketed under the Gosund, TanTan, and Nitebird brands (Compl. ¶28). The complaint provides a non-exhaustive list of over 30 specific product models, encompassing smart plugs, smart wall sockets, smart power strips, smart switches, and smart bulbs (Compl. p. 9).

Functionality and Market Context

The accused products are power measurement and switching devices that allow users to monitor and control the power supplied to electrical equipment via a local wireless network or a cloud platform (Compl. ¶29). The complaint alleges that Defendant holds itself out as "lead[ing] sales in [the] North American market" and sells a high volume of devices in the United States (Compl. ¶11). The complaint includes a graphic from Defendant's website depicting a world map with sales concentrations, highlighting 1,500,000 connected devices per year in the United States (Compl. p. 3).

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits (Exhibits E, F, G, H) that are not included in the filed complaint document. The narrative infringement theory is summarized below.

’377 Patent Infringement Allegations

The complaint alleges that Defendant’s customers directly infringe the method of claim 1 when they use the Accused Products with a controller, such as a smartphone, to establish a wireless link and control power to an appliance (Compl. ¶36, ¶37). It alleges that the products establish a peer-to-peer link and vary the supply of electricity as claimed, either literally or under the doctrine of equivalents (Compl. ¶36). The complaint references Exhibit E for detailed element-by-element mapping, which is not provided (Compl. ¶46).

’427 Patent Infringement Allegations

The complaint alleges that the Accused Products themselves constitute an infringement of the apparatus claims of the ’427 Patent (Compl. ¶48). The narrative suggests the devices contain the claimed wireless control module and microcontroller configured to operate in both a peer-to-peer mode and a non-peer-to-peer (WLAN client) mode, and are capable of switching between these modes upon receiving instructions (Compl. ¶48, ¶49). The complaint references Exhibit F for detailed mapping, which is not provided (Compl. ¶58).

Identified Points of Contention

• Evidentiary Questions: The complaint does not provide technical details on how the accused devices establish wireless connections. A central question will be what evidence demonstrates that the accused products perform the specific steps of "simulating a Wi-Fi access point" or "negotiating" a group owner role as required by the ’377 Patent's claims, as opposed to utilizing other connection methods.
• Scope Questions: For the ’427 Patent, a likely point of dispute will be whether the accused devices' hardware and firmware meet the claim limitation requiring a microcontroller "configured to change from the first mode to the second mode upon receiving instructions from the personal controller." The analysis may focus on whether the mode selection is a user-initiated, instruction-based process as claimed, or an automated or default behavior.

V. Key Claim Terms for Construction

Term from the ’377 Patent: "simulating a Wi-Fi access point"

• Context and Importance: This term is central to how the patented method achieves compatibility with controllers that do not support Wi-Fi Direct. The scope of "simulating" will define the specific technical actions a power control device must perform, which will be a critical issue for infringement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides a functional definition, stating that "‘simulating an access point’... refers to a role in which a discovery message is sent in order to initiate contact with another device" (’377 Patent, col. 3:29-33).
  • Evidence for a Narrower Interpretation: The context for this function is consistently described as making the power control unit "appear to legacy Wi-Fi devices, such as smartphones, as a Wi-Fi Access Point" (’377 Patent, col. 6:40-44). This may suggest that merely sending a discovery message is insufficient, and that the "simulation" must mimic the specific protocols of a standard AP.

Term from the ’427 Patent: "peer-to-peer communications standard"

• Context and Importance: The claim requires the device to operate using both a "peer-to-peer" and a "non-peer-to-peer" standard. Practitioners may focus on this term because the definition will determine which wireless protocols (e.g., Wi-Fi Direct, Bluetooth, or others) satisfy this element and whether the accused devices, in fact, use such a standard for device control.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification explicitly lists examples, stating, "There are other wireless standards available that could be used to implement the wireless link, such as Bluetooth, Zigbee, and Near Field Communications" (’427 Patent, col. 2:66-3:3). This suggests the term is not limited to a single protocol.
  • Evidence for a Narrower Interpretation: The detailed description of the preferred embodiments focuses heavily on Wi-Fi Direct as the exemplary peer-to-peer standard (’427 Patent, col. 2:31-37). A defendant may argue that the invention described and enabled is limited to Wi-Fi Direct, thereby narrowing the scope of the general term.

VI. Other Allegations

Indirect Infringement

The complaint alleges both induced and contributory infringement for all four patents-in-suit. The inducement allegations are based on Defendant providing "product manuals, brochures, videos, demonstrations, and website materials" that allegedly instruct and encourage customers to use the products in an infringing manner (Compl. ¶38, ¶49-50, ¶61-62, p.18 ¶3-4).

Willful Infringement

Willfulness is alleged for all four patents. For the ’427, ’313, and ’869 patents, the allegation is based on knowledge "since at least the filing of this Complaint" (Compl. ¶52, ¶64, p.19 ¶6). For the ’377 Patent, the complaint alleges pre-suit knowledge, stating Defendant "has knowingly (since at least June 16, 2020)" infringed (Compl. ¶37).

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

• A core issue will be one of technical operation: What evidence will establish that the accused products' wireless connection protocols perform the specific functions of "simulating a Wi-Fi access point" or "negotiating" a group owner role, as claimed in the ’377 and ’869 patents, versus alternative, non-infringing methods?
• A key question of claim scope will be whether the accused devices' functionality meets the two-mode, instruction-based switching limitation of the ’427 and ’313 patent claims. The case may turn on whether the products’ ability to be configured for initial setup and then operate on a home network constitutes the specific mode-changing functionality recited in the claims.
• The allegation of pre-suit knowledge for the ’377 patent raises a significant question of willfulness: what facts support the assertion that Defendant was aware of this specific patent more than a year before the suit was filed, and will that evidence be sufficient to support a finding of willful infringement if liability is established?