Focus Prods. Grp. Int'l, LLC v. Kartri Sales Co.

• Decision Date: 16 April 2020
• Docket Number: 15 Civ. 10154 (PAE)
• Citation: 454 F.Supp.3d 229
• Parties: FOCUS PRODUCTS GROUP INTERNATIONAL, LLC, Zahner Design Group Ltd., Hookless Systems of North America, Inc., Sure Fit Home Products, LLC, Sure Fite Home Décor Holdings Corp., and Sf Home Décor, LLC, Plaintiffs, v. KARTRI SALES COMPANY, INC., and Marquis Mills, International, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

454 F.Supp.3d 229

FOCUS PRODUCTS GROUP INTERNATIONAL, LLC, Zahner Design Group Ltd., Hookless Systems of North America, Inc., Sure Fit Home Products, LLC, Sure Fite Home Décor Holdings Corp., and Sf Home Décor, LLC, Plaintiffs,

v.KARTRI SALES COMPANY, INC., and Marquis Mills, International, Inc., Defendants.

15 Civ. 10154 (PAE)

United States District Court, S.D. New York.

Signed April 16, 2020

Lee A. Goldberg, Limor Wigder, Morris E. Cohen, Goldberg Cohen, LLP, New York, NY, for Plaintiffs.

Bernhard Percival Molldrem, Jr., Law Office of Bernhard Molldrem, Syracuse, NY, Donald J. Cox, Jr., Law Offices of Donald Cox LLC, Princeton, NJ, for Defendants.

OPINION & ORDER

Paul A. Engelmayer, United States District Judge

Plaintiffs Focus Products Group International, LLC ("Focus"), Zahner Design Group, Ltd. ("ZDG"), Hookless Systems of North America, Inc. ("HSNA"), SF Home Décor, LLC, Sure Fit Home Décor Holdings Corp., and Sure Fit Home Products, LLC (together, "Focus" or "plaintiffs") bring this action against defendants Kartri Sales Company, Inc. ("Kartri") and Marquis Mills, International, Inc. ("Marquis," and together with Kartri, "defendants") alleging: infringement of three utility patents and a related design patent, in violation of 35 U.S.C. § 271 ; infringement of a registered and an unregistered trademark and infringement of unregistered trade dress, in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ; and unfair competition, in violation of New York common law. Defendants together bring 13 counterclaims, many but not all of which correspond to Focus's affirmative claims. The parties have cross-moved for summary judgment on a subset of these claims. For the following reasons, the Court grants in part and denies in part each side's motions.

I. Background

A. Factual Background¹

1. The Parties

Plaintiff ZDG owns, as relevant here, one design patent and three utility patents relating to shower curtains with integrated shower rings. ZDG granted an exclusive license for these patents to its affiliate, plaintiff HSNA. HSNA, in turn, granted an exclusive license for these patents to plaintiff Focus.²

Defendant Marquis makes, imports, and sells furniture and other home accessories, including shower curtains, in the United States. Defendant Kartri distributes furniture and other home accessories, including shower curtains, in the United States. Marquis supplies Kartri with the allegedly infringing shower curtains that are at issue in this lawsuit.

Non-party Carnation Home Fashions, Inc. ("Carnation"), is a sub-licensee of Focus.

2. Plaintiffs' Intellectual Property

ZDG develops and commercializes designs and inventions for, inter alia , shower curtains. It owns the four patents at issue in this lawsuit: (1) Design Patent No. D746,078, entitled "Shower Curtain," (" '078 patent" or the "Design Patent"), FAC ¶ 23; id. , Ex. 1; (2) Utility Patent No. 6494,248, entitled "Suspended Materials Having External Slits," (" '248 patent"), Pl. 56.1 ¶¶ 6–7; (3) Utility Patent No. 7296,609, entitled "Hanging Products," (" '609 patent"), FAC ¶ 32; Pl. Ex. 9; and (4) Utility Patent No. 8235,088, entitled "Hanging Products," (" '088 patent," and together with the '248 patent and the '609 patent, the "utility patents"), FAC ¶ 33; Pl. Ex. 10. ZDG, through its affiliate HSNA, has exclusively licensed each of these patents to Focus. See Pl. Ex. 31; Pl. Ex. 42. Focus sells shower curtains incorporating the patented inventions in the hospitality industry throughout the United States. FAC ¶¶ 114, 120.

Plaintiffs have trademark rights in the registered mark HOOKLESS®. Pl. Exs. 33–36. Plaintiffs also claim to have common law trademark rights in the unregistered "EZ ON" mark, which they allege has been used on shower curtains sold throughout the United States, including through their sub-licensee Carnation. FAC ¶ 82.

Finally, plaintiffs claim to have trade dress rights in the visual appearance of shower curtains sold under their HOOKLESS® brand. Id. ¶ 104. As described by plaintiffs, these shower curtains lack hooks protruding above the upper edge of the curtain. Id. Instead, they have a row of rings along the upper portion of the curtain. Id. These are coplanar with the curtain's material, fixed in place, and include a slit or gap, creating, as alleged, an "organized and symmetrical repeating visual pattern along the top width of the shower curtain." Id. The effect of this combination and arrangement of design elements, plaintiffs allege, is to give the "visual appearance of an essentially ‘neat’ and ‘orderly’ " shower curtain. Id.

Plaintiffs claim that they have extensively marketed, promoted, and sold their shower curtains, including their associated trademarks and trade dress, throughout the United States, and that their shower curtain design has become the "leading shower curtain in the hospitality industry." Id. ¶¶ 113–20.

3. The Dispute

Plaintiffs claim that defendants have willfully infringed, and continue to willfully infringe, plaintiffs' patents by manufacturing, selling, using, and/or importing shower curtains embodying the design of the '078 patent and the inventions of the '248, '609, and '088 patents. Id. ¶¶ 157–65. They claim that defendants have also infringed (1) plaintiffs' HOOKLESS® trademark; (2) plaintiffs' unregistered EZ ON trademark, by using the mark "EZY HANG" on the accused shower curtains; and (3) plaintiffs' trade dress, by copying the visual appearance of the shower curtains sold under plaintiffs' HOOKLESS® brand. Id. ¶¶ 166–74. Plaintiffs claim that in making and selling the accused products, defendants have acted in bad faith, deliberately seeking to "trade off of the goodwill, secondary meaning, and success" that plaintiffs' trademark and trade dress have accrued in the marketplace. Id. ¶ 131. Finally, plaintiffs claim that defendants' use of the EZY HANG mark and imitation of plaintiffs' trade dress is likely to cause confusion and to mislead consumers to believe that their goods originate from, are sponsored by, or are affiliated with plaintiffs. Id. ¶ 132.

Defendants deny these allegations. They contend that their products do not infringe on plaintiffs' patents, trademarks, or trade dress or, in the alternative, that such patents, trademarks, and trade dress are invalid for a variety of reasons. See Kartri Answer; Marquis Answer. Ten of defendants' counterclaims dispute plaintiffs' claims. Marquis Answer pp. 22–33, 36–40. Their remaining two counterclaims allege tortious interference, monopolization, and patent misuse by plaintiffs. Id. pp. 33–36; Kartri Answer pp. 18–21.

4. The Cross-Motions for Summary Judgment

The parties have brought cross-motions for summary judgment on a subset of the claims in this litigation. Focus has moved for summary judgment on these claims: (1) that defendants have infringed the '248, '609, and '088 utility patents as a matter of law; (2) that defendants have infringed plaintiffs' trade dress; and (3) certain damages theories.³ Focus also opposes all of defendants' counterclaims, either cross-moving for summary judgment or contending that genuine disputes of material fact preclude their resolution at this time.

Defendants purport to oppose each claim for which Focus seeks summary judgment, although, as discussed below, the Court finds that defendants have abandoned certain counterclaims by failing to defend them in their briefing.

B. Procedural History⁴

1. The Initial Phase of Litigation

On June 30, 2015, Focus filed a complaint against Kartri in a related action, No. 15 Civ. 5108, bringing claims for infringement of the three utility patents, for trademark infringement, and for common law unfair competition. No. 15 Civ. 5108, Dkt. 1. On December 30, 2015, Focus filed the original complaint in this action against Kartri. No. 15 Civ. 10154, Dkt. 1. Focus brought claims for design patent infringement, trademark and trade dress infringement, and common law unfair competition. On February 4, 2016, Kartri filed a third-party complaint against Marquis. Dkt. 11.

On February 9, 2016, Kartri moved to dismiss the complaint, Dkt. 15, and the Court granted Focus leave to amend, Dkt. 16. On March 1, 2016, Focus filed the First Amended Complaint, which amended its claims against Kartri and added Marquis as a defendant. Dkt. 20. The amended complaint brought claims against Marquis for utility patent infringement that mirrored Focus's claims against Kartri in the related action. On April 11, 2016, Kartri dismissed its third-party complaint against Marquis. Dkt. 32. That day, Marquis moved to dismiss the amended complaint, Dkt. 35, and the Court granted Focus leave to amend its complaint as to Marquis, Dkt. 37. On July 14, 2016, the Court denied the motions to dismiss in a bench decision. Dkt. 63; Dkt. 71 ("MTD Tr.").⁵ On July 25, 2016, the Court formally consolidated the two cases, Dkt. 67, and approved a case management plan, Dkt. 65. On September 29, 2017, following the close of fact discovery, Focus submitted its Fourth Amended Complaint, Dkt. 148 (FAC), which is the operative complaint in this litigation. On October 13, 2017, Marquis and Kartri submitted their respective answers to the FAC. Kartri Answer; Marquis Answer.⁶

On October 12, 2017, Kartri filed a new motion to dismiss on the basis of improper venue. Dkt. 149. On November 22, 2017, the Court issued an order denying the motion, Dkt. 164, and on December 21, 2017, explained its reasons in a bench opinion, Dkt. 171 (transcript of bench opinion).

2. The Markman Hearing and Ruling⁷

On July 7, 2017, the parties filed their original joint claim terms chart. Dkt. 124. On November 22, 2017, the parties filed an amended joint claim terms chart. Dkt. 162. On December 22, 2017, Focus filed its opening Markman brief. Dkt. 169. On January 22, 2018, Kartri and Marquis each filed responsive Markman briefs. Dkts. 173, 174. On February 5, 2018, Focus filed two reply briefs. Dkts. 177, 179. On February 9, 2018, Marquis filed a letter motion...