Focus Prods. Grp. Int'l v. Kartri Sales Co.
| Decision Date | 22 December 2022 |
| Docket Number | 15 Civ. 10154 (PAE) |
| Parties | FOCUS PRODUCTS GROUP INTERNATIONAL, LLC, ZAHNER DESIGN GROUP LTD., HOOKLESS SYSTEMS OF NORTH AMERICA, INC., SURE FIT HOME PRODUCTS, LLC, SURE FIT HOME DECOR HOLDINGS CORP., and SF HOME DECOR, LLC, Plaintiffs, v. KARTRI SALES CO., INC., and MARQUIS MILLS INTERNATIONAL, INC., Defendants. Marquis Kartri Marquis Kartri 2014 2015 2016 2017 2013 2014 2015 2016 2017 2018 Total 2013 2014 2015 2017 Disgorgeable Revenues for Infringement Period Ending July 31, 2018 Disgorgeable Revenues for Infringement Period Ending Nov. 15, 2018 2013 2014 2015 2016 2017 Total Infringement Period Ending July 31, 2018 Infringement Period Ending Nov. 15, 2018 Damages Theory Infringement Period Ending July 31, 2018 Infringement Period Ending Nov. 15, 2018 2013 2016 2017 2018 2014 2015 2016 2017 2018 2016 2013 2014 2016 Aug. 1-Nov. 15, 2018 2013 2016 2017 |
| Court | U.S. District Court — Southern District of New York |
FOCUS PRODUCTS GROUP INTERNATIONAL, LLC, ZAHNER DESIGN GROUP LTD., HOOKLESS SYSTEMS OF NORTH AMERICA, INC., SURE FIT HOME PRODUCTS, LLC, SURE FIT HOME DECOR HOLDINGS CORP., and SF HOME DECOR, LLC, Plaintiffs,
v.
KARTRI SALES CO., INC., and MARQUIS MILLS INTERNATIONAL, INC., Defendants.
No. 15 Civ. 10154 (PAE)
United States District Court, S.D. New York
December 22, 2022
OPINION AND ORDER
PAUL A. ENGELMAYER, District Judge
This decision sets out the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52 following a six-day bench trial in this case.
Plaintiffs manufacture, sell, and distribute shower curtains with hookless rings that are coplanar with the curtain. These products have obtained considerable acclaim and commercial traction within the hospitality industry, insofar as they enable shower curtains to be put up more quickly and easily than conventional shower curtains that attach by means of hooks. Plaintiffs claim that defendants have manufactured, sold, and distributed confusingly similar shower curtains, and thus have infringed plaintiffs' utility and design patents, infringed plaintiffs' trademarks and trade dress, and engaged in unfair competition under the Lanham Act and New York law. Plaintiffs further claim that defendants' infringements were willful, warranting enhanced damages. Defendants deny these claims and advance a host of affirmative defenses.
During lengthy pretrial litigation, the Court conducted a Markman hearing, resolved many pretrial motions, and entered summary judgment for plaintiffs on their utility patent
infringement claims. Trial was held on June 27-29 and July 26-28, 2022. The Court received testimony from 14 witnesses. As to six, called by plaintiffs,[1] the Court received direct testimony by affidavit, followed by live cross and redirect examination.[2] As to nine, the Court heard testimony in wholly live form.[3] The Court also received testimony, in the form of deposition excerpts, from five witnesses,[4] and received hundreds of exhibits.[5]
The findings of fact that follow are based on the Court's review of the entire trial record. Where based in whole or in part on a witness's testimony, the Court's findings reflect credibility determinations based on the Court's assessment of, inter alia, the relevant witness or witnesses' experience, knowledge, and demeanor.
For the reasons that follow, the Court finds for plaintiffs on all claims tried;[6] dismisses defendants' counterclaims and affirmative defenses; awards plaintiffs lost profits and reasonable royalty damages of $2,938,337, which reflects the trebling of certain damages; and commissions briefing on pre- and post-judgment interest and attorneys' fees, I. Findings of Fact
A. The Parties and Other Relevant Entities
Plaintiff Focus Products Group International, LLC ("Focus Products") was a limited liability company organized under the laws of, and with its principal place of business in, Illinois. Kreilein Aff. ¶ 3; PTX 88. On March 6, 2017, Focus changed its name to Sure Fit Home Decor, LLC ("Sure Fit Home Decor"), also a plaintiff here. Kreilein Aff. ¶ 6; PTX 88 at 3. Plaintiff Sure Fit Decor Holdings Corp. ("SFD Holdings") is a Delaware corporation with a principal place of business in New York City. Kreilein Aff.¶10. Plaintiff SF Home Decor LLC ("SF Home Decor") is a subsidiary of SFD Holdings and a Delaware limited liability company with its principal place of business in Pennsylvania. Id. ¶ 9. Plaintiff Sure Fit Home Products, LLC ("SF Home Products") is a subsidiary of SF Home Decor and a Delaware limited liability company with a principal place of business in Pennsylvania. See PTX 416. Non-party Hollander Sleep Products acquired the Sure Fit entities in 2021. See Dkt. 494 at 3. However, the Sure Fit entities continue to exist. Id.
Plaintiffs Zahner Design Group, Ltd. ("ZDG") and Hookless Systems of North America ("HSNA") are affiliated New York corporations each with a principal place of business in New
York. Dkt. 323 ("JPTO") at 12. Non-party David Zahner, who invented the hookless shower rings forming the basis of this intellectual property dispute, wholly owns ZDG and HSNA.[7] Id.
Non-party Arcs and Angles, Inc. ("A&A Inc.") was a corporation registered and with its principal place of business in New York.[8] Non-party Arcs & Angles, LLC ("A&A LLC") was a limited liability company. On July 9, 2004, HSNA exclusively licensed its rights in the hookless shower ring patents to A&A Inc. PTX 387 at 1-14. On December 22, 2010, A&A Inc. assigned those rights to A&A LLC. Id. at 23-24. On October 10, 2012, Focus acquired A&A LLC and its intellectual property rights. Id. at 28-29; see also Dkt. 297 at 3 ("SJ Op.").
Defendant Kartri Sales Company, Inc. ("Kartri") is a Pennsylvania corporation with its principal place of business in Forest City, Pennsylvania. JPTO at 12; Tr. at 626.
Defendant Marquis Mills International, Inc. ("Marquis") was a New Jersey corporation with its principal place of business in New Jersey that went out of business in 2020. JPTO at 12; Tr. at 576. Marquis manufactured and sold the accused shower curtains to Kartri, which sold these to resellers, mostly in the hospitality market. Middleberg Dep. Tr. at 96; Kubus Dep. Tr. at 14-15.
Non-party Carnation Home Fashions, Inc. ("Carnation") once owned the EZ-ON Mark pertinent to the trademark infringement claims here.
Non-party Star Linen, Inc. ("Star Linen") is a company that resells Kartri's products to the hospitality and healthcare industries. Tr. at 549. Middleberg worked in acquisitions for both Marquis and Star Linen. Id.
Non-party Ramtex is a manufacturer of hospitality products based in Shaoxing, China. It assisted Marquis in manufacturing the accused shower curtains. Middleberg Dep. Tr. at 46-47. Non-party Pong Hsu ("Pong") is an individual employed by Ramtex in 2012 and 2013. Id. at 58. Pong had formerly worked for Waytex, a manufacturer that supplied the HOOKLESS® product to Focus and its predecessor A&A LLC. Pong had been a "part of [Focus's] product development team and .. . manufacturing team." Tr. at 554.
B. Witnesses
Plaintiffs' witnesses were Burbank, Sure Fit's CEO; Dubinski, who from 2018 to May 2022 held leadership roles in marketing and branding for Sure Fit Home Decor and Hollander Sleep; Erickson, Sure Fit's vice president of mass-market retail sales; Kemp, Focus's former senior vice president of hospitality; Kreilein, Focus's former executive vice president; Kuehne, Focus's former CFO; Whipple, Sure Fit's CFO; Zahner; and Elmore, a damages expert.
Defendants' witnesses were Dolph, Kartri's sales operations manager; Goskowski, Kartri's co-owner and president; Kubus, Kartri's co-owner and president of sales and marketing; Mayer, Carnation's former owner; Middleberg, Marquis's director of global operations and president of Star Linen; Ranieri, Marquis's owner; and Rogers, a damages expert.[9]
C. The Intellectual Property in Dispute
1. The Patents
ZDG owns the four patents at issue-one design patent and three utility patents. Zahner Aff.¶¶ 2-3.
The first is Design Patent No. D746,078, entitled "Shower Curtain" (the "' 078 Patent" or "Design Patent"). It covers the design of the shower curtain ring that is worked into the shower curtain at the curtain's upper edge. It looks like this:
(IMAGE OMITTED)
The second patent is Utility Patent No. 6,494,248, entitled "Suspended Materials Having External Slits," (the '"248 Patent"). PTX 3 at 1. The '248 Patent's abstract describes it as "openings each having a slit therein for attachment to a fixed rod,... reinforced with rings having projecting flanges .. . [which] make[] it easier to open up the ring" and thus "facilitate the placement of [a shower] curtain upon the fixed rod." Id. It looks like this:
(IMAGE OMITTED)
See Id. at 5.
The third and fourth patents are Utility Patent Nos. 7,296,609, entitled "Hanging Products" (the '"609 Patent"), PTX 4 at 1, and 8,235,088, entitled "Hanging Products," (the '"088 Patent"), PTX 5 at 1. The abstracts for these patents describe them as "[h]anging products" with "an opening for suspending the item from a rod," where each opening is strengthened "with a ring having a gap," and the ring contains "a movable member for opening and closing the gap." PTX 4 at 1; PTX 5 at 1.
Relevant here, the '248 Patent claimed an "approximately horizontal component," that is, a slit, when the shower curtain "is hanging from the rod," Dkt 148-2 at 13; the '609 Patent claimed a ring that included "a projecting edge, said projecting edge being an edge which projects from [the] outer circumference of the shower curtain ring, and that "projecting edge . .. [is] provided next to said slit," Dkt. 148-3 at 15; and the '088 Patent similarly claimed "a projecting edge, said projecting edge being an edge which projects from [the] outer circumference of the shower curtain ring, Dkt. 148-4 at 15. ZDG has exclusively licensed each of these patents to Focus Products and Sure Fit through its affiliate HSNA. See PTX 89; Kreilein
Aff. ¶ 4. Sure Fit sells shower curtains incorporating the patented inventions in the hospitality industry throughout the United States.
In its summary judgment decision on April 16, 2020, the Court held that defendants had infringed plaintiffs' three utility patents. See SJ Op.
2. The EZ-ON Trademark and HOOKLESS® Trademark
The design patent and utility patents are incorporated into shower curtains and sold under the HOOKLESS® Trademark ("Hookless Mark") and the EZ-ON Trademark ("EZ-ON Mark") (collectively, the "Marks"). The HOOKLESS® Mark is registered with the PTO. It was registered to its inventor Zahner's company ZDG, initially under U.S. Trademark Registration number 2,355,554 (Principal Register), and then under the numbers 2,381,995 (Supplemental Register) and 4,127,283 (Principal...
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