Luminara Worldwide, LLC v. Liown Elecs. Co.
| Decision Date | 20 April 2015 |
| Docket Number | Case No. 14-cv-3103 (SRN/FLN) |
| Parties | Luminara Worldwide, LLC, Plaintiff, v. Liown Electronics Co. Ltd., Liown Technologies/Beauty Electronics, LLC, Shenzhen Liown Electronics Co. Ltd., Boston Warehouse Trading Corp., Abbott of England (1981), Ltd., BJ's Wholesale Club, Inc., Von Maur, Inc., Zulily, Inc., Smart Candle, LLC, Tuesday Morning Corp., Ambient Lighting, Inc., The Light Garden, Inc., and Central Garden & Pet Co., Defendants. |
| Court | U.S. District Court — District of Minnesota |
[FILED UNDER SEAL]
Daniel R. Hall, Joseph W. Anthony, and Courtland C. Merrill, Anthony Ostlund Baer & Louwagie PA, 90 South 7th Street, Suite 3600, Minneapolis, MN 55402; Ryan S. Dean, Fish & Tsang LLP, 2603 Main Street, Suite 1000, Irvine, CA 92614, for Plaintiff.
Devan V. Padmanabhan, Erin O. Dungan, Nadeem Schwen, Brooks F. Poley, Lukas Dustin Jonathon Toft, and Paul J. Robbennolt, Winthrop & Weinstine, PA, 225 South 6th Street, Suite 3500, Minneapolis, MN 55402-4629, for Defendants Liown Electronics Co. Ltd., Liown Technologies/Beauty Electronics, LLC, and Shenzhen Liown Electronics Co. Ltd.
Devan V. Padmanabhan, Nadeem Schwen, Brooks F. Poley, Lukas Dustin Jonathon Toft, and Paul J. Robbennolt, Winthrop & Weinstine, PA, 225 South 6th Street, Suite 3500, Minneapolis, MN 55402-4629, for Defendants Boston Warehouse Trading Corp., Abbott of England (1981), Ltd., Von Maur, Inc., Zulily, Inc., Smart Candle, LLC, Tuesday Morning Corp., The Light Garden, Inc., and Central Garden & Pet Co.
Devan V. Padmanabhan, Nadeem Schwen, Brooks F. Poley, Lukas Dustin Jonathon Toft, and Paul J. Robbennolt, Winthrop & Weinstine, PA, 225 South 6th Street, Suite 3500, Minneapolis, MN 55402-4629; Michael J. Pape, Fish & Richardson PC, 60 South 6th
Street, Suite 3200, Minneapolis, MN 55402, for Defendant BJ's Wholesale Club, Inc.
Lukas Dustin Jonathon Toft and Paul J. Robbennolt, Winthrop & Weinstine, PA, 225 South 6th Street, Suite 3500, Minneapolis, MN 55402-4629, for Defendant Ambient Lighting, Inc.
This matter is before the Court on Plaintiff's Motion for Preliminary Injunction [Doc. No. 50]. For the reasons set forth below, the Court grants Plaintiff's motion.
Luminara Worldwide, LLC, ("Luminara" or "Plaintiff") alleges that Defendants are offering for sale and selling flameless candles that infringe Plaintiff's patents. (See Pl.'s Mem. at 1 [Doc. No. 52].) "Luminara's Artificial Flame Technology was originally developed by Disney." (See id. at 2 [Doc. No. 52].) Although Disney initially licensed the Artificial Flame Technology to Candella, LLC in 2008 (see id.), after Candella and Luminara merged on December 31, 2014, Luminara became the exclusive licensee for the Artificial Flame Technology, with standing to enforce, without joinder of Disney, a number of patents, including (1) United States Patent No. 7,837,355 ("the '355 patent"), (2) United States Patent No. 8,070,319 ("the '319 patent"), (3) United States Patent No. 8,534,869 ("the '869 patent"), and (4) United States Patent No. 8,696,166 ("the '166 patent"). (See 4/3/15 Order Filed Under Seal [Doc. No. 143].)
Plaintiff seeks a preliminary injunction that (1) enjoins Defendants frommanufacturing, distributing, offering for sale, selling, or importing any moving flameless candles to any of Plaintiff's customers, and (2) orders Defendants to recall any and all moving flameless candles currently in Luminara's customers' stores or distribution centers. (See Pl.'s Mem. at 13 [Doc. No. 52].)
Although this lawsuit was initially filed against Defendants Liown Electronics Co. Ltd., Liown Technologies/Beauty Electronics, LLC, and Shenzhen Liown Electronics Co. Ltd. (hereinafter, "Liown" or "the Liown Defendants") (see Compl. ¶ 12 [Doc. No. 1]), Plaintiff later amended its Complaint to add several additional Defendants that sell flameless candles manufactured by Liown throughout the United States. (See generally First Am. Compl. [Doc. No. 13]; Second Am. Compl. [Doc. No. 88].)
Plaintiff alleges nine counts against Defendants, including but not limited to patent infringement, tortious interference, and trademark infringement. (See generally Third Am. Compl. [Doc. No. 131].) For purposes of its Motion for Preliminary Injunction, Plaintiff focuses solely on two of its claims. Specifically, Luminara argues that the Court should grant a preliminary injunction because it is likely to succeed on (1) its claim that Defendants are infringing the '166 patent; and/or (2) its claim that the Liown Defendants and Boston Warehouse tortiously interfered with Luminara's contracts. (See Pl.'s Mem. at 14-15 [Doc. No. 52]; Third Am. Compl. ¶¶ 26, 60-67 [Doc. No. 131].)
Luminara argues that Liown's moving flameless candles utilize every aspect of claim 1 of its '166 patent, and therefore literally infringe claim 1. Plaintiff contends that claim 1 of the '166 patent "claims the core invention of Disney's Artificial FlameTechnology." (See Pl.'s Mem. at 4 [Doc. No. 52].) Claim 1 claims a pendulum with a "flame silhouette" that pivots on a support element through a hole in the body of the pendulum to create a realistic flickering flame effect. (See Merrill Decl., Ex. 5, "'166 Patent" [Doc. No. 55-1].) Claim 1 provides as follows:
(Id. at claim 1 (bold and bracketed numbering added).) However, claim 1 does not claim the specific mechanism or manner for causing the pendulum to pivot. (See Patton Decl. ¶ 6 [Doc. No. 54].) Therefore, as Doug Patton, the co-inventor of the '166 patent, explains, "the invention can be practiced with one, or two, or ten pendulums." (See id.)
Figure 1 of the '166 patent shows a two-stage, or two pendulum design for a flameless candle made in accordance with the invention claimed in claim 1. (See id. ¶ 5.) However, the invention "can also be implemented in a single-stage design using a single pendulum." (See id.) In fact, Figure 7 of the '166 patent shows a single-stage, or single pendulum design that utilizes the technology claimed in claim 1. (See Merrill Decl., Ex. 5, "'166 Patent," Fig. 7 [Doc. No. 55-1].) Plaintiff explains that the full scope of claim 1 of the '166 patent is supported by the written disclosure of the earlier-filed provisional application filed on September 30, 2008. (See Pl.'s Mem. at 5 (citing Patton Decl. ¶ 6)[Doc. No. 52].) Claim 1 describes the technology visually depicted inside the circle below:
Image materials not available for display.
(Merrill Decl., Ex. 7, "Provisional Application 61/101,611," Fig. 1 [Doc. No. 55-1].)
Luminara granted Liown the right to distribute candles using the Artificial Flame Technology in China and parts of Asia. (See Merrill Decl., Ex. 15, "NDA" at 1 [Doc. No. 55-5].) However, Liown was not authorized to sell flameless candles using Disney's Artificial Flame Technology. (See id.) Luminara argues that Liown copied Disney's Artificial Flame Technology after it obtained details about the technology in a non-disclosure agreement ("NDA"). (See Pl.'s Mem. at 6 [Doc. No. 52]; Merrill Decl., Ex.14, "Product Development and Supply Agreement" [Doc. No. 55-5]; Merrill Decl., Ex. 15 "NDA" [Doc. No. 55-5].)
Plaintiff explains that in June 2010, the parties were unable to agree on a price for the candles, and Liown subsequently filed a patent application in China claiming ownership to a moving flameless candle. (See Pl.'s Mem. at 7 [Doc. No. 52].) Luminara alleges that these flameless candles rely on exactly the same technology as Disney's Artificial Flame Technology. (See id.) In 2012, Liown began selling its own flameless candles and Plaintiff filed suit against Liown in November 2012 for patent infringement. See Candella, LLC v. Liown Elecs. Co. Ltd., No. 12-cv-2803 (PJS/JJK) (D. Minn. Nov. 2, 2012) [Doc. No. 1]. Although the parties initially reached a settlement in 2013, negotiations fell apart, and on August 5, 2014, Liown's counsel notified Luminara that Liown would no longer comply with the terms of the November 2013 settlement. (See Merrill Decl., Ex. 20, "Letter from Liown to David Baer" [Doc. No. 55-9].)
Liown's termination of its settlement with Luminara occurred a few days after United States Patent No. 8,789,986 ("the '986 patent") was issued. (See Third Am. Compl. ¶ 32 [Doc. No. 131].) The '986 patent is entitled "Electric Lighting Device and Method of Manufacturing Same." (See id.) It was issued to Mr. Xioafeng Li, and was assigned to Liown. (See id.) Plaintiff alleges that the '986 patent infringes the Artificial Flame Technology patents, including the '166 patent. Thus, Luminara and Liown appear to have dueling patents for similar technology.
While Liown's sales of its flameless candles largely consisted of sales to non-Luminara customers in 2012, Liown's sales strategy allegedly changed in 2014. (See Pl.'s Mem. at 10 [Doc. No. 52].) According to Jerry Cain, the President of Luminara, in 2014, "Liown began aggressively offering infringing flameless candles for sale to customers who had previously purchased flameless candles from Luminara, or who were under contract to purchase flameless candles using the licensed Artificial Flame Technology exclusively from Luminara." (Cain Decl. ¶ 3 [Doc. No. 53].) Plaintiff claims that Defendant Boston Warehouse Trading Corp. ("Boston Warehouse") sold a "Forever Flame" Candle...
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