Top Brand LLC v. Cozy Comfort Co.
| Decision Date | 24 March 2021 |
| Docket Number | No. 20 C 1238,20 C 1238 |
| Parties | TOP BRAND LLC, SKY CREATIONS, LLC, E STAR LLC, and FLYING STAR LLC, Plaintiffs, v. COZY COMFORT COMPANY LLC, BRIAN SPECIALE, and MICHAEL SPECIALE, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
The parties to this case are competitors. Both market oversized hooded sweatshirts to customers over the Internet, and both hold design patents that (they say) cover these products. Invoking their patent, Defendants prevailed upon Amazon to exclude Plaintiffs from the Amazon marketplace, prompting this lawsuit. Plaintiffs seek a declaratory judgment that their products do not infringe Defendants' design patent, or that the patent is invalid and unenforceable. They also assert claims of false marking, unfair competition and tortious interference with contract and with prospective economic advantage.
Plaintiffs are Top Brand LLC, E Star LLC, Flying Star LLC, and Sky Creations, LLC. The first three Plaintiffs sell oversized hooded sweatshirts through online retailers to customers in Illinois. Plaintiff Sky Creations owns a design patent for a hooded sweatshirt. It licenses the patent to Top Brand and Flying Star, but not to E Star. Defendants Michael and Brian Speciale are the inventors of the design patent invoked in the complaints to Amazon. They reside in Arizona and operate Defendant Cozy Comfort Company LLC (Cozy Comfort), which has its principal place of business in Arizona. Defendants move to dismiss the false marking claim under Federal Rule of Civil Procedure 12(b)(6) and ask the court to transfer the remaining claims to the District of Arizona under 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406(a). In the alternative, Defendants ask the court to dismiss the remaining claims for lack of jurisdiction and improper venue under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3).1 As explained here, the false marking claim is dismissed without prejudice, and the remaining claims are transferred to the District of Arizona under 28 U.S.C. § 1406(a).
Before reviewing the allegations in detail, the court pauses to note the difference between design patents and utility patents. A design patent protects "any new, original and ornamental design for an article of manufacture." 35 U.S.C. § 171(a). It "must claim an 'ornamental' design, not one 'dictated by function.'" Auto. Body Parts Ass'n v. Ford Glob. Techs., LLC, 930 F.3d 1314, 1318 (Fed. Cir. 2019), cert. denied, 140 S. Ct. 1298, 206 L. Ed. 2d 377 (2020) (quoting High Point Design LLC v. Buyers Direct, Inc., 730 F.3d 1301, 1315 (Fed. Cir. 2013)). "If [a] particular design is essential to the use of the article, it can not be the subject of a design patent." Auto. Body Parts, 930 F.3d at 1318 (quoting L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir 1993)); see also High Point, 730 F.3d at 1315 () (quoting Hupp v. Siroflex of America, Inc., 122 F.3d 1456, 1460 (Fed. Cir. 1997)). "When there are several ways to achieve the function of an article of manufacture, the design of the article is more likely to serve a primarily ornamental purpose." Hupp, 122 F.3d at 1460 (quoting L.A. Gear, 988 F.2d at 1123-24).
The following facts are set forth as favorably to Plaintiffs as the First Amended Complaint and the attached exhibits permit. The court references facts from Defendants' affidavit where relevant to issues of personal jurisdiction and venue.
Plaintiffs Top Brand and E Star are California corporations with their principal places of business in Carson, California. (First Am. Compl. ("FAC") [26] ¶¶ 7, 9.) Plaintiff Flying Star is an Illinois corporation with its principal place of business in Elgin, Illinois. (Id. ¶ 11.) Top Brand, E Star, and Flying Star produce and sell clothing, including oversized hooded sweatshirts. (Id. ¶¶ 8, 10, 12.) They use online retailers such as Amazon.com to sell the clothing to customers in Illinois, including in Chicago. (Id. ¶¶ 8, 10, 12, 48.) They do not state whether they sell clothing to customers outside of Illinois. It is unclear whether Top Brand, E Star, and Flying Star are independent businesses, nor have Plaintiffs explained how their economic interests align, apart from the fact that Plaintiffs Top Brand and Flying Star both sell a product called the Tirrinia® Hoodie, and Plaintiffs E Star and Flying Star both sell a product called the Catalonia Wearable Fleece Blanket with Sleeves and Foot Pockets (the "Catalonia").
Plaintiff Sky Creations is an Illinois corporation located in Chicago, Illinois. (Id. ¶ 13.)2 It owns all right, title, and interest U.S. Design Patent No. D728,900 (the '900 Patent). (Id. ¶ 14.) The '900 Patent claims an ornamental design for a "Hoodie", which the court understands to be a hooded sweatshirt. (Id.)3 Plaintiffs Top Brand and Flying Star are the sole licensees of Sky Creations' intellectual property, including the '900 Patent. (FAC ¶ 16.) E Star is not a licensee, and Plaintiffs do not state what relationship, if any, exists between E Star and Sky Creations. Top Brand and Flying Star sell a "large sweatshirt" called the Tirrinia® Hoodie (id. ¶ 49), which is pictured here:
Image materials not available for display.
(Tirrinia® Hoodie, Ex. C to FAC [26-1] at PageID #:379.) The Tirrinia® Hoodie is available in various colors, shapes, and sizes. (FAC ¶ 50.) As far as the court can tell, Plaintiffs claim that the '900 Patent covers the Tirrinia® Hoodie and all of the variations just mentioned.4
Defendants Michael Speciale and Brian Speciale are residents of Arizona. (Id. ¶¶ 22-23.) They are the inventors of U.S. Design Patent No. D859,788 (the "'788 Patent"), which claims "the ornamental design for an enlarged over-garment with an elevated marsupial pocket[.]" 5 This is a "front elevation view" of the ornamental design claimed in the '788 Patent:
Image materials not available for display.
('788 Patent, fig 1, at PageID #:263, 265.) Thomas Galvani, a patent attorney "who practices and resides in Arizona", helped Michael and Brian Speciale secure the '788 Patent. "All of the records relating to" the '788 Patent "are located in Arizona." (Id.) The examiner of the '788 Patent cited the '900 Patent as a prior art reference. (See '788 Patent at PageID #:263; FAC ¶ 15.)
Defendant Cozy Comfort is an Arizona corporation with its principal place of business in Cave Creek, Arizona. (FAC ¶¶ 17-18.) Plaintiffs allege, on information and belief, that Michael and Brian Speciale "individually and/or together manage, direct and control the actions of Cozy Comfort." (FAC ¶ 20.) Michael Speciale is "the co-founder" of Cozy Comfort and is involved in its day-to-day operations. (Speciale Decl. ¶ 1; see also FAC ¶ 21.) Defendants state that they are "unaware of any potential Cozy witness that lives in, works in, or is otherwise based in Illinois." (Speciale Decl. ¶ 14.) According to the FAC, no assignment of the '788 Patent has been recorded with the U.S. Patent and Trademark Office. (FAC ¶ 27.) Accordingly, Plaintiffs allege, Michael and Brian Speciale are "presumed to be" the co-owners of all right, title, and interest in the patent. (Id. ¶ 28.)
Defendants sell products that they say are covered by the '788 Patent, including a productcalled "the Comfy". (Speciale Decl. ¶ 20 (); see also FAC ¶ 35 ().) Plaintiffs allege that Defendants market and sell their products to customers in Illinois using online retailers, such as Amazon.com; brick-and-mortar stores in the Chicago area, such as Costco and Target; and www.thecomfy.com, which is Defendant Cozy Comfort's website. (FAC ¶¶ 34-36.) The Cozy Comfort website is allegedly an "interactive website" that allows customers to select Illinois "as the shipping destination state" using "a drop-down shipping menu." (Id. ¶¶ 37-38.) Defendants state that they operate the website from Arizona. (Speciale Decl. ¶ 5.) Plaintiffs allege, on information and belief, that "in the last two years," Defendants achieved "over 70 million in sales for their products." (FAC ¶ 34.) They further allege on information and belief that "a substantial amount" of those sales were to customers in the Northern District of Illinois. (Id.)
Plaintiffs allege that in early November 2019, "just prior to the critical holiday retail selling season," Cozy Comfort sent an e-mail to Amazon.com, complaining that 15 products Top Brand was selling—specifically, the Tirrinia® Hoodie in 15 different colors—infringe the '788 Patent. (Id. ¶¶ 29, 61, 110; see Nov. 13, 2019 Ltr., Ex. D to FAC [26-1] at PageID #:381.) Cozy Comfort allegedly asked Amazon to remove the listings for the accused products to prevent further sales. (FAC ¶ 29.) As discussed in more detail below, Amazon eventually honored that request.
Plaintiffs allege that the "overall appearance" of the Tirrinia® Hoodie is significantly different from the ornamental design claimed in the '788 Patent, and that the Tirrinia® Hoodie therefore does not infringe. (FAC ¶¶ 60, 67.)6 Pointing to side-by-side images of a Tirrinia®Hoodie and the ornamental design claimed in the '788 Patent, Plaintiffs allege that the hemline of the Tirrinia® Hoodie tapers outward and is horizontal, whereas the hemline depicted in the '788 Patent tapers inward, is...
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