Court of Appeals Upholds Mighty Mug’s Trade Victory Against Patent-Infringing Chinese Imports

NEW YORK, Aug. 25, 2020 /PRNewswire/ — Goetz Fitzpatrick LLP (https://goetzfitz.com) announced a major victory in the U.S. Court of Appeals…

NEW YORK, Aug. 25, 2020 /PRNewswire/ — Goetz Fitzpatrick LLP (https://goetzfitz.com) announced a major victory in the U.S. Court of Appeals for the Federal Circuit for its client, Mighty Mug, Inc. (https://themightymug.com/). The Court upheld the exclusion order issued by the U.S. International Trade Commission (ITC) against all Chinese imports that infringed Mighty Mug’s patent on self-anchoring beverage containers, U.S. Patent No. 8,028,850 (‘850 patent). Goetz Fitzpatrick attorney Donald R. Dinan represented Mighty Mug before the ITC in the case, obtaining the exclusion order, as well as in the post-investigation challenge filed by the producers who tried to get the order rescinded.

«We are incredibly happy to see justice prevailing and are excited for the infringing items to be removed from the marketplace immediately. Don Dinan and the rest of the team at Goetz Fitzpatrick did an incredible job, ensuring that knockoffs were removed from the marketplace in the most cost-effective manner,» said Jayme Smaldone, the CEO of Mighty Mug. «As a small company that has put our blood, sweat, and tears into our IP, nothing makes us happier than knowing that the full force of the United States government is on our side in the fight against infringers. We celebrate each notice from Customs and Border Patrol when infringing items have been confiscated and are en route for destruction.» 

Mighty Mug is the manufacturer of the highly popular drinkware line, which has been featured in Real Simple®, Good Housekeeping™, and Wired® magazines. The Mighty Mug contains the patented feature that keeps the mug from being accidentally knocked over, putting an end to damaging spills over electronics and upholstery.

As soon as Mighty Mug became a success, companies based in China began shipping knockoffs into the United States. Numerous Chinese companies began to flood the market with inferiorly made products, which often tipped over, and sold them at drastically reduced prices. At one point, in an attempt to siphon off Mighty Mug’s sales, many infringers sold their knockoff mugs – shipping all the way from China – for less than what Mighty Mug was charged by the USPS to ship their goods within the U.S. These companies worked under fictitious names with false or non-existent addresses.

Mighty Mug brought a Complaint before the ITC under section 337 (19 U.S.A 1337), which prohibits unfair acts and unfair methods of competition, including patent infringement, in the importation of goods into the United States. Mr. Dinan, a former director of unfair import investigations at the ITC, after proving that the accused articles infringed on the ‘850 patent, argued that a general exclusion order (GEO) was the only appropriate remedy. Mr. Dinan urged the ITC to grant a GEO because it was difficult to gain information about the companies selling the infringing beverage containers and numerous entities were importing the containers, making it nearly impossible to identify the sources of the products. The ITC agreed and issued the GEO. A GEO is an in rem order, which runs against the goods and bars importation, regardless of source, manufacturer, importer, or country of origin, into the United States. In this way, the order is designed to prevent circumvention by infringing importers.

Subsequent to the issuance of the GEO, Mayborn Group, Ltd, and Mayborn USA, Inc., (Mayborn), a British corporation recently acquired by a large Chinese state conglomerate, filed a petition to rescind the GEO because the conditions which led to the exclusion from entry no longer existed. Mayborn is a major producer of children’s products and the manufacturer of a «sippy cup» called Tommee Tippee that directly copied the technology covered by the ‘850 patent. Mayborn asserted that the claims of the ‘850 patent were invalid based on newly discovered prior art, which made the invention anticipated or obvious under 35 U.S.C. 102, 103.

In the Rescission Proceeding, Mr. Dinan argued that under section 337 law, the asserted discovery of invalidating prior art after the issuance of a GEO was not a changed circumstance under the statute and thus not grounds for rescission. Mr. Dinan further argued that because the alleged new prior art was not a changed circumstance, the ITC lacked authority to consider the substance of Mayborn’s petition. The ITC agreed and summarily dismissed Mayborn’s Petition for Rescission. Mayborn appealed.

In a unanimous decision, the Court of Appeals upheld the ITC’s decision. It ruled that a patent claim is only extinguished upon a final judgment of invalidity or unpatentability by a federal court and that the ITC’s interpretation of section 337, that the rescission of an exclusion order only occurs upon such subsequent action by a federal court, was correct.

«The legal status of the ‘850 patent is unaffected by Mayborn’s wish to present an invalidity challenge,» stated the Court. The Court concluded by quoting its famous dictum in the Roper case, «A patent is born valid. It remains valid until a challenge proves its invalidity.»

«This ruling by the Federal Circuit is a major decision upholding the ITC’s power to exclude infringing imports and prohibit unfair trade practices in the United States,» shared Mr. Dinan.  

About Goetz Fitzpatrick LLP

Goetz Fitzpatrick was founded in 1967 and has grown to be a powerhouse in commercial litigation and business law. The firm’s clients include individuals, families, and businesses of all sizes across a variety of industries. With more than 20 attorneys, they serve both domestic and international clients from their offices in New York City, White Plains, New York, and Roseland, New Jersey. Their practices include Construction Litigation, Arbitration, and Mediation; Construction Contracts and Transactions; Commercial Litigation; Bankruptcy and Business Reorganization; Business Law & Transactions; Intellectual Property, Media, and Technology; Real Estate; Trusts and Estates; and International Trade. Regarded as subject matter experts in their respective fields, Goetz Fitzpatrick attorneys frequently publish articles relating to law and litigation. For more information, visit www.goetzfitz.com

Contact:  Allison Price

303-800-6364

 

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