When South Korean company Mirae Lighting (Mirae) ran out of money before it could start manufacturing its flat panel lights for backlighting LCD TVs, Cupertino, California startup Lumiette, Inc. (Lumiette) bought Mirae’s patent portfolio covering the lighting technology and manufacturing methods in the hopes of selling the flat lights for ordinary residential lighting purposes.

The patent portfolio includes pending patent applications Pub. No. 2006/0279215 and 2007/0247070 (’070 application) directed to flat fluorescent lamps.  Though the lamps work essentially the same way as standard fluorescent bulbs, the difference is that the electrodes 140 are external to the channels 111 on electrode sections 111a, so the bulbs can be made very thin, four millimeters thin to be exact.

According to this greentech media interview with a Lumiette employee, the bulbs also include a reflection layer between the flat glass back panel and the formed glass in front, which reflects light forward and boosts efficiency.  Because the system efficiency is so much greater than in standard fluoroscent bulbs (about 90% versus 60% range), Lumiette’s flat panel lights last longer than fluorescents. 

Lumiette also claims that its lights are as bright as LEDs but at a substantially reduced cost.  It’s good to know that substantial energy efficiency doesn’t always require radically new technology but can be achieved with incremental changes to existing technology.

This is something I haven’t seen before:  a shareholder derivative action for patent infringement. 

BaoLiang Wang (Plaintiff Wang) is a 22% shareholder of a small California LED sign maker called Sun LED Sign Supply Inc. (Sun). 

Last month, Plaintiff Wang sued Sun, two of its directors, Xiao Ping Wang (Defendant Wang) and Wei Rong Fang, as well as JT LED USA (JT), Sunfire LED, LLC (Sunfire) and The LED, Inc. in federal court in Los Angeles, alleging patent infringement against all defendants and unfair competition against the two directors of Sun.

The patent at issue is U.S. Patent No. 7,245,279 (’279 patent), for which Defendant Wang is the named inventor.

The ’279 patent is directed to an easily extendable waterproof LED display array.  Each LED unit comprises a tray-like housing (62) containing a printed circuit board (55).  LED elements (31) are soldered onto the circuit board, and an outer covering (45) is attached to the opening of the housing.

A liquid gel provides a watertight seal for the elements on the PCB.  Each unit has a positive power source (20) and a negative power source (21).  According to the ’279 patent, a significant advantage of the invention is that each LED display unit has its own waterproof arrangement, so each unit can function separately, allowing LED displays of variable length at low cost.

According to the complaint (wang_complaint.pdf), while the application that issued as the ’279 patent was pending, Defendant Wang assigned the application to Sun, “giving the exclusive right to [Sun] for a period of eight (8) years.”  The U.S. Patent & Trademark Office patent assignments database lists Sun as the assignee of the ’279 patent.

The patent count of the complaint alleges that defendants’ JT-SLS01, JT-SLS02 and JT-SLS03 series products and similar waterproof LED devices infringe the ’279 patent.  Defendant LED, Inc. is also accused of selling infringing LED modules.

Under the unfair competition claim the complaint alleges, on information and belief, that Defendant Wang:

. . . via false pretense and deceit, executed assignment of the 279 patent to himself on or about 4/23/2007, without proper corporate authority, violating the previous 8-year requirement, and in an attempt to avoid patent infringement liability.

The complaint goes on to accuse Defendant Wang of using the patented technology to conduct his own business, JT LED USA, dba Jia Tang Electronic Company, in violation of Sun’s exclusive right. 

Plaintiff Wang is asking the court to find defendants liable for patent infringement, to compensate him for his losses and to assess punitive damages on defendants for their alleged fraudulent acts.

So it’s a competing director type shareholder suit with an IP twist.  And because the inventor assigned away his rights, we have a situation in which the inventor is accused of infringing his own patent. 

P3 International (P3) is a New York consumer electronics company that makes the Kill A Watt electric power meter.  The Kill A Watt meter allows consumers to determine how much energy particular appliances are using.  You simply plug the meter into the wall, plug the appliance into the meter, and monitor the energy consumption of the appliance on the meter’s LCD display. 

The Kill A Watt meter is protected by U.S. Patent No. 6,095,850 (’850 patent), which is directed to an electric adapter (1) having a plug (2) on its rear side which can be plugged into an electric socket (7).  The adaptor has an outlet socket with three holes (3a, 3b, 3c) on the front and a display (4) to show electrical parameters of the appliance being monitored.

When the user presses the display mode selection switch (6) the display (4) shows, in sequence, voltage level, current value, watt, kilowatt-hour, apparent power value and power factor.

P3 is the exclusive licensee of the ’850 patent.  In June, P3 sued SmartLabs Inc. (SmartLabs), UPM Marketing Inc.  and UPM Technology USA, inc. (collectively “UPM”) in federal court in Manhattan alleging that the electric device makers were infringing the ’850 patent. 

According to the complaint (p3_complaint.pdf), UPM’s infringing devices are the EM100, EM130, EM338 and EM369 Plug-in Energy Meters infringe, and SmartLabs also imports and sells some of UPM’s meters.  The complaint also alleged that SmartLabs intends to import and sell an infringing “Save-A-Watt” energy meter.

In August, the defendants filed counterclaims for declaratory judgment of noninfringement, invalidity and unenforceability of the ’850 patent (smartlabs_answer.pdf).

This month Judge Denise L. Cote signed a stipulation and order (p3_order.pdf) temporarily enjoining SmartLabs from making, importing, offering for sale or selling the Save-A-Watt meter pending the result of the lawsuit.  

The temporary injunction ordered by Judge Cote is one component of an agreement between P3 and SmartLabs to narrow the issues and focus the case.  The two parties also agreed to sever from the suit the issue of SmartLabs’ infringement of the ’850 and to dismiss with prejudice SmartLabs’ counterclaim of noninfringement.

Thus, the case between P3 and SmartLabs will only go forward on the issues of validity and enforceability of the ’850 patent.  If P3 prevails and at least one claim of the patent is found to be valid and enforceable, SmartLabs will be permanently enjoined from moving forward with its Save-A-Watt meter:

It is further stipulated and agreed that, once this case is finally terminated by order, judgment, decree, dismissal, settlement or otherwise, if any one of claims 1, 4, 5, 6, 7, 10 or 11 of United States Patent No. 6,095,850 has not been adjudged to be invalid or unenforceable, SmartLabs shall be permanently enjoined, by this Stipulation and Order, from making, importing into the United States, selling or offering for sale the Save-A-Watt during the term of that patent…

Since SmartLabs hasn’t sold any of the allegedly infringing devices yet, there are no money damages to be gained by P3 through a full court press on infringement.  This stipulation is a good example of a sensible, efficient approach to patent litigation (in contrast to the Nichia-Seoul Semiconductor lawsuit I blogged about here and here) where the parties expend legal fees and use court time only as necessary to decide the issues that actually matter for disposition of the case.