Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-00824/USCOURTS-cand-4_04-cv-00824-26/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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1Both parties' motions to strike are denied; the arguments

therein go toward the weight and import of the evidence, and do not

provide the Court with any reason to strike the initial filings.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SHARPER IMAGE CORPORATION, a Delaware

corporation,

Plaintiff,

v.

TARGET CORPORATION, a Minnesota

corporation, IONIC PRO, LLC, a

Delaware corporation, IDEAL PRODUCTS,

LLC, a Nevis (offshore) corporation,

SYLMARK, INC., a Delaware

corporation, SYLMARK, LLC, a Delaware

corporation, QWIK COOK, INC. d/b/a

HOME TRENDS, a New York corporation,

FACTORIES2U, LLC, a California

corporation, and CHAIM MARK BESS, an

individual,

Defendants.

 /

No. C 04-0824 CW

ORDER ADDRESSING

CROSS-MOTIONS FOR

SUMMARY JUDGMENT

Defendants Target Corporation, Ionic Pro, LLC, Qwik Cook, Inc.

d/b/a Home Trends, Ideal Products, LLC (Ideal Products), Sylmark,

Inc. (Sylmark), Sylmark, LLC, Factories2U, LLC and Chaim Mark Bess

(collectively, Defendants) move for summary adjudication of

Plaintiff Sharper Image Corporation's claims of patent

infringement, trade dress infringement and unfair competition and

of Defendants' counterclaims for non-infringement of the asserted

patents. Plaintiff opposes the motion, and separately moves to

strike portions of it. Defendants move to strike the opposition.1

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2Plaintiff has filed an “ex parte motion to compel” Defendants

to withdraw the reply Defendants filed in support of their

purported cross-motion. Defendants oppose the ex parte motion to

compel. The Court denies Plaintiff's purported ex parte motion. 

However, the Court strikes Defendants' reply; because Defendants

separately filed their own motion for summary judgment, they are

not entitled to file an additional cross-motion and reply. 

2

Plaintiff separately moves to strike, under California Code of

Civil Procedure § 425.16, Defendants’ tort and State law

counterclaims, and in the alternative moves for judgment on the

pleadings of the counterclaims, and for partial summary

adjudication on its utility patent infringement claim. Defendants

oppose those motions, and purportedly cross-move for summary

judgment.2

 Plaintiff separately moves for leave to file a Third

Amended Complaint (TAC) and to join additional defendants. 

Defendants oppose the motion. 

These matters were heard on January 27, 2006. Having

considered the papers filed by the parties and oral argument on the

motions, the Court grants in part Defendants' motion for summary

adjudication of patent and trade dress infringement, as described

below. The Court grants Plaintiff's motion for summary

adjudication of Defendants' tort and State law counterclaims. The

Court grants Plaintiff leave to join Mr. Spiegel as a defendant,

but otherwise denies the motion for leave to amend. 

BACKGROUND

Plaintiff is a corporation with its principal place of

business in San Francisco, California. Plaintiff manufactures its

own line of consumer products, known as the Sharper Image Design

products, which it sells to wholesale and retail customers through

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a multi-channel distribution system. One of Plaintiff's recent,

highly successful products is the Ionic Breeze Quadra (IBQ) air

purifier, which purports to clean air without the use of filters,

by using wire electrodes to charge airborne particulates, which are

then attracted to oppositely-charged plates. 

Ionic Pro, LLC is the manufacturer of a cheaper, competing

filter-less air purifier, the Ionic Pro. Ideal Products, LLC is a

sister company, and shares some employees with Ionic Pro, LLC. 

Sylmark, LLC is the parent corporation of both Ionic Pro, LLC and

Ideal Products, LLC. Sylmark and Sylmark, LLC (referred to

collectively as "the Sylmark entities") share common owners, and

both provide services to Ionic Pro, LLC. Specifically, Sylmark's

employees provide customer service support for sales of Ionic Pro. 

Barry Decl., Ex. G, IP 5767. Chaim Mark Bess is the former

President of Ionic Pro, LLC and former co-President of Sylmark. 

Proposed defendant Peter Spiegel is the Managing Director of

Sylmark, LLC and former Chief Strategic Officer of Ionic Pro, LLC. 

 Defendants Target, Home Trends and Factories2U are retailers

of the Ionic Pro. 

Additional facts are set forth in the discussion section

below. 

LEGAL STANDARD

Summary judgment is properly granted when no genuine and

disputed issues of material fact remain, and when, viewing the

evidence most favorably to the non-moving party, the movant is

clearly entitled to prevail as a matter of law. Fed. R. Civ. P.

56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

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Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.

1987).

The moving party bears the burden of showing that there is no

material factual dispute. Therefore, the court must regard as true

the opposing party's evidence, if supported by affidavits or other

evidentiary material. Celotex, 477 U.S. at 324; Eisenberg, 815

F.2d at 1289. The court must draw all reasonable inferences in

favor of the party against whom summary judgment is sought. 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d

1551, 1558 (9th Cir. 1991). 

Material facts which would preclude entry of summary judgment

are those which, under applicable substantive law, may affect the

outcome of the case. The substantive law will identify which facts

are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986).

Where the moving party does not bear the burden of proof on an

issue at trial, the moving party may discharge its burden of

production by either of two methods. Nissan Fire & Marine Ins.

Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir.

2000). 

The moving party may produce evidence negating an

essential element of the nonmoving party’s case, or,

after suitable discovery, the moving party may show that

the nonmoving party does not have enough evidence of an

essential element of its claim or defense to carry its

ultimate burden of persuasion at trial. 

Id. 

If the moving party discharges its burden by showing an

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absence of evidence to support an essential element of a claim or

defense, it is not required to produce evidence showing the absence

of a material fact on such issues, or to support its motion with

evidence negating the non-moving party's claim. Id.; see also

Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990); Bhan v.

NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If the

moving party shows an absence of evidence to support the non-moving

party's case, the burden then shifts to the non-moving party to

produce "specific evidence, through affidavits or admissible

discovery material, to show that the dispute exists." Bhan, 929

F.2d at 1409. 

If the moving party discharges its burden by negating an

essential element of the non-moving party’s claim or defense, it

must produce affirmative evidence of such negation. Nissan, 210

F.3d at 1105. If the moving party produces such evidence, the

burden then shifts to the non-moving party to produce specific

evidence to show that a dispute of material fact exists. Id.

If the moving party does not meet its initial burden of

production by either method, the non-moving party is under no

obligation to offer any evidence in support of its opposition. Id.

This is true even though the non-moving party bears the ultimate

burden of persuasion at trial. Id. at 1107.

Where the moving party bears the burden of proof on an issue

at trial, it must, in order to discharge its burden of showing that

no genuine issue of material fact remains, make a prima facie

showing in support of its position on that issue. UA Local 343 v.

Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir. 1994). That

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is, the moving party must present evidence that, if uncontroverted

at trial, would entitle it to prevail on that issue. Id.; see also

Int’l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th

Cir. 1991). Once it has done so, the non-moving party must set

forth specific facts controverting the moving party's prima facie

case. UA Local 343, 48 F.3d at 1471. The non-moving party's

"burden of contradicting [the moving party's] evidence is not

negligible." Id. This standard does not change merely because

resolution of the relevant issue is "highly fact specific." Id.

DISCUSSION

I. Infringement of ‘484 (Utility) Patent

Defendants move for summary adjudication of non-infringement

of the '484 patent. Plaintiff has affirmed that it does not allege

that Defendants' second-generation Ionic Pro infringes the '484

patent, and covenants not to sue Defendants for such infringement. 

Barry Decl. ¶ 8. Accordingly, the Court grants Defendants' motion

for summary adjudication of non-infringement and dismisses with

prejudice any '484 patent infringement claims based on the secondgeneration Ionic Pro. With respect to the first-generation Ionic

Pro, however, Plaintiff opposes Defendants’ motion for summary

adjudication, and separately moves for summary adjudication of its

claim of infringement of the '484 patent. 

A. Factual Background

Plaintiff is the assignee of U.S. Patent No. 6,709,484 (the

'484 patent), issued on March 23, 2004. The '484 patent's asserted

claims pertain to a method for cleaning the emitter electrodes of

an "electro-kinetic electro-static air conditioner." Of the

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asserted claims, only Claim 29 and 32 are independent. Claim 29

discloses,

A method for cleaning an emitter electrode with an electrode

cleaning mechanism, . . . the method comprising:

(a) rotating the housing from the upright position so

that the electrode cleaning mechanism travels, from an

initial position, along the emitter electrode and

frictionally removes debris from the emitter electrode;

and 

(b) rotating the housing generally back to the upright

position so that the electrode cleaning mechanism travels

back to the initial position.

'484 patent 18:66-19:10. Claim 32 is the same except that it

discloses "generally inverting" the housing instead of "rotating"

the housing. Id. at 20:4-10. 

Plaintiff accuses Defendants of infringing the '484 patent due

to their recommended method of cleaning the first-generation of the

Ionic Pro. Sylmark was responsible for designing the Ionic Pro

Owner's Guide. Barry Decl., Ex. K, IP-2287. The Owners' Guide

distributed with the first-generation Ionic Pro recommended that

users clean the "internal ionizing wires" "after every eight to ten

days of use or whenever you hear excessive noise." Barry Decl.,

Ex. E, Owner's Guide at 9. In order to do so, the Owners' Guide

instructed users to "tilt the unit upside down for a few seconds

and then right side up again to allow the internal wire cleaner to

work." Inverting the Ionic Pro caused a cleaning plate to slide

along the wire emitter electrodes. Spiegel Decl. ¶ 7. Mr. Spiegel

also specifically recommended in an email that Wal-Mart should

clean the first-generation Ionic Pro units by rotating them upside

down. Barry Decl., Ex. H, IP 8584. 

According to Mr. Spiegel, early feedback from sales of the

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first-generation Ionic Pro "indicated that consumers either did not

read the instructions for inverting the purifier to clean the

emitter electrodes, or that they were unwilling to go to the

trouble of physically lifting and inverting the Pro just to clean

the emitter electrodes." Spiegel Decl. ¶ 8. In order to overcome

this consumer resistence, Ionic Pro, LLC developed a secondgeneration product with a "new cleaning mechanism that works

without physically inverting the air purifier." Spiegel Decl. ¶ 9. 

Internal company emails suggest an additional motivation for the

new design, however. Plaintiff had already brought its patent

infringement charges, and in a May 26, 2004 email, Paul Shellhammer

reported that Ionic Pro, LLC had "turned both Patent challenges

into positive changes." Barry Decl., Ex. G, IP 11037, May 26, 2004

Email from Paul Shellhammer to Yu Shen. The new mechanism is

described and claimed in U.S. Patent No. 6,855,190 (the '190

patent), of which Sylmark Holdings, Ltd. is the assignee. The

application for this patent was filed on April 12, 2004, and the

PTO issued it on February 15, 2005. 

Manufacturing of the first-generation Ionic Pro ceased in

early February, 2004. Spiegel Decl. ¶ 7. However, as Defendants

conceded at the hearing, Ionic Pro, LLC continued to ship its

first-generation product after the '484 patent was issued. Between

February and June, 2004, Mr. Spiegel admits that orders were filled

from the existing inventory of first-generation products. Barry

Decl., Ex. B, Spiegel Dep. 249:15-17. In April, 2004, Sylmark

employees insured that manuals accompanied Ionic Pro units. Barry

Decl., Ex. B, IP 8414. A May 13, 2004 email exchange among Sylmark

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A user also submitted a review to Amazon.com on March 21,

2004, two days before the '484 patent issued, including the

statement "cleaning is very easy." Barry Decl., Ex. H, IP 12322. 

9

employees shows that the Ionic Pro continued to be advertised after

the '484 patent issued. See Barry Decl., Ex. G, IP 5758 Email from

Joel Chamberlain to Rick Shiu (noting Ionic Pro advertisement and

offering product for sale). A June 23, 2004 email from a Sylmark

employee stated that the company "only started making [secondgeneration Ionic Pros] a week ago." Barry Decl., Ex. L. 

Plaintiff identifies evidence of two Ionic Pro users who

directly infringed the asserted method claims after the patent

issued.3

 On August 29, 2004, an Ionic Pro customer wrote the

manufacturer to say that she noticed "when I turn the unit upside

down I have to really shake it to make whatever slides up and down

move. I'm sure it's gummy inside" due to her smoking. Barry

Decl., Ex. H, Email from Marlaine to Inbox. On June 7, 2004,

another Ionic Pro customer wrote to complain that the red light

kept going on, explaining, "The first couple of times this happened

we cleaned everything as per the instruction, even though the

blades were not dirty." Id., Email from Cheryl Welsh-Carrier to

Inbox. Defendants object to use of these customers' emails to

prove direct infringement on the grounds that they are not

authenticated. This objection is sustained, and the Court does not

consider the consumer statements for the truth of the matters

asserted therein. 

On July 26, 2004, Plaintiffs' counsel ordered two Ionic Pro

air purifiers, one first-generation and one second-generation, from

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Target. The first-generation product arrived just two days later. 

Barry Decl. ¶ 15. The second-generation version was not delivered

until October, 2004. Id. ¶ 7. Factories 2U sold several Ionic

Pros in late August and early September, but the sales records do

not indicate that these were first-generation products. Barry

Decl., Ex. I, Factories 2U, LLC, Sales by Item Detail, January

through December 2004. There is no evidence showing that any of

these products was accompanied by an Owners' Manual. 

On August 23, 2004, in connection with Plaintiff's motion for

a preliminary injunction, Mr. Spiegel declared to the Court that he

believed that all Ionic Pro units being sold at that time by his

company or other Defendants were second-generation products. 

August 23, 2004 Spiegel Decl. However, he acknowledged in his

deposition that other retailers may have been continuing to sell

first-generation Ionic Pros at that time. Spiegel Dep. 252:14. 

The parties dispute which entities and individuals

participated in selling or offering for sale the first-generation

Ionic Pro. The purpose of Ideal Products is to “open up the retail

trade for the infomercial products, the wholesale trade, in other

words, to sell to mass merchandisers, the carriage trade, that

group.” Barry Decl., Ex. C, McConnell Dep. 21:19-22. As evidence

that Ideal Products sold the Ionic Pro product, Plaintiff points to

the testimony of Andrew Parker, Senior Vice President for Sharper

Image Design, and Estelle Cohen, former CFO for Sylmark. Mr.

Parker states that in February, 2004, he saw the Ionic Pro product

for sale in a booth rented by Ideal Products. Parker Decl. ¶ 6. 

Ms. Cohen testified, “If Ideal Products sold” Ionic Pro products,

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“then it would be reflected on the Ideal Products’ financial

statements.” Barry Decl., Ex. U., Cohen Dep. 215:20-22. Plaintiff

notes that Defendants produced a 2004 projected sales chart for the

Ionic Pro labeled, “Ideal Product, L.L.C. Ionic Pro.” Barry Decl.,

Ex. XX. Mr. Shellhammer, its author, testified that he mistakenly

labeled the sales chart using an Ideal Products template and

neglected to change the name. Shellhammer Reply Decl. ¶ 3. 

Plaintiff also accuses Mr. Bess, who served as president of

Ionic Pro, LLC until June, 2005 and holds a minority interest in

its parent company. He testified that, other than his formal

duties as a company officer, he had "almost no involvement" with

the Ionic Pro, which was developed and managed by Mr. Spiegel. 

Rosenblatt Decl., Ex. M., Bess Dep. 104-05. Mr. Bess did attend a

meeting with outside counsel in which it was decided that a

disclaimer would be added to the Ionic Pro box stating that it was

not a Sharper Image product. Barry Decl., Ex. TT, Bess Dep. 19:18-

20:12. He also participated in a sales meeting with prospective

retailer Wal-Mart in September, 2004. Barry Decl., Ex. UU, IP

9098-9100. Also in September, 2004, Mr. Bess was included in an

email exchange in which he stated that he would "steal a container

[of Ionic Pros] at the factory for Harriet Carter (1100). They

have almost 500 backorders, and may put us on the front cover for

Christmas if we can solve this problem." Id. at IP 9144. Finally,

at an unspecified time, Mr. Bess was involved in analyzing the

effectiveness of an Ionic Pro advertisement that ran in USA Today. 

Barry Decl., Ex. WW, 45, 51. 

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B. Applicable Law

Title 35 U.S.C. § 271(b) provides, “Whoever actively induces

infringement of a patent shall be liable as an infringer.” Absent

direct infringement, there can be no inducement of infringement. 

Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 687

(Fed. Cir. 1986) (citing Stukenborg v. Teledyne, Inc., 441 F.2d

1069, 1072 (9th Cir. 1971)). Circumstantial evidence is sufficient

to establish direct infringement and inducing infringement, and

"may also be more certain, satisfying and persuasive than direct

evidence." Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261,

1272 (Fed. Cir. 1986) (quoting Michalic v. Cleveland Tankers, Inc.,

364 U.S. 325, 330 (1960)). In Arthrocare Corp. v. Smith & Nephew,

Inc., 406 F.3d 1365, 1377 (Fed. Cir. 2005), the court found "strong

circumstantial evidence" that users directly infringed a patent,

including both testimony regarding the intended infringing design

and sales literature instructing customers to follow an accused

method. See also Golden Blount v. Robert H. Peterson Co., 438 F.3d

1354 (Fed. Cir. 2006) (finding direct infringement could be

inferred from evidence of sales of unassembled product with

instructions to users for creating infringing configuration). 

Intent is also a required element of induced infringement. To

be liable for inducing infringement, the alleged infringer “must be

shown . . . to have knowingly induced infringement.” Manville

Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir.

1990) (emphasis in original). 

As a general rule, "inducement of infringement under § 271(b)

does not lie when the acts of inducement occurred before there

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existed a patent to be infringed." Nat'l Presto Indus., Inc. v. W.

Bend Co., 76 F.3d 1185, 1196 (Fed. Cir. 1996). 

C. Analysis

1. Ionic Pro, LLC and Sylmark Entities

With respect to Defendants Ionic Pro, LLC and the Sylmark

entities, neither Plaintiff nor Defendants are entitled to summary

judgment on the issue of inducement of infringement. Defendants do

not deny that a user who followed the cleaning instructions

accompanying the first-generation Ionic Pro would directly infringe

once the '484 patent was issued. Defendants nevertheless contend

that they cannot be liable for inducing infringement because

Plaintiff has introduced no evidence that any Ionic Pro users

indeed directly infringed. 

In Moleculon Research, the plaintiff met its burden of showing

infringement of a puzzle method claim under § 271(b) by showing

"circumstantial evidence of extensive puzzle sales, dissemination

of an instruction sheet teaching the method of restoring the

preselected pattern with each puzzle, and the availability of a

solution booklet on how to solve the puzzle." 793 F.2d at 1272. 

Here, there is similar circumstantial evidence that Ionic Pro users

infringed after the patent was issued: the Owner's Guide

instructed users to invert the product to clean the wires, which

provides circumstantial evidence that those who followed the

product instructions infringed the '484 patent. The market

research showing that consumers were unwilling to clean the firstgeneration Ionic Pro by inverting it is evidence that some, and

possibly many, consumers did not infringe. Based on the evidence,

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however, a reasonable trier of fact could also draw the inference

that at least some customers did follow the instructions. 

Therefore, the Court finds that a disputed issue of material fact

exists as to whether Ionic Pro users directly infringed the

asserted claims of the '484 utility patent. 

Defendants also contend that, in the time period after the

patent issued, no evidence shows that they acted with the necessary

intent to be held liable for inducement. With respect to Ionic

Pro, LLC and Sylmark, the evidence contradicts Defendants'

assertions. These entities undisputedly learned of the '484 patent

when Plaintiff filed suit. Sales records show that Ionic Pro, LLC

continued to sell what Mr. Spiegel admits was first-generation

product for months after the '484 patent was issued. After the

'484 patent was issued, but before the second-generation product

was available, Sylmark employees advertised the product for sale

and insured that instruction manuals were included with the

product. Therefore, those sales of first-generation product, in

combination with the instruction manuals designed in part by

Sylmark, are some evidence of a knowing intent to induce

infringement. Disputed issues of fact thus preclude summary

adjudication of Plaintiff's utility patent infringement claims

against Ionic Pro LLC and the Sylmark entities. 

With respect to the retail Defendants, however, Plaintiff has

not identified evidence of intent sufficient to withstand summary

judgment. There is no evidence that Factories 2U, Target or Qwik

Cook knowingly sold the instruction manual with first-generation

products after they were made aware of Plaintiff's claims of

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infringement. For this reason, Court denies Plaintiff's motion for

summary judgment of infringement of the '484 patent by Defendants

Factories 2U, Target and Qwik Cook, and grants Defendants' motion

for summary adjudication with respect to these retailers. 

2. Ideal Products

Defendants move for summary adjudication of Plaintiff’s claims

against Defendant Ideal Products, on the grounds that there is no

evidence that Ideal Products was involved in the sale or

manufacture of the Ionic Pro. 

Neither Mr. Parker's nor Ms. Cohen’s testimony is direct

evidence that Ideal Products sold the Ionic Pro at a time when

doing so could constitute inducement of infringement of the ‘484

utility patent, i.e. after March 23, 2004. Mr. Parker says only

that he observed the Ionic Pro in an Ideal Products sales booth in

February, 2004. Ms. Cohen had left the company by the time the

'484 patent was issued. Nevertheless, Mr. Parker's testimony is

evidence that Ideal Products at some point sold the Ionic Pro or

offered it for sale. Because Ideal Products' admitted purpose is

to promote the trade of Sylmark products such as the Ionic Pro, Mr.

Parker and Ms. Cohen's testimony would allow the trier of fact to

draw a reasonable inference that Ideal Products continued to offer

to sell the Ionic Pro after the March 23 patent issue date. For

this reason, the Court denies Defendants’ motion for summary

adjudication with respect to Ideal Products. 

3. Chaim Mark Bess

Defendants move for summary adjudication of Plaintiff’s claims

against Mr. Bess, on the grounds that he lacks sufficient

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involvement with Ionic Pro to be held liable for any of Plaintiff’s

claims against him. 

Plaintiff claims that the Court should “pierce the corporate

veil” and hold Mr. Bess liable under the alter ego theory. The

Court may pierce the corporate veil only where the following two

conditions are met: “(1) there is such a unity of interest and

ownership that the individuality, or separateness, of the said

person and corporation has ceased, and (2) an adherence to the

fiction of the separate existence of the corporation would sanction

a fraud or promote injustice.” SEC v. Hickey, 322 F.3d 1123, 1128

(9th Cir. 2003) (citations and quotation marks omitted). 

Plaintiff has failed to show any evidence to justify piercing

the corporate veil. Plaintiff's allegations of deceit are directed

generally toward "Mr. Bess and his associates," and therefore do

not show that the separateness between Mr. Bess, specifically, and

the Defendant corporations had ceased. Accordingly, it is not

appropriate to pierce the corporate veil and hold Mr. Bess liable

for all of his company's actions. 

Plaintiff has also failed to raise a dispute of fact regarding

the question of whether Mr. Bess personally should be held liable

for inducement of infringement. Although the evidence shows that

Mr. Bess understated his own involvement in the development and

marketing of the Ionic Pro, it does not show that Mr. Bess was

actively involved in developing and marketing the first-generation

Ionic Pro, with the knowledge that this would induce the infringing

acts, after the issuance of the '484 patent. 

Therefore, the Court grants Defendants' motion for summary

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adjudication of Mr. Bess' liability for infringement. 

II. Infringement of ‘494 (Design) Patent

Defendants move for summary adjudication of non-infringement

of the ‘494 design patent. 

A. Factual Background

Plaintiff is also the assignee of U.S. Design Patent No.

433,494 (the '494 patent). The '494 patent was issued on November

7, 2000 and claims an ornamental design for an air purifier. 

Tristan Christianson, a co-inventor of the patent and

Plaintiff’s Rule 30(b)(6) designee on the topics of the design and

selection of trade dress for IBQ, testified that there were only

three aspects of the design that “did not arise from functional

need": the scalloped cut-outs on either side of the body, the

curved button below the handle and the handle itself. Rosenblatt

Decl., Ex. AA, Christianson Dep. 198:2-10. In prior briefing

before this Court, however, Mr. Christianson had explained that,

viewing the '494 patent as a whole, the following features were

part of the claimed ornamental design: "an overall tower-shape,

size, shape and configuration (see Figures 1 through 6); (b) an

oval cross-section; (c) a circular base, which is not flush with

the bottom of the air cleaner's housing; (d) numerous

(approximately 50) sleek, smooth horizontal inlet and outlet vents

located along the front and back of the air purifier's tower that

are interrupted by a vertical seam; and (e) operational controls

that are situated at the top of the housing, which is slightly

sloped downward." Docket No. 60, May 18, 2004 Declaration of

Tristan Christianson. 

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Andrew J. Parker, Senior Vice President of Sharper Image

Design, declares that the following features of the IBQ are

“ornamental in nature and selected to create a visually attractive

product”: the rounded tower shape; the downward slant of the top

and upper surface; the clean design lines of the top surface,

including the recessed handle; the cross-sectional shape creating a

narrow, tapered impression; the horizontal orientation and

arrangement of the vents; the wrapping around to the sides of the

vents; the narrow, vertical airflow band; and the vertical band

separating front vents from the rear vents. Parker Decl. ¶¶ 3-11. 

Mr. Parker identifies other competitors’ air purifiers that do not

include some of those features; for instance, Duracraft air

purifiers are short and boxy. Id. ¶ 4. 

B. Applicable Law and Analysis

Determining whether a design patent is infringed requires

(1) construction of the patent claim and (2) comparison of the

construed claim to the accused product. Elmer v. ICC Fabricating,

Inc., 67 F.3d 1571, 1577 (Fed. Cir. 1995). 

1. Construction of the ‘494 Patent

“In construing a design patent claim, the scope of the claimed

design encompasses ‘its visual appearance as a whole,’ and in

particular ‘the visual impression it creates.’” Contessa Food

Prods., Inc., v. Conagra, Inc., 282 F.3d 1370, 1376 (Fed. Cir.

2002) (citing Durling v. Spectrum Furniture Co., 101 F.3d 100, 104-

05 (Fed. Cir. 1996)). If the design contains both functional and

non-functional elements, then “the scope of the claim must be

construed in order to identify the non-functional aspects of the

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4Plaintiff moves to strike the portions of Defendants’ motion

which rely on Mr. Christianson’s testimony for the purpose of

construing the '494 patent's claim, arguing that such extrinsic,

inventor testimony cannot be considered. Plaintiff's motion to

strike is denied. While Mr. Christianson's testimony is not, in

itself, evidence of the proper construction of the claim, it is

relevant to the Court's determination of which features are

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design.” OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396,

1405 (Fed. Cir. 1997) (citing Lee v. Dayton-Hudson Corp., 838 F.2d

1186, 1188 (Fed. Cir. 1988)). However, the fact that a particular

feature of a design performs a function does not mean that the

feature cannot be part of a claimed design; as the Federal Circuit

has explained in relation to a dispute over a design patent for

shoes,

There is no dispute that shoes are functional and that certain

features of the shoe designs in issue perform functions. 

However, a distinction exists between the functionality of an

article or features thereof and the functionality of the

particular design of such article or features thereof that

perform a function. Were that not true, it would not be

possible to obtain a design patent on a utilitarian article of

manufacture, or to obtain both design and utility patents on

the same article.

Avia Group Int’l, Inc., v. L.A. Gear Cal., Inc., 853 F.2d 1557,

1563 (Fed. Cir. 1988). 

Defendants urge the Court to adopt a construction of the

design patent based only on those aspects of the design which Mr.

Christianson testified did not arise from functional need,

specifically the scalloped cut-outs on the sides, the crescentshaped curved button below the handle and the recessed handle

itself.4 Plaintiff, on the other hand, asks the Court to rely

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ornamental in nature and which are functional, an inquiry which

must precede construction of claimed design and which is not

answered by the patent itself. See Key Pharms. v. Hercon Labs.

Corp., 161 F.3d 709, 716-17 (Fed. Cir. 1998) (noting that district

courts properly consider extrinsic evidence to resolve questions in

claim construction not answered by the intrinsic evidence of the

patent and its file history). Mr. Christianson's testimony is

consistent with the intrinsic evidence of the patent itself; all of

the ornamental features he identifies are clearly visible in the

patent drawings.

20

exclusively on the declaration of Mr. Parker and his much broader

view of the design's ornamental features in order to determine the

scope of the patented design. 

The Court finds that all of the features identified by the

declarants are significant parts of the “overall visual impression”

given by the patented design. Mr. Christianson's and Mr. Parker's

testimony is not necessarily inconsistent. The fact that some of

the features described by Mr. Parker provide the IBQ with

functional as well as aesthetic advantages (and thus were not

listed as "purely" ornamental by Mr. Christianson) does not mean

that those features are purely functional. Furthermore, the three

ornamental attributes specifically identified by Mr. Christianson,

considered in isolation, do not encompass, as the construction of a

design patent must, an overall visual impression of the design

(which Mr. Christianson himself testifies to be a “sleeker, more

sculptured appearance"). Christianson Dep. 199:2-3. On the other

hand, those distinctive, purely ornamental features identified by

Mr. Christianson are also part of the design's overall visual

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impression. 

Therefore, the Court gives the following claim construction to

the '494 patent. The '494 patent is directed toward an ornamental

design for a tower-type air purifier. The housing has a narrow and

tall shape with an oval cross-section, as shown in Figure 1, fixed

on top of a circular base which is bigger than the bottom of the

housing, see Fig. 2. Figures 1, 2 and 5 show many horizontal vents

which are located along the front and back of the tower, separated

by scalloped cut-outs on either side of its body. A crescentshaped control button is located on top of the unit, below the

handle. Figures 1 and 7. As seen from the perspective of Figures

5 and 6, the top of the unit is slanted downward. A boomerangshaped handle (see Fig. 7) is located in a recessed cavity and

protrudes up from the top. See Figs. 5 and 6. 

2. Comparison

The trier of fact need not find that the patented and accused

designs are identical in order to find design patent infringement. 

Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 820 (Fed. Cir.

1992). Comparison of the accused product “includes two distinct

tests, both of which must be satisfied in order to find

infringement: (a) the ‘ordinary observer’ test, and (b) the ‘point

of novelty’ test.” Contessa Food Prods., Inc., v. Conagra, Inc.,

282 F.3d 1370, 1377 (Fed. Cir. 2002). Because the Court finds that

Plaintiff has failed to raise a disputed issue of material fact

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under the point of novelty test, it need not decide whether the

Ionic Pro infringes under the ordinary observer test. 

The point of novelty test requires that the accused product

“contain substantially the same points of novelty that

distinguished the patented design from the prior art.” Goodyear

Tire & Rubber Co. v. Hercules Tire & Rubber Co., Inc., 162 F.3d

1113, 1118 (Fed. Cir. 1998) (citing L.A. Gear, Inc., v. Thom McAn

Shoe Co., 988 F.2d 1117, 1125 (Fed. Cir. 1993)). The purpose of

the point of novelty test is to focus only on those aspects of a

design which render it different from prior art designs. Winner

Int’l Corp. v. Wolo Mfg. Corp., 905 F.2d 375, 376 (Fed. Cir. 1990),

overruled on other grounds by Cardinal Chem. Co., v. Morton Int’l,

508 U.S. 83, 92 n.12 (1993), (citing Litton Sys., Inc., v.

Whirlpool Corp., 728 F.2d 1423, 1444 (Fed. Cir. 1984)). 

Plaintiff objects to Defendants’ use of prior art not cited by

Plaintiff to the PTO during prosecution, specifically U.S. Patent

No. Des. 389,567 (the Gudefin patent) and U.S. Patent No. Des.

375,546 (the Lee patent), in order to establish the ‘494 patent’s

points of novelty. Plaintiff relies on Bernhardt, LLC v.

Collezione Europa USA, Inc., in which the Federal Circuit held that

to satisfy the points of novelty test in a design patent

infringement case, the patentee must “at minimum” introduce as

evidence “the design patent at issue, its prosecution history, and

the relevant prior art references cited in the prosecution

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5

After the hearing on their motions, both parties submitted

short supplemental briefs addressing the Federal Circuit's recent

holding in Lawman. 

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history.” 386 F.3d 1371, 1384 (Fed. Cir. 2004). However, nothing

in Bernhardt suggests that prior art not cited during prosecution

may not also be considered in determining which aspects of a design

are novel. 

Plaintiff also argues that design patent features are points

of novelty if the particular combination of features is not found

in the prior art. Plaintiff relies on an overly-broad

interpretation of Rubbermaid Commercial Prods., Inc., v. Contico

Int’l, Inc., 836 F.Supp. 1247, 1259 (W.D. Va. 1993), where the

court stated (in the context of a challenge to a design patent’s

validity, not infringement), that the overall arrangement of

individual elements could be considered a point of novelty. The

Rubbermaid court's approach has since been abrogated by the Federal

Circuit's decision in Lawman Armor Corp. v. Winner Int'l, LLC, 437

F.3d 1383 (Fed. Cir. 2006) that a new combination of elements shown

in the prior art could not, in itself, constitute a "point of

novelty" in the new design.5 

Plaintiff fails to identify points of novelty in light of the

uncited prior art Gudefin and Lee patents. Of the elements of the

claimed design, as construed by the Court, virtually none of those

proffered by Plaintiff as points of novelty are, in fact, new. The

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Lee design shows a round cross-section with horizontal vents that

wrap around both the front and back of the housing. The Gudefin

design shows a narrow and tall housing shape, fixed on top of a

circular base which is bigger than the bottom of the housing, with

many vents located on the front and back of the unit, separated on

the sides by solid portions with no vents. The Gudefin design also

places the controls on the top of the unit, and the top of the unit

angles downward. See Gudefin Patent Figs. 3 and 5. Thus, only the

following elements of the '494 patented design, as construed by the

Court, remain as potential points of novelty: the oval crosssection; the scalloped cut-outs separating the vents on either side

of the body; the crescent-shaped control button; and the boomerangshaped handle located in a recessed cavity and protruding from the

top. Of these, the only element arguably shared by the Ionic Pro

is the placement of the handle in a recessed cavity. Otherwise,

the Ionic Pro does not share the IBQ's points of novelty: its

cross-section (rounded like Gudefin's) is guitar-pick rather than

oval-shaped; its vents are separated by a narrow, solid seam rather

than scalloped cut-outs; its control button is round; and its

handle is formed by two round holes, which do not protrude from the

top. 

The Court finds that Plaintiff has failed to introduce a

triable issue of material fact under the required point of novelty

test. Accordingly, the Court grants Defendants' motion for summary

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adjudication of Plaintiff's claim of design patent infringement. 

III. Trade Dress Infringement

Defendants also move for summary adjudication of Plaintiff’s

claim of trade dress infringement. 

A. Factual Background

Plaintiff claims that its trade dress consists of the combined

use of the following five elements: (1) upright, rounded tower

shape; (2) number, arrangement and design of its sleek, smooth,

horizontal wrap-around vents; (3) slanted top; (4) placement and

design of the handle for the removable collector grid; and

(5) design, placement and designation of the operational controls. 

According to Jeffrey Forgan, a Sharper Image CFO, Plaintiff

has conducted an "extensive advertising and marketing campaign" for

the IBQ using its trade dress. Forgan Decl. ¶ 3. The IBQ is

featured prominently in every Sharper Image catalog, a publication

into which Plaintiff puts substantial resources. Id. ¶ 6. 

Plaintiff has spent huge amounts of money advertising the IBQ in

newspapers, magazines and informercials. Id. ¶¶ 8-9. The IBQ has

also received unsolicited media coverage, including appearances in

two popular television shows. Id. ¶ 11. Defendants' and other

competitors' advertisements and infomercials have featured the IBQ

without identifying it by name. Id. ¶ 12. 

Before the release of the Ionic Pro, an employee in Sylmark's

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product development office ordered two IBQ air purifiers,

explaining that these were "needed for China," where Ionic Pros

were being manufactured. Barry Decl., Ex. G, IP 5661. As

Plaintiff suggests, a reasonable inference is that Defendants used

those IBQs to assist in manufacturing. Other internal Sylmark

emails show that Ionic Pro manufacturers imitated the internal

working of the IBQ. See, e.g., id. at IP 10306 (noting that,

although Ionic Pro has three wires and IBQ has two, both products

produced the "same result" and used the "same metal piece"). Ms.

Cohen testified that, in her personal opinion, the Ionic Pro

product "was meant to have the same look and feel and same

functionality as The Sharper Image product." Barry Decl., Ex. U,

Cohen Dep. 70:16-18. Plaintiff also notes that Defendants used the

same or similar marketing techniques such as offering free

shipping. 

Plaintiff's expert, Walter McCullough, conducted consumer

research showing a twenty-one percent level of “design related

confusion” between the IBQ and Ionic Pro products. McCullough

Decl., Ex. A, Report on a Test of Source Confusion for the Sharper

Image Ionic Breeze Quadra Air Purifier. In addition to comparing

consumer reactions to the IBQ and Ionic Pro air purifiers, Mr.

McCullough also did a comparison between the IBQ and the Trion Rx,

another vented, tower air purifier of the same color that is less

similar in shape to the IBQ than is the Ionic Pro. The results of

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the survey showed that three percent of consumers were confused

about the source of the Trion Rx, twenty-four percent were confused

about the source of the Ionic Pro, and thus twenty-one percent were

confused by the similarity in appearance between IBQ and Ionic Pro,

specifically. 

Both parties have been contacted on several occasions by

consumers confused about the source of the Ionic Pro. For

instance, one consumer wrote to Sylmark to complain, "i did not

realize that the ionic pro was not part of the sharper image co. 

that was due to my own fault i have not used this and would like to

know about returning costs etc [sic]." Barry Decl., Ex. A, IP

14192. An internal memorandum from Mr. Spiegel provided Ionic Pro,

LLC sales staff and Sylmark customer service employees with answers

to questions regarding the Ionic Pro and IBQ, such as, "Why is the

Ionic Pro so much less expensive that the Ionic Breeze by Sharper

Image?" and "Is the Ionic Pro as good as the Ionic Breeze by

Sharper Image?". Barry Decl., Ex. G, IP 5767. Two consumers have

tried to return an Ionic Pro to Plaintiff for a refund. Arney

Decl. ¶ 4. Consumer Richard Jankowitz, after watching an Ionic Pro

infomercial, was confused about the source of the product because

of the "similarities of the Ionic Pro and the Ionic Breeze® Quadra®

infomercials as well as similarities in the appearance of the

products themselves." Jankowitz Decl. ¶ 2. Upon ordering an Ionic

Pro and realizing it was not a Sharper Image product, Mr. Jankowitz

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felt deceived. Id. ¶ 5. 

As direct evidence of consumer association of its trade dress

and the Sharper Image source, Plaintiff provides twenty unsworn

declarations of consumers, which it submitted to the PTO in the

context of its application to register its trademark. Barry Decl.,

Ex. P. Only the spaces for name and number of years as a Sharper

Image customer are completed by the declarants; each form is preprinted to state, 

I have purchased air purifiers/air cleaners from Sharper

Image, and am aware of the air purifier product that is the

subject of this application. I instantly recognize towershaped air cleaners with forward sloping heads and doublesided, crescent shaped, horizontal vents, as products of

Sharper Image only, and not of any other company in the field. 

It is my belief that the tower-shaped air cleaners, as

described and shown above, come from Sharper Image and have

the same high quality and performance as other products from

Sharper Image.

Plaintiff also provides sworn statements from Sharper Image

retailers with similar content. Barry Decl., Ex. Q. 

Plaintiff sought and eventually received protection for its

trade dress from the Patent Office. At one point, the PTO

examining attorney rejected Plaintiff’s attempt to establish

acquired distinctiveness for its trade dress based on the

similarity of the design to others on the market, referring

Plaintiff to twenty examples of "third party use of similar product

configurations for tower air purifiers and air cleaners,” including

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Defendants also criticize as overbroad Plaintiff’s

characterization of its trade dress because Plaintiff includes 

functional elements, but Defendants do not move for summary

adjudication on this ground. 

29

the accused Ionic Pro. Rosenblatt Decl., Ex. II, SI-IP 009345. In

its Amendment and Response to the PTO, Plaintiff insisted that, of

the twenty competitors identified by the examining attorney, “not

one of them references a product comprised of the same design

features as those found within Applicant’s product.” 

B. Applicable Law

A product's “trade dress” is its total image and overall

appearance; it may include “features such as size, shape, color,

color combinations, texture, or graphics.” Vision Sports, Inc. v.

Melville Corp., 888 F.2d 609, 613 (9th Cir. 1989) (internal

quotation and citation omitted). Trade dress, including a

product’s design, may be a protected mark under the Lanham Act. 

Wal-Mart Stores, Inc., v. Samara Bros., Inc., 529 U.S. 205, 209

(2000). A claim for infringement of trade dress requires a

plaintiff to prove three required elements: (1) distinctiveness,

(2) non-functionality and (3) likelihood of confusion. KendallJackson Winery Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1046-47

(9th Cir. 1998). Defendants argue that Plaintiff has failed to

introduce sufficient evidence to raise a triable issue of material

fact on either distinctiveness or likelihood of confusion.6

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C. Analysis

1. Distinctiveness

In an action for infringement of unregistered trade dress

under § 43(a) of the Lanham Act, “a product’s design is

distinctive, and therefore protectible, only upon a showing of

secondary meaning.” Wal-Mart Stores, 529 U.S. at 216. Whether

trade dress has acquired secondary meaning is a question of fact. 

Lindy Pen Co., Inc., v. Bic Pen Co., 725 F.2d 1240, 1246 (9th Cir.

1984), cert. den., 469 U.S. 1188 (1985), (citation omitted). In

the Ninth Circuit, secondary meaning is defined as “the mental

association by a substantial segment of consumers and potential

consumers ‘between the alleged mark and a single source of the

product.’” Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352,

1354 (9th Cir. 1985) (quoting in part 1 J. McCarthy, §§ 15:2 at 659

and 15:11(B) at 686)). Factors to be assessed in determining

secondary meaning include whether actual purchasers associate the

product design with its source, the degree and manner of the

plaintiff’s advertising, the length and manner of the plaintiff’s

use of the design and whether the plaintiff’s use of the design has

been exclusive. Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517

(9th Cir. 1989), cert. den., 493 U.S. 872 (1989). “Extensive use

and advertising over a substantial period of time is enough to

establish secondary meaning.” Id. (citing First Brands v. Fred

Meyer, 809 F.2d 1378, 1383 (9th Cir. 1987)); but see Yankee Candle

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Co. v. Bridgewater Candle Co., 259 F.3d 25, 44 (1st Cir. 2001)

(finding that even a plaintiff who relies on circumstantial

evidence of secondary meaning must show “some evidence that

consumers associate the trade dress with the source”) (emphasis in

original). “Proof of exact copying, without any opposing proof,”

may also be sufficient. Transgo, Inc., v. Ajac Transmission Parts

Corp., 768 F.2d 1001 (9th Cir. 1985) (citing Audio Fidelity, Inc.,

v. High Fidelity Recordings, Inc., 283 F.2d 551, 557 (9th Cir.

1960). 

The only direct evidence identified by Plaintiff of consumer

association of the combined use of the five elements of Plaintiff's

asserted trade dress with the Sharper Image source is the twenty

unsworn, pre-printed consumer declarations. Even setting aside

their questionable admissibility and probative value, this small

collection of pre-printed declarations is not evidence of a mental

association by a "substantial segment" of consumers. Furthermore,

these declarations do not address the specific combination of five

elements which Plaintiff claims constitutes its protected trade

dress; specifically, the declarants do not mention "placement and

design of the handle for the removable collector grid" or "design,

placement and designation of the operational controls." Likewise,

the sworn statements of Sharper Image retailers are not probative

of association in the minds of the consuming public. See Yankee

Candle, 259 F.3d at n.14 (noting that opinions of retailers and

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those active in the field not evidence of views of the consuming

public). Plaintiff produces no consumer surveys showing

association between its trade dress and the Sharper Image brand. 

Plaintiff also alleges that Defendants deliberately copied the

IBQ in designing the Ionic Pro. However, the evidence it cites

refers primarily to the internal workings and performance of the

IBQ, rather than to its trade dress. The only evidence related to

appearance is the "personal opinion" of Ms. Cohen that Ionic Pro

was generally designed to “look and feel” similar to the IBQ; this

clearly is not sufficient to show that the IBQ is distinctive. 

Furthermore, as described in Section 2 below, the Ionic Pro is in

fact not an exact copy. 

Finally, Plaintiff points to media coverage (including its own

competitors’ advertisements) and its copious spending on

advertising the Ionic Breeze product. Advertising and media

coverage are factors indicating distinctiveness. However, evidence

of a heavy advertising campaign is not, in itself, sufficient to

allow a reasonable inference of consumer association between

Plaintiff's alleged trade dress and its source. In contrast to the

product in Clamp Mfg., where the Ninth Circuit found that a

plaintiff could prove distinctiveness, without showing direct

evidence of consumer association, based on decades of exclusive

trade dress use, Plaintiff has only sold the current version of the

IBQ since 2000. Forgan Decl. ¶ 2. Although it is true that

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Plaintiff has successfully obtained two consent judgments

permanently enjoining its competitors based on its allegedly

distinctive trade dress, neither of those judgments indicates that

the trade dress issue was subject to discovery or dispute. See

Barry Decl. Ex. T, Consent Judgment and Permanent Injunction,

Sharper Image Corp. v. Bluebargain, Inc., No. CV-05-6755 AHM (C.D.

Cal., September 28, 2005); Consent Judgment and Permanent

Injunction, Sharper Image Corp. v. Master Household, Inc., No. 03-

03257-RMW (N.D. Cal., August 28, 2003). In fact, those cases, in

addition to evidence of Ionic Pro sales, indicate that Plaintiff

has not had exclusive use of its alleged trade dress, but has faced

similar-looking competitors almost from the beginning. 

For these reasons, the Court finds that Plaintiff has failed

to introduce evidence that would allow a reasonable jury to

conclude that its trade dress is distinctive or that a substantial

segment of consumers and potential consumers has a mental

association between the alleged trade dress and the Sharper Image

source. 

2. Likelihood of Confusion

Although Plaintiff's failure to show distinctiveness in itself

would entitle Defendants to summary judgment on the trade dress

infringement claim, the Court finds that Plaintiff has also failed

to show a triable issue of material fact under the likelihood of

confusion prong. 

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Eight factors are relevant to likelihood of confusion. AMF,

Inc., v. Sleekcraft, 599 F.2d 341, 348-49 (9th Cir. 1979). 

However, summary judgment on likelihood of confusion is appropriate

when marks are so dissimilar that there can be no likelihood of

confusion. See Chesebrough-Pond’s, Inc., v. Faberge, Inc., 666

F.2d 393, 397-98 (9th Cir. 1982) (affirming summary judgment of

non-infringement where marks clearly dissimilar and conclusory

expert affidavit unlikely to assist trier of fact). 

Plaintiff's representation to the PTO that the Ionic Pro is

not "comprised of the same design features as" the IBQ

significantly undercuts Plaintiff’s present claim that the products

share similar trade dress. See Petro Stopping Centers, L.P. v.

James River Petroleum, Inc., 130 F.3d 88, 94 (4th Cir. 1997)

(noting that trademark applicant’s representation to PTO that term

in mark was very dilute significantly undercut later claim in

infringement action that term was strong mark). 

Other than attorney argument and suggestions that the Court

view each air purifier from a distance, Plaintiff offers no

evidence of similarity of trade dress. Defendants do offer

evidence of some dissimilarity, based on the testimony of

Plaintiff’s own witnesses, such as the IBQ's guitar-pick shaped

cross-section and angled vents. As the initial response from the

PTO shows, there are many generally similar tower-type air

purifiers on the market. Given the range of generally similar

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products on the market, Plaintiff's evidence of actual confusion is

de minimis, and it certainly is not probative of confusion based on

trade dress. Indeed, consumers could easily become confused based

on generic similarities shared by the other nineteen tower air

purifiers identified by the PTO examining attorney. 

For these reasons, the Court finds that Plaintiff has failed

to raise a triable issue of material fact as to whether consumers

are likely to be confused by Ionic Pro's alleged use of IBQ's trade

dress. Accordingly, on the bases of both distinctiveness and

likelihood of confusion, the Court grants Defendants' motion for

summary adjudication of Plaintiff's claim for trade dress

infringement. 

IV. Plaintiff’s Unfair Competition Claim

Defendants move for summary adjudication of Plaintiff’s unfair

competition claim under California Business and Professions Code

§ 17200. At the hearing, Plaintiff explained that its UCL claim

was based only on Defendants' alleged trade dress infringement. 

Because the Court grants Defendants’ motion with respect to the

trade dress issue, it also grants Defendants' motion with respect

to Plaintiff's § 17200 claim.

V. Defendants’ Counterclaims

Defendants bring counterclaims for tortious interference with

economic advantage and unfair competition under California Business

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and Professions Code § 17200. Plaintiff moves to strike those

counterclaims under California's Code of Civil Procedure § 425.16,

which provides for special motions to strike claims based on the

defendant's right of petition or free speech in connection with a

public issue, and for judgment on the pleadings under Federal Rule

of Civil Procedure 12(c) and, in the alternative, for summary

adjudication, on the grounds that the counterclaims are barred by

three absolute defenses, the litigation privilege, the competition

privilege and the First Amendment. Defendants oppose the motion. 

A. Factual Background

At issue in Defendants' tort and State law counterclaims are

emails sent by Plaintiff to retailers advising them of this

lawsuit, and asking them not to carry the Ionic Pro product. A

sample email, sent July 20, 2004 from a Sharper Image employee to

an official at the Boise Cascade/Office Max store, stated, in part,

“Sharper Images [sic] wishes to make you aware of the serious legal

consequences we expect the distributors of the Ionic Pro to suffer

because of the direct assault upon Sharper Image’s Ionic Breeze

Quadra Silent Air Purifier.” Plaintiff’s Request for Judicial

Notice (RJN), Ex. 4, Novak Decl., Ex A, SI-IP001199. It warned,

"Sharper Image pursues all its legal rights against any entity or

individual which is involved in the further publication of Ionic

Pro's infringing product and fraudulent claims." Id. The end of

the emailed letter listed Robert Schultz, Vice-President of

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Business and Legal Affairs for Sharper Image Corporation, and also

included the name and contact information of Plaintiff’s outside

general counsel, e. robert wallach. Michelle Arney, a Sharper

Image Rule 30(b)(6) designee, testified that the purpose of the

letters was to "make sure the retailers were aware that this

litigation was ongoing and to understand that ultimately they may

not be able to rely on their indemnification from Ionic Pro." 

Plaintiff also contacted various media outlets with its claims

of infringement. A form letter for this purpose, also signed by

Mr. Schultz and Mr. wallach, stated, in part,

Sharper Image has been informed that the manufacturers and

distributors of the Ionic Pro indoor air purifier have

provided or will soon provide a commercial presentation for

viewing on your station. We have viewed the Ionic Pro video

presentation and are writing this letter to make you aware of

the serious legal consequences we expect the distributors of

the Ionic Pro to suffer . . . . As you would expect, Sharper

Image pursues all its legal rights against any entity or

individual which is involved in the further publication of

Ionic Pro's infringing product and fraudulent claims. We

request that you give strong consideration to rejecting this

misleading advertisement instead of being a party to its

further exposure.

Plaintiff's RJN, Ex. 5, SI-IP001260. 

The letters referred to Plaintiff's then-pending motions in

this Court for a temporary restraining order and for preliminary

injunctive relief. The Court denied the motion for a preliminary

injunction on September 9, 2004. 

Although the text of the letters to retailers is threatening,

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the evidence also shows that Plaintiff hoped for commercial

relationships with these retailers. Plaintiff's Rule 30(b)(6)

designee Roger Bensinger testified that "what we wanted was to get

Sharper Image Ionic Breeze in" to JC Penney and other retail

stores. Novak Decl., Ex. L, Bensinger Dep. 75:6-8. 

B. Applicability of Special Motion to Strike

California Code of Civil Procedure § 425.16(b)(1) provides,

A cause of action against a person arising from any act of

that person in furtherance of the person's right of petition

or free speech under the United States or California

Constitution in connection with a public issue shall be

subject to a special motion to strike, unless the court

determines that the plaintiff has established that there is a

probability that the plaintiff will prevail on the claim. 

The California legislature recently amended this law so that it 

does not apply to any cause of action brought against a person

primarily engaged in the business of selling or leasing goods

and services . . . arising from any statement or conduct by

that person if both of the following conditions exist: 

(1) The statement or conduct consists of representations

of fact about that person's or a business competitor's

business operations, goods, or services, that is made for

the purpose of obtaining approval for, promoting, or

securing sales or leases of, or commercial transactions

in, the person's goods or services, or the statement or

conduct was made in the course of delivering the person's

goods or services.

(2) The intended audience is an actual or potential buyer

or customer, or a person likely to repeat the statement

to, or otherwise influence, an actual or potential buyer

or customer . . . .

Cal. Civ. Proc. § 425.17(c). This exception was "intended to apply

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to commercial disputes." Brill Media Co. v. TCW Group, Inc., 132

Cal. App. 4th 324, 342 (2005). Even in the context of a commercial

dispute, however, "promises made to induce settlement of a lawsuit"

are not statements of fact and do not fall within the exception

created by § 425.17(c). Navarro v. IHOP Prop., Inc., 134 Cal. App.

4th 834, 841 (2005). 

The letters at issue contain representations of fact regarding

Plaintiff's business competitor's goods. Although those factual

representations contain implicit legal threats, they are far

removed from the settlement promises made in Navarro. Plaintiff's

own witnesses testify that one purpose of the letters was to

promote Sharper Image products. The retail recipients were clearly

potential buyers of the IBQ, and the media representatives were

advertisers whose business is to influence potential customers. 

Plaintiff's argument that Defendants' counterclaims attack

protected speech activity is inapposite; § 425.17(c) specifically

excludes from § 425.16's coverage speech activity that would

otherwise be protected under § 425.16. Plaintiff has shown no

legal basis for its argument that § 425.16's heightened procedural

protections for non-commercial speech are unconstitutional. Cf.

R.A.V. v. City of St. Paul, 505 U.S. 377, 381 (invalidating State

statute which placed special prohibitions on certain categories of

fighting words). 

Accordingly, the Court concludes that § 425.17 prevents a

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special motion to strike in this case. Therefore, the Court

considers Plaintiff's motion to be a motion for judgment on the

pleadings, or, in the alternative, for summary adjudication

pursuant to Rule 56. 

C. Litigation Privilege

Defendants assert, and Plaintiff does not dispute, that they

have presented sufficient evidence to raise material issues of fact

regarding all of the elements of their State law claim for tortious

interference with economic advantage. Therefore, the question for

the Court is whether any of Plaintiff’s proposed defenses applies

as a bar. 

1. Applicable Law

Under California Civil Code § 47(b), communications made in or

related to judicial proceedings are absolutely immune from tort

liability. The purpose of the privilege is "to afford litigants

. . . the utmost freedom of access to the courts without fear of

being harassed subsequently by derivative tort actions." Silberg

v. Anderson, 50 Cal. 3d 205, 213 (1990). 

 The litigation privilege applies to any communications

(1) made in a judicial proceeding; (2) by litigants or other

participants authorized by law; (3) to achieve the objects of the

litigation; (4) that have some connection or logical relation to

the action. Silberg, 50 Cal. 3d at 212; Premier Communications

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Network, Inc. v. Fuentes, 880 F.2d 1096, 1102 (9th Cir. 1987); see

also Rubin v. Green, 4 Cal. 4th 1187, 1194 (1993) (noting that

Silberg and other decisions emphasized the "importance of virtually

unhindered access to the courts"). Once these requirements are

met, § 47(b) operates as an absolute privilege. Silberg, 50 Cal.

3d at 216. Courts have applied the litigation privilege to all

torts, with the exception of actions for malicious prosecution. 

See Edwards v. Centex, 53 Cal. App. 4th 15, 29 (1997). "Any doubt

about whether the privilege applies is resolved in favor of

applying it." Kashian v. Harriman, 98 Cal. App. 4th 892, 913

(2002). 

The first prong of the litigation privilege test is quite

broad. It covers "any publication required or permitted by law in

the course of a judicial proceeding to achieve the objects of the

litigation, even though the publication is made outside the

courtroom and no function of the court or its officers is

involved." Silberg, 50 Cal. 3d at 216. 

The parties dispute the meaning of the second prong. In

Silberg, the California Supreme Court stated that "republications

to nonparticipants in the action are generally not privileged under

section 47(2), and are thus actionable unless privileged on some

other basis." 50 Cal. 3d at 219. For instance, statements "to the

general public through the press" are not privileged, because the

public and press have no particular connection to the proceeding. 

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Susan A. v. County of Sonoma, 2 Cal. App. 4th 88, 93, 94 (1991);

but see Designing Health, Inc. v. Erasmus, 2001 U.S. Dist. LEXIS

25952, *13 (C.D. Cal., Apr. 24, 2001) (finding that press release

fell within California's litigation privilege). However, those

non-litigants possessing a "substantial interest in the outcome of

the litigation" are "authorized participants" for purposes of the

litigation privilege. Costa v. Superior Court, 157 Cal. App. 3d

673, 678 (1984); see also Adams v. Superior Court, 2 Cal. App. 4th

521, 529 (1992) (noting that "the privilege is not restricted to

the parties in the lawsuit but need merely be connected or related

to the proceedings") (citing Profile Structures, Inc., v. Long

Beach Bldg. Material Co., 181 Cal. App. 3d 437, 442 (1986)). 

Although Defendants claim that authorized participants must have a

"formal association" with a party to the litigation, this

requirement is not supported by the case law and has not been

recognized by other district courts. See, e.g., eCash Techs. Inc.

v. Guagliardo, 127 F. Supp. 2d 1069, 1076, 1082 (C.D. Cal. 2000)

(finding allegedly false letter sent to a third party domain name

auction service to be privileged under California law). Defendants

attempt to distinguish eCash on the grounds that the letter there

was found not to be false or misleading; however, the court made

that finding after concluding that the litigation privilege did

apply, reasoning that “even if” the privilege didn’t apply, the

tort claim would fail. Therefore, the Court concludes that, to

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meet the second prong of the litigation privilege, Plaintiff need

only show that the recipients of its letter possessed a

"substantial interest" in the litigation. 

The California Supreme Court "has characterized the third

prong of the foregoing [Silberg] test . . . as being 'simply part'

of the fourth, the requirement that the communication be connected

with, or have some logical relation to, the action." Rothman v.

Jackson, 49 Cal. App. 4th 1134, 1141 (1996) (citing Silberg). The

"'connection or logical relation' which a communication must bear

to litigation in order for the privilege to apply, is a functional

connection," i.e., the communication must "function as a necessary

or useful step in the litigation process and must serve its

purposes." Id. at 1146 (emphasis omitted). The test "cannot be

satisfied by communications which only serve interests that happen

to parallel or complement a party's interests in the litigation,"

including vindication in the court of public opinion. Id. at 1147. 

Instead, the "connection or logical relation" prong of the test

"can be satisfied only by communications which function

intrinsically, and apart from any consideration of the speaker's

intent, to advance a litigant's case." Id. 1148. 

When litigation is not yet underway, statements may still meet

the requirement of "some connection or logical relation to the

action" if an action is "contemplated in good faith and under

serious consideration." Aronson v. Kinsella, 58 Cal. App. 4th 254,

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262, 266 (1997). Thus, the privilege "has been broadly applied to

demand letters and other prelitigation communications by

attorneys." Blanchard v. DIRECTV, Inc., 123 Cal. App. 4th 903, 919

(2004) (citing Rubin v. Green, 4 Cal. 4th 1187, 1194 (1993) and

Knoell v. Petrovich, 76 Cal. App. 4th 164, 169 (1999)); Premier

Communications Network, Inc., v. Fuentes, 880 F.2d 1096, 1102 (9th

Cir. 1987). However, "it is not the mere threat of litigation that

brings the privilege into play, but rather the actual good faith

contemplation of an imminent, impending resort to the judicial

system for the purpose of resolving a dispute." Eisenberg v.

Alameda Newspapers, Inc., 74 Cal. App. 4th 1359, 1380 (1999)

(citing Edwards v. Centex Real Estate Corp., 53 Cal. App. 4th 15,

35-36 (1997) (emphasis in original). 

2. Litigation Privilege Analysis

Plaintiff proffers two alternative theories by which the

litigation privilege applies to its letters to retailers and the

media. First, Plaintiff argues that the recipients of the letters

were "authorized participants" in its existing litigation against

Defendants, because the recipients possessed a substantial interest

in the outcome of the litigation. Second, Plaintiff argues that

potential litigation against the recipients was contemplated in

good faith and under serious consideration, and thus the letters

were protected pre-litigation communications. Because the Court

finds that the first theory provides Plaintiff with absolute

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Accordingly, the parties' various objections to evidence

regarding Sharper Image's intent in sending the letters are denied

as moot. 

45

immunity from suit, it need not consider the factual question of

whether Plaintiff seriously contemplated suing the retailers and

media outlets.7

 

Even if Plaintiff's threats against them were not serious, the

retailer and media recipients possessed a substantial interest in

the underlying dispute. At that time, Plaintiff was seeking

injunctive relief which, if granted, would have significantly

disrupted the recipients' business arrangements with Defendants. 

Furthermore, even if Plaintiff did not intend to follow through on

its threats to sue the recipients for infringement, a finding by

the Court that the Ionic Pro likely infringed Plaintiff's patents

would have significantly increased the legal liability of the

letter recipients. 

In disputing whether the second prong of the litigation

privilege applies here, Defendants rely on cases such as Susan A.,

where a California court held that statements to the general public

through reporters were not privileged because the press and the

public at large had no connection with the criminal case being

litigated. Here, however, the statements were not broadcast to the

entire media through a press release, or to the public generally,

but to specific media representatives who carried advertisements

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for the Ionic Pro. Although their interest in the underlying

action may not have been as great as that of Ionic Pro retailers,

the media outlets faced a potential disruption if the Court had

granted the injunctive relief sought by Plaintiff. Therefore, the

Court finds that the undisputed evidence shows that the recipients

of the letters had a substantial interest in Plaintiff's lawsuit

against Defendants. Because none of the other prongs of the

litigation privilege is in dispute, the litigation privilege

applies as an absolute bar to Defendants' counterclaims. 

VI. Plaintiff’s Motion for Leave to File TAC

Plaintiff moves for leave to file a TAC adding Peter Spiegel,

Mehran Gabbay, Sylmark Holdings, Ltd. and Great Products, Ltd. as

defendants; adding the Ionic Pro Compact as an accused product; and

adding allegations of tax fraud as additional bases for Plaintiff’s

§ 17200 unfair competition claim. The motion was filed on November

28, 2005, and is based primarily on the testimony of Ms. Cohen, who

was deposed on November 10, 2005. Defendants oppose the motion. 

A. Factual Background

Mr. Spiegel was significantly involved in the development of

the Ionic Pro. Mr. Bess has testified that he is transferring all

of his interest in the Sylmark entities to Mr. Spiegel. Barry

Decl., Ex. F, Bess Dep. 113:11-16. According to Mr. Spiegel, an

entity called Tetra Partners will soon own ninety percent of the

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Sylmark partnership interests. 

According to Ms. Cohen, Sylmark Holdings, an Irish company,

has the same owners as the Sylmark entities, including Mr. Spiegel. 

Cohen Dep., 96-97. Mr. Spiegel testified that Irish company Great

Products, which owns the rights to Ionic Pro, received a nine

percent royalty on the United States license to sell the Ionic Pro

(later reduced to six percent). Spiegel Dep. 325-326. 

Mehran Gabbay is the registered owner of

www.factoryprices4U.com. Barry Decl. ¶ 9. Since January 1, 2005,

internet users logging onto Defendant Factories2U's website have

been directed to www.factoryprices4U.com, where the Ionic Pro

product is being sold. Id. ¶ 8. Mr. Gabbay is one of only two

employees of Factories2U. Barry Decl., Ex. G, Gabbay Dep. 7. 

In October, 2005, Plaintiff became aware of the commercial

availability of the new "Ionic Pro Compact" product. Barry Decl.

¶ 12. Plaintiff asserts that the Ionic Pro Compact has the same

design, shape and features as the original Ionic Pro. 

B. Legal Standard

Federal Rule of Civil Procedure 15(a) provides that leave of

the court allowing a party to amend its pleading "shall be freely

given when justice so requires." Leave to amend lies within the

sound discretion of the trial court, which discretion "must be

guided by the underlying purpose of Rule 15 to facilitate decision

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on the merits, rather than on the pleadings or technicalities." 

United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981) (citations

omitted). Thus, Rule 15's policy of favoring amendments to

pleadings should be applied with "extreme liberality." Id.; DCD

Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987)

(citations omitted).

The Supreme Court has identified four factors relevant to

whether a motion for leave to amend should be denied: undue delay,

bad faith or dilatory motive, futility of amendment, and prejudice

to the opposing party. Foman v. Davis, 371 U.S. 178, 182 (1962). 

The Ninth Circuit holds that these factors are not of equal weight;

specifically, delay alone is insufficient ground for denying leave

to amend. Webb, 655 F.2d at 980. Further, the "liberality in

granting leave to amend is not dependent on whether the amendment

will add causes of action or parties." DCD Programs, 833 F.2d at

186. Rather, the court should consider whether the proposed

amendment would cause the opposing party undue prejudice, is sought

in bad faith, or constitutes an exercise in futility. Id. (citing

Acri v. Int’l Ass'n of Machinists & Aerospace Workers, 781 F.2d

1393, 1398-99 (9th Cir. 1986); United States v. City of Twin Falls,

806 F.2d 862, 876 (9th Cir. 1986); Howey v. United States, 481 F.2d

1187, 1190-91 (9th Cir. 1973); Klamath-Lake Pharm. Ass’n v. Klamath

Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983)).

Prejudice typically arises where the opposing party is

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surprised with new allegations which require more discovery or will

otherwise delay resolution of the case. See, e.g., Acri, 781 F.2d

at 1398-99; Guthrie v. J.C. Penney Co., 803 F.2d 202, 210 (5th Cir.

1986). The party opposing the motion bears the burden of showing

prejudice. DCD Programs, 833 F.2d at 186; Beeck v. Aquaslide 'N'

Dive Corp., 562 F.2d 537, 540 (8th Cir. 1977).

C. Analysis

1. Mr. Gabbay and Ionic Pro Compact

Plaintiff asserts that the Ionic Pro Compact, introduced in

October, 2005, shares the design, shape and features of the

original Ionic Pro and thus infringes the '494 patent and the

Sharper Image trade dress. Because the Court grants Defendants'

motion for summary adjudication of the design patent and trade

dress claims, the Court also denies on grounds of futility the

motion to add the Ionic Pro Compact as an accused product. 

With respect to Mr. Gabbay, there are no claims remaining in

this case which are relevant to his activities after January 1,

2005, when Factories2U ceased directly selling the accused

products. Furthermore, Plaintiff has known about Mr. Gabbay's

additional website since January, 2005, and offers no grounds to

justify its delay in adding him as a defendant. Therefore, the

Court denies leave to add Mr. Gabbay. 

Similarly, with respect to Sylmark Holdings, Ltd., and Great

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Products, Ltd., Plaintiff has failed to show that these entities

were involved or intertwined in Defendants' activities during the

specific time frame for which the Court has found that a triable

claim for infringement exists. Instead, it appears that Plaintiff

wishes to add these proposed defendants for purposes of its

additional § 17200 claim. Because, as described below, the Court

denies Plaintiff leave to add claims based on the allegedly illegal

Sylmark corporate structure, leave to add Sylmark Holdings, Ltd.,

and Great Products, Ltd. is also denied. 

2. Mr. Spiegel

On the other hand, Plaintiff has shown evidence that Mr.

Spiegel was personally and actively involved in selling the firstgeneration Ionic Pro after the '484 patent issued. Defendants do

not identify any prejudice that will flow from adding Mr. Spiegel. 

Although Plaintiff was aware of Mr. Spiegel’s involvement since at

least July, 2004, when he submitted a declaration describing his

role, Plaintiff has recent cause to believe that Mr. Spiegel is

needed as a named defendant in order to satisfy any judgment in

Plaintiff's favor. Therefore, the Court grants Plaintiff's motion

to add Mr. Spiegel. 

3. Additional Claims

The Court denies Plaintiff leave to amend to add its proposed

additional claims relating to international tax fraud. These

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proposed additions introduce an entirely new theory of liability

and could substantially delay this action. Even assuming, as

Plaintiff argues, that all of the relevant information is within

Defendants’ possession, another round of case-dispositive motions

would be appropriate, and the May 8, 2006 trial date would be lost. 

Such a disruption to the schedule would cause undue prejudice to

Defendants. Accordingly, Plaintiff's motion to add these claims is

denied. 

CONCLUSION

For the foregoing reasons, the Court GRANTS in part

Defendants' motion for summary adjudication (Docket No. 670) of

Plaintiff's claims of infringement of the '484 utility patent based

on the second-generation Ionic Pro product; infringement of the

'494 design patent; infringement of Plaintiff's trade dress; and

unfair competition under California Business and Professions Code

§ 17200. The Court also grants summary adjudication in Defendants'

favor with respect to Plaintiff's remaining claims against Mr. Bess

and the retail Defendants Target, Qwik Cook d/b/a Home Trends and

Factories2U. Otherwise, the Court denies Defendants' motion for

summary adjudication. 

The Court GRANTS Plaintiff's motion for summary adjudication

of Defendants' tort and State law counterclaims against it (Docket

Nos. 520 and 625). Otherwise, the Court denies Plaintiff's motion

for summary adjudication. 

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The parties' motions to strike based on evidentiary objections

are denied (Dockets No. 661 and 677), as is Plaintiff's ex parte

application requesting that Defendants withdraw their reply brief

(Docket No. 701). 

The Court GRANTS in part Plaintiff's motion for leave to file

a TAC (Docket No. 467). Plaintiff may add Mr. Spiegel as a

defendant. Otherwise, Plaintiff's motion for leave is denied. The

TAC must be filed within three days of the date of this order. Mr.

Spiegel may stand on the Answer already filed. 

Remaining for trial are Defendants' invalidity counterclaims

and Plaintiff's claim against Mr. Spiegel, Ionic Pro, LLC, Ideal

Products, Sylmark and Sylmark, LLC for inducing infringement of its

utility patent. 

IT IS SO ORDERED.

Dated: 3/29/06

 

CLAUDIA WILKEN

United States District Judge

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