Why Is The Federal Government Shutting Down A CES Booth Over A Patent Dispute?
from the how-is-it-their-concern dept
One of the big stories coming out of CES this week is the bizarre situation in which US Marshals showed up here at the event yesterday and completely shut down the booth of a Chinese company, named Changzhou First International Trade Co. This happened after a judge granted a motion for a temporary restraining order, filed by US company Future Motion, following a seven minute hearing about the matter, in which Changzhou was not present and had no say.
To be clear, it does appear that Changzhou is building a knockoff of Future Motion’s one wheeled self-balancing scooter thing — a device that got plenty of attention via a big Kickstarter campaign. And, Future Motion does hold both a patent on a self-balancing skateboard (US Patent 9,101,817) as well as a design patent (US D746,928), which was just granted a few days ago, on a device that obviously looks quite a lot like what both companies are selling:
If there’s a legitimate patent infringement case here, as there may well be (even though I’ll have some more to say about patents in this space in an upcoming post…), it’s still troubling that the company got shut down in the middle of the trade show and that it involved the US government intervening in what is a civil issue. This is certainly not out of the ordinary in general. Part of the job of the US Marshals is to execute seizures related to restraining orders that are ordered by federal courts. But it still seems like pretty massive overkill for a company that’s just showing some scooters at a trade show, and where they haven’t had a chance to present a defense.
Filed Under: ces, hoverboard, onewheel, patents, retraining order, seizure, us marshals
Companies: changzhou first international trade co., future motion
Comments on “Why Is The Federal Government Shutting Down A CES Booth Over A Patent Dispute?”
odd
i never heard of this happening ever at ces!
Design?
So far as that design patent is concerned, that looks an awful lot like the bongo board we had when we were kids (1960’s). It may go by, or have gone by other names but it was a 6″ or 7″ thick round wooden dowel with a channel cut in the middle into which a guide attached to a board fit. The top side of the board had some gritty material glued on at either end. The point of the device was to balance oneself on it.
Oh look they still exist, though I never heard anyone make a health claim with regard to them then. It did help with balance.
A few notes.
Why would they do a fast seizure?
Preservation of evidence. It’s a trade show. Up for a few days, gone forever afterward. Along with the physical evidence of infringement, which is one reason an emergency seizure would have been permitted.
The infringer also does NOT have a physical presence in the US, but is marketing their product here, so intercepting infringing devices and recovering judgment monies would be difficult at best unless the booth was seized.
Passwords
From the Ars Technica copy of the order signed by Judge Du:
(Emphasis added.)
Re: Passwords
Now there’s a judge who sees no problem against self-incrimination, and no value in privacy.
I can only imagine the massive amount of requests that are going to start showing up on his desk in the near future once the police and government agencies learn about his complete and utter indifference to privacy.
Re: Re: Passwords
Her.
Injunction against the world
Also from the Ars Technica copy(*) of the order signed by Judge Du:
(Emphasis added).
Looks like an injunction contra mundum.
(*) Document 11 appears to be the same posted both here at Techdirt, and over at Ars. But I’m working of the Ars copy right now, if there’s any difference.
Re: Injunction against the world
“remove the infringing products”
So in the space of 7 minutes, hearing only 1 side of the case, a Judge has ruled it is infringing.
Can’t be bothered to allow them to put on a case, just the word of 1 side and we get rulings. Sure hope the people who were targeted don’t manage to put on a case and show how they reinvented the wheel and the Judge made an error.
Of course the system will protect the Judge who managed to undermine the legal system so there will be little recourse than a vindication reported on page 32k in very small print.
Re: Re: Injunction against the world
No, in the space of 7 minutes, the judge heard that the company had been contacted, served, whatever, and had continued anyway – and failed to be present in court. The plaintiff makes the case, asks for an injunction to stop what they feel is harm, and in absence of any other information, the judge rules on what they have at hand and grants the injunction.
He didn’t rule that it’s infringing at all. He only ruled that the request for an injunction was valid, and the failure to follow this injunction by the Chinese company lead to the seizure of the products at the trade show.
There is no ruling that says that it’s infringing.
Re: Re: Re: Injunction against the world
The injunction contra mundum is prima facie evidence that Judge Du failed to give proper scrutiny to the proposed seizure order before she signed it.
On page 7, note:
So why did Judge Du order service of the Summons and Complaint if defendant had already been served? Why did plaintiff include that language in the [Proposed] Order if they could make a colorable argument that defendant had already been served before the hearing?
Judge Du just signed the [Proposed] Order without even crossing out the word “[Proposed]”.
Re: Re: Re:2 Injunction against the world
Does it take any longer than 7 minutes to decided that (a) the plaintiff appears to have cause (ie, they have a patent and the products look very similar in nature) and to see that the defendant has been contacted by lawyer letter and sent a cease and desist (ie, being served notice)?
Again, it’s not the judge making a detailed ruling on the validity of the patent or declaring the defendant to be infringing. It’s about injunctive relief from a situation that would not be able to be undone.
“why did Judge Du order service of the Summons and Complaint if defendant had already been served? “
I used a word incorrectly, Mr Technical. They had contacted the Chinese via lawyer letter, a cease and desist, etc. The judge ruled on the injunction at the moment the suit was filed, which is why the judge ordered service.
Put simply, the Chinese company wasn’t blind sided – just hoping that they could do the trade show, make a bunch of sales, and go home to produce the product without having to deal with the patent issue. Once back in China, they could produce all they want with the protection of their weak legal system, and flood the market. Once the contacts are made at the trade show and orders secured, it would be very hard for the Patent holder to deal with each and every infringing seller, effectively rendering the patent moot. The Chinese company could also flood other markets with the product, essentially killing the value of holding a valid patent.
I guess that explains why Techdirt is so upset… patents suck, right?
Re: Re: Re:3 Injunction against the world
It shouldn’t take longer than about 7 seconds to recognize that injunctions contra mundum do not comport with FRCP Rule 65(d)(2)
(Emphasis added.)
It might indeed take 7 minutes to comprehend the separation-of-powers concerns arising when a federal judge purports to enact laws of general applicability. Especially when she does not present the bill to the President in conformity with Article I, Section 7.
( I would tend to think, at least, that House of Representatives has a well-founded complaint, should that House desire to pursue it. Usurpation of the legislative power is patently subversive to our plan of government. Of course, one might wonder whether the Senate would concur in that. Judge Du has a very touching and emotionally-compelling personal story. )
Anyhow, that should have been a red-flag warning that the [Proposed] Order might contain other drastic infirmities.
Re: Re: Re:3 Injunction against the world
“Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. ‘[S]ervice of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served.’ Thus, before a court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant and a constitutionally sufficient relationship between the defendant and the forum.”
Re: Re: Re:3 Injunction against the world
Your position is that the statutory monopoly conferred under a U.S. patent reaches world-wide?
Re: Re: Re:3 Injunction against the world
Pray tell, what’s wrong with that? Who wants to deal with patent lawsuits? Nobody but patent lawyers. These guys want to sell consumer electronics, not enrich litigation lawyers.
Look at some other markets, such as automobiles. There’s Rolls Royce, Mercedes Benz, Ferrari, yada yada, and there’s Volkswagen, Yugo, and Deus Chevau. Not everyone wants to pay every penny they have to drive a Rolls Royce. Lots of people just want basic transportation.
Walk into any Walmart and you’ll see very expensive, top of the line stuff from name brand manufacturers sold right along side with cheap crap that does the same thing but isn’t sexy and wears out in no time doing the same job poorly. Is Rolls Royce hurt in any way by Yugos being sold to less discriminating, less wealthy patrons who’d never be able to afford Rolls Royce’s price tag?
Yet Future Motion has managed to get a patent and is using it as a club against those they perceive to be competition, and they get to use the full weight of law enforcement to implement a ban. Why would I want my tax dollars to go toward putting a system like that in place, to prop up entitled jerks who’re afraid of competition?
Any law that can be used as a club to short circuit the free market is going to suck, so yeah. I very much prefer it when market forces control what happens, not blunt edged weapons like lawyers, judges, and regulatory powers. The former is far more democratic and works better in the long run. The latter just makes rich jerks with powerful connections richer and leaves the rest of us with disappointment.
It is part of the militarization of the police
The goal of law enforcement is to put the fear of God in you. They treat every issue from jaywalking to terrorism as a reason to deploy the SWAT team. They want the sheeple to be so afraid to step out of line that they will barely leave the house. By going into a trade show it gives them a great opportunity to give a show of force.
It’s because it’s more than a patent dispute. In this case it’s counterfeit consumer goods that have crossed an international border.
Now the Anti-Counterfeiting Trade Agreement (ACTA) kicks in. It’s no longer a civil issue, but a criminal one.
Interesting Unfair Competition Question
I am not an expert in unfair competition law, so I put this to the comment-goers here: stripping out all the international issues and the importance of CES to the industry, if this was the Fall Midwestern Carpet Show and Carpet-o-Rama was trying to enjoin CarpetMonger from selling Carpet-o-Rama’s patented mid-pile shag, should Carpet-o-Rama have the right to get a judge to shut down CarpetMonger’s booth?
As a matter of pure fairness, I’m thinking maybe a judge does have that power, because it prevents the infringer from profiting.
Re: Interesting Unfair Competition Question
Seems to me that a certain amount of prior restraint is being exercised as there has been no adversarial court encounters and no one has been found guilty or since this is actually a civil matter at fault (which is probably not the correct vernacular)?
Re: Re: Interesting Unfair Competition Question
“Prior restraint” is a First Amendment thing, as I understand it. Marketing does sometimes raise a free speech question but if you know someone’s going to sell your infringing product, it makes sense for the court, if it has injunction power at all, to enjoin the sale before it’s even attempted.
There’s a federal standard for temporary restraining orders following ex parte proceedings, so sometimes that’s OK, at least under current law.
Re: Re: Re: Interesting Unfair Competition Question
See that’s the thing. How does one determine if one product is infringing on another in a 7 minute non-adversarial hearing? Oh, and also get world wide restraining orders issued?
How long did it take Apple and Samsung to get the rounded corners thing adjudicated?
Silly Really
Its a one wheeled Segway.
The unique and novel thing that makes it patentable is the self balancing aspect of it and the segway is prior art for that.
The design patent aspect here might make a little sense. But something to consider, making an identical knock-off I think is wrong (akin to trademark infringement) but making a similar looking device I see no problem with.
Not unheard of
A situation like this is what lead me to Techdirt years ago.
We were a small company that developed a product that provided a better solution than the product of one of the largest players in our market. It truly had new technology developed in house at our company that was in the process of being patented. The day before the trade show where we were introducing the product opened, the law firm the competitor got a US federal judge to issue a emergency TRO and a order to seize our equipment and documents present at the trade show, along with orders for us to turn over all design documentation and software claiming that we had copied their design.
We had set up the booth the night before the show was to open and we didn’t find out about any of this until we arrived at the show the next morning to discover that all of our stuff was gone, seized by the US Marshall service. (and later delivered to the competitor.)
The court that issued the order was way across the country in the south, the competitor had hired the law firm of the judges son to represent them. Needless to say, our company did not the resources or connections to fight this very far.
It was our rude awakening on how things really work.
How can this thing work?
It looks to me like in order to balance/stay on this “scooter” and also propel it, you’d have to have 3 legs.
Re: How can this thing work?
I don’t see why. The wheel contains the driving motor. Depress the front and it goes forward. Depress the back, backward. During both, the board keeps itself mostly horizontal. Fall off, and it stops in its place.
It’s a one wheeled, foot controlled Segway. This thing, plus a person looking down at a cell phone while riding it, is going to be hilarious for all spectators looking on.
Just wait for the other shoe
Just wait to see what the Chinese start shutting down and seizing at events outside the US.
Why? Because they can apparently. Live by the IP, die by the IP…
It costs well over $50K to operate a small booth at a trade show. In this case, a foreign company with a product demo at CES, it was likely substantially more.
Future Motion crippled a competitor for only a few hours of lawyer time. Even if they lose their $10K bond (not especially likely), it’s still a bargain.
For those that doubt the $50K amount, ask anyone that has been in charge of a trade show. They will tell you that $50K might get you the smallest professional-looking booth and pay the expenses for staffing it. Then consider that it’s CES, when everything 3x-5x the price if it can be had at all. Flights are at full fare, hotel rooms are at least 3x, rental cars are impossible to get, and services on the show floor are extremely expensive. It often costs more to move a crate from the loading dock to the booth location than getting it halfway around the world to the loading dock in the first place.
To have all of this destroyed, with no notice, by a foreign government must be extremely frustrating. It must really look like protectionism and corruption.
Re: Re:
I think that overstates it a bit, however I agree the incident would seriously pee me off if I were the Chinese competitor. It makes me think there’s a blockbuster Chinese domestic market movie begging to be made, the Chinese version of a Steven Segal revenge flick. The final scene would be a mushroom cloud rising from CES. Reap what you sow, running dog capitalist swine!
Good luck to Future Motion trying to partner up with Chinese mfgrs once word of this gets around back home. They’ll be out to steal ’em blind in every way possible. The lawyer and judge might want to review their security, including that of their families.
Re: Re: Re:
” The lawyer and judge might want to review their security, including that of their families.”
That is perhaps the saddest comment ever on Techdirt. It’s insanely sad to think that court officers, doing their job as prescribed by the law, should have to worry about angry plaintiffs coming to get them.
Re: Re: Re: Re:
Oh, come on, no one need worry. The federal courthouses are all fortresses. And starting next week, they’ll be taking even better steps to keep the rude mobs in the streets from invading their precincts. So the security forces are very good at their jobs and work very hard. You must trust them.
If things get truly bad, Judge Du can just move her family inside the Palace of Justice temporarily, and they’ll all be perfectly safe there. The crisis will blow over after awhile, like these situations always do, and then everyone can go home—things will be like they used to be once again. You’ll see. Everyone shall be fine and grand.
Re: Re: Re: Re:
Perhaps you should read up on the history of China, and note their population numbers. The USA is ca. 240 years old. China goes back four millennia, and they don’t revere the life of individuals like we do (https://en.wikipedia.org/wiki/Qin_Shi_Huang#Death_and_postmortem_events):
We were very naive when we showed up in Korea in the fifties. Then, the Chinese showed up. That war is still going on to this day.
This story’s about an arguably slimy move by a lawyer leveraging the US justice system to cut the legs out from under a Chinese competitor. I’d worry about blowback, and I don’t underestimate the Chinese (nor any Orientals for that matter).
You go ahead and believe court officers are sacrosanct. I doubt many of the tyrants of history would’ve cared about your protestations, nor your laws or its functionaries.
Re: Re: Re:2 they don't revere the life of individuals like we do
What do you mean “we”, White Man?
Re: Re: Re:3 they don't revere the life of individuals like we do
Well, that was quite a while ago, and tribalism is pretty heavily embedded into pretty much all living creatures’ cultures (including Natives, of course). Considering Natives little better than vermin has largely disappeared in recent decades.
I tend not to want to hang around with people who blame others just for being different. There are much better things to use to judge others’ value than whatever DNA their parents gifted them with. I think all the more civilized among us are trying to get away from that sort of thinking, but it’s a pretty virulent attitude. Most living things, including humans, don’t even want to give it up. It’s pretty low-level brainstem programming stuff and I doubt we’ll ever see it end.
Re: Re: Re:2 Re:
Are we really surprised that Whatever would pander to the cocks of authority?
He’s simply disappointed that this time his precious authorities aren’t messing with mere citizens. The opposition can actually put up a fight this time. This prospect distresses him greatly.
Re: Re: Re:3 Re:
I can assure you troll that I am not distressed in the least. Certainly a lot less than you are about me posting here.
Re: Re: Re:4 Re:
For what it’s worth, I haven’t determined whether you’re here to push some specific agenda, or if you’re just hoping to see the “other side’s” arguments. It could be that what you’ve shown us is just due to who or what you are, which is fine by me.
I wonder about some of your stated opinions, but I wouldn’t put you down as an obvious troll. We’ve far more egregious examples of them lurking about waiting to pounce to pontificate their masters’ agenda.
I’m just here to learn, and wish everyone was.
Re: Re: Re:4 Re:
It is insanely sad
Not distressed in the least. I guess when you live in the copyright enforcer universe your terms and definitions get a little warped, but then how else are you going to claim “forever minus a day” as a reasonable length of time?
How sad.....
That world war 3 will be started over IP!
IP is our most valuable asset.
Protecting it means the rule of law doesn’t apply to parties not smart enough to be waiting in every court room in the country where a competitor might file motions making claims.
You are not entitled to defend yourself.
You are not entitled to innocent until proven guilty, a corporation has said you are not.
We will take all of your possessions and turn them over to your competitor & compel you to provide passwords so that they can gather evidence to support the claims before any formal legal case is filed.
We will perp walk your property out of a large scale event, helping to destroy your reputation.
Accusations are what are reported not the outcome of any trial that might not come to pass as we’ve handed your competitor all of your information and they can see how you did things and improve their product from your designs.
All of this before you have any chance to defend yourself in a court that isn’t interested in the truth, just in granting corporations wishes to have publicity for their product, shutting out a competitor, the added bonus of draining that competitors resources for an event they will not be able to participate in & making sure that any future competitors will think twice about making anything remotely like their product because all it takes is a corporation making unopposed/unverified claims to have your product seized and held until the court can find a clear day on its calendar to hear any evidence.
IP means not having to compete, just claim you were infringed and gain control the market. The cost to you is a tiny fraction of what you stand to make.
My question is who come up with the idea first? One wheel or http://www.robosys.co.uk?
Re: Re:
Patent office not doing it’s work is the culprit here then?
I don't care if they're right...
Future Motion is on my boycott list, right next to Microsoft, Apple, Sony, Disney, all cable companies, etc… Fucking compete on quality/value/price or go away. Don’t be a child and hide behind the government. Pussies…
Both Patents Are Fundamentally Invalid.
Robert Heinlein, in his classic science fiction story, “the roads must roll” (1940), described a gyroscopically-stabilized single-wheel scooter similar to a Segway. Dean Kamen, the developer of the Segway, committed an act of “engineering cowardice” by using two wheels instead of one, failing to go “full Heinlein.” A sideways wheel would fall under the KSR v. Teleflex heading of “obvious to try.” For that matter, it is immediately obvious to mount the wheel on a rotating fork, similar to the front wheels of motorcycles, bicycles, etc.
However, it seems, there is also a design patent on the device in the present controversy, and _that_ was improperly granted. The basic configuration of a balancing moving vehicle, that is, the location of hand grips, foot-rests, seats, and wheels is a matter of _physics_, at much the same level as the motion of a dancer’s body. It is inherently utilitarian, and therefore not eligible for a design patent. I have looked at the pictures of the respective devices in the Ars Technica article. Both are so minimal in design that there are essentially no non-utilitarian elements. There is no ornamental matter on which a design patent could rest.
A ballerina “en pointe” is beautiful in approximately the same sense that a suspension bridge is beautiful– it is inherent in the condition of staying up, with the least possible support, and not going splat. There is a man named Kenneth Laws, retired from Dickinson College in Pennsylvania, who wrote a book about the physics of dance, back in the 1990’s.
http://physics.dickinson.edu/~pod_web/
The work has been carried on by a man named George Gollin at Illinois:
http://www.hep.uiuc.edu/home/g-gollin/dance/dance_physics.html
http://web.hep.uiuc.edu/home/g-gollin/
I remember reading about it about thirty years ago in a summary article about Laws’ work in Scientific American’s “Amateur Scientist” column. A lot of it involves the dancer moving her arms and legs in such a way as to shift her center of gravity relative to her head and torso (for purposes of jumping, jump in the air, pull the arms and legs up, and then put them down again to land); or changing her moment of rotational inertia (for purposes of spinning, accumulate a lot of rotational momentum with the arms out, at a relatively low rate of spin, then go up on pointe, and pull the arms in to spin fast).
Re: Both Patents Are Fundamentally Invalid.
http://dltruth.com/attachment.php?aid=232
George Gollin is fundamentally invalid.
Re: Re: Both Patents Are Fundamentally Invalid.
Ethics dunce George Gollin has been convicted of violating the Illinois State Employees and Officials Ethics Act and fined $5,000. George Gollin “knowingly and intentionally used his state-provided email account to engage in prohibited political activity.” George Gollin admitted he knew he was misappropriating state resources when he sent “dozens” of campaign emails with his university email. The Executive Ethics Commission levied a $5,000 fine against George Gollin, the maximum allowed under the statute.
https://www.illinois.gov/oeig/investigations/Documents/14EEC011_Gollin.pdf
Why Not Abolish The Design Patent
Design patents are aesthetically obsolete. Nineteenth-century (Victorian) designers followed much the same line as nineteenth century architects. They borrowed massively from the past, often from several different periods at once. Items had a lot of physical decorations. This is the kind of thing which Sigfried Giedion talked about in _Mechanization Takes Command_. A design patent was meant to give protection to, say, a knife or fork with an elaborately decorated handle.
In our own time, however, the trend is towards styles of work which have essentially no inherent ornamentation, and which are designed in the most efficient possible fashion. If you want ornamentation, you paint on a picture, or attach a picture. This is most perfectly expressed in the “nose art” of military aircraft. Flying at 1500 mph, there is absolutely NO room for decorative pieces of metal, but there is a long tradition of painting pictures of pretty girls on the cowling. I have a picture of a RAF Tornado fighter-bomber, circa 1990, named “Mig-Eater,” with a picture of a shark, in 1930’s bathing-beauty pose, eating a Russian Mig fighter-jet. Similarly, in architecture, very modern architecture could co-exist with mural-painters such as Diego Rivera, who were not at all modern, at least not in the sense that a leading architect, someone like Walter Gropius, would have used the term. The building had a big concrete wall, which the artist could paint whatever he wanted on. Such a painting can be copyrighted like any other painting, and subjected to appropriate fair-use tests. For example, photographing a mural on the side of a building, and printing the picture in a magazine, should be fair use, but copying the picture onto the side of another building should not be.
Ref: Siegfried Giedion, Mechanization Takes Command: A Contribution to Anonymous History, Oxford University Press, New York, 1948.
Wut?
Sounds like OneWheel was desperately trying to obfuscate the fact that the same quality item could be delivered at half the price ($1,500 is for suckers anyway).
https://youtu.be/WJmdfaz84ns?t=260
To protect US companies
Because the current US intellectual property system is protectionist.
Re: To protect US companies
The USA has always put on a big show about how free enterprise capitalistic the USA is, but it’s never been true. They’ve a bad, bad, case of multiple personality disorder. Republicans, Democrats, Northerners, Southerners, Conservatives, Progressives, secular, nonsecular, … It’s just marketing BS. Think softwood lumber, or how many miles is their off-shore fishing boundary? I’m Canadian. One of our prime ministers likened it to sleeping with an elephant.
It took them a while to get around the Constitution (they were busy living and raising families, I guess), but they finally invented the IRS and the CIA, and from that point on they were on a roll, just yet another entitled rich guy’s empire on its inevitable path to implosion.
At least we got some seriously cool tech out of the process, and some way entertaining mass media. Too bad their attempt at that democracy thing was so poorly executed. Damn, they suck at that stuff.
does this includ the uk england
hi there
Does the patents include the uk (if it was soid in the uk could i expect a law suit from one wheel) ?
many thanks
Jon
Re: does this include the uk england
The fact that question even needs to be asked is annoying. Can’t anything be done these days without getting lawyers involved? Maybe we should all be hounding our politicians into writing laws in clear language anyone can understand without learning a dead language (Latin) and spending years earning a law degree.
Unfortunately, to answer your question you probably need to talk to a lawyer. There are numerous types of patents. Some are just domestic, some are international, and it could hinge on whether treaties are in place between the two gov’ts to honour each others’ laws.
Remember also that whether to expect a lawsuit has nothing to do with being on the right or wrong side of the law. Money, or lack thereof, controls the situation. You may have the law on your side but if you can’t afford to prove it in court, you lose.