Sell Below Cost USA v. Blue Island Holding - Complaint

Case 1:19-cv-06095 Document 1 Filed 10/29/19 Page 1 of 20 PageID #: 1
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
SELL BELOW COST USA LLC, CIVIL ACTION NO. 19-6095
Plaintiff, COMPLAINT
v.
ECF CASE
BLUE ISLAND HOLDING GROUP (US)
INC. and MINGLAN CHEN,
Defendant.
Plaintiff, Sell Below Cost USA LLC (hereinafter “Plaintiff” or “Sell Below Cost”), by
and through its undersigned attorneys, for its Complaint against Defendant, Blue Island Holding
Group (US) Inc. (“Blue Island”) and Minglan Chen (“Chen”)(hereinafter collectively
“Defendants”), alleges as follows:
NATURE OF ACTION
1. Sell Below Cost operates a successful online store located on the Amazon.com
platform. Sell Below Cost sells various types of high-quality goods to consumers who prefer to
shop online. One of the goods that Sell Below Cost advertised and sold on its online store is the
Multi-Color Saucer Tree Swing.
2. Sell Below Cost brings this action against Defendants for disparagement, tortious
interference with business relations, defamation, unfair competition, and for declaratory relief,
all resulting from an objectively baseless scheme to knowingly make false statements and
complaints against Sell Below Cost to Amazon.com that the Multi-Color Saucer Tree Swing
infringes U.S. Patent No. D854,106 (“the ‘106 patent”).

3. With regard to the declaratory relief being sought, this is an action for a
declaratory judgment arising under the patent laws of the United States, 35 U.S.C. § 101 et. seq.,
for a declaration that the ‘106 patent, issued on July 16, 2019, entitled “Swing” is invalid, not
infringed by Sell Below Cost and/or is unenforceable. Attached hereto as Exhibit A is a copy of
the ‘106 patent.
4. Defendants executed the scheme described herein for no legitimate purpose, with
the knowledge that the patent that they are asserting is invalid, and knowing that their actions
would harm Sell Below Cost.
5. The false statements and complaints described herein made by Defendants against
Sell Below Cost were a sham and were made for the express purpose of disrupting and damaging
Sell Below Cost’s business, and to improperly and illegally try to maintain control of the price of
swing products advertised and sold to consumers online.
6. After being presented with incontrovertible evidence that the same products on
which they claim patent protection were advertised and sold online on Amazon.com prior to the
filing date of the application for the ‘106 patent, Defendants simply ignored the facts and
evidence presented to them, and instead demanded an accounting of Sell Below Cost’s sales to
extort Sell Below Cost.
7. Sell Below Cost contacted Defendant Chen on two more occasions pointing out
that no response had been provided to the evidence that the ‘106 patent is invalid on the grounds
that the claimed product design was advertised and sold on Amazon.com prior to the filing date
of the application of the ‘106 patent.
8. In view of the foregoing, upon information and belief, Defendants knew that the
‘106 patent is invalid at the time when they made complaints to Amazon.com.
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9. Moreover, upon information and belief, Defendants filed an application for the
‘106 patent even though they did not create the design claimed therein.
10. At the very least, since filing the complaints against Sell Below Cost, Defendants
have been made aware and currently know that the design of the ‘106 patent is invalid. This
should have resulted in a retraction of the complaint to Amazon.com since the design claimed in
the ‘106 patent is not novel. Yet, Defendants continue to refuse to withdraw their complaint and
their false, defamatory and disparaging statements to Amazon.com regarding Sell Below Cost
and its products.
11. Defendants’ actions have caused Sell Below Cost’s online listing of its Multi-
Color Saucer Tree Swing to be delisted at its most profitable time, resulting in severe monetary
harm and reputational damage to its business and ongoing business operations.
THE PARTIES
12. Sell Below Cost is a limited liability company organized and existing under the
laws of the State of New Jersey.
13. Sell Below Cost has an office and a place of business at 14 Dunham Place,
Brooklyn, NY 11249.
14. Sell Below Cost also has an office and a place of business at 1 Paragon Drive,
Suite 153, Montvale, NJ 07645.
15. Plaintiff is in the business of advertising, marketing, distributing, offering for sale
and selling a wide variety of consumer products to retail consumers on Amazon.com.
16. Upon information and belief, Defendant Blue Island maintains a place of business
and has a registered address at 36 S. 18th Avenue, Suite A, Brighton, Colorado 80601.
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17. Upon information and belief, Defendant Blue Island is the assignee of record of
the ‘106 patent.
18. Upon information and belief, Defendant Chen is listed as being the registered
agent of Defendant Blue Island at the address at 36 S. 18th Avenue, Suite A, Brighton, Colorado
80601.
19. Upon information and belief, Defendant Chen maintains a residence in the
Peoples Republic of China at Tangzhuang Group, Laozhuang Village, Fengjing Town, Huoqiu
County, Anhui.
20. Upon information and belief, Defendant Chen is also known by the name Tracy
Chen.
21. Defendant Chen currently claims to be the owner of the ‘106 patent and is
asserting rights in and enforcing the ‘106 patent on behalf of herself and/or Defendant Blue
Island.
22. Based on the information of record at the United States Patent and Trademark
Office, the ‘106 patent is owned and has been assigned to Defendant Blue Island.
23. Indeed, in connection with the Issue Fee form submitted on May 6, 2019 with the
application for the ‘106 patent, Defendant Blue Island is listed as the assignee on the form, with
a residence of Brighton, CO, USA listed on the form.
24. Defendant Chen exercises control over Blue Island and is the moving, conscious,
active force behind Blue Island’s unlawful conduct.
25. Upon information and belief, Chen makes and/or is integrally involved in all
important decisions involving Blue Island, including without limitation decisions involving the
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advertising, marketing, offers for sale, and sales of competing products to the Multi-Color Saucer
Tree Swing sold by Sell Below Cost.
26. Upon information and belief, Chen also personally made false statements to
Amazon.com at issue herein and is personally responsible for several of the acts complained of
herein.
27. Upon information and belief, there exists, and all times herein mentioned there
existed, a unity of interests between and among Defendants Chen and Blue Island vis-à-vis the
ownership, operation, and/or management of the business of Blue Island.
28. Upon information and belief, Blue Island is dominated and controlled by Chen
such that Defendants Blue Island and Chen may considered interchangeable with one another.
29. Since Defendants regularly transact business in the State of New York and within
this judicial district, jurisdiction in the Eastern District of New York is appropriate for the
adjudication of the claims brought herein.
JURISDICTION AND VENUE
30. This Court has jurisdiction pursuant to 28 U.S.C. §§1331 and 1338 with respect to
the claims arising under the Patent Act, 35 U.S.C. §101 et. seq., and pursuant to the Declaratory
Judgment Act, 28 U.S.C. § 2201 et. seq.
31. Upon information and belief there is personal jurisdiction over Defendants since
Defendants are doing business within this State and judicial district, transact business within this
State and judicial district, derives substantial revenue from intra-state and inter-state commerce
and is otherwise within the jurisdiction of this Court.
32. Upon information and belief, there is personal jurisdiction over Defendants by
reason of the false and disparaging claims against Sell Below Cost in this District, namely, that
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Sell Below Cost’s activities and products infringe the ‘106 patent while having actual knowledge
that the asserted design patent is invalid, and in defaming and disparaging Sell Below Cost and
its goods to Amazon.com.
33. In view of the disparaging and defamatory statements to Amazon.com about Sell
Below Cost as well as Sell Below Cost’s intention, at the present time, to continue to conduct its
business and activities which are now being asserted to infringe the ‘106 patent; and Sell Below
Cost’s allegations that the ‘106 patent is invalid, not infringed and/or is unenforceable, there has
been and now is an actual controversy between Sell Below Cost and Defendants.
34. This Court also has diversity jurisdiction over this dispute under 28 U.S.C.
§1332(a) since this dispute exceeds $75,000.
35. This Court also has supplemental jurisdiction over Sell Below Cost’s state and
common law claims pursuant to 28 U.S.C. § 1367, as these other claims are so related to the
claims in the action which form the basis for the Court’s original jurisdiction that they form part
of the same case or controversy under Article III of the United States Constitution and derive
from a common nucleus of operative fact.
36. Venue is proper in this district pursuant to 28 U.S.C. §1391 and §1400 because a
substantial part of the events giving rise to the claims occurred in this district, and Defendants
are subject to personal jurisdiction in this judicial district and may be found in this judicial
district.
FACTUAL BACKGROUND
37. Over the past several years, Sell Below Cost had built a very successful business
by advertising, marketing, promoting, offering for sale, and selling many different types of
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authentic and genuine products on its own online store located on the online retail website,
Amazon.com.
38. Sell Below Cost advertises, offers for sale and sells authentic consumer products
at discount prices. One of the consumer products that Sell Below Cost advertised, offered for
sale and sold in its online shop was the Multi-Color Saucer Tree Swing.
39. Sell Below Cost has achieved success through the advertising and sales of the
Multi-Color Saucer Tree Swing.
40. Sell Below Cost’s success of this product was cut short when Defendants filed a
false, defamatory and disparaging claim of design patent infringement of the ‘106 patent with
Amazon.com.
41. The ‘106 patent has a single claim that covers the ornamental design for a swing
as shown and described in the figures incorporated into the ‘106 patent.
42. The application for the ‘106 patent was filed on January 15, 2018, under
Application Ser. No. 29633554.
43. As provided on the face of the ‘106 patent, the design embodied therein was
purportedly invented by Defendant Chen.
44. In the application for the ‘106 patent, Defendant Chen is listed as having a
residence in Huoqiu County, China.
45. The application for the ‘106 patent was assigned by Chen to Blue Island.
46. Blue Island is listed as the assignee on the ‘106 patent.
47. By virtue of the assignment, Blue Island is the owner of the ‘106 patent.
48. The rights have never been assigned from Blue Island to another individual or
entity.
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49. On or about July 20, 2019, Sell Below Cost received a notice from Amazon.com,
under Complaint ID 6269090561, stating that Sell Below Cost’s listing for its Multi-Color
Saucer Tree Swing was delisted because Amazon received a report from the rights owner stating
that the product advertised and sold on the Amazon.com platform infringes the ‘106 patent.
50. The listing that was removed was listed under Amazon ASIN B07G8NQF6L.
51. In particular, the notice states that the listing was removed because it “may be
infringing the intellectual property rights of others.”
52. The email address sandorslaw@outlook.com was provided on the notice received
from Amazon.com.
53. Chen identified herself as the Rights Owner of the ‘106 patent, even though rights
to the ‘106 patent have been assigned to Blue Island.
54. Chen provided the email address sandorslaw@outlook.com to Amazon.com as a
notice address at which to contact Chen.
55. The email address sandorslaw@outlook.com belongs to Chen.
56. The email address sandorslaw@outlook.com belongs to Blue Island.
57. The email address sandorslaw@outlook.com is used by Chen.
58. The email address sandorslaw@outlook.com is used by Blue Island.
59. After receiving the notice from Amazon, a letter demonstrating the invalidity of
the ‘106 patent was sent to Defendants at the email address sandorslaw@outlook.com. A copy
of letter is attached hereto as Exhibit B.
60. As demonstrated in the letter, a product known as the Royal Oak Giant 40 Inch
Flying Saucer Tree Swing (“Royal Oak Swing”) was sold at least as early as September 11,
2017, when a review of the product was posted on Amazon.com.
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61. The date of the Amazon.com review for the Royal Oak Swing is over four months
prior to the filing date of the application for the ‘106 patent.
62. The design embodied in the Royal Oak Swing shown in the Amazon.com review
is indistinguishable from the design claim in the ‘106 patent.
63. Based on the virtual identity in designs of the Royal Oak Swing and the ‘106
patent, the ‘106 patent is invalid as anticipated under 35 U.S.C. § 102.
64. In addition, a product known as the Swinging Monkey Products Fabric Saucer
Spinner Swing (“Swinging Monkey Swing”) was sold at least as early as December 30, 2016,
when a review of the product was posted on Amazon.com.
65. The date of the Amazon.com review for the Swinging Monkey Swing is over a
year prior to the filing date of the application for the ‘106 patent.
66. The design embodied in the Swinging Monkey Swing shown in the Amazon.com
review is also indistinguishable from the design claim in the ‘106 patent/
67. Although there are some minor differences that can be parsed between the
Swinging Monkey Swing and the ‘106 patent, those differences are trivial or minor and do not
impact the ordinary observer’s overall impression of the respective designs.
68. Based on the virtual identity in designs of the Swinging Monkey Swing and the
‘106 patent, the ‘106 patent is invalid as anticipated under 35 U.S.C. § 102.
69. Alternatively, if the Swinging Monkey Swing does not anticipate the design
claimed in the ‘106 patent, then it certainly renders it obvious, under 35 U.S.C. § 103.
70. In response to receiving the letter, Defendants ignored all facts and contentions
regarding the invalidity of the ‘106 patent.
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71. Instead, Chen on behalf of Blue Island, asserted that Sell Below Cost’s product
infringes the ‘106 patent. Chen on behalf of Blue Island further said that if Sell Below Cost
“wants to continue selling on Amazon, please contact us and provide an accounting of past sales
of the accused products.” This request for an accounting is an obvious attempt by Defendants to
extort Sell Below Cost.
72. Since receiving the letter demonstrating that the ‘106 patent is invalid, neither
Chen nor Blue Island has taken any actions to withdraw the complaint filed with Amazon.
73. By virtue of the unwarranted accusations, Sell Below Cost is compelled to seek a
declaration from this Court that the ‘106 patent is invalid and not infringed, and/or that the ‘106
patent is enforceable so that it may continue its normal business operations without further
interruption from Defendants.
74. Moreover, based on the facts currently known to Sell Below Cost, including the
fact that products that appear virtually identical to the design claimed in the ‘106 patent have
been sold on Amazon.com prior to the filing date of the application for the ‘106 patent, Sell
Below Cost believes that Defendants have committed fraud on the United States Patent and
Trademark Office since Defendants did not create or invent the design for the swing that is
claimed. Sell Below Cost reserves the right to assert a formal claim against Defendants for
having committed fraud on the Patent Office at such time as discovery demonstrates sufficient
facts which allow Sell Below Costs to plead such claim of fraud with particularity.
75. Upon information and belief, Defendants became aware of Sell Below Cost’s
advertising and sale of its Multi-Color Saucer Tree Swing and were concerned that Sell Below
Cost was selling this product which competed with their own products.
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76. Upon information and belief, to address the issue, Defendants decided to execute
a sham operation to assert what they know to be an invalid design patent by filing false claims
with Amazon.com, alleging that the Multi-Color Saucer Tree Swing products being advertised
and sold by Sell Below Cost are infringing.
77. Upon information and belief, Defendants intent was to remove the Sell Below
Cost from the online marketplace and to otherwise harm Sell Below Cost for advertising and
selling competing goods to consumers.
78. Upon information and belief, Defendants do not have any legitimate reason to
believe that their patent is valid, and that the Multi-Color Saucer Tree Swing infringes any valid
patent owned by Defendants.
79. Nevertheless, on July 20, 2019, Chen on behalf of herself and/or Blue Island, and
acting as the purported rights owner and owner of the ‘106 patent, filed a false complaint with
Amazon.com, alleging that the Multi-Color Saucer Tree Swing product being advertised and
offered for sale in Sell Below Cost’s online store were infringing. ‘
80. Upon information and belief, Defendants, at the time, knew that the ‘106 patent
was invalid because they did not create the design claimed in the ‘106 patent.
81. Upon information and belief, Defendants, at the time, knew that the ‘106 patent
was invalid because other products with the same design claimed in the ‘106 patent were already
being advertised, offered for sale and sold to the public, yet Defendants did not disclose such
information to the Patent Office.
82. In addition, Defendants never threatened Amazon.com directly for selling
allegedly infringing goods, and never threatened to take any action against Amazon.com if it did
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not take down the goods. Accordingly, Defendants were not petitioning Amazon to take any
particular action.
83. Defendants notice to Amazon.com was also not a cease and desist letter to
Amazon.com, rather it was part of Defendants’ effort to make false claim to Amazon.com so as
to prevent Sell Below Cost from advertising and selling non-infringing goods and to cause other
harm to Sell Below Cost.
84. Defendants’ actions have caused Sell Below Cost’s online listing of its Multi-
Color Saucer Tree Swing to be delisted, resulting in severe monetary harm to its business.
85. Moreover, even if its products are now relisted, the monetary and reputational
damage to Sell Below Cost and its product listing cannot be reversed and recovered without
significant effort and monetary expenditures by Sell Below Cost.
86. Sell Below Cost was further harmed because Defendants’ false complaints
established a record of complaints, which Amazon.com takes into account when considering
future complaints raised by customers and others.
87. Sell Below Cost seeks monetary relief from the Court for the harm it suffered as a
result of Defendants’ improper and illegal activities, including the harm it suffered for the
delisting of its products and for the additional harm which it continues to suffer as a result of the
knowingly false, malicious and disparaging statements and misrepresentations made by
Defendants to Amazon.com about the nature of the products it advertised, offered for sale and
sold.
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COUNT I
DECLARATORY JUDGMENT OF INVALIDITY, NON-INFRINGEMENT
AND/OR UNENFORCEABILITY OF THE ‘106 PATENT
88. Plaintiff repeats and re-alleges each allegation in paragraphs 1 through 87 of this
Complaint as if set forth in full herein.
89. An actual controversy has arisen and now exists between Sell Below Cost and
Defendants concerning whether the ‘106 patent is invalid, whether Sell Below Cost has infringed
and is infringing the ‘106 patent, and whether the ‘106 patent is unenforceable.
90. Based on the facts set forth above, the ‘106 patent is invalid and not infringed by
Sell Below Cost.
91. In particular, since the Royal Oak Swing was publicly advertised, offered for sale
and sold prior to the filing date of the application for the ‘106 patent, the ‘106 patent is invalid as
a matter of law.
92. Moreover, since the Swinging Monkey Swing was publicly advertised, offered for
sale and sold prior to the filing date of the application for the ‘106 patent, the ‘106 patent is
invalid as a matter of law.
93. Upon information and belief, the claim of the ‘106 patent is also invalid and/or
unenforceable for failing to comply with one or more of the conditions and requirements of the
patent laws, including, but not limited to 35 U.S.C. §§ 101, 102, 103 and/or 112, and/or the rules,
regulations and laws pertaining thereto.
94. Since the ‘106 patent is invalid, it cannot be infringed by Sell Below Cost.
95. By virtue of the foregoing, Sell Below Cost desires a judicial determination of the
parties’ rights and duties with respect to the ‘106 patent.
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96. A judicial declaration is necessary and appropriate at this time so that the parties
may proceed in accordance with their respective rights as determined by the Court.
97. This is an exceptional case which entitles Sell Below Cost to an award of
reasonable attorney fees under 35 U.S.C. § 285.
COUNT II
PRODUCT DISPARAGEMENT UNDER NEW YORK COMMON LAW
98. Sell Below Cost repeats and realleges the allegations set forth above in
paragraphs 1 through 97 as though fully set forth herein.
99. Sell Below Cost advertised, offered for sale and sold Multi-Color Saucer Tree
Swing products on its online store located on the retail website Amazon.com.
100. By virtue of the statements made by Defendants to Amazon.com falsely
asserting that the products being sold by Sell Below Cost were infringing, Defendants have
made statements that are materially false and misrepresent the quality, condition, and value
of Sell Below Cost’s products.
101. In asserting that the products advertised, offered for sale and sold by Sell Below
Cost were infringing, Defendants have declared that these products are of lesser quality and
poorer condition than other products available on the market to consumers.
102. By the same token, in contending that the products advertised, offered for sale
and sold by Sell Below Cost were infringing, Defendants have suggested to Amazon.com
that the condition and value of the products sold by Sell Below Cost are inferior to those very
same items purchased elsewhere when they are, in fact, not.
103. Defendants’ materially false statements and misrepresentations about Sell
Below Cost’s products were made intentionally and in reckless disregard for the truth and
were known to be false or unsubstantiated at the time that such statements were made.
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104. As a result of Defendants’ materially false statements and misrepresentations
about Sell Below Cost’s products to Amazon.com, Sell Below Cost has suffered pecuniary
damages, including the loss of sales on the Amazon.com platform during the time the listing
was shut down, and from retail customers on Amazon.com who would have otherwise
purchased from Sell Below Cost in the future had the store not been shut down.
105. As a proximate result of Defendants’ wrongful acts, Sell Below Cost has been
irreparably harmed and is entitled to injunctive relief and damages in an amount to be
determined at trial.
COUNT III
TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS
UNDER NEW YORK COMMON LAW
107. At all relevant times herein, Sell Below Cost had a valid agreement and
business relationship with Amazon.com which permitted Sell Below Cost to use the platform
that Amazon.com provides to operate its online store and sell authentic goods to consumers.
108. At all relevant times herein, Defendants were aware of Sell Below Cost’s
agreement and business relationship with Amazon.com.
109. Pursuant to its agreement with Amazon.com, Sell Below Cost advertised,
offered for sale and sold Multi-Color Saucer Tree Swing products on its store located on the
retail website Amazon.com.
110. In addition to its business relationship with Amazon.com, at all relevant times
herein, Sell Below Cost had successful business relationships with existing retail customers
that purchased products from Sell Below Cost on Amazon.com.
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111. At all relevant times herein, Defendants were aware of Sell Below Cost’s
relationships with Sell Below Cost’s existing customers.
112. Defendants’ false reports of counterfeiting to Amazon.com were made for a
wrongful purpose and Defendants used a dishonest, unfair and improper means to disrupt and
interfere with Sell Below Cost’s business relationships.
113. Defendants had no justification for their actions.
114. Absent the filing of the false and disparaging reports of infringement,
Defendants knew that Sell Below Cost would continue to advertise and sell products on its
online store on Amazon.com to retail consumers in search of such products.
115. As a result of Defendants’ dishonest, unfair, and improper acts of interference
with Sell Below Cost’s business relationship with Amazon.com, Amazon.com removed Sell
Below Cost’s listing from its popular platform.
116. As a further result of Defendants’ dishonest, unfair and improper acts of
interference with Sell Below Cost’s relationships with current and prospective purchasers, said
purchasers were unable to purchase Sell Below Cost’s products.
117. The harm caused to Sell Below Cost and its business was Defendants’ intended
result.
118. Moreover, by virtue of Defendants’ dishonest, unfair, and improper acts of
interference Sell Below Cost’s business relationship with Amazon.com has been stained and
blemished since there is now a record of claims of “infringement” with Amazon.com asserted
against Sell Below Cost. These false claims asserted against Sell Below Cost will be kept by
Amazon.com for years to come, tarnishing Sell Below Cost’s relationship with Amazon.com
and causing substantial monetary damage to Sell Below Cost.
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119. As a result of Defendants’ actions, Sell Below Cost has suffered pecuniary
damages, including the loss of sales.
120. As a result of Defendants’ actions, Sell Below Cost has also suffered injury by
virtue of its loss of standing with Amazon.com and its customers, and harm to its reputation as
an honest seller of goods.
121. As a proximate result of Defendants’ wrongful acts, Sell Below Cost has been
irreparably harmed and is entitled to injunctive relief and damages for in an amount to be
COUNT IV
UNFAIR COMPETITION UNDER NEW YORK COMMON LAW
123. Defendants’ unlawful activities as set forth herein constitute unfair competition
as proscribed by New York common law.
124. Defendants’ acts of unfair competition have caused Sell Below Cost to sustain
pecuniary damage, loss, and injury.
125. Upon information and belief, Defendants have engaged and continue to engage
in these activities knowingly and willfully.
126. Defendants’ acts of unfair competition, unless enjoined by this Court, will
continue to cause Sell Below Cost to sustain irreparable damage, loss, and injury.
127. Sell Below Cost has no adequate remedy at law.
128. Sell Below Cost, as a proximate result of Defendants’ materially deceptive
activities, has been irreparably harmed and is entitled to injunctive relief and damages in an
amount to be determined at trial.
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COUNT V
DEFAMATION UNDER NEW YORK COMMON LAW
130. Defendants’ written publication of material that libels Sell Below Cost, namely
its false written claims of “infringement,” constitute defamation.
131. Defendants’ statements about Sell Below Cost were demonstrably false.
132. Defendants knew or should have known that those statements about Sell Below
Cost were false when they published those statements.
133. Those statements were defamatory because they accused Sell Below Cost of
engaging in illegal and/or unethical behavior in conducting their business.
134. As a direct and proximate result of Defendants’ publication of those false
statements, Sell Below Cost has sustained damages, including but not limited to lost sales, lost
profits, loss of goodwill, lost business opportunities, lost customers, and damage to Sell Below
Cost’s reputation.
135. Sell Below Cost, as a proximate result of Defendants’ defamatory statements,
has been irreparably harmed and is entitled to injunctive relief and damages in an amount to be
WHEREFORE, Sell Below Cost prays for the following relief against Defendants:
A. For a declaration and judgment declaring that the ‘106 patent is invalid and not
infringed by Sell Below Cost;
B. For judgment holding Defendants liable for product disparagement, tortious
interference with business relations, unfair competition, defamation, and other wrongful
activities in connection with Defendants’ action as described herein;
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C. For judgment enjoining preliminarily and permanently Defendants, their agents,
servants, related companies, and all parties in privity with them, or any of them, from
committing any further acts that constitute product disparagement, tortious interference with
business relations, and unfair competition, and other wrongful activities;
D. For judgment requiring Defendants to pay Plaintiff such damages as Plaintiff has
sustained as a consequence of Defendants’ product disparagement, tortious interference with
business relations, unfair competition, defamation, and other wrongful activities complained of
herein, and to account for all gains, profits, and advantages derived by Defendants from said
product disparagement, tortious interference with business relations, and unfair competition, and
other wrongful activities complained of herein;
E. For judgment requiring Defendants to issue corrective advertising to Amazon.com
and to retail consumers stating that the Multi-Color Saucer Tree Swing products advertised and
sold by Sell Below Cost are not infringing;
F. Awarding Plaintiff costs, expenses, and reasonable attorney’s fees as permitted by
law;
G. For an award to Plaintiff of its costs, expenses and reasonable attorney fees as
permitted by law;
H. For a declaration and judgment declaring this case to be exceptional within the
meaning of 35 U.S.C. § 285;
I. Awarding Plaintiff such other and further relief as the Court may deem just and
proper.
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JURY DEMAND
Sell Below Cost demands a trial by jury on all issues so triable.
STERN & SCHURIN LLP
By: _________________________
Steven Stern (SS 5203)
sstern@sternschurin.com
Richard Schurin (RS 0199)
rschurin@sternschurin.com
Attorneys for Plaintiff
Sell Below Cost USA LLC
595 Stewart Avenue
Suite 510
Garden City, New York 11530
Telephone: (516) 248-0300
Facsimile: (516) 283-0277
Dated: October 29, 2019

Garden City, New York
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Case 1:19-cv-06095 Document 1-1 Filed 10/29/19 Page 1 of 8 PageID #: 21
RICHARD S. SCHURIN 595 STEWART AVENUE

STEVEN STERN SUITE 510
EVGENY KRASNOV GARDEN CITY, NY 11530
BENJAMIN LITTLE TEL. (516) 248-0300
PENINA GREEN FAX (516) 283-0277
MEGAN ABNER WWW.STERNSCHURIN.COM
August 16, 2019

VIA EMAIL ONLY
Ms. Tracy Chen
sandorslaw@outlook.com
Re: Complaint ID: 6269090561

ASIN: B07G8NQF6L
Request to Reactivate Listing Based Upon Invalidity of US Patent D854106
Dear Ms. Chen:
My name is Steven Stern and I am a partner at the law firm of STERN & SCHURIN
LLP. We are an intellectual property boutique law firm, located in New York.
We write in connection with Complaint ID 6269090561, ASIN: B07G8NQF6L,

whereby you as the purported rights owner of US Design Patent D854106 (“the ‘106 patent”)
filed a complaint asserting that my client infringed this design patent. We write to request that
you retract your complaint to enable our client’s listing be reactivated as soon as possible since
the asserted ‘106 patent is invalid as a matter of law, and therefore cannot be infringed by our
client’s product, the SORBUS Multi-Color Saucer Tree Swing (“SORBUS Tree Swing”). A
picture of the SORBUS Tree Swing is presented below for reference:
SORBUS TREE SWING

Ms. Tracy Chen
August 16, 2019
Page 2
As an initial matter, we wish to advise the you that our client respects the intellectual
property rights of others and takes allegations of infringement very seriously. In that regard, we
have investigated the claims that have been asserted and we have determined that the ‘106 patent
is invalid and therefore has not been infringed by our client. The bases of our opinion and
contentions are set forth below in greater detail.
U.S. PATENT D854106 IS INVALID AND CANNOT

BE INFRINGED BY THE SORBUS TREE SWING
A. The Standard for Invalidity and Non-Infringement of a U.S. Design Patent

– the “Ordinary Observer” Test
Courts apply the ordinary observer test to determine whether a design patent is invalid
and/or infringed. See Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 678 (Fed. Cir. 2008)
(en banc). As articulated by the Supreme Court, the test is:
[I]f, in the eye of the ordinary observer, giving such attention as a

purchaser usually gives, two designs are substantially the same, if the
resemblance is such as to deceive such an observer, inducing him to
purchase one supposing it to be the other, the first one patented is
infringed by the other.
Gorham Co. v. White, 81 U.S. 511, 528 (1871). That is, the accused product must “embod[y] the
patented design or any colorable imitation thereof” for there to be infringement. Egyptian
Goddess, 543 F.3d at 678. Proper application of the ordinary observer test requires that the
“accused design be compared to the claimed design, not to a commercial embodiment.” Payless
Shoesource, Inc. v. Reebok Int’l Ltd., 998 F.2d 985, 990 (Fed. Cir. 1993).
The ordinary observer test is also used to determine whether the design patent is invalid
as anticipated. See Int’l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240 (Fed.
Cir. 2009). In the case of anticipation, the question is whether the design patent and prior art
would be viewed as substantially similar in the eyes of an ordinary observer. Id.
An ordinary observer is not an expert because an expert cannot be deceived. See

Gorham, 81 U.S. at 527-28. Instead, an ordinary observer is typically “someone who has
purchased, or shopped for, a like item in the past.” Hutzler Mfg. Co., Inc. v. Bradshaw Int’l, Inc.,
Case No. 11-cv-7211, 2012 U.S. Dist. LEXIS 103864, at *18-*19 (S.D.N.Y. July 24, 2012)
(collecting cases). The ordinary observer gives “such attention as a purchaser usually gives” and
does not include the attention that a person would give if asked to conduct a critical examination
of the products, or after being told that there may be differences between them. Id. at *20 (citing
Gorham, 81 U.S. at 529-30).
The ordinary observer test requires a comparison of the overall effect of the designs. See
Int’l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1243 (Fed. Cir. 2009); Crocs,
Inc. v. ITC, 598 F.3d 1294, 1303 (Fed. Cir. 2010) (“‘[T]he deception that arises is a result of the
similarities in the overall design, not of similarities in ornamental features in isolation’”). The
comparison takes into account “significant differences” that may exist between the designs, not
Ms. Tracy Chen
August 16, 2019
Page 3
minor or trivial differences. See Int’l Seaway, 589 F.3d at 1243. Minor or trivial differences do
not prevent a finding of infringement. See id. Notably, however, when the alleged infringing
product does not include a feature depicted in the design patent drawing a court may find that
there is no infringement. Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1577 (Fed. Cir. 1990).
B. U.S. Patent D854106 Is Invalid
The ‘106 patent, which is attached to this letter as Exhibit A, is invalid as being
“anticipated” because it cannot be disputed that an ordinary observer would find that the design of
the ‘106 patent and “prior art” swings advertised and sold on the Amazon.com platform are the same
or substantially similar. The following illustration taken from the ‘106 patent is virtually identical to
the products shown in reviews on Amazon.com prior to the filing date of the ‘106 patent:
TOP VIEW OF ‘106 PATENT FILED ON JANUARY 15, 2018
AMAZON REVIEW ROYAL OAK TREE SWING

DATED SEPTEMBER 11, 2017
Ms. Tracy Chen
August 16, 2019
Page 4
AMAZON REVIEW OF SWINGING MONKEY SWING

DATED DECEMBER 30, 2016
AND PICTURE OF ACTUAL SWINGING MONKEY SWING
Ms. Tracy Chen
August 16, 2019
Page 5
To an ordinary observer, the Royal Oak tree swing and Swinging Monkey swing each
appear to be virtually identical to the design claimed in the ‘106 patent. The ordinary observer in
this case is a person who has previously purchased or shopped on Amazon for a swing product
and other outdoor toys for children. See Hutzler, 2012 U.S. Dist. LEXIS 103864, at *18-*19.
Given the relatively modest price of swings of this nature (approximately $60), the ordinary
observer would likely not give too much attention to his/her purchase. See id at *21.
This ordinary observer, upon viewing the top surfaces of the Royal Oak and Swinging
Monkey tree swings, would find that each one comprises a circular shape in the form of a
substantially flat saucer that is divided between a center area and its perimeter. The center area
forms a nondescript circle which takes up the bulk of the surface of the saucer. The center area
is surrounded by a relatively narrower perimeter having four equidistant points of attachment
through which rope attaches to the saucer. Each point of attachment is formed by a small section
of material that is overlaid onto the perimeter, wherein each piece of material has an elongated
opening.
This description of the Royal Oak and Swinging Monkey tree swings applies equally to
the design of the ‘106 patent, as well as the SORBUS Tree Swing. That is why it is not
surprising that the overall visual effect and appearance of these saucer swings are all the same: a
substantially flat saucer swing, comprised of a center area and a perimeter with four equidistant
points of attachment through which rope attaches to the saucer and where each point of
attachment is formed by a small section of material with an elongated opening that is overlaid
onto the perimeter.
To be sure, there are minor differences that can be parsed between the Swinging Monkey
tree swing and the and the ‘106 patent. However, those differences are trivial or minor and do
not impact the ordinary observer’s overall impression of the respective designs. See, Int'l Seaway
Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1243 (Fed. Cir. 2009) (Minor differences
cannot prevent a finding of invalidity through anticipation); Mobile Hi-Tech Wheels v. Direct
Tire & Wheel, Inc., No. CV09-07583 DMG (PJWx), 2011 U.S. Dist. LEXIS 163767, at *9 (C.D.
Cal. Jan. 24, 2011) (“Minor differences between a patented design and an accused article's
design cannot prevent a finding of anticipation.”) Inhale, Inc. v. Kaldi Worldwide Trading, Inc.,
No. CV 11-3845-GW(JCx), 2012 U.S. Dist. LEXIS 199915, at *6 (C.D. Cal. Oct. 18, 2012)
(“Minor differences that do not change the overall visual impression do not preclude a finding of
infringement.”) For example, the relative size of the Swinging Monkey tree swing and number
of sections of material that form the Swinging Monkey tree swing may be different than the
design claimed in the ‘106 patent. However, the exact size and number of sections of material
needed to form the respective swings are not significant here. The ordinary observer would have
the impression that each swing appears to be the same. The bottom line is that whatever
differences may exist between the Royal Oak and Swinging Monkey tree swings as compared to
the ‘106 patent, the differences are not significant to the ordinary observer purchasing these
swings, and thus do not prevent a finding of anticipation.
Ms. Tracy Chen
August 16, 2019
Page 6
In view of the foregoing, we hereby demand that you immediately retract Complaint
ID 6269090561 so that our client’s product can be relisted on Amazon.com and so that
Amazon.com may make the appropriate notation in its record that our client has not infringed
any rights asserted under Complaint ID 6269090561 and ASIN B07G8NQF6L.
Please note that we have already been authorized to commence a lawsuit seeking a
declaratory judgment of non-infringement and/or invalidity of the ‘106 patent. If we do not
receive an affirmative response from you that the complaint has been withdrawn, we intend to
file suit in the United States District Court, seeking the appropriate relief. It is our hope that we
can avoid the fees and costs associated with a patent infringement lawsuit. If you wish to discuss
further, we ask that you or your attorney please contact the undersigned at
sstern@sternschurin.com or (516) 248-0300.
We thank you in advance for your prompt action on this matter.
Sincerely,
STERN & SCHURIN LLP
Steven Stern
EXHIBIT A

Sell Below Cost USA v. Blue Island Holding - Complaint

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Case 1:19-cv-06095 Document 1 Filed 10/29/19 Page 1 of 20 PageID #: 1

UNITED STATES DISTRICT COURT

SELL BELOW COST USA LLC, CIVIL ACTION NO. 19-6095

“Defendants”), alleges as follows:

Multi-Color Saucer Tree Swing.

infringes U.S. Patent No. D854,106 (“the ‘106 patent”).

the ‘106 patent.

would harm Sell Below Cost.

swing products advertised and sold to consumers online.

extort Sell Below Cost.

of the application of the ‘106 patent.

and its products.

laws of the State of New Jersey.

Suite 153, Montvale, NJ 07645.

and selling a wide variety of consumer products to retail consumers on Amazon.com.

the ‘106 patent.

a residence of Brighton, CO, USA listed on the form.

active force behind Blue Island’s unlawful conduct.

Tree Swing sold by Sell Below Cost.

ownership, operation, and/or management of the business of Blue Island.

adjudication of the claims brought herein.

JURISDICTION AND VENUE

Judgment Act, 28 U.S.C. § 2201 et. seq.

and is otherwise within the jurisdiction of this Court.

its goods to Amazon.com.

§1332(a) since this dispute exceeds $75,000.

from a common nucleus of operative fact.

Multi-Color Saucer Tree Swing.

Application Ser. No. 29633554.

purportedly invented by Defendant Chen.

residence in Huoqiu County, China.

46. Blue Island is listed as the assignee on the ‘106 patent.

infringing the intellectual property rights of others.”

to the ‘106 patent have been assigned to Blue Island.

54. Chen provided the email address sandorslaw@outlook.com to Amazon.com as a

notice address at which to contact Chen.

55. The email address sandorslaw@outlook.com belongs to Chen.

56. The email address sandorslaw@outlook.com belongs to Blue Island.

57. The email address sandorslaw@outlook.com is used by Chen.

58. The email address sandorslaw@outlook.com is used by Blue Island.

of letter is attached hereto as Exhibit B.

2017, when a review of the product was posted on Amazon.com.

is indistinguishable from the design claim in the ‘106 patent.

patent, the ‘106 patent is invalid as anticipated under 35 U.S.C. § 102.

when a review of the product was posted on Amazon.com.

impact the ordinary observer’s overall impression of the respective designs.

regarding the invalidity of the ‘106 patent.

extort Sell Below Cost.

interruption from Defendants.

and sold by Sell Below Cost are infringing.

selling competing goods to consumers.

patent owned by Defendants.

information to the Patent Office.

82. In addition, Defendants never threatened Amazon.com directly for selling

harm to Sell Below Cost.

significant effort and monetary expenditures by Sell Below Cost.

future complaints raised by customers and others.

knowingly false, malicious and disparaging statements and misrepresentations made by

Complaint as if set forth in full herein.

Sell Below Cost.

invalid as a matter of law.

regulations and laws pertaining thereto.

parties’ rights and duties with respect to the ‘106 patent.