PTAB Weighs in on Christmas Tree Patent War

February 27, 2018 – Press Releases

A Fox Rothschild IP litigation team led by partner Larina Alton in Minneapolis has secured a major victory in a case before the Patent Trial and Appeal Board involving the patents for a revolutionary new design for pre-lit artificial holiday trees.

Fox client Willis Electric transformed the holiday tree industry with its conception of a pre-lit tree that had wiring internal to the trunk, allowing users the benefit of simple assembly by mere alignment of the tree portions. Prior designs required users to reach into branches in order to plug the lights of each section together, a step entirely eliminated by the innovation championed by Willis Electric’s General Manager Johnny Chen.

Willis Electric applied for and was granted several patents covering the design: the keystone 8,454,186, “Modular Lighted Artificial Tree with Trunk Electrical Connectors,” and 8,454,187, “Modular Lighted Tree,” as well as related 8,936,379, “Modular Lighted Tree,” and 9,044,056, “Modular Tree with Electrical Connector.” These patents were challenged in a series of Petitions for inter partes review by Willis Electric’s competitor, Polygroup Ltd. The PTAB determined that all challenged claims of all four different patents were not unpatentable, confirming the validity of Willis Electric’s patents before the United States Patent and Trademark Office.

“We are very pleased with the result,” said lead attorney Larina Alton. “It’s apparent from these decisions that Willis Electric has championed a true innovation that has created substantial market demand. We’re glad we were able to make that clear to a majority of the Panel considering these claims. These consolidated cases also make clear that there is still room for creative advocacy before the PTAB in order to ensure that your client’s best case is put forward. We look forward to pursuing our case in District Court.”

The consolidated decisions are a game-changing development for Patent Owners litigating before the PTAB in inter partes review proceedings. In a series of unusual decisions, the Panel allowed one of the first-ever claim amendments under the Federal Circuit’s recent Aqua Products decision. It also allowed rarely granted Additional Discovery, and ruled in favor of rarely successful arguments concerning secondary considerations and the analogous nature of asserted references.

In its 82-page decision concerning the ‘186 and ‘187 patents, the majority noted that “[w]e are faced with a remarkable amount of evidence suggesting non-obviousness of the claimed invention.” In an issue of apparent first impression before the PTAB, the majority held that a survey presented by Willis Electric regarding a patented combination of elements was effective to demonstrate nexus between commercial success and the challenged claims. The majority also concluded that Willis Electric’s evidence of its own and Polygroup’s own products demonstrated nexus. As to the merits of commercial success, the majority found that Willis Electric had demonstrated that its patented products earned a higher margin and were in substantial demand by both retailers and competitors, who had requested exclusive deals or licenses to the technology on numerous occasions.

The ruling is the latest development in a struggle between two major manufacturers of seasonal decorations. In 2014, Polygroup filed two petitions for inter partes review of Willis Electric’s ‘186 and ‘187 One Plug Tree patents. Simultaneously, an ex parte reexamination was anonymously filed against both patents. No trial was instituted as to the challenged claims, and the reexamination resulted in no changes to the two patents.

Having secured its patented claims, Willis Electric filed suit in 2015 in the District of Minnesota against Polygroup for infringement of six patents related to its revolutionary “One Plug” design for pre-lit artificial holiday trees. Polygroup responded with a retaliatory suit in North Carolina, but was forced to dismiss two of its six patents from the suit.

Polygroup then filed 14 Petitions for inter partes review of Willis Electric’s patents, several of which were consolidated in the PTAB proceedings at issue in this ruling. Because of these serial filings, Willis Electric was one of the top 25 parties most frequently involved in inter partes review in the year 2016. Willis Electric also filed petitions against Polygroup’s asserted patents on One Plug technology. Willis Electric argued that Polygroup’s patents were invalidated by Willis Electric’s because they were filed later and offered nothing sufficiently novel above what Willis Electric itself had invented. Final decisions on those petitions are expected in May.

Alton was assisted by Luke Toft of Fox Rothschild and backup counsel Doug Christensen of Christensen Fonder Dardi PA. The consolidated IPRs are IPR2016-01610, IPR2016-01612, IPR2016-01613, IPR2016-1615, IPR2016-01616, IPR2016-01617.