Patent infringement expert said these types of cases are expected to increase with the rise of the Metaverse
TAMARAC, Fla. — City Furniture, based here, is being sued by Austin, Texas-based AR Design Innovations LLC for alleged patent infringement of a 3D interior design system filed in October 2003 and subsequently acquired by ARDI in April 2020.
The suit, filed in late January with the United States District Court for the Southern District of Florida, states, “This is a patent infringement action to stop defendant’s infringement of the following United States Patent (the “Asserted Patent”) issued by the United States Patent and Trademark Office, a copy of which is attached hereto as Exhibit A: U.S. Patent No. Title.A 7,277,572 (the ‘572 patent), a three-dimensional interior design system.”
While this action initiated by ARDI against City Furniture marks the latest litigation taken against members of the home furnishings sector, it certainly is not the first time ARDI has taken similar legal actions against a surprising list of other home furnishings majors.
In May 2020, ARDI filed similar charges against Ashley Furniture, Ethan Allen Interiors and La-Z-Boy in Texas.
In each case, the complaints were almost identical, with ARDI claiming the defendants had, both directly and indirectly, infringed on the ‘572 patent with their individual AR applications.
In the interim, ARDI also filed similar suits against Wayfair, Ikea, Euromarket Designs, dba as CB2, and Walmart.
Court records indicate that, with the exception of Walmart and City Furniture, all of those other cases have been settled. City Furniture declined comment on the pending litigation and attempts to reach Walmart were unsuccessful.
Ron Wanek, chairman of Ashley Furniture declined comment and an attorney for ARDI did not respond to a request for comment.
According to Ryan N. Phelan, a patent attorney with Chicago-based law firm Marshall, Gerstein & Borun LLP (https://www.marshallip.com) virtual reality-related patents are expected to rise with the onset of the Metaverse.
However, as utilization of this technology grows, Phelan cautions that so too does the likelihood of more of these types of lawsuits.
In his blog called Patent Next (www.patentnext.com), which is a patent and intellectual property law blog focusing on next-generation and new-age technologies, Phelan recaps the litigation between ARDI, Ashley, Ethan Allen and La-Z-Boy and chronicles why the court denied the defendants’ motion to dismiss.
You can read the entire blog here at the article titled Patenting Virtual Reality Inventions in the Age of the Metaverse (https://www.patentnext.com/2022/09/patenting-virtual-reality-vr-inventions-in-the-age-of-the-metaverse/).
In that blog article, and with respect to the defendants’ arguments against ARDI, Phelan writes, “In their argument against ARDI, in particular, the defendants alleged that claim 1 of the ’572 patent was not eligible under 35 U.S.C. § 101 because it was “directed to” an abstract idea — specifically, the abstract idea of “retrieving, manipulating and displaying three-dimensional objects in space,” which was “just a well-known longstanding practice commonly used by model builders, students constructing dioramas, architects and even movie makers.” AR Design Innovations, 4:20-cv-392, Mem. Op. and Order (Dkt. 78), slip op. at 3 (E.D. Tex. filed May 12, 2020).
He further writes that “Defendants specifically argued that claim 1 of the ’572 patent was analogous to the longstanding human practice of making models or constructing dioramas (i.e., miniature scenes reproduced in three dimensions by placing figures before a painted background). Id. at 18.”
Still further, Phelan comments that the “Patent Owner, AR Design, rebutted that claim 1 was instead directed to a software tool that set 3D objects in 3D scenes, and that provided an improvement by allowing for the application of luminosity characteristics to the scene and the real-time manipulation of 3D objects on client devices via an easy-to-use graphical user interface. Id.”
Phelan explains that “The court agreed with AR Design. According to the court, the ’572 patent claim 1 was ‘directed to’ specific improvements to the manipulability and appearance of 3D scenes and objects, including luminosity characteristics. Id. at 17. The ’572 specification explained that the claimed invention enhanced the speed with which such scenes and objects may be rendered and edited. Thus, because claim 1 was directed to the underlying system’s ‘speed’ and ‘usability,’ it could not be abstract (and, therefore, could not be patent ineligible). Id.”
Phelan summarizes the article by stating that:
The court further noted that the defendants’ characterization of AR Design’s claims as a well-known “diorama” technique was overly simplistic and did not capture the essence of AR Design’s claimed invention. Id. at 18.
Instead, the court noted that it discerned “no difference between improvements to a tool such as a hammer or saw that makes building dioramas faster and easier and a patent on specific improvements to a tool such as the software at issue that makes digital 3D modeling faster and easier.” Id.
Accordingly, the court denied the defendants’ motion to dismiss. Id. at 19. Each of the defendants subsequently settled their respective cases.
Regarding the current litigation involving City Furniture, one source told Home News Now that City Furniture might attempt to get ARDI’s ‘572 patent invalidated.
Home News Now asked Phelan for his opinion on this tactic. “Invalidating a patent is a very common defensive strategy in the patent world. And basically, what you’re telling the court is that this patent should never have been granted in the first place because there’s nothing new about it,” he explained.
Phelan also offered an important piece of advice for companies planning to use technology similar to that of ARDI. “One of the best things that a company planning to use technology from a third-party provider should do is to make sure to include an indemnity clause that would essentially say, if I use your software and I get sued I will be indemnified and be held harmless.”
More to come?
While the outcome of the litigation facing City Furniture and Walmart has yet to be determined, some observers expressed concern that the battle between ARDI and those it believes may be infringing on its ’572 patent may be far from over.
The notion that ARDI acquired the patent in 2020, but to date, has apparently not brought any products to the market using that technology, has prompted some industry observers to conclude that the company may continue to use the ‘572 patent as leverage to sue companies it believes are infringing on that patent.
According to Phelan, a company that holds a patent but chooses not to develop a product based on that patent is called a nonpracticing entity (i.e., an NPE). “And it appears that is what is happening here,” he observed.
Check back with Home News Now at www.homenewsnow.com for ongoing updates to this story.