Guidecraft v. Magformers

7/30/2019 Guidecraft v. Magformers

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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

GUIDECRAFT, INC.,

Plaintiff,

v.

MAGFORMERS, LLC,

Defendant.

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Civil Action No. ________________

COMPLAINT

(Jury Trial Demanded)

For its complaint against Defendant Magformers, LLC ("Magformers" or “Defendant”),

Plaintiff Guidecraft, Inc. (“Guidecraft” or “Plaintiff”) hereby states as follows:

Nature of the Case

1. This is an action for a declaratory judgment of non-infringement of a United

States patent and an action for unfair competition and misconduct in the marketplace under the

Lanham Act. This action is commenced pursuant to the Declaratory Judgment Act, 28 U.S.C.

§ 2201, and arises under the United States patent laws, 35 U.S.C. § 1, et seq. and the Lanham Act

15 U.S.C § 1051 et seq.

Parties

2. Plaintiff, Guidecraft is a New York corporation with places of business at 55508

State Highway, 19 West, Winthrop, Minnesota, 55396 and 204 Route 17, 2nd

floor, Tuxedo Park,

NY 10987-4410. Guidecraft is a worldwide leader in the design and manufacture of toys,

furniture for children, and art and craft products that are designed for children.



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3. Plaintiff offers to sell and sells its products nationally, internationally, and within

this judicial district.

4. Plaintiff sells toys and other products in this judicial district, including stores such

as USA Baby, located at 2257 Babcock Blvd., Pittsburgh, PA 15237 and All About Kids, located

at 3043 Washington Rd., McMurray, PA 15317. Plaintiff also offers its products in catalogs that

are distributed throughout the United States including this judicial district.

5. Plaintiff further advertises its products and provides customer service and other

services throughout the world and in this judicial district via its website, www.guidecraft.com.

6.

On information and belief, Defendant is a Utah limited liability company having a

place of business located at 1440 East 4045, Salt Lake City, Utah 84124.

7. On information and belief, Defendant sells its products throughout the United

States and internationally, including in this judicial district.

8. On information and belief, Defendant advertises its products in this judicial

district, sells its products in this judicial district, and offers to sell its products in this judicial

district.

9. On information and belief, Defendant sells its products to retailers such as

Amazon.com, which sells Defendant’s products in this judicial district and throughout the United

States

10. On information and belief, Defendant also advertises its products, offers its

products for sale, and sells its products at its website, www.magformers.com.

11. On information and belief, Defendant offers to sell its products in this judicial

district via its online store at the uniform resource locator (URL)

http://www.magformers.com/shop.html.



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12. On information and belief, Defendant sells its products in this judicial district via

its online store that is available via the internet.

13. On information and belief, Defendant sells its products to retailers in this judicial

district, such as the Learning Express store located at 4100 William Penn Highway, Monroeville,

PA 15146 and the Learning Express store located at 20418 Route 19, Cranberry Township, PA

16066.

14. On information and belief, Defendant also has offered to sell and sells its products

to national retailers such as Toys “R” Us.

Jurisdiction And Venue

15. This action arises under the patent laws of the United States. 35 U.S.C.

§ 1, et seq. This Court enjoys subject matter jurisdiction over this controversy pursuant to 28

U.S.C. §§ 1331 and 1338, and is empowered to grant declaratory relief pursuant to 28 U.S.C.

§ 2201.

16. This Court has personal jurisdiction over Defendant because Defendant has

established minimum contacts with the forum such that the exercise of personal jurisdiction over

Defendant will not offend the traditional notions of fair play and substantial justice.

17. Venue is proper in this District under 28 U.S.C. §§ 1391 and 1400(b) at least

because Defendant resides in this judicial district, a substantial part of the events or omissions

giving rise to these events are located within this judicial district, and Defendant is subject to the

Court’s personal jurisdiction.



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Defendant’s Allegations Of Patent Infringement

18. At the Toy Fair tradeshow held in New York on February 10-13, 2013, Guidecraft

displayed and offered for sale its PowerClixTM

toys, which are toys that include spherical

magnets encased within different shaped structures. The PowerClixTM

toys provide a 3D

building system that lets children or other users build models while learning the basics of

science, construction, and engineering.

19. An employee or agent of Defendant came to Guidecraft’s booth at Toy Fair, saw

PowerClixTM

toys displayed and offered for sale and told Guidecraft’s representatives that the

sale of the PowerClix

TM

products infringed Defendant’s patent. Customers and potential

customers were present and heard this allegation.

20. On information and belief, Defendant’s representatives have told customers of

Guidecraft and prospective customers of Guidecraft, including customers who do business in this

judicial district that the sale of the PowerClixTM

products infringed Defendant’s patent.

21. On information and belief, the allegations made by Defendant have led some

customers and potential customers to not purchase the PowerClixTM products.

22. In a letter dated August 8, 2013, an attorney for Defendant sent a letter to

GuideCraft stating that “Magformers is the owner of the U.S. Patent No. 7,154,363” (“the ‘363

patent”) and that “Guidecraft’s sale of Power Clix infringes the Patent and breaches

Magformers’ rights under 35 U.S.C. § 271”. A copy of this letter is provided herewith as

Exhibit A. A copy of the ‘363 patent is provided herewith as Exhibit B.

23. In the letter of August 8, 2013, Defendant asserts that if Guidecraft does not stop

selling its PowerClixTM

products, Defendant “will pursue all available legal remedies; including,

but not limited to, seeking injunctive relief, disgorgement of profits, costs and attorneys’ fees.”



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24. The letter of August 8, 2013 was the first time that Defendant identified the ‘363

patent to Guidecraft.

25. The letter of August 8, 2013 does not cite a single claim that Defendant contends

cover the PowerClixTM

toys.

26. The letter of August 8, 2013 quotes language from the Abstract of the ‘363 patent

to assert that Guidecraft’s PowerClixTM

toys infringe the ‘363 patent.

27. The letter of August 8, 2013 explicitly states Guidecraft’s sale of PowerClixTM

products infringes the ‘363 patent” because they are a ‘plurality of magnetic connector bodies in

various different forms for magnetic connection of two or more bodies together along mutually-

confronting, longitudinally-elongated, linear peripheral border edges, each linear peripheral

border edge having at least one particularly-configured longitudinally elongated, cylindrical

magnet supported adjacent thereto for rotation of the magnet adjacent said peripheral edge of

each connector body for orientation of the magnetic polarity of magnets of confronting connector

bodies for mutual magnetic attraction along, mutually confronting, linear, peripheral border

edges of magnetic connector bodies.’ See the Patents abstract.”

U.S. Patent No. 7,154,363

28. The ‘363 patent is entitled “Magnetic Connector Apparatus”, lists Larry Dean

Hunt as the sole inventor, and issued on December 26, 2006.

29. On information and belief, no assignment has been recorded with the United

States Patent and Trademark Office for the rights to the ‘363 patent as of the filing date of this

Complaint.

30. In the Background Of The Invention section of the patent the ‘363 patent says that

U.S. Patent No. 5,347,253 to Ogikubo “provides a connector body arranged to contain a



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spherical magnet rotatably within its interior, for substantially universal rotation of the

spherical magnet body on any diametric axis through the magnet for orientation of the opposite,

north and south poles of the magnet as needed for proper magnetic attraction to a corresponding

magnet of a second body member.” (Exhibit B at Col. 1, lines 28-34).

31. The ‘363 patent, says, “Of critical importance to the present invention is the

particular, required configuration of the particular magnet body 16 contained in the

aforementioned magnet pocket 14 disposed adjacent each peripheral linear confronting border

edge of each connector body 10”. (Exhibit B at Col. 5, lines 35-39) (emphasis added).

32.

The ‘363 patent explicitly states that “the magnet 16 is specifically provided in

the form of a longitudinally elongated cylinder having a selected, longitudinal length

dimension that is greater than its selected uniform diameter dimension, the magnet body

arranged for rotatable containment within the particular, corresponding magnet pocket 14

provided in a linear leg 12 of the connector bodies.” (Exhibit B at Col. 5, lines 40-45) (emphasis

added).

33. Claim 1 of the ‘363 patent is the lone independent claim of this patent.

34. Claim 1 is for a magnetic connector apparatus and recites that the connector

apparatus comprises, among other limitations, “a longitudinally extending, cylindrical magnet

in each said at least one magnet pocket of each said body member, each said magnet arranged

with opposite magnetic poles occupying opposite diametric halves of the cylindrical magnet

throughout its entire longitudinal length, each magnet supported in a magnet pocket for

rotation therein about the longitudinally-extending axis of the diametric center line

through the longitudinal length of the magnet, said axis of rotation extending substantially



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parallel to said longitudinally extending, linear peripheral border edge of the connector

body” (emphasis added).

35. Claims 2-6 of the ‘363 patent depend from claim 1 and therefore include the

limitations of claim 1.

The PowerClixTM

Toys

36. Guidecraft makes and sells PowerClixTM

toys that permit a child to build a model.

37. The PowerClixTM toys made and sold by Guidecraft include parts that each

contains spherical magnets at each corner or end of the part.

38.

Each of the spherical magnets of the PowerClix

TM

toys rotate within the interior

of the part in which the magnet is located for substantially universal rotation of the spherical

magnet body on any diametric axis through the magnet for orientation of the opposite, north and

south poles of the magnet as needed for proper magnetic attraction to a corresponding magnet of

another part.

39. The spherical magnets provide a quick connect for fast, simple, and powerful 3D

modeling so that a child may build different structures (e.g. a model of a bridge, building, car, or

animal).

40. Below is an annotated image of different parts of the PowerClixTM toy system that

permits the building of different objects:



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41. Below is a first annotated image of one of the numerous different structures that

could be made by use of the PowerClix

TM

toys:

Spherical magnets

providing quick connection to other

parts

Spherical magnets

providing quick

connection to other

parts

Spherical magnetsproviding quick

connection between

adjacent parts

Spherical magnets

providing quick connection between

adjacent parts



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42. Below is a second annotated image of one of the numerous different structures

that could be made by use of the PowerClixTM toys:

43. Each of the spherical magnets within the different parts of the PowerClixTM

toys

does not have an elongated length that is greater than its diameter dimension.


toys

does not have a longitudinally-extending axis of a diametric center line through a longitudinal

length of the magnet.


toys

does not have an axis of rotation extending substantially parallel to a longitudinally extending,

linear peripheral border edge of a connector body.

46. None of the parts in the PowerClixTM

toys contain a cylindrical magnet.

47. None of the parts in the PowerClixTM toys contain a magnet that is elongated.

Spherical magnets

providing quick

connection between

adjacent parts



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48. None of the parts in the PowerClixTM

toys contain a magnet that is longitudinally

elongated.

49. None of the parts of the PowerClixTM

toys contain a magnet that has a

longitudinal length.

Defendant’s Review Of The PowerClixTM

Toys

50. On information and belief, Defendant asserted that Guidecraft infringed the ‘363

patent prior to reviewing the claims of the ‘363 patent to determine whether any of the claims of

the ‘363 patent were infringed.

51.

On information and belief, Defendant was unable to explain its basis for asserting

patent infringement by Guidecraft at the Toy Fair tradeshow in New York.

52. In the letter of August 8, 2013, Defendant did not identify a single claim that was

infringed by the PowerClixTM toys.

53. In the letter dated August 8, 2013, Defendant never explained how a spherical

magnet found in the PowerClixTM

toys could be a cylindrical magnet.

54. On information and belief, Defendant never had a patent attorney review the

PowerClixTM

toys to determine whether any claim of the ‘363 patent was infringed by the ‘363

patent.

55. On information and belief, Defendant never had a patent agent review the

PowerClixTM

toys to determine whether any claim of the ‘363 patent was infringed by the ‘363

patent.

COUNT I

DECLARATORY JUDGMENT OF NON-INFRINGEMENT

56. Paragraphs 1-55 are incorporated by reference herein as if fully recited herein.



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57. Guidecraft reasonably apprehends that Defendant will commence infringement

litigation against Guidecraft alleging that the manufacture, sale and/or use of Guidecraft’s

PowerClixTM

toys infringes the '363 patent.

58. Consequently, there is an actual case and controversy between Guidecraft and

Defendant concerning whether Guidecraft infringes any valid claim of the '363 patent.

59. Guidecraft has not infringed and does not infringe any valid claim of the ‘363

patent.

60. The manufacture, use and sale of Guidecraft’s PowerClixTM

toys do not infringe

any valid claim of U.S. Patent No. 7,154,363.

COUNT II

LANHAM ACT VIOLATION

61. Paragraphs 1-60 are incorporated by reference herein as if fully recited herein.

62. Defendant, through its public statements and actions asserting that sale of the

PowerClixTM infringes its patent has violated 15 U.S.C. § 1125 of the Lanham Act.

63. Due to Defendant’s actions and erroneous allegations made with respect to the

‘363 patent, customers and the marketplace for toys are confused and are likely to be confused as

to whether or not Guidecraft infringes the ‘363 patent.

64. There are numerous express limitations of claims 1-6 of the ‘363 patent that are

clearly not found within the PowerClixTM toys.

65. Defendant’s erroneous allegations of patent infringement that have been publicly

made to the toys marketplace misrepresent the nature, characteristics, and qualities of

Guidecraft’s PowerClixTM toys.



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66. On information and belief, Defendants actions are in bad faith and are objectively

baseless.

WHEREFORE, Guidecraft prays that this honorable Court grant Guidecraft the following

relief:

A. Declare that the manufacture, use and sale of Guidecraft’s PowerClixTM toys do

not infringe any valid claim of U.S. Patent No. 7,154,363.

B. If the facts demonstrate that this is an exceptional case pursuant to 35 U.S.C.

§ 285, order Defendants to reimburse Guidecraft for its attorneys' fees and cost reasonably

incurred in prosecuting this action; and

C. Enjoin Defendant, its offers, employees, sales representatives, and agents from

telling others that Guidecraft’s PowerClixTM

toys infringes U.S. Patent No. 7,154,363; and

D. Award Guidecraft such further relief as this Court deems just and reasonable

under the circumstances.

Jury Demand

Guidecraft hereby demands trial by jury of all issues properly so triable.



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Dated: August 23, 2013 Respectfully submitted,

GUIDECRAFT, INC.

/s/ Lynn J. Alstadt

Lynn J. AlstadtRalph G. Fisher

Buchanan Ingersoll & Rooney, PC

One Oxford Center301 Grant Street

Pittsburgh, PA 15219

(412) 562-1632 (tel.)

[email protected]@bipc.com

Attorneys for Plaintiff

Documents

Guidecraft v. Magformers