1. Navigating the IP Minefield in Wearable Technology
Presented by:
Michelle Mancino Marsh
Partner

2. Patents in the United States

3. Putting the “Smart” in Smartphones
Approximately 250,000 active U.S. patents impact smartphones
1 out of 6 active patents impacts smartphones
Include technologies such as:
touchscreens,
internet access,
video streaming,
media playback, and
application store readiness

4. “Smart Clothing” Landscape
As of May 2015, US Patents related to:
“Biometrics” & “Wearable Device”:
3,260 patents
“Smart threads” or “smart fibers”:
universe 282,186 patents
sub-universe 4, ,000 patents

5. NPEs: Not a Laughing Matter

6. NPE Lawsuits NPEs initiated 62% of all patent litigation in 2012
Source: Patent Freedom (Accessed 5/6/2015)
NPEs initiated 62% of all patent litigation in 2012

7. Exposure to NPEs
The most exposure to NPEs is in high technology sectors including: “hardware, software, semiconductors, communications, and consumer electronics”
Patent Freedom (Accessed 5/6/2015)

8. NPEs and the Fashion Industry: The Next Frontier
As of July 2014:
382 NPEs were actively filing lawsuits
1,231 patents associated with retail/fashion were actively being litigated
Patent Freedom (Accessed 5/6/2015)

9. Is it Safe to Go Swimming?

10. Case Study 1: “Fitness Trackers”
Example Shown: Adidas “miCoach pacer bundle”
Sensors woven into the fabric
Pacer unit contains the processor
Performs heart rate monitoring, stride sensing, and workout management
Transmits monitored feed to another wireless device
MSRP: $140 (shown)

11. SportBrain, Inc. v. Adidas America, Inc.

12. filed complaints against:
“Fitness Trackers” War
filed complaints against:

13. Case Study 1: “Fitness Trackers”
asserts:
U.S. Pat. No. 7,454,002
“Integrating Personal Data Capturing Functionality into a Portable Computing Device and a Wireless Communication Device”
Filed suit against
Adidas on November 2, 2012
Fitbit on November 2, 2012
Nike on January 2, 2013

14. Case Study 1: “Fitness Trackers”

15. Case Study 1: “Fitness Trackers”
Sample Claim from ‘002 Patent:
A method for integrating personal data capturing functionality into a wireless communication device and for analyzing and supplying feedback information to a user, the method comprising:
(a) receiving personal data…by at least one personal parameter receiver;
(b) capturing the personal data in the wireless communication device;
(c) periodically transmitting the personal data…to a network server…;
(d) at the network server, [(i)] storing…the personal data, [(ii)] analyzing the personal data to generate feedback information, [(iii)] posting the feedback information to a website…

16. Case Study 1: “Fitness Trackers”
Seeking:
Damages for Infringement
Permanent Injunctions
Enhanced Damages for Willful Infringement
Costs of Action (including Attorneys’ Fees)

17. Case Study 1: “Fitness Trackers”
Status of the Cases
SportBrain filed a Notice for Voluntary Dismissal
Settlement in all three cases
Fitbit & Adidas: Settlement in 3-4 months
Nike counterclaims of non-infringement & invalidity
Mediation
One year to settlement

18. Case Study 2: “Tech Gloves”
Example Shown: Agloves
Conductive threads woven into the fabric
Allows for touchscreen use without direct contact
MSRP: $18 (shown) ~$10-$40
(Accessed 21 Nov. 2014).
(Accessed 22 Nov. 2014).

19. Case Study 2: “Tech Gloves”
Family owned business vigorously protects investment in patent
Licensed by the Ralph Lauren brand:
Polo
Lauren by Ralph Lauren
American Living
Echo maintained right to sue infringers

20. filed complaints against:
“Tech Gloves” War
filed complaints against:

21. Case Study 2: “Tech Gloves”
asserts:
U.S. Pat. No. 8,528,117
“Gloves for Touchscreen Use”

22. Case Study 2: “Tech Gloves”

23. Case Study 2: “Tech Gloves”
Sample Claim from ‘117 Patent:
A glove consisting essentially of:
a first, non-conductive, knitted material defining an inner surface and an outer surface forming a bulk of the glove;
a second, conductive, knitted material continuing from the first knitted material at finger tip portions of a thumb and an index finger of the glove, wherein … said second knitted material being electrically conductive between the outer and inner surfaces…; and said finger tip portions of said thumb and said index finger oversewn with a conductive thread.

24. Case Study 2: “Tech Gloves”
Infringing Products: “Text Enabled Gloves”
Thumb
First non-conductive knitted surface
Index Finger
Second conductive knitted surface

25. Case Study 2: “Tech Gloves”
Seeking:
Damages for Infringement
Preliminary & Permanent Injunctions
Enhanced Damages for Willful Infringement
Costs of Action (including Attorneys’ Fees)

26. Case Study 2: “Tech Gloves”
Fownes Brothers asserted counterclaims for its own patent, U.S. Pat. No. 8,507,102 (“Conductive Leather Materials and Methods for Making the Same”)
Asserted Infringing Product: “Echo’s Men’s Echo Touch 3 in 1 Glove”

27. Case Study 2: “Tech Gloves”
Status of the Cases
Settlement achieved in all cases
Fownes Brothers stronger bargaining position
Ralph Lauren avoided litigation

28. Case Study 3: “Smart Shirts”
Example Shown: NuMetrex/Adidas “miCoach Men’s Training Shirt”
Sensors woven into the fabric
Performs heart rate monitoring
Transmits monitored feed to another wireless device
MSRP: $62 (shown) - $100+

29. Sarvint Technologies, Inc. v. Textronics, Inc. and Adidas

30. filed complaints against:
“Smart Shirts” War
filed complaints against:

31. Case Study 3: “Smart Shirts”
asserts:
U.S. Pat. No. 6,381,482*
“Fabric or Garment with Integrated Information Infrastructure”
U.S. Pat. No. 6,970,731
“A Novel Fabric-Based Sensor for Monitoring Vital Signals”

32. Case Study 3: “Smart Shirts”
asserts:

33. Case Study 3: “Smart Shirts”

34. Case Study 3: “Smart Shirts”
Seeking:
Damages for Infringement
Preliminary & Permanent Injunctions
Enhanced Damages for Willful Infringement
Costs of Action (including Attorneys’ Fees)

35. Case Study 3: “Smart Shirts”
Status of the Cases
No Settlements to Date
Plaintiff lost Motion for Preliminary Injunction in July 2015
Proposed Claim Constructions Exchanged

36. Case Study 4: Fit to be Tied up in Litigation
First Use: November 17, 2005
First Use: September 9, 2009

37. Case Study 4: FITBUG, Inc. v. FITBIT, Inc.
On March 29, 2013, Fitbug filed a complaint in the Northern District of California:
asserted two of its U.S. Trademark Registrations to protect its Fitbug goodwill and cancel Fitbit’s Registration
alleges that Fitbit’s use of its mark violates Fitbug’s Trademark Registration
Fitbit has marketed and sold products under its own U.S. Trademark Registration

38. Case Study 4: FITBUG, Inc. v. FITBIT, Inc.
On February 20, 2014, Fitbit filed a complaint in the Northern District of Illinois:
asserted its U.S. Patent No. 8,177,260 (‘260) to protect its Fitbit activity trackers
alleges that Fitbug induces infringement by instructing its partners to sell Fitbug’s activity trackers
Fitbug countered that Fitbit’s patent is invalid
seeks to protect its Fitbug product line (which includes Fitbug Air, Fitbug Go, and Fitbug Orb).

39. Case Study 3: “Smart Shirts”
Status of the Cases
Fitbug lost its trademark case and its leverage.
The parties continue to litigate the patent infringement and the counterclaim for invalidation of Fitbit’s patent.

40. Optimer Performance Fibers Inc. v. Pelagic, Inc.
On the Horizon…
Optimer Performance Fibers Inc. v. Pelagic, Inc.
Complaint filed on Oct. 1, 2015.
Chedark v. Aliphcom /dba/ JAWBONE
Complaint filed on Aug. 10, 2015

41. IP Minefield: Case Study Lessons
Before entering a market carefully consider the patents in the landscape for the art at hand. Evaluate, to the extent possible, if relevant patents are held by competitors, NPEs or little old ladies.
Consider licensing options before entering the market.
Consider strategic acquisition of a patent(s) before entering the market, even if just for defensive purposes.
Be too aggressive and be ready for retaliatory litigation.
Cease litigation on your terms. Have a strong patent portfolio that can be used to ease into settlement.

42. Protect It! Patent Trademark Trade Dress Copyright Trade Secrets
Utility
Design
Trademark
Trade Dress
Copyright
Trade Secrets

43. Innovators Truly understand the patent landscape for your invention.
File for protection – take advantage of Provisional Patent Applications option, but make sure to still explain “how to make, how to use.”
Avoid disclosure of your invention until after filing a patent application. Use non-disclosure agreements during development.
Maintain records of your ideas and keep ideas labeled “Confidential.”
Provide all relevant records/documents of your Invention to your In-House Legal Department or an experienced IP attorney.

44. Seeking Suppliers
Do your Due Diligence: Don’t be afraid to ask for all relevant information from your potential supplier/partner.
Review the IP assets (patents, trademarks, copyrights, et al.) to ensure they protect any valuable services and products involved in the due diligence.
Review the chain of title of the IP assets to ensure actual ownership (many deals are thwarted when it’s discovered that the company doesn’t fully own its assets).
Be sure to involve an IP attorney who has the specific technological expertise.
Strong Indemnification agreement with reps and warranties not only for the product and all of its component parts, but also how it is manufactured. Agreement should anticipate what happens in case of litigation.
Don’t be afraid to walk away.

45. Michelle Mancino Marsh Michelle.Marsh@arentfox.com @mmarshiplaw
Questions?
Michelle Mancino