On September 26, 2016, District Judge Paul Oetken (S.D.N.Y.) denied defendant Jay Franco & Sons’ (“Franco”) motion to dismiss, granted plaintiff Infinity Headwear & Apparel’s (“Infinity”) motion for leave to amend to assert additional claims, and laid out the Court’s construction of the disputed claim terms.  Infinity alleged that Franco infringed claims 1-2, 6, 8, 10-11, 15-16 and 18-20 of U.S. patent No. 8,864,544 (“the ‘544 patent”), entitled “Hooded Blanket and Stuffed Toy Combination.”

During an ongoing ex parte reexamination, Infinity amended certain claims, cancelled others, and added some new claims. The Patent and Trademark Office rejected all of the claims.  Infinity appealed the rejections on August 22, 2016.

While the appeal is pending, Franco moved the Court to dismiss the suit, arguing that there was no longer any case or controversy due to Infinity’s amendments and cancellations in the reexamination.  Franco’s argument relies on the doctrine of absolute intervening rights, which gives an accused infringer the “absolute right to use or sell an accused product made, used, or purchased before the grant of the reissue patent as long as the activity does not infringe a claim of the reissue patent that was also in the original patent.”  The Court observed in its analysis that “the proposed amendments will not be effective until the reexamination certificate is issued and published” and “[u]ntil a reissue application is granted, the original patent shall remain in effect.”  Moreover, even if there were a reissue patent and an issuance of a reexamination certificate, Franco still needed to demonstrate that the amended claims are not “substantially identical” to the original claims.  Here, the reexamination process is still ongoing, and a patent based on the amendments has not even been granted.  As such, the motion to dismiss was denied.

Case: Infinity Headwear & Apparel, LLC v. Jay Franco & Sons, No. 15-CV-1259 (JPO), 2016 BL 316593 (S.D.N.Y. Sept. 26, 2016).