Remember How US Marshals Seized All Those 'Hoverboards' At CES In A Patent Dispute? The Company Has Now Dropped The Case

from the wait,-what? dept

Back in January, we wrote with some concern over the news that US Marshals had seized a bunch of one wheel scooters that everyone wants to call hoverboards, even though they don't hover. The case involved a US company, Future Motion, that had gotten a lot of attention (and a utility patent and a design patent) on such single-wheel balancing scooters. Future Motion then sued a Chinese firm, Changzhou First International Trade Co., that was making a product that certainly looked similar. Changzhou was demonstrating its product at CES in Las Vegas, only to have the US Marshals raid its booth and seize all its products based on a 7 minute hearing in front a judge where Changzhou didn't even get to present its side.

And now that Changzhou has attempted to present its side... Future Motion turned tail and ran, ran away. It flat out dropped the case once it was clear that Changzhou was going to challenge the lawsuit. In fact, Changzhou is so up in arms over this that it's not accepting the case being closed and has asked the court to reopen the case so that it can seek attorney fees from Future Motion.

The filing by Changzhou is well worth reading. It accuses Future Motion of misleading the US Patent Office and the court, claiming that the lawsuit and the seizure were a combination attempt to stifle a competitor and get publicity for itself, and that this all helped Future Motion raise more money. It also says that Changzhou's product, the Trotter, does not infringe on Future Motion's patents. From the filing:
CES is the world's largest electronics and technology show, and was a major opportunity for Changzhou to promote sales of its Trotter product. Instead, Future Motion orchestrated an effort to obtain a baseless TRO and to effect seizure of Changzhou's products from CES. These acts caused Changzhou to lose sales and suffer public embarrassment at a critical juncture in marketing its new Trotter product. Indeed, Future Motion engaged in a significant media campaign to gain freee publicity from the fact that it wrongfully prevented Changzhou's sales....

Moreover, Future Motion directly relied upon its baseless TRO to obtain additional financial backing for itself. On February 3, 2016, Future Motion announced that it had obtained $3.2 million in additional funding for its business.... One of the stated bases for obtaining that funding was that Future Motion "vigorously protects its Intellectual Property as it protects safety and a ride experience that cannot be replicated by knock-offs."... Interestingly, Future Motion dropped this lawsuit against Changzhou on February 4, 2016 the next day after announcing it obtained the new funding.

It is now apparent that Future Motion's actions were conducted with full knowledge that that the asserted patents... were non-infringed and invalid.... Future Motion undoubtedly sought the TRO and preliminary injunction with the expectation that Changzhou would not fight back in this litigation, and therefore would not discover the fatal flaws in Future Motion's case. Unfortunately for Future Motion, Changzhou did fight back.

Changzhou filed an opposition to the preliminary injunction motion on January 29, 2016, explaining in detail that the two patents in suit were both noninfringed by Changzhou's Trotter product and invalid in light of Future Motion's own prior art (as well as the prior art of others), most of which was never disclosed to the United States Patent Office.... For example, with respect to Future Motion's design patent, its "proof" of infringement consisted of a single sentence by the inventor, coupled with a few of the figures in the patent.... This was insufficient on its face, as a design patent must be construed and infringement evaluated based on all of the figures.... Further, with respect to Future Motion's utility patent, the "proof" of infringement provided no claim construction analysis (which is required under Federal Circuit law) and relied on a conclusory claim chart.... Moreover, Future Motion baldly stated that it was aware of no anticipatory prior art to either patent, but it neglected to tell the Court about prior art disclosures of Future Motion's own product and other similar products....

Upon reviewing Changzhou's opposition and supporting declarations, Future Motion simply gave up, filing a voluntary notice of dismissal. Even then, Future Motion only offered to dismiss without prejudice despite the uncontroverted evidence that the patents in suit were non-infringed and invalid.
And this is why we're supposed to have an adversarial process in court, folks. Whichever side you come down on, it's ridiculous (1) that without even hearing the other side, the court simply ordered that the CES booth be raided and all products and other supplies be seized and (2) that the US Marshals got involved and seized the product.

Future Motion is claiming that it's dropping the lawsuit because "it had been outgunned" and that following through on the court case would cost too much. But that's ridiculous since it was Future Motion who filed the lawsuit in the first place. Those claims really do suggest that it filed the case for one reason only, which was to shut down a competitor, and then it also got a bunch of free publicity out of it. Maybe the company has a case, but if it wants to argue infringement it should have to make its case in court, not simply use the filing as an excuse to shut down and embarrass a competitor with no repercussions at all if the original claims were exaggerated or simply false.



Reader Comments (rss)

(Flattened / Threaded)

  1. icon
    Oblate (profile), Feb 17th, 2016 @ 12:50pm

    They what?

    ...Future Motion turned tail and ran, ran away...


    That was the first sign that something was very wrong.

    Considering that they make 'hoverboards', anything other than "rolling, rolling away" is highly suspicious.

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, Feb 17th, 2016 @ 12:54pm

    Hmm, since this is a Chinese firm I wonder if they can claim corporate sovereignty and sue the US government directly for losses. I'm guessing that would go over great with the USTR.

    reply to this | link to this | view in thread ]

  3. identicon
    James T, Feb 17th, 2016 @ 1:08pm

    Corruption

    The whole 7 minute court decision makes me feel that the judge knew exactly how he was going to rule. This leads me to ask how he knew the details of the case. I don't know if it's possible to get enough evidence but this sets off all sorts of alarm bells.

    Rico? maybe a stretch, conspiracy, may still be out of reach.

    reply to this | link to this | view in thread ]

  4. identicon
    Matthew A. Sawtell, Feb 17th, 2016 @ 1:20pm

    Trouble with "Talking Big"...

    ... is that you have to eventually back it up. Let a 1000 lawyers rack up some fees on this debacle!

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, Feb 17th, 2016 @ 2:06pm

    Re: They what?

    If Future Motion did this just to hurt Changzhou by keeping them out of CES then I hope in the near future Changzhou owns every last asset of Future Motion.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, Feb 17th, 2016 @ 2:28pm

    Re: Re: They what?

    Would that be the Future Motion Products Association of America, the FMPAA?

    reply to this | link to this | view in thread ]

  7. icon
    Trails (profile), Feb 17th, 2016 @ 2:54pm

    Re: Corruption

    Unlikely. FM probably realised they had a slam dunk as it plays on the prejudice of "sneaky chinese bastards who don't respect IP."

    "Chinese knock offs" are a common theme in a lot of media. I'd speculate they just banked on the judge having typical western bias to Chinese products.

    reply to this | link to this | view in thread ]

  8. icon
    Ryunosuke (profile), Feb 17th, 2016 @ 2:57pm

    Brave Future Motion ran away
    Bravely ran away
    When Danger reared it's ugly head
    They bravely turned their tail and fled
    Yes Future Motion turned about
    And bravely chickened out.

    Bravely taking to their feet
    he beat a very brave retreat,
    Bravest of the brave, Brave Future Motion.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, Feb 17th, 2016 @ 3:27pm

    It is really pretty surprising that they got an injunction based on patent infringement based on an ex large hearing of a few minutes. Patent cases typically hinge on pretty small details. Even though this was a design patent it still these aren't typically cut and dry cases.

    reply to this | link to this | view in thread ]

  10. icon
    JoeCool (profile), Feb 17th, 2016 @ 3:40pm

    Re:

    Hehe - that's my favorite part of the movie. I can see the minstrels as FM's lawyers accompanying the CEO to/from the courthouse. :)

    reply to this | link to this | view in thread ]

  11. icon
    Richard (profile), Feb 17th, 2016 @ 3:51pm

    US Marshals

    Should sue Future motion for wasing their time.

    reply to this | link to this | view in thread ]

  12. icon
    katsai (profile), Feb 17th, 2016 @ 4:01pm

    Junior partner: "Are we sure we want to file this? They probably aren't infringing. What if they fight it?"

    Senior partner: "If that happens, we'll address it with a Future Motion...

    (puts on sunglasses)

    to dismiss."

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, Feb 17th, 2016 @ 4:13pm

    and along side Future Motion should be standing the idiot judge that made the decision to have all the Changzhou stuff 'confiscated' and their booth closed! had it not been for him getting the marshals to take the actions they did, there wouldn't be any case at all!

    reply to this | link to this | view in thread ]

  14. identicon
    JBDragon, Feb 17th, 2016 @ 5:16pm

    Can we end this whole Hoverboard garbage! If it has Wheel's it's clearly not a Hoverboard. Call it a Self balancing Skateboard or whatever. Wheelboard!!!

    It's a dumb as so called Wireless charging that's not wireless!!! If you have to physically place it on some type of device that's plugged into a wall, it's not wireless. That would be like saying the Wifi only worked on your phone when it was sitting on top of the router and calling that wireless!!! If you are going to call it wireless,it should work walking around a room or open space just like how Bluetooth and Wifi work. Even something as simple as IR. It may be line of site, but it's still wireless.

    Call it what it is. Mat Charging and Self balancing Skateboard.

    reply to this | link to this | view in thread ]

  15. icon
    That Anonymous Coward (profile), Feb 17th, 2016 @ 6:06pm

    The gift of prophecy.
    https://www.techdirt.com/articles/20160108/09410533282/why-is-federal-government-shutting-d own-ces-booth-over-patent-dispute.shtml#c322

    "The cost to you is a tiny fraction of what you stand to make."

    There is a pox in this land of those able to bring cases, cause all sorts of harm & expense, and then use the power of without prejudice to walk away not owing anything for all of the misery caused.

    The harm caused here will be wide ranging, and those who caused it... got paid and put ahead in business. They shifted perception & reaped the benefits filing a small pointless lawsuit could create. Courts can only repair actual harm, how does one calculate that in this situation?

    IP there isn't anything it can't do, and perhaps its time to admit servicing it has gone way to far.

    reply to this | link to this | view in thread ]

  16. identicon
    Anonymous Coward, Feb 17th, 2016 @ 6:18pm

    My guess is that their manufacturing plant burned down.

    reply to this | link to this | view in thread ]

  17. identicon
    Anonymous Coward, Feb 17th, 2016 @ 6:20pm

    Re:

    They can call them inductive chargers.

    I agree. What will we now call boards that really do hover if this fake took the name hoverboard?

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, Feb 17th, 2016 @ 6:25pm

    Re: Re:

    and what's annoying is that had I looked up the word hoverboard on Youtube or Google before this stupid thing came out I would have gotten something completely different. Now that this product took the name it has cluttered those other more relevant search results with this thing that's not even a hoverboard.

    Granted this is partly a search engine problem. Perhaps search engines should give me an easy way to omit this product from my search results to get what my search results would look like had this product not existed.

    reply to this | link to this | view in thread ]

  19. icon
    PRMan (profile), Feb 17th, 2016 @ 7:43pm

    Re:

    And again, this is why the adversarial process is SO important.

    You would think a judge would know this.

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, Feb 17th, 2016 @ 9:19pm

    Reverse test

    Imagine a Chinese judge had closed down an American manufacturer's booth at a trade show in Shanghai, following a 7-minute one-sided hearing, confiscating goods and publicly humiliating a US company - and using the PR to secure additional funding for itself.

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, Feb 18th, 2016 @ 12:34am

    Re: Trouble with "Talking Big"...

    Let's not!

    I agree that Future Motion should be punished for what it did, but I prefer the money goes to Changzhou to compensate their losses (lost sales and reputation damage control) and not disappear into the pockets of lawyers...

    reply to this | link to this | view in thread ]

  22. identicon
    David, Feb 18th, 2016 @ 1:40am

    Re: Re:

    Helicopter. Things that can actually put a distance between themselves and the ground (like what you now call a "helicopter") are then called "rockets". Rockets are renamed into "impulse drive".

    Everyone wins with language inflation. "In my youth, I dreamt of owning $x."

    reply to this | link to this | view in thread ]

  23. icon
    That One Guy (profile), Feb 18th, 2016 @ 2:06am

    Make it hurt or don't bother

    More than just legal fees Future Motion needs to be forced to pay extra on top of that, to compensate Changzhou for the PR black-eye they got, and the fact that they were forced to pull their booth at CES due to Future Motion's actions. Just award legal fees, even if it's all of Changzhou's legal fees, and Future Motion still comes out ahead, as they managed to seriously screw over a competitor with minimal effort on their part.

    Dragging them through court to invalidate the patents would be a nice act of returning the favor as well, and well deserved at this point.

    reply to this | link to this | view in thread ]

  24. icon
    Ninja (profile), Feb 18th, 2016 @ 2:44am

    Re: Make it hurt or don't bother

    That. Future Motion needs a severe beating, not just attorney fees. And the US Marshals, the judge who gave the order to the seizures too. This has to hurt for everybody or it will keep happening in the future.

    As a side note, it's almost shocking how the US went from leading innovation to lagging behind and litigating only...

    reply to this | link to this | view in thread ]

  25. icon
    That Anonymous Coward (profile), Feb 18th, 2016 @ 4:29am

    Re: Re:

    They said the magic words....
    IP, China, Patent.

    Obviously they were guilty and it took less than 7 minutes to destroy the competition.

    reply to this | link to this | view in thread ]

  26. identicon
    Anonymous Coward, Feb 18th, 2016 @ 6:04am

    only to have the US Marshals raid its booth and seize all its products based on a 7 minute hearing in front a judge where Changzhou didn't even get to present its side.


    FFS it takes 8-9 minutes to make mac-n-cheese , this was the minute rice version of hearings.

    reply to this | link to this | view in thread ]

  27. identicon
    David, Feb 18th, 2016 @ 6:25am

    Re: Re: Make it hurt or don't bother

    That. Future Motion needs a severe beating, not just attorney fees. And the US Marshals, the judge who gave the order to the seizures too. This has to hurt for everybody or it will keep happening in the future.

    None of those in the position to "make it hurt" are interested in stopping Chinese companies getting a gratuitous kick in their nethers in order to give U.S. business a prop-up.

    This is a country where talking about summary execution of Muslim Mexican rapists like the Chinese are will make you lead the polls.

    reply to this | link to this | view in thread ]

  28. icon
    nasch (profile), Feb 18th, 2016 @ 7:05am

    Re:

    I like wheelboard, that's a much better name.

    reply to this | link to this | view in thread ]

  29. identicon
    Matthew A. Sawtell, Feb 18th, 2016 @ 7:39am

    Re: Re: Trouble with "Talking Big"...

    Ah... I see that you are not familiar with quote from Mao, and his Hundred Flowers Program:

    https://en.wikipedia.org/wiki/Hundred_Flowers_Campaign

    Looks to be my fault on that one, added an extra 0 to my parody. Regardless, a lot of U.S. entities at an international level are going to be dealing with what folks in P.R. China have been suffering with for decades. It ought to make for some grand public theater.

    reply to this | link to this | view in thread ]

  30. icon
    Monday (profile), Feb 18th, 2016 @ 7:58am

    Abuse of Patent Law... again...

    You have wrote of this abuse so many times, I don't even shake my head anymore - EXCEPT, with this one, today.

    Can Changzhou really get Future Motion back in Court? I know nothing of these laws, and I'm wondering, no, I'm hoping that Changzhou can do this. This was an attack through the failing Trade/Patent Laws I've read of here, using Gov't forces, to 'kill' competition - Foreign competition; CHINESE competition, that obviously has/presented a product that was a clear and present threat to any position Future Motion had in the Market. They received financial compensation through illegal malicious activity because of it.

    I wonder how many; how much investor capital will be NSF when Future Motion tries cashing those cheques? You obviously don't move that kind of money around in six weeks, especially when you're involved in a legal dispute.

    So again, my question is, "Can Changzhou get Future Motion back into Court? This could be ground breaking. A primer for future Corporate deceit.

    reply to this | link to this | view in thread ]

  31. identicon
    David, Feb 18th, 2016 @ 9:39am

    Re: Re:

    Does not differentiate from other wheeled boards like an ordinary skateboard.

    How about wheeboard?

    reply to this | link to this | view in thread ]

  32. icon
    nasch (profile), Feb 18th, 2016 @ 10:54am

    Re: Re: Re:

    But nobody calls a skateboard a wheelboard. Nobody calls anything a wheelboard, which makes it a good candidate for a new thing.

    reply to this | link to this | view in thread ]

  33. identicon
    Anonymous Coward, Feb 18th, 2016 @ 11:18am

    Re: Corruption

    This leads me to ask how he knew the details of the case.

    US company versus foreign company. What more is there to know?

    reply to this | link to this | view in thread ]

  34. icon
    BernardoVerda (profile), Feb 18th, 2016 @ 3:26pm

    Re: Re: Make it hurt or don't bother

    I suspect the judge was less "corrupt" than disinclined to believe the the plaintiff was so blatantly scamming the system -- and him.

    After all, judges tend to be hard on litigants who they find to be bald-faced, outright lying to them; they call it "perjury", and mostly respond rather badly to it (unless, perhaps, you're a police officer in an "excessive force" case).

    reply to this | link to this | view in thread ]

  35. identicon
    Wendy Cockcroft, Feb 19th, 2016 @ 2:38am

    Re: Re:

    reply to this | link to this | view in thread ]

  36. identicon
    China Hand, Feb 19th, 2016 @ 10:48am

    Well duh

    I don't see the misunderstanding here. They filed suit to go after a scummy IP stealing company when they dared to step onto the soil of a country that's not a poisoned hellscape. Objective achieved. China refuses to accept any ruling by a foreign court, so the end result here would be nothing but lots of wasted time and money only for China to demand that it be redone in China, where even if you win you will see maybe $100k in damages awarded, while the company just changes names and goes right back to doing what it was doing and never bothers to pay the $100k anyways.


    But I guess you don't understand that if you actually are under the impression that China is not a shithole that needs to be banned from the world.

    reply to this | link to this | view in thread ]

  37. icon
    nasch (profile), Feb 19th, 2016 @ 11:15am

    Re: Well duh

    But I guess you don't understand that if you actually are under the impression that China is not a shithole that needs to be banned from the world.

    China is a shithole, therefore no due process for Chinese companies? Got it.

    reply to this | link to this | view in thread ]

  38. icon
    JoeCool (profile), Feb 20th, 2016 @ 2:55pm

    Re: Re: Re: Make it hurt or don't bother

    Except when it comes to IP cases, then those same judges often bend over (very often literally) for those same scammers. It's pretty rare to find judges who are skeptical of IP cases, and you'll find those rare few quite often here in articles at TechDirt.

    reply to this | link to this | view in thread ]

  39. identicon
    LBackover, Mar 7th, 2016 @ 2:49pm

    awsome fun device

    Not illegal in the US anymore, Future Motion dropped their lawsuit. You can get the Trotter for $890 delivered with a coupon at www.beep-boop.net, otherwise it’s $927. The owner told me the new fast shipping method costs more and pricing is definitely going up April 1. My kid got his in 8 days and loves it! Also the battery is completely enclosed in an aluminum cavity. This has to be the safest self balancing scooter on the market.

    reply to this | link to this | view in thread ]


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