United States: Luminara And Liown Burn Down The House: A Customer’s Patent Battle To Remember (Video Content)

Last Updated: April 8 2015
Article by Justin F. McNaughton

Luminara and Liown have been fighting for years.  A couple weeks ago, Liown upped the stakes by now suing QVC, Inc., Darice, Inc., Bed Bath & Beyond, Inc., Williams-Sonoma Stores, Inc., Costco Wholesale Corporation, PC, Treasures, Inc., One Kings Lane, Inc., and Brookstone Stores, Inc. as well.

According to a recent article in the Star Tribune, a Minnesota newspaper, Candella acquired the rights to produce artificial candles (with flickering artificial flames) back in the 2008.  In 2010, Candella began negotiating with Liown Electronics to manufacture the candles in China, and the two parties signed an agreement in March 2010.  Reportedly, the agreement gave Liown the right to distribute and sell the product in China.  Candella later merged with Luminara.

All the candlelit romance couldn't last, and Candella soon split with Liown.  Liown kept right on manufacturing and a couple years later filed for patents on a flameless candle.

So fast forward 5 years and the roles have reversed with the Chinese manufacturer Liown now suing its former customer who introduced it to LED candles in the first place!  How does this crap happen?  More importantly, what can you do to try to stop it from happening to you?

Here are some ideas:

  1. Have a non-compete clause in your supply agreement that survives termination for year or so after your agreement ends
  2. If your product is somewhat unique, consider an exclusive supply agreement so your manufacturer doesn't already have existing customers when you split
  3. Have an intellectual property assignment in your supply agreement so that you own all improvements – even if they were made by your supplier
  4. Consider requiring your supplier to tell you when it files a patent application during the term of your agreement and for a year or so after it ends
  5. Be absolutely certain you control everything about your trademarks in the country where your manufacturer is located (although this would not have helped here)
  6. Protect your own product updates with patents so that you continue to block competitors from entering your space
  7. Have someone try to design around your patents to figure out where the holes are (and potentially improve your own products)

As a customer, if you really just need fake fire in your house, consider the following cheaper alternative to this patented candle mess:

~TechAttaché

P.S.  Some of you might have been wondering how Liown got a patent on a flameless candle when Candella had been making these for so long.  Below is the first claim (one of the broader claims) of Liown's patent 8,926,137 patent:

Claim 1: An electronic candle comprising:

an outer shell shaped, in appearance, like a wax candle and having a top surface intersecting with at least one side wall, the top surface comprising a through hole extending between an interior of the outer shell and exterior of the outer shell;

a flame sheet divided by a through hole, extending from one side of the flame sheet to the other, into a top portion and a bottom portion, the top portion shaped, in appearance, to substantially resemble the shape of a flame when viewed from at least one perspective, and the bottom portion having a magnet positioned at or near a lower end thereof opposite the top portion;

a support rod within or adjacent the through hole of the top surface and extending through the through hole of the flame sheet, supporting the flame sheet thereon such that the top portion of the flame sheet extends through the through hole of the top surface and at least a portion of the top portion of the flame sheet is exposed to the exterior of the outer shell, and such that the bottom portion of the flame sheet is beneath the support rod and within the outer shell, wherein the flame sheet is movable relative to the support rod;

a coil positioned near the magnet of the flame sheet and energized by an electronic control circuit to produce a changing magnetic field interacting with the magnet of the flame sheet, thereby causing movement of the flame sheet;

a battery compartment electrically connected with the control circuit and configured to receive one or more batteries for powering the control circuit;

and a light-emitting element contained entirely within the interior of the outer shell and positioned such that an outgoing direction of a light from the light-emitting element is projected from within the interior of the outer shell, through the through hole of the top surface of the outer shell, and onto at least one surface of the top portion of the flame sheet that is exterior to the outer shell, thereby illuminating the flame sheet from a light source external to the flame sheet.

As you may recall, in order to infringe a patent a product must have every element (i.e., an important short phrase) of at least one claim of the patent being asserted.  I did not count up the number of elements, but assuming at least one per line above there are a minimum of 26 different elements to this claim.  This means that a product must have each of these 26 elements in order to infringe claim 1.  Assume now that there are approximately 1,000,000 words in the English language (forgive me if some of them are never considered important).    Now based on my blind faith in a calculator I found at StatTrek.com, there are about 2.46E129 (2 followed by 129 zeros) possible combinations of these elements.  Questionable math aside, it means these claims are pretty narrow because a product would require so many elements to infringe, which is how Liown likely got this claim allowed.  Note: Please do not rely on the math in this post . . . .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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