Ellison Sues 5 Companies, Alleging Patent Infringement

Ellison Educational Equipment, the parent company of Sizzix brand, has sued five companies over the past few months alleging infringement of a die technology patent that they own. Since November 2018, the company has sued Prima Marketing, Stephanie Barnard (and her The Stamps of Life company), Hero Arts, Avery Elle, and Heartfelt Creations.

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The '325 Patent

The patent at issue in the lawsuits filed by Ellison is No. 9,079,325 (referred to here and in court filings as the '325 patent for the sake of brevity). The first paperwork related to the application for this patent was filed on July 15th, 2011. The formal patent application is dated July 26th, 2012. The patent was ultimately granted on July 14th, 2015.

The '325 patent has three elements, or "claims" in patent law terminology. All of these claims relate to the construction and use of chemically etched metal dies. These are the dies commonly called "thin metal dies" by crafters.

Claim One: The first element of this claim is the actual structure of the die. The patent claims ownership of the technology of manufacturing dies with an open center - as virtually all thin metal dies manufactured today are - that do not have a lip extending past the cutting edge into the center of the die.

A method for cutting out, by means of a first die, a shape that is printed on a sheet material, wherein the die includes an inside opening that corresponds to the shape to be cut from the sheet material, a flat outside border having first and opposite faces that surround said inside opening, and a cutting edge that projects from the first face of the flat outside border, such that said cutting edge surrounds the inside opening of said first die and corresponds exactly with the shape that is printed on the sheet material and none of the flat outside border of said die extends into the inside opening of said die

To put that description in graphic terms, it means a die with the profile below. (Graphic taken from the patent.)

Claim one goes even further though, taking ownership of the technique of using dies designed like this by aligning the die with a shape (such as a stamped image) on material (such as paper) and then putting the die and material through a die cut machine to cut the shape out.

said method comprising the steps of:
locating the shape printed on the sheet material to be cut therefrom;
placing the cutting edge which projects from the first face of the flat outside border of said first die directly against the sheet material, and looking through the inside opening of said first die so that the shape printed on the sheet material is located entirely within the inside opening of said first die and the cutting edge which projects from the first face of said flat outside border is automatically registered so as to surround the shape to be cut from the sheet material;
positioning said first die and the sheet material having the shape to be cut therefrom within a roller press; and
moving said first die and said sheet material through said roller press for causing a force to be applied to the opposite face of the flat outside border of said first die after said cutting edge has first been placed against the sheet material and said first die and said sheet material have been positioned in said roller press for pushing said cutting edge through said sheet material to cut the shape outwardly therefrom.

An illustration accompanying the patent shows a basic die cutting out a stamped shape:

Claim Two: This claim stipulates that the die utilized in step one is created using a chemical etching process from a flat sheet of metal.

Claim Three: The last claim patents ownership of the invention of nested dies that are shaped like the image above.

forming at least a second die by chemically etching the flat piece of metal, such that the second die is nested within and spaced from the first die so as to lie at the inside opening of said first die, whereby the size of the inside opening of said first die is larger than said second die.

The patent's illustrations show the nesting concept in product form:

The Lawsuits

Ellison is being represented in the four California cases by lawyers from Stradling Yocca Carlson & Rauth, P.C. The case against Heartfelt Creations is located in Indiana and required hiring local counsel, so their representatives there are attorneys from Faegre Baker Daniels LLP. Various attorneys are representing the different defendants in the case, although several of the companies have called on creative industry intellectual property law specialist Tammy Browning-Smith as an assistant counsel in their cases.

Ellison has not responded to a request for comment on their pending litigation.

Stephanie Barnard Designs

The first suit was filed against Stephanie Barnard and Stephanie Barnard Designs (dba The Stamps of Life) on November 15th, 2018. In addition, the suit names as defendants unknown parties referred to as Does 1-10. Barnard has been a licensed product designer for Sizzix for nearly a decade, but the suit alleges she and her company are violating the '325 patent by producing products for The Stamps of Life that are covered by the patent that aren't licensed from Ellison.

In an amended complaint filed against Barnard in December, the company also alleges Barnard and The Stamps of Life are violating the '325 patent by teaching the method described in Claim 1 of the patent in videos on the website:

In addition to directly infringing the ‘325 Patent, Defendants indirectly infringe on the ‘325 Patent by instructing, directing and/or requiring others, including customers, purchasers, users and developers, to perform some of the steps of the method claim, either literally or under the doctrine of equivalents, of the ‘325 Patent, where all of the steps of the method claim is performed by either Defendants or its customers, purchasers, users and developers, or some combination thereof.

Barnard filed a response in mid-January, categorically denying Ellison's claims of infringement. She also filed a counter-claim against Ellison, alleging the '325 patent is invalid and therefore cannot be enforced:

An actual case or controversy exists between Counterclaimant Barnard and Counterdefendant Ellison concerning validity of the ’325 Patent by virtue of Counterdefendant Ellison’s assertion of infringement of the patent.
The claims of the ’325 Patent are invalid on the ground that the purported invention, attempted to be patented therein, fails to meet the conditions of patentability specified in Title 35 of the United States Code, including, but not limited to, the conditions specified in 35 U.S.C. §§ 101, 102, 103, and/or 112 of the Code.

The sections of U.S. code cited refer to specific things regarding patents. Section 101 refers to patents only being granted to inventors of an item. Section 102 refers to prior art and when its presence does and doesn't impede the ability to patent. Section 103 is very brief, simply precludes granting of patents " if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains." Section 112 deals with how an inventions specifications must be described in a patent. (Read the entire text the U.S. code on the U.S. PTO website here.)

A Special Master has been appointed in the case, and the parties are entering the discovery phase of the litigation. Trial is scheduled for September 2020.

Stephanie Barnard declined to comment to Scrapbook Update on the pending litigation.

Prima Marketing

Ellison filed two lawsuits on December 21st, 2018. One was against Prima Marketing. Like in the previous suit, the Prima Marketing suit also alleged infringement against who it called Does 1-10 that it said it was "ignorant to the true names and capacities of" but who it alleged "were and are a moving, active, conscious force behind the infringement of Ellison’s rights."

Prima has never been known as a major die producer. Its only product line that incorporates dies in a major way is the Julie Nutting paper dolls line - and that is the product line cited repeatedly in Ellison's court complaint against Prima. Other than the company-specific details, the complaint is generally a duplicate of the one against Stephanie Barnard.

One difference of note from the previous suit is that Prima was sent a cease & desist notice shortly before Ellison took the matter to court, a step that isn't mentioned in the Stephanie Barnard filings. One of the demands in the cease & desist was that Prima "provide information on the manufacturer(s) or source(s)" of the allegedly infringing products. Another notable difference is that where no time frame is used in describing Ellison's discovery of Stephanie Barnard's alleged infringement, Ellison's court filing in the Prima case says that "Ellison recently discovered that Prima is making or having their patterns made into chemically-etched dies that perform the method taught by the ’325 Patent." [emphasis added]

in mid-February 2019, Prima filed a response to the suit taking much the same position as Stephanie Barnard and challenging the validity of the '325 patent based on the same sections of U.S. code. However, by mid-March, the parties reached a settlement and the case was quickly closed. Terms of the settlement are confidential and neither party has responded to a request from Scrapbook Update for comment. But the Julie Nutting dies (and all except a handful of their other ones) have disappeared from product listings on the Prima website, and the video cited in the suit as infringing has been removed from Prima's YouTube as well. (The Julie Nutting and other Prima dies can still be found for sale on sites such as Scrapbook.com and Amazon.com, though.)

Prima has not responded to a request from Scrapbook Update to comment on its settlement with Ellison.

Hero Arts

The second lawsuit filed by Ellison on December 21st, 2018 was against Hero Arts. Like with the previous suits, it also names as defendants unknown persons or entities as Does 1-10. According to the filing, Hero Arts was sent a cease & desist order on December 12th, 2018. Like with the Prima c&d letter, Ellison demanded information on the source of the products from Hero Arts.

The Hero Arts complaint is largely the same as the Prima one filed the same day, with the exception of the company-specific information. It contains the same language about recent discovery of the alleged infringement. Ellison alleges infringement by dies Hero Arts make that match their stamp sets. But the filing also returns to a theme from the original Stephanie Barnard case by alleging the company is also infringing the method in the '325 patent through video content produced by their design team that is "teaching members of the public how to infringe the ’325 Patent".

One section of the Ellison complaint against Hero Arts appears erroneous. It shows photos of two of Hero Arts' layering stamps, under a caption that labels them as infringing products. There are no dies (the product covered by the patent) in the images. I wasn't the only one confused by this, since Hero Arts' response to that paragraph in their next filing says "it does not understand the allegations of that paragraph."

Hero Arts filed their response to the suit on March 8th, 2019. Like the other defendants, they are challenging the validity of the '325 patent in a counterclaim against Ellison. But they are taking their defense further, asserting fourteen different affirmative defenses.

Under the proposed schedule, which hasn't yet been made final, the case would be scheduled for trial on August 24th, 2020.

A representative for Hero Arts responded to Scrapbook Update with the following statement when asked for comment:

Hero Arts firmly believes this lawsuit is without merit. Hero Arts does not infringe Sizzix’s patent nor does it encourage anyone else to do so. Hero Arts intends to fight this lawsuit and win. But mostly, I am very disappointed in Sizzix’s decision to sue before even trying to resolve any issues they have in a respectful manner that involves talking as opposed to engaging in a blunt legal process, which is bad for everyone -- Hero Arts, Sizzix, and the entire community. We are fortunate that we all get to play, craft and create together in this wonderful industry, and I, as one of the members of this fine community, intend to do what I can to keep this misguided action from fracturing the cooperative, family spirt that has been the norm for so many years.

Avery Elle

Ellison filed suit against Avery Elle and unknown defendants named as Does 1-10 alleging infringement of the '325 patent on January 25th, 2019. Ellison says in court documents that it served Avery Elle a cease & desist notice on January 15th, 2019 - two days before the first education day at the Creativation trade show at which both companies exhibited.

The court filing against Avery Elle is again largely a duplicate of the previous filings, with the exception of the company specific material. Ellison alleges that Avery Elle violated the '325 patent both through its product sales and through indirect infringement by instructing others on how to do the method included in the patent. A video on the Avery Elle YouTube channel (that has since been removed) is cited as evidence of the indirect infringement.

Avery Elle filed a response on March 6th denying infringement of the '325 patent, challenging the patent's validity, and also claiming several affirmative defenses. The same day, they also filed a counterclaim response asking for a judgement declaring the '325 patent invalid, as well as a judgement declaring their non-infringement of the patent.

Ellison responded to the counterclaim in a filing on March 27th, 2019 asserting the validity of the '325 patent and denying Avery Elle's arguments of a right to relief.

No schedule has yet been set for trial or further hearings in the case.

Avery Elle's representative has not supplied a comment to Scrapbook Update as of publication time of this article.

Heartfelt Creations

The most recent case filed by Ellison alleging infringement of the '325 patent was filed against Heartfelt Creations (and unknown defendants Does 1-10) on February 18th, 2019. It's the first of the suits to target a company outside of California, where Ellison is headquartered. Ellison says Heartfelt Creations was served with a cease & desist letter on December 21st, 2018.

As with the previous lawsuits, Ellison is alleging that Heartfelt Creations is violating the '325 patent with both the products it sells and by instructing others on the method included in the '325 patent. The court filing cites content from the Heartfelt Creations YouTube channel as proof of the indirect infringement by teaching of the method.

Heartfelt Creations has until April 23rd to file its initial response in the case. The company, when asked for comment, confirmed the existence of the suit and told Scrapbook Update that "We are investigating their accusations and will be able to provide additional information as soon as it becomes available."

The Analysis

Ellison is claiming ownership via the '325 patent of not just thin metal dies that have a completely open center (with no lip that extends past the cutting edge towards the middle), but also the technique of aligning them with a stamped image and running them through a die cut machine to cut out the image. The '325 patent also claims ownership of so-called "nested" dies created with the open centers.

Several designer/bloggers are called out by name in the various court filings as examples of infringement of the patent by teaching in videos this method described in the '325 patent. This will almost certainly have a chilling effect on the production of influencer content using stamps with matching dies until more clarity is brought to the legal situation regarding the '325 patent.

This isn't the first time, of course, that craft industry companies have fought over technology that involved chemically etched dies with open centers. Spellbinders fought for several years to enforce a patent it had on chemically etched die technology against QuicKutz, ultimately losing both the case and the patent in 2013. The ghost of that case will almost certainly come back to haunt the new Ellison-filed cases, for multiple reasons.

One of the key reasons the Spellbinders patent fight will be relevant to the new cases will involve the question of prior art. Whether there is "prior art" of the concept is key to determining if something can be patented. Lack of prior art by other companies or individuals is typically seen by the patent office as proof an idea is unique. However, the market for thin metal dies with open centers was artificially chilled during the period of 2009 to 2013 while the Spellbinders case was ongoing. The vast majority of companies were holding out of the thin metal die market waiting to see if the patent suit was won or not. It was right in the middle of that period, in June 2012, that Ellison applied for the '325 patent. The final appeal in the Spellbinders case wasn't over until the patent was declared invalid in the summer of 2013. Then the market started to be flooded with thin metal dies (including ones that matched stamps) in early 2014.

Perhaps the biggest question remaining to be answered about the Ellison suits - besides who will eventually prevail in them in court - is why Ellison seemingly suddenly chose now to go on the offense regarding the '325 patent that it has held since 2015. Two of the specific products cited in the court complaints were already on the market prior to the granting date of the '325 patent. So why did Ellison wait until late 2018 to begin enforcement instead of following the model utilized by My Sweet Petunia with their stamp platform patent to begin pursuing alleged infringement the moment the patent was approved? Ellison will have to answer that question eventually, since Hero Arts has raised it in its response as one of its affirmative defenses (the doctrine of laches).

Ellison also holds a patent similar to the '325 patent in China (Click here to view) that was granted in April 2016, after the U.S. patent had been granted. Online records show at least one suit filed early in 2018 in China in defense of that patent, months before the first U.S. suit was filed. Scrapbook Update has been unable to confirm the outcome of that case or the existence of any others.