Ellison/Sizzix Patent Litigation Update

In a move likely in the works for months, Stampin' Up has announced that they are discontinuing the Sizzix Big Shot and also are replacing Sizzix as the manufacturer for their dies. Stampin' Up's new dies will be a slightly different die style than the previous ones. As part of the transition to a new die manufacturer, Stampin' Up is discontinuing (they call it "retiring") a large number of die designs from their catalog The existing designs that are being retained in the product line will transition to the new style of die once existing inventory of the old Sizzix-manufactured die style is sold out.

In early April, Ellison laid off a significant number of staff in their U.S. office in Lake Forest, California. The layoffs, reportedly as high as 20% of the U.S. staff, included at least some of the company's U.S.-based in-house project designers. Several of Ellison's graphic designers also departed the company around that time, according to their LinkedIn profiles.

Ellison lawsuits

Against the backdrop of those events, four of the patent lawsuits initiated by Ellison in defense of its die patent have also continued throughout April. (To learn more about the background on these lawsuits and the patent they are alleging infringement of, click here.)

Court proceedings have been quiet in Ellison's case against Stephanie Barnard since early March when a Special Master was appointed by the judge to assist in managing the case. The parties have entered the time-consuming (and expensive) period of litigation involving discovery and other out-of-court preparation for an eventual court trial scheduled for September 2020.

April has been taken up by relatively routine matters in the case between Ellison and Hero Arts. The two companies jointly requested a protective order from the judge to govern the handling of confidential information during the case. That order was granted on April 24th. The two sides have also agreed with the court to a schedule for the case that will lead to a trial in October 2020.

Heartfelt Creations filed a Motion to Dismiss Ellison's case against them on April 24th. The filing claims that Ellison was too vague in their original lawsuit filing, failing to meet a sufficient burden of proof for a claim of infringement because they never pointed to a specific product of Heartfelt's that allegedly infringes under the '325 patent standard. Heartfelt is asking for the lawsuit to be dismissed as a result.

Avery Elle was responsible for the most notable activity in any of Ellison's ongoing lawsuits in April. On April 11th, Avery Elle's lawyers filed a Motion for Sanctions against both Ellison and their lawyers. The motion accuses Ellison of filing a frivolous lawsuit to harass Avery Elle and failing to do a proper investigation before filing. Avery Elle claims that their dies do not infringe the '325 patent because 32% of their dies' flat border extends into the center and the '325 patent describes dies with "none" of the border extending into the center.

The company went a step further in its Motion for Sanctions, however, by claiming that prior art from Spellbinders (a 2011 video and an internet archive of their website)  and Quickutz (a 2007 circle die) makes the patent itself invalid. Avery Elle also claims that Ellison should have been aware of this art, and concludes, "Ellison and its Attorneys either failed to perform a basic pre-filing investigation or they knowingly brought an objectively baseless lawsuit."

As a result of the claims in its motion, Avery Elle is asking for the court to sanction Ellison and its attorneys by awarding attorney's fees and other costs to them to compensate them for what they call an action that was "frivolous and filed to harass." Attorney's fees being awarded to a successful defendant is not the normal outcome in patent litigation. It's only done when the court rules there has been some egregious behavior by the plaintiff in the course of the suit. (Coincidentally, the industry's previous die patent litigation ended this way, with Spellbinders ordered to pay attorney's fees to Quickutz.)

Ellison filed its response to the Motion for Sanctions on April 29th. To defend their lawsuit, they presented some interpretations of both the word "none" and the first claim in the patent to the court.

The original patent application demonstrated the die construction with "none" of the cutting edge extending into the center of the die with this art:

325 Patent Illustration - figure 4

However, Ellison (via an affidavit from '325 inventor Kevin Corcoran) now claims that the word "none" encompasses a lip inside the die's vertical surface because that lip is technically part of the blade. They used this art to demonstrate their claim:

Ellison die lip blade

They also made a second argument, however, that could render that one moot. They claim the "none" description of the die lip is part of a "preamble" and not actually a technical requirement of the patent. In essence, they are trying to divorce it from the method claim of aligning a die with a stamp to cut it out. Were that argument to be successfully defended, Ellison would be the only company with the legal right to manufacture and sell open centered chemically etched dies that match stamps - regardless of whether there is an edge extending into the center or not - in the U.S.

Oral arguments are scheduled about the motion on May 13th in U.S. District Court in the Southern District of California before Judge Marilyn Huff.