The maker of intricate accordion-style in-store displays continues to wage its patent infringement battle against Chanel for allegedly copying its popular designs. In its recently filed amended complaint, Molo adds new allegations to the mix, including ones that center on communications between Chanel executives and the managing director of a new co-defendant – Chanel supplier Procedes Chenel International – while also dropping two of its four patent infringement claims following an October 2023 U.S. Patent and Trademark Office appeals hearing and subsequent dispute in court. Meanwhile, Chanel has fired back with counterclaims that allege non-infringement and that challenge the validity of the patents at the heart of Molo’s case.
The underlying details at the center of the lawsuit largely remain the same: “Molo claims that after coming in contact with Chanel for a number of years, and after Chanel ordered samples of its products, the famed luxury brand copied the patent-protected designs for its “award-winning flexible space partitions” to decorate its stores. Stephanie Forsythe and Todd MacAllen, who founded Vancouver-based Molo Design, claim that their company had “discussions and exchanges [with Chanel] since at least 2014, when a Chanel employee expressed interest in Molo’s collection, including its “black textile softwall + softblock products.” Subsequently, in 2016, Molo alleges that “one of Chanel’s executive directors visited Molo at the International Contemporary Furniture Fair in New York City, [and] the following year, the same executive director ordered samples of Molo’s “softwall + softblock products.”
The amended complaint, which Molo filed in June in New York federal court, adds to the intrigue with new details about how Chanel executives and the managing director of one of its design and architecture suppliers, Procedes Chenel International (“Procedes”), allegedly came to infringe on Molo’s utility patents. Procedes, which provides materials used in Chanel’s store displays, was added as a co-defendant in the suit in connection to these new claims, with Molo alleging that the company and its executives played a larger role in the alleged infringement scheme than had previously been revealed.
According to the amended complaint, Procedes’ Managing Director Sophie Chenel and Chanel executive Bendetto Rigo, who was in charge of overseeing Chanel’s window displays around the world at the time, communicated directly about Molo’s designs and the possibility of future patent infringement accusations. In October 2020, for instance, the complaint states that Chenel sent an email to Rigo specifically mentioning that Molo has a patent in the United States that protects its softwall + softblock products. In the complaint, Molo asserts that Chenel went on to insist that the patent “wouldn’t be a problem” and that Procedes had installed window décor displays in New York and had never been worried about a lawsuit.
After that, Rigo allegedly communicated with other Chanel employees about the purchase of the desired window décor modules and not only encouraged various Chanel regions and stores to use Procedes’ cheaper “knock off” versions of the “cellular structure” window décor, but also warned Chanel employees to speak to him before they engaged with Molo. In one exchange between Rigo and a Chanel employee, for instance, Molo alleges that the employee said, “I will let you know if we see anyone investigating our windows. I’m sure it will be fine, it’s just window décor and they have no reason to say it’s copying [Molo’s] product. I can buy paper décor at the dollar store.”
“The import was clear that Chanel was worried about Molo claiming Procedes and Chanel were infringing its patents,” Molo writes in the amended complaint.
As it states in its original complaint, Molo again alleges that it has been damaged “at least financially and in brand value by the copied material in Chanel stores in the United States and around the world,” and is seeking a finding from the court that its patents are “valid, enforceable, and have been infringed by [Chanel]” and that such infringement was willful. In addition to monetary damages to “adequately compensate” for such alleged infringement, Molo also wants “a judgment that this is an exceptional case under 35 U.S.C. § 285,” and thus, an award of attorneys’ fees, expert witness fees, costs, and all expenses incurred in this action, with interest.
A Little Background: Not only does Chanel have a history with Molo, the newly filed amended complaint states that Procedes has a history with Molo, as well, which dates back to 2005 when Molo approached Procedes with interest in its paper as a potential option for use for Molo’s patented products. Although Molo never proceeded with that deal, Procedes eventually became a reseller and dealer of Molo’s products, and Molo claims that it had to remind – and ultimately demand that – Procedes not infringe its intellectual property rights or copy its proprietary designs.
Dropped Patent Claims: Also worthy of attention in connection with the amended complaint are the patent infringement claims that Molo removed from its original complaint following an October 2023 review by the Patent Trial and Appeal Board (“PTAB”) review, which found that two of Molo’s patents at the heart of its infringement claims are “unpatentable,” a determination that was subsequently upheld by the the U.S. District Court for the Southern District Of New York. The dispute about those patents centered on whether the terms “support” and “self-supporting” – which is how Molo describes certain aspects of its products in its patents – made for patentable subject matter.
The court rejected that idea when it came to two of the now-dropped patent claims, even though it did recognize that the PTAB had “determined that Chanel had not shown that the remaining challenged claims were unpatentable.”
Chanel’s Counterclaims: Meanwhile, Chanel fired back at Molo’s amended complaint with its own set of affirmative defenses and counterclaims. In its July 5 answer and counterclaim filing, Chanel argues that Molo fails to state a claim under which relief can be granted; the patent infringement claims that remain in the suit are not valid because the patents themselves are invalid; and that Molo’s request for damages – enhanced or otherwise – is barred by statute. That is where the counterclaims come in, which seek declaratory judgment that Molo’s patents for the products at issue are invalid.
According to its filing, Chanel is asking the court to dismiss Molo’s complaint in its entirety, with prejudice; enter judgment in its favor; declare that it has not infringed the claims of Molo’s two remaining patent claims; declare that the claims are invalid; as well as declare that the dispute is “an exceptional case under 35 U.S.C. § 285; and award Chanel the costs (including expert fees), expenses, disbursements, and attorneys’ fees incurred in this action.
The case is Molo Design, Ltd. v. Chanel, Inc., 1:21-cv-01578 (SDNY).
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