During this year's CES conference in Las Vegas, some members of the press witnessed a surprising scene. US Marshals raided the booth of a Chinese company selling one-wheeled "hoverboards," packing up their merchandise and forcing them to close up shop.
The raid was prompted by legal action from Future Motion, a California startup that sells a similar looking one-wheeled "hoverboard" called the Onewheel. Future Motion says that the Chinese competitor, Changzhou First International Trade Co., was violating two of its patents. The company went to federal court and in an "ex parte" proceeding, with no opposition, asked the judge to issue a temporary restraining order. After a seven-minute hearing, the TRO was issued.
The raid produced unexpected blowback. Changzhou First didn't give in—the company lawyered up, hiring major law firm Merchant & Gould to argue its case. A hearing was set for February 19, but it won't take place. Future Motion dropped its case two weeks before the hearing.
"After considering the economics of the litigation, Future Motion has voluntarily dismissed its patent infringement lawsuit against Changzhou First International Trading Co.," a company spokesperson said via e-mail. "In view of apparently minimal US sales of the accused CZ-First product, Future Motion determined that the likely costs of continuing litigation would outweigh the potential benefits."
"We would much rather be innovating than litigating," added Future Motion CEO Kyle Doerksen. "However, we will continue to fully defend our innovations through our intellectual property rights in ways that make strategic sense for our company."
However, Changzhou isn't going to let the case slide away that easily. The company has filed a motion seeking attorneys' fees (PDF).
"It is now abundantly clear that the sole purpose of FM's TRO was to deprive its chief competitor Changzhou of its lawful right to display Changzhou’s Trotter product at the Consumer Electronics Show (CES) in Las Vegas, Nevada," writes Changzhou's lawyer, referring to Future Motion by the initials FM.
The show “was a major opportunity for Changzhou to promote sales of its Trotter product. Instead, FM orchestrated an effort to obtain a baseless TRO and to effect seizure of Changzhou’s products." That caused Changzhou "to lose sales and suffer public embarrassment at a critical juncture."
FM sought legal relief "with the expectation that Changzhou would not fight back… Unfortunately for Future Motion, Changzhou did fight back."
Changzhou filed opposition papers on January 29, arguing the patents were not infringed and were invalid in light of Future Motion’s own prior art and that of others.
After "inflicting unwarranted harm on Changzhou, Future Motion now hopes it can slink away unnoticed with no repercussions." That shouldn’t be allowed to happen, the Chinese company urges the judge. It’s asking for $100,000 (£70,000) as compensation for lost sales and embarrassment, as well as attorneys’ fees. It also wants Future Motion to be ordered to issue a press release telling the public it dismissed its case.
Future Motion will have to respond to the motion by Monday.
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