The One LLP team of Paul Y. Feng, Stephen M. Lobbin, and John E. Lord recently secured a preliminary injunction in a patent infringement case for client Cordelia Lighting, Inc. of Los Angeles, which is a very rare and special achievement in patent litigation.
The litigation concerns one of Cordelia’s premium and popular LED recessed lighting fixtures, which is protected by Cordelia’s U.S. Patent No. 8,474,204 (“the ‘204 patent”). Mr. Feng prosecuted the ‘204 patent, which the Patent Office approved without any objection. The ‘204 patent is directed to the particular heat-dissipating and magnetic trim features of Cordelia’s product, which it sells exclusively through Home Depot stores throughout the United States. Cordelia’s opponent in the litigation—China-based Zhejiang Yankon Group Co., Ltd. (“Yankon”)—recently began selling its accused infringing LED lighting fixture, also nationwide, at Home Depot’s chief retail competitor Lowe’s.
In his April 27, 2015 Order, U.S. District Judge Jesus G. Bernal of the Central District of California agreed with Cordelia that infringement of the ‘204 patent is likely, that the ‘204 patent likely is valid and enforceable, and that the recent competition from Yankon—selling its accused infringing product at Lowe’s—is causing irreparable harm to Cordelia. As the Court summarized, “Cordelia presents persuasive evidence of irreparable harm through price erosion, loss of market share, and harm to Cordelia’s market position.” Concerning price erosion, the Court found, “After Yankon entered the market, Home Depot demanded price reductions, which lowered Cordelia’s wholesale price . . . approximately 22 percent . . . so that Home Depot could lower its retail price point in response to the accused products being sold through Lowe’s. . . . These forced price reductions are evidence of irreparable harm.”
Concerning loss of market share, the Court found that “in a single year after the introduction of the accused products, Cordelia has already lost approximately one-third of its market share, and as a result of this reduction, it has lost a significant amount in gross revenues. . . . These sharp losses are likely exacerbated by the fact that Cordelia and Yankon are the only two players in the premium recessed lighting fixture market. The nature of the market further strengthens Cordelia’s argument for an injunction.” As the Court concluded, “Finally, Yankon is a foreign corporation, presumably with most of its assets located overseas. Therefore, it is likely that Cordelia would face significant difficulty in collecting damages even if it prevailed at trial. The potential difficulty inherent in collecting damages from a foreign defendant with limited assets in the United States supports a finding of irreparable harm.”