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Pony Pal, LLC v. Claire's Boutiques

October 2, 2006

PONY PAL, LLC, PLAINTIFF,
v.
CLAIRE'S BOUTIQUES, INC., DEFENDANT.



The opinion of the court was delivered by: Charles S. Haight, Senior District Judge

MEMORANDUM OPINION AND ORDER

In this diversity action, Plaintiff Pony Pal, LLC ("Pony Pal") sues Defendant Claire's Boutiques, Inc. ("Claire's") for breach of contract for failing to make royalty payments pursuant to a licensing agreement authorizing Defendant to manufacture and sell products covered by Plaintiff's patent. Defendant has moved for summary judgment pursuant to Rule 56, Fed. R. Civ. Proc. Plaintiff resists that motion and cross-moves for partial summary judgment as to liability.*fn1 For the reasons that follow, Defendant's motion is denied and Plaintiff's motion is granted.

BACKGROUND

The factual background giving rise to the present action was detailed in the Court's prior opinion in this action (reported at 2006 wl 846354 (S.D.N.Y. March 31, 2006), familiarity with which is assumed. Accordingly, I recount below only those facts pertinent to the resolution of the present motions.

Pony Pal is the owner, by assignment, of the right, title and interest in United States Patent No. 5,899,211 (the "'211 Patent"). Plaintiff's Memorandum, Ex. A. On September 1, 2004, Plaintiff and Defendant entered into a License Agreement (the "Agreement") authorizing Defendant to make and sell hair products covered by one or more claims of the '211 Patent in exchange for royalties. Complaint, Ex. B. Pursuant to the Agreement, Claire's paid $10,000 in exchange for a release of liability for sales of any product covered by the '211 Patent prior to execution of the Agreement. Id. Claire's contends that subsequent to the execution of the Agreement it has not sold any products covered by the claims of the '211 Patent, and thus it owes no royalties to Pony Pal under the Agreement. Defendant's Memorandum, at 2-3. Both parties agree that Defendant changed the construction of its product and has sold only the newly constructed products since entering into the Agreement. Pony Pal contends that these products (the "Accused Products"), sold after September 1, 2004 and represented by Exhibits C and D to the Complaint, are covered by the claims of the '211 Patent. Plaintiff's Memorandum, at 3. It is undisputed that, under the terms of the Agreement, Claire's would owe Pony Pal royalty fees if it sells products covered under the scope of the '211 Patent claims. Plaintiff's Memorandum, at 1; Defendant's Memorandum, at 1-2.

The Accused Products consist of an elastic loop and a length of braided hair strands. Moeri Decl. ¶ 6, Ex. B; Complaint, Exs. C & D. The length of hair strands is folded over the elastic loop roughly at the midpoint of the length of hair. The length of hair is then braided manually to secure it to the loop. Moeri Decl. ¶ 7, Ex. B; Complaint, Exs. C & D. Thus the Accused Products each consist of an elastic loop with a length of braided hair strands attached to it, but with the remainder of the elastic loop free. Moeri Decl., Ex. B; Complaint, Exs. C & D.

The '211 Patent

Although Plaintiff claims that at least claims 1, 5, 8, and 9 of the '211 Patent cover the Accused Products, only claim one need be considered initially for purposes of these motions, as the remaining claims are dependent on claim 1. Claim 1 is an independent claim describing a removable hair piece consisting of an elastic loop capable of surrounding and binding a pony tail and a connection securing a length of hair to the loop. The full text provides:

A removable hair piece comprising:

A length of hair strands having a first end and a second end; an elastic loop which is stretchable, twistable, and foldable, having a diameter in a non-expanded state of on the order of 1" to 2" and a diameter of several inches in an expanded state so that it is sized and configured to surround and bind a pony tail in place; a connection securing the first end of the length of hair strands to a portion of the elastic loop so that the remainder of the elastic loop is free and available to surround and bind a pony tail.

Because the terms of the Agreement at issue are undisputed, the present motions turn on the construction of the '211 Patent, and whether the Accused Products fall under the literal scope of its claims.

DISCUSSION

I. Standard of Review on Motion for Summary Judgment Pursuant to Rule 56

A court shall grant a motion for summary judgment "if the pleading, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Cattrett, 477 U.S. 317 (1986). "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995). The substantive law governing the case will identify those facts which are material and "only ...


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