A series of patent infringement lawsuits may finish weaving their way through the courts soon as Choon's Design LLC readies a new tactic for coping with knockoff products.
The Wixom, Mich.-based maker of Rainbow Loom bracelet craft kits, owned by inventor-engineer Cheong Choon Ng and his wife, Fen Chan, won a Feb. 11 ruling from a U.S. International Trade Commission administrative law judge that 10 companies, including six based in or importing goods from China, infringed on Ng's patent.
The matter now goes to the Trade Commission board to sign off on a proposed exclusion order to U.S. Customs and Border Protection, barring such products from the country and authorizing agents to seize them.
“We'd already had a trademark approved to help enforce the name, so we had the power to get customs to look into things that were named the same ... or similar,” said Choon's lawyer, John Siragusa of Carlson, Gaskey & Olds PC in Birmingham, Mich.
“But a lot of infringers had stopped using the word ‘loom' or anything that obvious, and if it wasn't similar enough there wasn't an argument to help you stop that shipment — before this ruling.”
An ITC exclusion order, he said, will allow customs enforcement against knockoffs based on structural or design similarities to Rainbow Loom as well.
Choon's Design has filed 14 federal lawsuits since August 2013 for patent infringement against would-be competitors. Ten have been settled or otherwise closed, while four are pending.
Siragusa said litigation grew when Rainbow Loom sales were rapidly expanding about a year ago but should abate now that sales are normalizing. The company says it has sold more than 7 million Rainbow Looms since the product was launched in late 2011.
“A year ago last holiday season, it was the kind of turnaround where a Rainbow Loom product gained some exposure and became popular in a September-October time frame, and by November-December there were copies in mall kiosks all over the country,” Siragusa said.
Ng has said he developed the Rainbow Loom in 2010 after watching his daughters twist ponytail bands into rubber band bracelets. He and Chan invested $10,000 to bring it to market, and the company reported revenue grew to $44 million in 2013.
The company has rolled out several new products, Siragusa said. The travel-sized Monster Tail loom debuted last year, and the company showcased its Alpha Loom and Hair Loom products at the New York Toy Fair on Feb. 14-17.