The Diaper Wars: Angelcare and Playtex Fight Munchkin in Patent Infringement Lawsuit
On April 7, 2022, the Federal Court issued its judgment and reasons in Angelcare Canada Inc v Munchkin Inc, 2022 FC 507, finding that Munchkin, Inc. and Munchkin Baby Canada Ltd. (the “Defendants” or “Munchkin”) had infringed a number of patents owned by Angelcare Canada Inc. related to their diaper disposal system sold under the brand name “Diaper Genie”.
Justice Roy’s decision provides insight on a number of issues, namely, inducement, liability of the parent corporation, and an implied obligation of confidence to defeat an anticipation attack, specifically as applied to the consumer-products industry.
The parties are competitors in the Canadian and international markets of baby care products and, in particular, diaper pails and diaper pail cassettes. Diaper pails are essentially garbage pails purposed for the disposal of soiled diapers. Diaper pail cassettes are used in tandem with diaper pails; the cassettes dispense plastic bags to contain soiled diapers that are put into the pail.
In 2012, Munchkin started selling cassette refills, eventually selling four models of refills, that were specifically designed to be compatible with the Diaper Genie system. Until Munchkin launched its own line of pails in 2016, the Munchkin cassettes were compatible only with the Diaper Genie pails.
In 2016, the Plaintiffs, Angelcare Canada Inc, Edgewell Personal Care Canada ULC and Playtex Products LLC (the “Plaintiffs” or “Angelcare”), launched an action for patent infringement against Munchkin with regards to six Canadian patents: 2,640,384, 2,855,159, 2,936,415, 2,936,421, 2,937,312, and 2,686,128 (collectively, the “Angelcare patents”). Munchkin counterclaimed alleging that the patents-in-suit were invalid.
Justice Roy accepted that Munchkin encouraged consumers to use their products in a manner that infringes the assembly claims of the patents-at-issue. The Court found Munchkin’s labels affixed on the Munchkin encouraged end-users to use the Munchkin cassettes with the Diaper Genie pails. Justice Roy relied on prior FCA jurisprudence, holding that an indication to end-users to assemble infringing combinations may be sufficient to establish the necessary influence to ground inducement.
US Parent Liable
Justice Roy found the US parent company, Munchkin, Inc., liable as well as its Canadian subsidiary, Munchkin Baby Canada Ltd. The Defendants argued that even though the infringing cassettes were designed by Munchkin Inc., Munchkin Inc. did not have any role in the manufacture, use or sale of the Munchkin cassettes or diaper pails in Canada.
Justice Roy found otherwise, holding Munchkin Inc. made design and marketing decisions that had a direct impact on the resulting infringing activities in Canada, thus giving rise to liability.
Implied Obligation of Confidence Defeats Anticipation Attack
Angelcare argued an inventor’s disclosure by e-mail of a prototype of the patented invention to two third-party manufacturing companies anticipated the patents in-suit.
Justice Roy rejected this argument, finding that an implied obligation of confidentiality was present, such that the inventors’ disclosure was not made available to the public.
Relying on Corlac FCA, and Lac Minerals SCC, the Court held “[t]he manufacture of articles by a party for another would fall prima facie in that category carrying an obligation of confidentiality”. Justice Roy further emphasized that because the recipient companies were in the business of manufacturing prototypes, that inherently suggested the existence of an obligation of confidence.
Pursuant to a bifurcation order in place, the Court will next determine by separate hearing, the remedies Angelcare is entitled to.
MacLennan v Produits Gilbert Inc, 2008 FCA 35