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Ellison/Sizzix Patent Litigation Update

In a move likely in the works for months, Stampin’ Up has announced that they are discontinuing the Sizzix Big Shot and also are replacing Sizzix as the manufacturer for their dies. Stampin’ Up’s new dies will be a slightly different die style than the previous ones. As part of the transition to a new die manufacturer, Stampin’ Up is discontinuing (they call it “retiring”) a large number of die designs from their catalog The existing designs that are being retained in the product line will transition to the new style of die once existing inventory of the old Sizzix-manufactured die style is sold out.

In early April, Ellison laid off a significant number of staff in their U.S. office in Lake Forest, California. The layoffs, reportedly as high as 20% of the U.S. staff, included at least some of the company’s U.S.-based in-house project designers. Several of Ellison’s graphic designers also departed the company around that time, according to their LinkedIn profiles.

Ellison lawsuits

Against the backdrop of those events, four of the patent lawsuits initiated by Ellison in defense of its die patent have also continued throughout April. (To learn more about the background on these lawsuits and the patent they are alleging infringement of, click here.)

Court proceedings have been quiet in Ellison’s case against Stephanie Barnard since early March when a Special Master was appointed by the judge to assist in managing the case. The parties have entered the time-consuming (and expensive) period of litigation involving discovery and other out-of-court preparation for an eventual court trial scheduled for September 2020.

April has been taken up by relatively routine matters in the case between Ellison and Hero Arts. The two companies jointly requested a protective order from the judge to govern the handling of confidential information during the case. That order was granted on April 24th. The two sides have also agreed with the court to a schedule for the case that will lead to a trial in October 2020.

Heartfelt Creations filed a Motion to Dismiss Ellison’s case against them on April 24th. The filing claims that Ellison was too vague in their original lawsuit filing, failing to meet a sufficient burden of proof for a claim of infringement because they never pointed to a specific product of Heartfelt’s that allegedly infringes under the ‘325 patent standard. Heartfelt is asking for the lawsuit to be dismissed as a result.

Avery Elle was responsible for the most notable activity in any of Ellison’s ongoing lawsuits in April. On April 11th, Avery Elle’s lawyers filed a Motion for Sanctions against both Ellison and their lawyers. The motion accuses Ellison of filing a frivolous lawsuit to harass Avery Elle and failing to do a proper investigation before filing. Avery Elle claims that their dies do not infringe the ‘325 patent because 32% of their dies’ flat border extends into the center and the ‘325 patent describes dies with “none” of the border extending into the center.

The company went a step further in its Motion for Sanctions, however, by claiming that prior art from Spellbinders (a 2011 video and an internet archive of their website)  and Quickutz (a 2007 circle die) makes the patent itself invalid. Avery Elle also claims that Ellison should have been aware of this art, and concludes, “Ellison and its Attorneys either failed to perform a basic pre-filing investigation or they knowingly brought an objectively baseless lawsuit.”

As a result of the claims in its motion, Avery Elle is asking for the court to sanction Ellison and its attorneys by awarding attorney’s fees and other costs to them to compensate them for what they call an action that was “frivolous and filed to harass.” Attorney’s fees being awarded to a successful defendant is not the normal outcome in patent litigation. It’s only done when the court rules there has been some egregious behavior by the plaintiff in the course of the suit. (Coincidentally, the industry’s previous die patent litigation ended this way, with Spellbinders ordered to pay attorney’s fees to Quickutz.)

Ellison filed its response to the Motion for Sanctions on April 29th. To defend their lawsuit, they presented some interpretations of both the word “none” and the first claim in the patent to the court.

The original patent application demonstrated the die construction with “none” of the cutting edge extending into the center of the die with this art:

 

325 Patent Illustration - figure 4

However, Ellison (via an affidavit from ‘325 inventor Kevin Corcoran) now claims that the word “none” encompasses a lip inside the die’s vertical surface because that lip is technically part of the blade. They used this art to demonstrate their claim:

Ellison die lip blade

They also made a second argument, however, that could render that one moot. They claim the “none” description of the die lip is part of a “preamble” and not actually a technical requirement of the patent. In essence, they are trying to divorce it from the method claim of aligning a die with a stamp to cut it out. Were that argument to be successfully defended, Ellison would be the only company with the legal right to manufacture and sell open centered chemically etched dies that match stamps – regardless of whether there is an edge extending into the center or not – in the U.S.

Oral arguments are scheduled about the motion on May 13th in U.S. District Court in the Southern District of California before Judge Marilyn Huff.

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46 Responses to Ellison/Sizzix Patent Litigation Update

  1. Gab May 1, 2019 at 4:24 am #

    It seems sad to see cases like this in the craft industry where usually companies work together. Thanks for keeping us updated Nancy

    • Jennifer McGuire May 1, 2019 at 9:45 am #

      well said, gab!

  2. Sue Fitzsimmons May 1, 2019 at 6:16 am #

    Can you tell me what the difference is between this case and when the Misti company sued lots of our favourite craft companies

    • Nancy Nally May 1, 2019 at 4:34 pm #

      One major difference between the two suits is that MSP took action immediately upon receiving its patent to enforce it, whereas Ellison sat on theirs for several years before suddenly filing a raft of suits.

      • Linda Ewaldt May 1, 2019 at 7:01 pm #

        Well, however, I think the lawsuit than was just as wrong and I STILL see no copyright infrigment with Tims Stamping Plattform. It still makes me angry that she won and I am sadden that the crafting community wasn’t that vocal back than. This lawsuit back then has started an attitude.

        • Nancy Nally May 1, 2019 at 7:34 pm #

          I hear from a lot of people who feel the same way about Tim’s platform, but Tonic Studios chose to settle the legal case so that’s going to be the last word on it in the U.S. from a legal standpoint unless someone else challenges the patent itself and wins.

  3. bearclawflower May 1, 2019 at 7:56 am #

    I’m fairly new to crafting world, this is very sad to me!! Thanks for the wonderful updates/blog.

    • Nancy Nally May 1, 2019 at 10:11 am #

      Thanks for stopping by! Unfortunately just like any other businesses, craft companies are going to do things like sue each other sometimes. We can still enjoy our hobby though!

  4. Dianne Keough May 1, 2019 at 8:18 am #

    Interesting info. Thanks for the update.

    • PjP May 1, 2019 at 12:08 pm #

      Go get ’em Avery Elle! Ellison think they’re a shark but they’re just a minnow with attitude. Do I smell blood in the water? 🙂

  5. Michelle May 1, 2019 at 8:21 am #

    I guess I just don’t know enough about who does what in the industry to really understand this. Maybe Ellison/Sizzix manufacturers more dies than I realize? Because why isn’t Lawn Fawn also named since they have a narrow lip on the inside of many of their dies? Or what about Concord and 9th or Altenew? I figure these small companies just design and rely on a manufacturer like Sizzix. So is Sizzix really suing Hero Arts as a manufacturer?

    I guess I ask because if you’re a small business, and you team up with a manufacturer that says they can pull off a design for you, but they’re doing so using patented technology without permission, it’s the manufacturer who gets sued, not the small business? It might still hurt that business if they have to find another manufacturer, but at least they’re not buried in legal fees.

    I respect someone wanting to protect a patent, but it’s also a shame if that means limiting competition in the design market. I never cared for Spellbinders designs that much, and was happy when other companies could make wafer thin dies in designs I liked better. I also like my Misti, but love the versatility of the Stampin Up platform for certain projects. I hate to lose Altenew or Concord and 9th designs because of this.

    • Nancy Nally May 1, 2019 at 10:21 am #

      None of the companies sued by Ellison have their own production facility…they all contract with others to make their dies. It appears to be those contractors (mostly factories in China) that are the “Does” named in the suits.

      The entire supply chain can technically be made liable for patent infringement is my understanding – from the factory to the importer to the company whose name is on it to the retailers to even the consumer. However, typically in suits like this companies only go after the people making the product, the factory and the company that is marketing/selling it.

      No one I’ve spoken to seems to understand why these particular companies were targeted. Because you’re right, loads of companies make dies that are similar to the companies being sued that aren’t made for them by Sizzix. It’s possible the targets were chosen more for the currently unnamed “Does” they are trying to get to then the named companies.

      • Michelle Demel May 1, 2019 at 3:51 pm #

        Thanks for the response! I really appreciate the insight you offer in these blog posts. We all really just want a healthy, happy craft community I think, and knowing what’s going on is nice.

      • F.R.Allison May 2, 2019 at 2:03 pm #

        MOST US based companies do not use a factory in China.
        First, let’s redefine “manufacturer” and “factory”. A company like Avery Elle, Sizzix, and all the others, ourselves included, design the product (stamps and dies). By “design”, I mean that we draw what we want a stamp or die to look like. We then go to a factory to make that item for us. Most US made dies are made at a factory in Arizona. SOME (not all) companies use factories in China.
        So when you say “Sizzix manufactures”, that is not entirely true. They have a factory they use in China. There are several factories in China that can make dies for you. You supply them with your designs and they manufacture them.

        In these cases, Ellison (aka Sizzix) is suing companies that are designing (i.e. drawing and submitting to a factory)…. not the factory itself.

        The scary issue here is that if they win this lawsuit, they will be the ONLY company allowed to have dies that cut stamped images. However, such dies (that cut stamps) were around long before their patent was awarded. BUT, if they do win, they can then put everyone out of business.

        A side story to this is that there are factories in China that actively steal designs on a daily basis and reproduce them (counterfeit them) and flood the market with cheap knock offs that they tout to be “unbranded”. In fact, these “unbranded” items are stolen designs. (Imagine, you draw this really cool image and get it made into a stamp or die, and the next day, a factory in China has copied your image AND your card samples, and sells it for 1/4 of your price…. those are the real thieves here)
        I don’t understand why Ellison is not going after them!!!

        • Nancy Nally May 2, 2019 at 5:12 pm #

          FR Allison, I meant that the Does in the suits appear to be mostly contractors in China, not industry-wide.

          Ellison did try to go after at least one company in China in patent litigation last year.

  6. Rijacki Ledum May 1, 2019 at 12:23 pm #

    Thank you, Nancy, for keeping us up-to-date on this issue.

    When I saw the initial information about this law suit, the first thought I had was “why now”. At that time I wasn’t seeing anything in Sizzix’s business that would compel them to change their business model to encompass patent license payments for revenue. However, Stampin’ Up dropping them as their die manufacturer goes a long way to explain the trigger. If they don’t know directly who Stampin’ Up is switching to (or didn’t at the filing) that would explain the Doe fishing and even which companies are being sued. With Stampin’ Up dropping them, the suit seems a bit punitive. If they can’t penalize Stampin’ Up, they can affect the company Stampin’ Up is going to use. I suspect the final decision on the departure of Stampin’ Up was late in March with a lot of late night negotiations down to the wire.

    When I saw that the Big Shot is being discontinued for Stampin’ Up I didn’t think about this suit, not thinking that they might be dropping Sizzix completely. Stampin’ Up dropping them will most definitely affect Sizzix’s bottom line. It’s really sad if they think it prudent to make up that shortfall by becoming a patent troll. In the high tech world, that often predicates the demise of the company’s legitimacy. Stampin’ Up dropping them also explains why Sizzix has changed their release calendar this year and how they showcase the celebrity designers. A couple of them looked a bit befuddled when announcing the release schedule for their own stuff in how it’s changed from previous years.

    • Pam Staples - Sunny Girl Scraps May 1, 2019 at 10:16 pm #

      Stampin’ Up! has chosen to go with a direct relationship with the manufacturer by eliminating Sizzix as the middle man. I feel some of the reason has to do with the recent issues Stampin’ Up! has had related to shortages of products especially the dies.

      I’m really cheering for Avery Elle. I used to have Quickutz and don’t see how Sizzix was allowed to get a Patent for thier dies.

  7. Grendelia Balandran May 1, 2019 at 4:44 pm #

    so sad, this is happening NEVER purchasing sizzix products again

    • CarolLee May 2, 2019 at 12:28 am #

      I TOTALLY AGREE!!! I sent the following to Sizzix:

      In light of the law suits Ellison/Sizzix has filed against five of my favorite stamp/die companies, I cannot in good conscience support anything that comes from Ellison. Even if your lawsuits are valid and you win in court, you could have approached this in a way that didn’t shatter lives and destroy hopes and dreams of some very special Mom & Pop companies. In my opinion, Ellison/Sizzix is destroying the industry! I can no longer buy any products backed by your company. Please know this is really a tough decision because I do really love some of your designs, but I just can no longer support anything that Ellison/Sizzix sells or makes. My friends all feel the same!

  8. Karen Gilmore May 1, 2019 at 5:38 pm #

    Just a thought… Sizzix USED to make embossing folders for Hero Arts (possibly dies too?), before parting ways.. maybe childish revenge for the loss of business? The fact that 20% of the Ellison staff left might reflect as much disruption inside the company as there is on the outside. By the way, if companies can’t manufacture in the USA, please, come to Canada. We’d love to have you.

    • Nancy Nally May 1, 2019 at 7:28 pm #

      The staff were laid off. They didn’t leave voluntarily.

      If Ellison successfully defends this patent it won’t matter where the dies are made to the U.S. market…no one will be able to legally import dies that cut stamps into the U.S.

  9. Stacey The Card Pirate May 1, 2019 at 5:45 pm #

    I find it sad that a huge company like Sizzix has to resort to these measures. This lawsuit is insane. What blows my mind is they make the dies for Stephanie Barnards company The Stamps of Life. Sizzix should have realized before filing this ridiculous lawsuit that every customer who buys from these companies will never buy from Sizzix again. I assure you, they lost my business. I hope they feel the pain when their stocks plummet and their company crumbles.

    • Nancy Nally May 1, 2019 at 7:25 pm #

      Stephanie’s dies are not currently made by Ellison. If they were making the dies for her, the dies would come with a license for the patent and there would be no grounds to sue for infringement.

  10. Kathy May 1, 2019 at 6:45 pm #

    This is sad to me, it’s fun to have a wide variety of products to choose from. I don’t buy from one company exclusively, rather, I have supported all of them whether it be paper, ink pads, stamps, dies or machines.
    Thank you for the update.

  11. Kerry May 1, 2019 at 9:34 pm #

    It seems to me that even if Ellison wins any part of this case, they lose. After how they treated their own designer, why would anyone feel comfortable signing a contract to do business with them? Clearly Stampin Up! no longer wants to be associated with them.

    With the speed at which technology advances, it won’t be long until someone will come up with a different way to design the dies yet achieve the same results while not violating the 325 patent (if that patent even is valid). When that happens Ellison will find themselves right back where they are now, losing market share (again) but without a key, prolific designer, having wasted who knows how much money, and with a shattered reputation.

    What really made me irate was what Nancy reported on April 5, that Ellison was suing Stephanie Barnard because she was “violating the ‘325 patent by teaching the method described in Claim 1 of the patent in videos on the website.” Really? So no one but Ellison can produce “how to” videos for how to use dies? Are they really that stupid ? Do they not to realize that by having people freely share how to use their products, that it is free advertising for them and creates a desire for their product?

    Claim 3 says Ellison invented nested dies. I would love to know when Spellbinders (ironically, they are not suing Spellbinders) started producing Nestabilities. Spellbinders was the first company that I knew of that sold nested dies, but I don’t have exact dates of who produced what and when.

    • Nancy Nally May 1, 2019 at 11:39 pm #

      To be clear…Ellison isn’t suing Stephanie Barnard for violating the patent by demonstrating her Sizzix products. They are suing her for violating the patent by demonstrating her products that she designs and sells through The Stamps of Life, which Ellison doesn’t make.

      If I understand Ellison’s latest filing in the Avery Elle case correctly, they are trying to divorce the die design part of the patent from the “method” part of the patent. In other words, they are claiming they own the technique of cutting out stamps with dies no matter what the specific design of the die is. If they win that argument with the court, no one could make and sell in the U.S. any design style of die that cuts stamps.

      However, it is technology that is killing them already…electronic die cut machines are massively cutting into the manual die cutting market, and some of the machines can even cut out stamps.

  12. Amy Wazwaz May 1, 2019 at 11:08 pm #

    This lawsuit makes me Really upset and mad. This was started by MSP. This is not the type of people we are in the craft field. I won’t be buying Sizzix products while they are doing this. I hope they come to their senses and stop this. Otherwise I hope the other companies wipe the ground with them. I truly believe this will be a changing point for Sizzix forever. This changes my perception of them in a very bad way.

    The fact that the craft companies regularly come together to help each other out and compliment each other makes my heart happy. I don’t want to be a pet of a community that is all sue happy. I would venture to say many other crafters feel the same way.

    Sizzix has not kept up with the changing tides in the craft community. Instead of work harder to bring in new designers and capture more business that way. The decide to try to shut companies down. Not cool at all. I believe this will be a nail in Sizzix’s coffin.

    • Nancy Nally May 1, 2019 at 11:45 pm #

      There’s a long history of patent and copyright suits in the craft industry. It started long before MSP. Whenever there are businesses holding intellectual property, there will be suits over the protection of it.

      This is an unusually collaborative industry and it is one of the wonderful things about it. That’s so true.

      Sizzix is facing a double whammy of challenges right now…technology infringing on their market segment at the same time their overall industry is shrinking. It’s a very tough row to hoe.

  13. Gina Howe May 2, 2019 at 1:12 am #

    The first time I saw dies that cut out stamps was at a Heartfelt Creations booth when Spellbinders was manufacturing their dies. They showed me how to cut them out. This was before Sizzix had their wafer thin dies. That they are suing over the method is disconcerting to me. So what happens to all of the You Tube videos out there who show the method? How can they say that they came up with the method when it was being taught long before they came out with their thin dies? Frustrating situation all around.

    • stacey July 18, 2019 at 7:19 pm #

      Spellbinders was the first to invent nested dies and I named them nestabilities… for that reason. We produced dies that matched stamps for many companys years before anyone else did that. Just go back and google it you will see the information is all still out there.

  14. Lorna May 2, 2019 at 4:08 am #

    What happens to the patent if Sizzix goes insolvent? It must be spreading itself thin suing so many companies. If they get them to stop maybe the other companies will continue and more suits will happen. Can we see this going on over and over. They could not sustain it. What if one of the companies being sued goes insolvent and pops up as another company with another name registered in another country. Surely there must be so many ways around being sued

    • Nancy Nally May 2, 2019 at 12:17 pm #

      Entertaining the hypothetical for a moment…Patents, like all intellectual property, are part of a company’s assets in a bankruptcy. Assuming we are talking about a liquidation bankruptcy, intellectual property would be sold off to raise funds to pay the company’s creditors just like physical assets would. So then someone else would own the patent (if anyone chose to purchase it) and the entire circus could theoretically start all over again.

  15. Amanda Atwood May 2, 2019 at 5:09 am #

    Truly the biggest loses here will be the consumers, who will have to pick up the bill for all this nonsense litigation through the pricing of products.

  16. Dania Boise May 2, 2019 at 9:52 am #

    I’m so sorry this is happening…Sizzix should have spoken up quicker if they felt their “patent” was violate. This is hurting so many small business acting in good faith and now their livelihood is being threaten….the means by which they care for their families. I call this bully….Sizzix you have shot yourself in the foot, at least where I’m concerned.

  17. Susan Ploski May 2, 2019 at 9:57 am #

    Thank you, Nancy, for the update. This lawsuit is not only frivolous but heartbreaking as well. Once again, corporate greed raises its ugly head. I am a champion of mom and pops and try to by most of my papercrafting tools and supplies from them. Sizzix has a presence in the Big Box craft stores like Michaels, etc. whereas the companies in this suit seem to be more online, in scrapbook stores and at conventions.

    I pray these lawsuits won’t put these small companies out of business. Sadly, the ones that will come out ahead are the lawyers.

  18. 1radchick May 2, 2019 at 10:00 am #

    Well, you won’t see me buy anything from Sizzix anytime soon, no matter what they come out with. This is such a sad set of cases. This industry is too thin and small to have this kind of strong arming. There’s room for everyone, and there needs to be, in an industry that is flailing. It will be survival of the fittest, and we NEED the little guys. Who wants to buy everything from ONE company? That’s just crazy. Also, it seems like Quickutz really was doing this style long before Ellison decided to switch from their lego-style humongous cutting shapes to the thin ones….. 🙁

  19. Kim Goodwin May 2, 2019 at 11:20 am #

    This is very sad to all creative people and companies. I know many people are saying they will not buy from Sizzix anymore. Please understand that they have many different people that design for them. Stephanie Barnard has designed for them besides her company for a long time. Other small businesses will also feel the impact of this lawsuit. It is just very sad for all the designers and companies all together.

    • Nancy Nally May 2, 2019 at 12:12 pm #

      Definitely true…there are no winners here. Except the lawyers.

  20. CarolLee May 3, 2019 at 1:43 am #

    Nancy… Do you know if any legal defense funds have been set up to help these companies that have been sued? I am sure there would be a lot of people that would donate to try and help them?

  21. Judy Brown May 3, 2019 at 1:54 pm #

    This really surprised me and saddened me and angered me. I own so much Sizzix that I could start my own store. I also own all of the other brands mentioned. Today is the first I’ve read of this, right on the heels of one of my favorite stamp companies (Love from Lizi) reporting her designs were stolen by a company in China. Trying to make a decision on how to proceed with my personal crafting is a moral dilemma for me. I follow all the rules and obey the requests of the Angel policy. I shop many brands and try to support all of the family companies (including the UK.) Those things are expected of me, but how can companies do what they wish? Oh, yes, lawyers and loopholes.

  22. Lori May 6, 2019 at 9:50 am #

    Thank you Nancy for taking the time to explain all the legal mumbo jumbo. A very sad time for an industry that promotes kindness and community.

  23. Knitty May 6, 2019 at 12:59 pm #

    I appreciate your summation of what is going on with Ellison. I don’t understand their delay if they felt they were being wronged by the companies mentioned.
    We are living in a world where happiness, peace and kindness could use a boost. Making cards, scrapbooking and other paper crafts is a dose of all three for me. I try to shop locally from independent shop owners but available outlets aren’t plentiful. Three of the companies mentioned and a few others are my go-to sources for styles that align with me and for dependable quality. I will avoid Sizzix purchases in the future because the only voice most of us have in matters like these is in our purchasing power.

  24. Sean May 12, 2019 at 12:13 pm #

    Thank you for the update. It doesn’t make sense to me why Ellison is doing this. Our industry suffers enough with unbranded items, let’s focus the fight on that instead of on each other. What they are accomplishing here is making the people who spend their hard earned money on their products not want to. From what I’m reading everywhere, they are losing customers and support left and right. So if they win these suits, are they really winning!?! If you have no customers left what’s the use of monopolizing this technique/technology, there will be no one buying it.

  25. Kerry July 4, 2019 at 4:28 pm #

    It appears that Avery Elle lost their motion for sanctions against Ellison. https://law.justia.com/cases/federal/district-courts/california/casdce/3:2019cv00181/612634/37/

    • Nancy Nally July 5, 2019 at 12:33 am #

      Yes, they did. And they settled the case shortly afterward. I wrote about it for Craft Industry Alliance:

      CIA News Roundup

  26. Sabine Lembke August 15, 2019 at 12:31 pm #

    well, I won’t buy any sizzix products anymore…

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