It’s an elusive market, but it’s huge. Just specifically who buys the product and how much the market is worth hasn’t been subjected to much research, according to this news article, but the bottom line is millions of dollars are at stake in the flameless candle industry. Unsurprisingly, the innovation began with Disney’s Magic Kingdom in an effort to “provide eerie lighting effects for the popular Haunted Mansion attraction.” But it’s ended up in “a bitter legal marathon” with a convoluted patent infringement lawsuit in a U.S. District Court because in the last five years the demand for realistic in-home flameless technology has skyrocketed.
But the legal tussle unfolding in court is far from simply deciding who owned the rights first. In 2008, Disney licensed the now-coveted Haunted Mansion technology to “a U.S. company named Candella,” which was introduced two years later to the Chinese manufacturer of the device at an electronics trade show in Las Vegas, where intellectual property attorneys might have predicted all the trouble ahead. Liown, the foreign manufacturer was apparently given exclusive access to and the right to distribute and sell the product in China according to an agreement signed in 2010. The patent infringement lawsuit began glinting in the shadows when Candella and Liown broke up due to “disagreement over the cost of manufacturing.”
When Candella took its business elsewhere, Liown applied for a Chinese patent for the technology it had developed and was producing. But Candella took issue with this, claiming that Liown’s technology “infringe on the Disney patents because Liown copied the technology from Candella.” Disney is wise enough to most every industry not to be going about waving new technology around without patenting it beforehand, so Candella’s claim might seem valid in a patent infringement lawsuit—at first. But Liown was beating them at their own game, claiming they improved the technology and had a subsequent U.S. patent to prove it.
It gets trickier, but we’ll summarize: a third company named Luminara wants in on the drama. Luminara was once Candella’s exclusive distributor before they got in bed with Liown, and now the jilted partner is back—in court. Going behind Candella’s back to partner with Liown in 2014, this spiteful act quickly sputtered out, less than six months later. Now both Candella and Luminara have their own spat with Liown, with Lumaria asking for “a primary injunction to prevent Liown from selling or importing flameless candles until a trial can be conducted” on the patent infringement lawsuit allegations. Of course, Liown countersued.
Whether this story is “a cautionary tale for American investors” as the attorney for Luminara warns the public, or whether it’s “an important test to determine whether there is a practical solution for dealing with foreign manufacturers who pay scan regard to the protections that the United States affords to creative inventions,” will be, in part, up to the U.S. District Court Judge to adjudicate.