Koss Corp.’s patent infringement suit against Skullcandy Inc. was dismissed based on a geographic venue issue but the Milwaukee headphone firm’s cases continue against four other companies, including Apple Inc.
A U.S. District Court Judge in Texas ruled in favor of Skullcandy’s motion that the Koss suit be dismissed because Skullcandy does not have offices or employees in the state. Skullcandy is incorporated in Delaware and said in court filings it hasn’t had any employees in Texas since 2016.
Therefore, Texas is an improper venue for the Koss case, Skullcandy argued. District Court Judge Alan Albright on March 31 ruled in favor of Skullcandy’s motion to dismiss.
Koss (Nasdaq: KOSS) had alleged that Skullcandy had strong business ties to Texas because, for example, it paid Best Buy stores to carry Skullcandy products. Skullcandy denied that it paid Best Buy for shelf space.
Koss failed to rebut Skullcandy’s arguments “with any evidence to the contrary,” Albright said.
The Skullcandy suit is one of five Koss filed in Texas in July 2020 alleging violation of multiple patents and the only one that has been dismissed. Besides Skullcandy and Apple, the defendants are Bose Corp., PEAG LLC doing business as JLAB Audio and Plantronics Inc.
Koss accuses the other headphone firms of infringement involving wireless devices, such as earphones, headphones, speakers and smart watches, according to an article on mondaq.com.
Koss states that in the 2000s, its Striva project developed "the first ever True Wireless headphones" out of "Koss's recognition that wireless headphones were going to be an integral part of peoples' audio consumption," the article states.
The Milwaukee company unveiled Striva in 2012 calling it a revolutionary headphone and in-ear monitor system with Wi-Fi technology that receives music directly from the Internet.
However, an approximately $500 price-tag dampened sales and analysts panned the Striva for failing to appeal to the core demographic of young listeners attracted to celebrity-backed Beats by Dre headphones from Apple and other popular brands like Skullcandy.
After Koss sued Apple in U.S. District Court in Texas, Apple in August 2020 filed a suit against Koss in U.S. District Court in California. Apple is seeking an injunction against Koss for violating a confidentiality agreement.
Koss responded that it engaged in good-faith discussions with Apple over Koss’ “legitimate patent infringement claims.” The California case is pending.
