Schwendimann & NuCoat v. Stahls’ — Heat Transfer Paper Patents Dismissed With Prejudice After IPR
Jodi A. Schwendimann and NuCoat, Inc. brought a five-patent infringement action against heat-transfer products supplier Stahls’ in the Eastern District of Michigan in 2019. After PTAB IPR proceedings invalidated four of the five asserted patents — a result the Federal Circuit affirmed and the Supreme Court declined to review — the parties stipulated to a dismissal with prejudice across the entire action, spanning 2,381 days.
Six Years, Four Invalidated Patents, and a Stipulated Exit in Michigan
Filed on February 21, 2019, in the Eastern District of Michigan, this infringement action pitted inventor Jodi A. Schwendimann and her assignee NuCoat, Inc. against Stahls’, Inc., a leading supplier of garment decoration transfer products. Plaintiffs asserted specific claims across five patents — US7749581, USRE041623, US7766475, US7754042, and US7771554 — covering inkjet-printable heat-transfer paper technology. The accused products included Stahls’ CAD-COLOR and InkTra Opaque product lines, widely used in the custom apparel and promotional-products market.
The case was stayed on January 19, 2021, pending IPR proceedings before the PTAB, in which both Neenah, Inc. and Stahls’ challenged the asserted claims. The PTAB invalidated Claims 1–6, 8–21, and 24–31 of the ‘581 Patent and all challenged claims of the ‘042, ‘623, and ‘475 Patents. The Federal Circuit issued a Rule 36 Judgment affirming those PTAB decisions without written opinion, and the Supreme Court subsequently denied plaintiffs’ petition for certiorari. With four of five patents effectively eliminated, the parties stipulated to a dismissal with prejudice on August 29, 2025 — ending all claims against Stahls’ permanently.
The duration of 2,381 days is largely attributable to the multi-year stay and the full appellate chain — PTAB, Federal Circuit, and Supreme Court — traversed before the parties resolved the district court action. Notably, the ‘554 Patent survived both IPR institution denial and a subsequent ex parte re-examination, but plaintiffs chose to dismiss rather than pursue Stahls’ on that lone surviving patent, explaining that the accused Stahls’ product is sourced from Neenah and that infringement is being litigated separately against Neenah in the District of Delaware. The public record leaves open whether any commercial settlement accompanied the stipulation, and Stahls’ fee motion, if filed, remains unresolved.
Filing to Dismissed with Prejudice in 2381 days
2,381 days from filing to dismissal — over 6.5 years, well above the median district court patent case duration
Dismissed with prejudice: what the stipulated exit means for both parties
Dismissal with prejudice is a permanent bar against Stahls’
A stipulated dismissal with prejudice under Rule 41(a)(1)(A)(ii) constitutes a final adjudication on the merits as to the named defendant. Plaintiffs Schwendimann and NuCoat cannot re-file these same patent claims against Stahls’ in any court. The underlying IPR invalidations of four patents, affirmed by the Federal Circuit and denied certiorari by the Supreme Court, mean the statutory basis for those claims no longer exists — making the with-prejudice posture consistent with, and effectively compelled by, those prior proceedings.
Permanent claim bar vs. Stahls’Plaintiffs exit Stahls’ action but preserve Delaware front against Neenah
By dismissing with prejudice against Stahls’, plaintiffs lose any future enforcement avenue against that defendant on these patents. However, the stipulation expressly reserves plaintiffs’ rights — including appeal rights — in the consolidated Delaware action, Schwendimann v. Neenah et al., Case No. 19-361-LPS. The ‘554 Patent, which survived both IPR and ex parte re-examination, remains live in that proceeding. The strategic calculus appears to be: Stahls’ is a downstream customer of Neenah; a win against Neenah as manufacturer may be commercially more valuable.
Delaware action preservedStahls’ achieves full dismissal but retains fee motion rights
Stahls’ secures a complete exit from six-plus years of litigation without an adverse merits ruling against it. The with-prejudice dismissal means it faces no further exposure from plaintiffs on the four PTAB-invalidated patents or on the ‘554 Patent in this forum. Critically, Stahls’ preserved its right to seek attorneys’ fees and costs — a significant reservation consistent with 35 U.S.C. § 285 practice in cases where a party believes the opposing litigation position was objectively unreasonable. Whether it pursues that motion, and the court’s receptivity, remains to be seen.
Fee motion right preservedSector faces weakened heat-transfer paper patent landscape after mass invalidation
The PTAB’s invalidation of four of the five asserted patents — covering broad swaths of inkjet heat-transfer paper technology — and the Federal Circuit’s Rule 36 affirmance, substantially reduces the IP barrier to entry in this product space. Competitors and manufacturers of CAD-cut or inkjet-printable transfer media can operate with greater freedom on the invalidated claims. However, the ‘554 Patent survives and is actively enforced in Delaware, meaning market participants should continue to monitor that proceeding. The downstream-customer dismissal pattern here also signals plaintiff’s enforcement strategy is manufacturer-focused.
‘554 Patent still live in DelawareFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Jodi A. Schwendimann | Individual | Inventor and NuCoat, Inc. — co-holders of five inkjet heat-transfer paper patentsSearch in Eureka ↗ |
| Co-Plaintiff | NuCoat, Inc. | Company | Search in Eureka ↗ |
| Defendant | Stahl’s | Individual | Stahls’, Inc. — US supplier of CAD-COLOR and InkTra heat-transfer paper products for garment decorationSearch in Eureka ↗ |
| Plaintiff counsel | Brett Gelbord | Attorney | Counsel for Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff counsel | Britta Schnoor Loftus | Attorney | Counsel for Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff counsel | Devan V. Padmanabhan | Attorney | Counsel for Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff counsel | Matthew J. Lund | Attorney | Counsel for Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff counsel | Michelle E. Dawson | Attorney | Counsel for Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff law firm | Dykema Gossett PLLC | Law Firm | Representing Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff law firm | Padmanabhan & Dawson PLLC | Law Firm | Representing Jodi A. SchwendimannSearch in Eureka ↗ |
| Plaintiff law firm | Troutman Pepper Locke LLP | Law Firm | Representing Jodi A. SchwendimannSearch in Eureka ↗ |
| Defendant counsel | Glenn E. Forbis | Attorney | Counsel for Stahl’sSearch in Eureka ↗ |
| Defendant counsel | J. Bradley Luchsinger | Attorney | Counsel for Stahl’sSearch in Eureka ↗ |
| Defendant counsel | Jewell N. Briggs | Attorney | Counsel for Stahl’sSearch in Eureka ↗ |
| Defendant law firm | Harness dickey & Pierce PLC | Law Firm | Representing Stahl’sSearch in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Michigan Eastern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The dismissal stipulation is unusually detailed for a Rule 41 filing, effectively serving as a public record of the litigation’s collapse after serial IPR defeats. The explicit enumeration of invalidated claims — including all claims of three patents and a large swath of the ‘581 Patent — combined with the Federal Circuit’s Rule 36 affirmance and Supreme Court certiorari denial, leaves plaintiffs with no viable appellate path on those patents. The carve-out preserving Delaware rights and the fee-motion reservation by Stahls’ are the two commercially live threads. The with-prejudice designation confirms this is a terminal resolution as between these parties in any U.S. forum on the patents-in-suit.
US7749581, USRE041623, US7766475, US7754042, US7771554 — Inkjet Heat-Transfer Paper Technology
The five patents-in-suit — US7749581, USRE041623, US7766475, US7754042, and US7771554 — all descend from application filings in the 2008 timeframe and cover inkjet-printable heat-transfer paper technology used in garment decoration. The patents protect compositions and methods for layered transfer sheets that allow inkjet-printed images to be heat-applied to textiles, including opaque formulations suitable for dark-coloured fabrics. USRE041623 is a reissue patent, indicating the original claims were broadened or corrected post-grant — a designation that can affect invalidity and unenforceability analysis.
These patents sit at the intersection of specialty coatings chemistry and the large custom-apparel and promotional-products market. Stahls’ CAD-COLOR and InkTra product lines are commercially significant in that space, making these patents strategically important assets. The PTAB’s decision to invalidate four of the five patents — upheld at every appellate level — substantially narrows the enforceable IP estate. The sole survivor, US7771554, which covers a heat-transfer sheet with specific adhesive and carrier layer properties, now carries outsized commercial weight in the ongoing Delaware litigation against Neenah, the upstream manufacturer.
Should you run an FTO against US7771554 and the heat-transfer paper patent family?
Any company developing, manufacturing, importing, or reselling inkjet-printable heat-transfer paper products — particularly opaque transfer media for dark garments — should treat US7771554 as an active risk. The patent survived IPR institution denial and ex parte re-examination, signals that its claims have been stress-tested and held. With the Delaware action against Neenah ongoing, a merits ruling could clarify claim scope in ways that affect the entire supply chain, including downstream decorators and distributors.
PatSnap Eureka’s FTO Search Agent can map the claim landscape of US7771554 against your specific product architecture, identify prior art that has not yet been raised in PTAB proceedings, and flag related continuation or family member applications that may present parallel risk. Given the complexity of the five-patent family — including the reissue and the surviving ‘554 — automated claim-charting and portfolio monitoring tools are especially valuable for R&D and procurement teams working in specialty transfer media.
Run a freedom-to-operate analysis on US7771554B2 to assess your product’s exposure
Run FTO in Eureka →Similar inkjet heat-transfer paper patent disputes and PTAB IPR outcomes
Explore related infringement actions involving inkjet heat-transfer paper technology and multi-patent IPR campaigns litigated in U.S. district courts and before the PTAB.
What this case signals for the heat-transfer paper IP landscape
Four patents invalidated via IPR, one survivor still in play — this case maps the boundaries of a contested technology space.
IPR remains the dominant invalidation tool for multi-patent enforcement campaigns
Stahls’ and Neenah’s coordinated IPR petitions neutralised four of five asserted patents before district court proceedings could reach trial. For defendants facing multi-patent complaints in the heat-transfer and specialty media space, this case confirms that a well-resourced IPR strategy — pursued in parallel by multiple petitioners — can collapse an infringement campaign before significant damages exposure arises.
Downstream-customer stays are tactically valuable but extend case duration significantly
The case was stayed for over four years pending PTAB and appellate proceedings initiated largely at the manufacturer level. Downstream defendants like Stahls’ — who purchase the accused product from a manufacturer like Neenah — should weigh the benefits of a stay against the extended litigation overhang. Here, the stay ultimately favoured Stahls’, but the 2,381-day duration represents substantial legal spend even without a trial.
Schwendimann v Stahl’s — key questions answered
Four of the five patents-in-suit — US7749581, USRE041623, US7766475, and US7754042 — had their asserted claims invalidated by the PTAB in IPR proceedings. The Federal Circuit affirmed via Rule 36 Judgment and the Supreme Court denied certiorari. US7771554 survived both IPR institution denial and ex parte re-examination and remains active in the Delaware litigation against Neenah.
Plaintiffs explained in the dismissal stipulation that the Stahls’ product accused of infringing US7771554 is sourced from Neenah, Inc., and that infringement of that patent is already being litigated in the consolidated Delaware case against Neenah. Pursuing Stahls’ separately on a single surviving patent — where the manufacturer is the primary defendant in another forum — was apparently not commercially justified.
A Rule 36 Judgment means the Federal Circuit affirmed the PTAB’s Final Written Decisions without a written opinion, finding no reversible error. While it creates no new precedential claim-construction guidance, it renders the PTAB invalidations final and binding. Combined with the Supreme Court’s certiorari denial, it closed all appellate avenues for the four invalidated patents.
The stipulated dismissal expressly reserves Stahls’ right to file a motion for attorneys’ fees and costs. Under 35 U.S.C. § 285 and the Octane Fitness standard, a court may award fees in exceptional cases. Given the scale of PTAB invalidations and the full appellate chain, Stahls’ may argue the litigation position was objectively unreasonable, though the court’s receptivity to any such motion has not yet been determined from the public record.
No. The stipulation expressly preserves plaintiffs’ rights — including appeal rights — in Schwendimann v. Neenah et al., Case No. 19-361-LPS (D. Del., consolidated). The ‘554 Patent (US7771554) is the primary surviving asset in that proceeding. The Michigan dismissal is limited in scope to claims against Stahls’ and has no preclusive effect on the Delaware action.
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