In a case that ended without a clear winner, Thirty Three Threads, Inc. and Pacific Manufacturing, LLC jointly moved to dismiss all remaining claims in their patent infringement dispute before the California Southern District Court (Case No. 3:23-cv-01459). Filed on August 9, 2023, and closed on August 21, 2024, after 378 days, the action involved two patents — design patent USD0802292S and utility patent US7346935B1 — covering specialized sock products. The court granted the joint motion under Federal Rule of Civil Procedure 41(a)(2), dismissing plaintiff’s Third, Fourth, and Fifth claims with prejudice and defendant’s counterclaims without prejudice, with each side bearing its own costs.

This outcome carries meaningful strategic implications for IP holders in the apparel and performance accessories space, where design and utility patents frequently intersect in competitive markets. The case is notable for its explicit preservation of parallel state court proceedings, signaling that the underlying commercial dispute remains unresolved and that IP professionals should monitor both federal patent enforcement strategies and concurrent state-law business tort claims in this sector.

Case Overview

The Parties

The Patents at Issue

Design patent USD0802292S (Application No. US29/553544) protects the ornamental appearance of a sock product — covering the distinctive visual design elements that differentiate Thirty Three Threads’ offerings in the marketplace. Utility patent US7346935B1 (Application No. US11/179068) protects the functional aspects of a sock construction, likely encompassing structural features such as toe separation, grip elements, or specialized fabric configurations used in performance and studio footwear. Together, these patents create overlapping layers of IP protection — one covering how the product looks, the other covering how it works — a dual-protection strategy common in the premium apparel accessories segment.

• • USD0802292S
• • US7346935B1

Legal Representation

Plaintiff Counsel: Gordon & Rees LLP; Gordon Rees Scully Mansukhani LLP (lead: Reid Eric Dammann)
Defendant Counsel: Tarter Krinsky & Drogin LLP (lead: Mark Berkowitz)

Litigation Timeline & Procedural History

The case was filed in the California Southern District Court — a first-instance district court venue in San Diego — on August 9, 2023. The Southern District of California is a moderately active patent litigation forum, and the selection of this venue is consistent with both parties having California-based business connections and the products being sold in the Southern California retail and studio market. The case proceeded as a standard first-instance infringement action, with the plaintiff filing a Second Amended Complaint (ECF No. 21) and defendants asserting counterclaims (ECF No. 23) before proceedings reached their resolution stage.

At 378 days, the case reflects a litigation arc that bypassed full trial proceedings and resolved through joint motion practice. The dismissal under Rule 41(a)(2) — a court-ordered dismissal upon joint motion — indicates the parties reached a negotiated resolution or commercial agreement that made continued federal litigation unnecessary, even as they explicitly preserved claims in a parallel California Superior Court action (Case No. 37-2023-00042062-CU-BT-CTL). The absence of a prevailing party declaration and the mutual cost-bearing arrangement are hallmarks of a structured settlement rather than a substantive judicial determination on the merits.

The Verdict & Legal Analysis

Outcome

The court granted the parties’ joint motion to dismiss, ordering that Thirty Three Threads’ Third, Fourth, and Fifth claims for relief in the Second Amended Complaint be dismissed with prejudice, while Pacific Manufacturing’s counterclaims (Counts One and Two) were dismissed without prejudice. No damages were awarded, no injunction was issued, and neither party was designated a prevailing party — meaning no fee-shifting under 35 U.S.C. § 285 was triggered. The parties each bear their own costs and fees, and the parallel San Diego Superior Court action expressly remains unaffected.

Verdict Cause Analysis

The dismissal by joint motion reflects a negotiated resolution rather than a merits-based judicial determination, but the structure of the dismissal carries specific legal implications worth examining:

• The plaintiff’s claims were dismissed with prejudice, meaning Thirty Three Threads is permanently barred from re-filing those specific infringement claims (Third, Fourth, and Fifth causes of action) against these defendants in federal court.
• The defendant’s counterclaims were dismissed without prejudice, preserving Pacific Manufacturing’s ability to assert those claims in future proceedings if circumstances warrant, including potentially in the parallel state court action.
• The explicit notation that neither party considers itself a prevailing party is a deliberate litigation posture designed to foreclose any basis for attorney fee motions under 35 U.S.C. § 285 or Rule 54(d), reflecting careful settlement drafting by both counsel.
• The preservation of the parallel Superior Court action (Case No. 37-2023-00042062-CU-BT-CTL) indicates the parties’ underlying commercial disputes — likely involving business tort or contract claims — remain live, and the federal patent case may have been resolved as part of a broader commercial settlement.

Legal Significance

1. 1. The dual dismissal structure — plaintiff with prejudice, defendant without prejudice — is a negotiated asymmetry that suggests the plaintiff may have received some commercial consideration in exchange for foregoing its federal patent claims permanently while allowing defendants to retain optionality on their counterclaims.
2. 2. This case underscores that design patent disputes in the performance apparel sector frequently resolve pre-trial, as the costs of litigating ornamental design scope against multiple defendants across product lines often exceed recoverable damages in niche consumer product markets.
3. 3. The parallel state court proceeding signals that IP-adjacent business tort claims (e.g., unfair competition, trade dress, misappropriation) remain a critical supplemental enforcement channel when federal patent claims are dropped, and IP counsel should coordinate federal and state strategies from case inception.

Strategic Takeaways

For Patent Attorneys:

• When asserting both design and utility patents against multiple co-defendants, structure initial pleadings to clearly segregate infringement theories by patent type, as this facilitates targeted partial dismissals — such as occurred here — without surrendering all claims simultaneously.
• The mutual ‘no prevailing party’ stipulation used here is a powerful settlement tool to neutralize fee-shifting exposure under § 285; counsel should negotiate this language explicitly when orchestrating joint dismissals in patent cases with uncertain damages positions.
• Preserve parallel state court claims early in case strategy — filing concurrent state court actions before federal resolution preserves leverage and gives clients a fallback enforcement path, as Thirty Three Threads appears to have done effectively here.
• When representing plaintiffs asserting design patents in competitive consumer product markets, conduct early damages analysis to assess whether litigation costs against multiple small-market defendants justify the full trial path, and build in structured settlement options at the pleading stage.

For IP Professionals:

• This case demonstrates the value of layered IP protection — combining design patents for ornamental features with utility patents for functional elements — to create multiple independent bases for infringement actions in performance apparel, even if some claims are ultimately withdrawn.
• Monitor co-defendant structures carefully: when a patent holder sues a manufacturer alongside downstream distributors and branded competitors (as here with four defendants), the resolution dynamics often differ significantly from single-defendant cases, and licensing or settlement terms may need to address the entire distribution chain.

For R&D Teams:

• Performance sock and studio accessory product development teams should conduct freedom-to-operate analyses covering both the visual design (design patents) and functional construction (utility patents) of any grip, toe-separation, or studio sock product before commercialization, as this case illustrates how dual-patent enforcement can be deployed simultaneously.
• Design-around strategies for utility patent US7346935B1 should focus on alternative sock structural configurations that achieve grip or toe-articulation functionality through materially different constructions, reducing exposure to both the asserted claims and any continuation patents in this family.