By Rae Ann Varona
Law360 (June 13, 2024, 8:15 PM EDT) — A company that holds a patent for making ice cream using cryogenics has accused a Florida franchisor of falsely claiming to operate under a patent, saying in Washington federal court that the dessert purveyor has even been charging franchisees an “intellectual property fee.”

Washington state-based NitroCream LLC alleges Chill-N Nitrogen Ice Cream Franchising LLC, a former licensee, knew the U.S. Patent and Trademark Office concluded Nitro’s patent — U.S. Patent No. 7,455,868 — was valid and enforceable in October 2020, following a reexamination, according to the Tuesday complaint.

The company, which designs and manufactures machines that allow users to make ice cream and other frozen desserts like gelato using cryogenic liquefied gas like liquid nitrogen, says Chill-N still used steps claimed in the ‘868 patent in its franchising business without a license from Nitro.

“Despite Chill-N’s knowledge that its methods practice the claims of the ‘868 Patent, Chill-N has failed and continues to fail to inform its franchisees and/or potential licensees of the existence of the ‘868’ patent,” Nitro said.

Nitro says Chill-N, which also does business as Chill N7 Nitrogen Ice Cream, claims it “operates under patent and patent pending processes” and includes in its Chill-N Franchise Agreement an “intellectual property fee” of $100 per month paid to Chill-N “or its designated third-party vendor.”

“Nitro has never received any of the IP Fee Chill-N charges its franchisees and/or licensees,” Nitro said.

The ‘868 patent, Nitro says, was originally issued to its owner, Robert Kennedy, in 2008 and generally covers a method of making an ice cream product by placing ingredients into an open-top container, dispensing a cryogenic liquefied gas into the container, and mechanically mixing the ingredients with the liquefied gas to produce the ice cream product.

Nitro says it initially entered into a license agreement with Chill-N in October 2018. Chill-N, however, terminated the agreement in July 2020, reasoning that Nitro’s patent was found to be invalid in July 2019.

According to Nitro’s suit, an unnamed entity requested an ex parte reexamination of the ‘868 patent in November 2018. But that patent “emerged from reexamination with valid and enforceable patent claims” in October 2020, Nitro said.

Nitro says Kennedy emailed Chill-N in December 2020 concerning the termination of the license agreement, explaining to Chill-N that what was publicly posted by the USPTO was “not what is actually going on behind the scenes.”

Nitro says that in light of that email, Chill-N knew that the ‘868 patent was still valid and enforceable.

Given Chill-N’s July 2020 letter, Nitro alleges that Chill-N further knew that it had “no license to use the ‘868 Patentmethods on or after” the December 2020 email.

Nitro accuses Chill-N of patent infringement, false patent marking, and false advertising. It also accuses Chill-N of unfair competition under Washington state law.

Nitro says that consumers have come to associate Nitro with “exceptional cryogenic liquified gas-based ice cream and ice cream making processes” due to its ‘868 patented methods. Chill-N, however, has been deceiving the public into believing that Chill-N’s establishments are associated with Nitro or that Chill-N owns the patent or pending patent for the ice cream-making process, according to the complaint.

Nitro also lodged patent infringement and breach of contract claims in the same suit against another creamery, Ohio-based Buzzed Bull Holdings LLC, which also has franchises.

Nitro claims that it has suffered damages as a result of material breaches to the Buzzed Bull agreement, and due toBuzzed Bull’s “unauthorized use” of the ‘868 patent methods.

Nitro is seeking injunctive relief, a finding that the defendants willfully infringed the ‘868 patent, and an order mandating damages.

Counsel for Nitro did not immediately respond to a request for comment Thursday, nor did Chill-N or Buzzed Bull.

The patent-in-suit is U.S. Patent No. 7,455,868. NitroCream is represented by W. Sean Hornbrook of Peterson Law PLLC and Joseph A. Farco of Norris McLaughlin PA

.

Counsel information for the defendants was not immediately available.

The case is NitroCream LLC v. Chill-N Nitrogen Ice Cream Franchising LLC et al., case number

2:24-cv-00199, in the U.S. District Court for the Eastern District of Washington.

–Editing by Orlando Lorenzo.