IP Law Daily, PATENT—N.D. Fla.: Attempted monopolization claims tossed as garden hose case unravels, (Apr 16, 2025)

By Martin A. Steinberg, J.D.

Tristar complained that Telebrands allegedly stole its rightful monopoly in the market for expandable and retractable hoses.

In a decade-long legal battle over valuable patent rights to expandable garden hose technology, the federal court in Pensacola dismissed the claims of Tristar Products, Inc., against Defendants Telebrands Corp., Whele LLC d/b/a Perch (Perch), and Jeffrey L. Snow, Telebrands’ outside counsel. At various times over the past decade, Tristar, Telebrands, and Perch have each marketed and sold competing expandable garden hose products. Tristar allegedly purchased the rights to sell the hoses from the inventor. However, the inventor later sold his patent rights to Telebrands. The feud between Tristar and Telebrands over the patent and licensing rights to sell the products has stretched through New Jersey, Delaware, Massachusetts, and Florida federal judicial districts and the Patent Office. Of the ten counts raised in the Complaint in this action, the RICO and Clayton Act claims were dismissed with prejudice under Rule 12(b)(6), while the remaining state law counts were dismissed without prejudice. Tristar was given 14 days to amend those counts (Tristar Products, Inc. v. Telebrands Corp., No 3:24-cv-00238-MCR-HTC (N.D. Fla. Apr. 14, 2025)).

Background. Expandable garden hoses were allegedly the brainchild of Gary Ragner, the inventor of dozens of patents relating to them. In 2012, Tristar agreed with Ragner’s company, Ragner Technology Corporation (RTC), for an exclusive license to his portfolio of expandable garden hose technology patents. Around that same time, Telebrands’ predecessors began marketing and selling expandable garden hoses based on patents obtained by a rival inventor, Michael Berardi. Ragner had previously demonstrated his prototype and shared other proprietary information with Berardi at an investment meeting. But Berardi developed a competing product instead of investing in Ragner’s prototype. An avalanche of litigation ensued. Throughout those actions, Tristar asserted the Ragner patents against Telebrands, while Telebrands asserted the Berardi patents against Tristar.

On August 12, 2021, in a still-pending case in the District of New Jersey that the parties colloquially refer to as the “Blue Gentian action,” the district court decided that Ragner co-invented the patents asserted by Berardi and Telebrands. The Federal Circuit affirmed.

As early as May 2022, Tristar claimed that Telebrands and Perch began meddling with its exclusive license to the RTC patent portfolio by conspiring to induce RTC to terminate that agreement wrongfully. After RTC terminated its exclusive licensing arrangement with Tristar on December 12, 2022, Tristar sued RTC for breach of contract and implied covenant of good faith and fair dealing based, among other things, on RTC's alleged failure to provide Tristar with the contractual right of first refusal embedded in its exclusive licensing arrangement.

On October 25, 2022, RTC agreed to license its patent portfolio to Telebrands, with an option for Telebrands to acquire the portfolio outright. Telebrands exercised that option on September 26, 2023, and RTC assigned "the entire rights, titles, and interests" to its expandable garden hose patent portfolio.

Tristar claimed that Telebrands and its attorney, Defendant Snow, concocted a plan to fraudulently extinguish Tristar's pending patent infringement claims against Telebrands and its "rightful monopoly in the market for expandable and retractable hoses." First, Tristar claims that Telebrands and Snow deceived the Patent Office into believing that Telebrands was the lawful owner/assignee of the RTC patents. Second, between October 31 and November 7, 2023, Snow, acting on behalf of Telebrands, submitted requests, as the patent owner of record, for ex parte reexaminations of the '448 Patent, '076 Patent, '944 Patent, and '057 Patent. The alleged goal was to cancel all claims under these patents fraudulently. In April 2024, the Patent Office issued certificates that cancelled the '448 Patent, '076 Patent, '944 Patent, and '057 Patent, effectively extinguishing both its "rightful monopoly in the market for expandable and retractable hoses," and its outstanding patent infringement claims.

Complaint. On May 22, 2024, Tristar filed this action against Telebrands, Perch, and Snow. The Complaint contained ten counts. Counts I and II alleged that Telebrands, under Florida and New Jersey common law, tortiously interfered with Tristar's exclusive licensing arrangement with RTC. Counts III and IV alleged that Telebrands and Perch unlawfully conspired under Florida and New Jersey common law to tortiously interfere with Tristar's exclusive licensing arrangement to wrongfully induce RTC to terminate Tristar's rights in the patents. Counts V and VI alleged that Telebrands and Snow committed fraud under Florida and New Jersey common law. Tristar sought treble damages under Count VII under RICO. Counts VIII and IX alleged that Telebrands and Snow unlawfully conspired under Florida and New Jersey common law to commit the fraud alleged in Counts V and VI. And Count X, brought under the Clayton Act's private right of action, alleged that Telebrands and Snow attempted to monopolize the market for "expandable and retractable hoses" in violation of § 2 of the Sherman Act, and sought treble damages.

Personal jurisdiction. The court found that Tristar's federal statutory claims are colorable, but “only by a whisker.” At the highest level of abstraction, Tristar's RICO and Clayton Act claims pass the smell test. However, notwithstanding their colorability, neither Tristar's RICO nor antitrust claims can support the exercise of pendent jurisdiction over Tristar's state law claims because these federal statutory claims do not survive Telebrands' and Snow's more formidable Rule 12(b)(6) challenge. Before Tristar can avail itself of jurisdiction under RICO or the Clayton Act, the court must decide whether Tristar has stated a colorable claim under either statute. Asking whether a claim is colorable is a different question than asking whether a claim is plausibly alleged under Rule 12(b)(6).

Count VII: Civil RICO. The court noted that none of the conduct alleged in the Complaint came close to racketeering. Tristar's allegations of wire fraud rested on the premise that Telebrands and Snow were somehow required to construct legal arguments that the assignment of patent rights that Telebrands had just bargained for and purchased was invalid and present those arguments to the Patent Office. However, Telebrands and Snow surely were not required to do so. Imposing such a requirement would threaten to distort our system of representation and chill legitimate First Amendment petitioning.

The Complaint further failed to plausibly allege that together Telebrands and Snow formed an association-in-fact enterprise. To state a civil RICO claim, the Complaint must establish a distinction between the defendant RICO "person" and the broader RICO "enterprise." Tristar could not name Telebrands as the named defendant and the entire enterprise and expect to state a plausible civil RICO claim. Tristar had to find at least one other person or entity to jerry-rig a RICO enterprise. So, Tristar named Telebrands' outside counsel, Snow, who allegedly guided Telebrands through the ex parte reexamination proceedings with the Patent Office, as a member of the putative enterprise. The Eleventh Circuit explained that a Plaintiff may not plead the existence of a RICO enterprise between a corporate defendant and its agents or employees acting within the scope of their roles for the corporation.

At most, Snow was alleged to have performed the relatively anodyne tasks of recording an assignment agreement with the Patent Office and checking a box certifying that Telebrands owned the patents it sought to have reexamined and ultimately cancelled. The other ancillary allegations that Snow guided a lay client through an unfamiliar agency procedure, drafted legal petitions, and formulated legal arguments at the intersection of litigation and patent prosecution—all fall squarely within the traditional provision of legal services.

Even if Telebrands and Snow could properly be considered a RICO enterprise or had committed two predicate acts of wire fraud, Tristar failed to allege a pattern of racketeering activity. RICO only applies to long-term, habitual criminal activity—not isolated or sporadic episodes. At most, Tristar alleged a scheme with a clear and terminable goal that had already reached its natural ending point. Nothing in the Complaint suggested that Telebrands or Snow would ever repeat the alleged course of conduct.

Finally, Tristar could not show that Telebrands' and Snow's alleged conduct caused its injuries as a matter of law. RICO provides a cause of action for "[a]ny person injured in his business or property because of a violation of section 1962." 18 U.S.C. § 1964(c). The Patent Office, not Telebrands or Snow, canceled the '448 Patent, '076 Patent, '944 Patent, and '057 Patent.

Count X: Attempted monopolization. The court held that Tristar's attempted monopolization claim must be dismissed because of the absence of an antitrust injury. When injury is absent, courts need not address whether the plaintiff is an efficient enforcer of the antitrust laws. Section 4 of the Clayton Act grants private parties, such as Tristar, the power to enforce federal antitrust laws. To perform the private attorney general role, Tristar must demonstrate that it has standing under Article III of the Constitution and has antitrust standing. First, Tristar must plausibly allege that it suffered an antitrust injury. Second, it must be an efficient enforcer of the antitrust laws. To survive dismissal, Tristar must plausibly allege that Telebrands' conduct injured its business and will harm competition; in other words, consumers will be made worse off by the things that make monopolies objectionable: higher prices, reduced output, or diminished quality.

Tristar complained that Telebrands allegedly stole its "rightful" monopoly in the putative market for "expandable and retractable hoses" through unlawful and fraudulent acts, placing Telebrands on the precipice of achieving "wrongful" monopoly power in that same market. “Monopoly-for-me-not-for-thee claims like this are dead on arrival.” The court could not find a consumer interest in this case. Tristar was complaining not because Telebrands was gouging the consumer by charging a monopoly price for expandable and retractable hoses, but because Telebrands allegedly took away a monopoly that rightfully belonged to Tristar as the alleged real holder of RTC's patent rights.

Leave to amend. Despite Tristar's blanket request for leave to amend, the court dismissed the RICO and antitrust claims with prejudice. Generally, when a more carefully drafted complaint might state a claim, a plaintiff must be given at least one chance to amend the complaint before the court dismisses the action with prejudice. However, the flaws with Tristar's federal claims were not technical pleading deficiencies. Because any retooled RICO or attempted monopolization claim would meet an identical fate, the court refused to permit Tristar to amend and found that dismissal with prejudice was appropriate.

State law claims. Counts I and II were dismissed without prejudice. Tristar's first state law claims alleged that Telebrands tortiously interfered with its longstanding exclusive licensing arrangement with RTC, causing its termination in August 2022. However, Tristar's tortious interference claim was a speculative theory searching for facts to support it. Thus, it failed to pass muster under Rule 12(b)(6). Even drawing all inferences in favor of Tristar, the Complaint failed to allege sufficient facts to plausibly state a claim for tortious interference with a contractual relationship. A careful review of the Complaint revealed that the only allegation that Telebrands negotiated with RTC before it terminated its arrangement with Tristar is made solely "upon information and belief,” a phrase used nearly 50 times in the Complaint.

Next, Tristar alleged that, despite being competitors in their own right, Telebrands and Perch unlawfully conspired to interfere with its exclusive license arrangement with RTC. The Complaint lacked any facts from which the court could plausibly infer any such agreement between Telebrands and Perch. As currently pleaded, Tristar had alleged “a tin foil hat conspiracy,” which was not plausible. Thus, Counts III and IV were dismissed without prejudice to allow Tristar to cure the defects.

Third, Tristar's fraud claims against Telebrands and Snow were premised on their purported misrepresentations to RTC during the negotiations over the assignment agreement and to the Patent Office during the ex parte reexamination proceedings. Neither the alleged statements to RTC regarding the continued availability of past patent infringement damages after the assignment, nor the allegedly false statements about the ownership of the RTC patent portfolio to the Patent Office, can support Tristar's fraud claims against Telebrands and Snow. Tristar cannot allege that it relied on either category of statements to its detriment, presumably because they were made to RTC and the Patent Office, not Tristar.

Furthermore, Tristar's fraud claims were preempted to the extent they were premised on allegedly false statements that Telebrands and Snow made to the Patent Office. State law causes of action are preempted when the federal government has the exclusive power to punish a federal statute or regulation violation.

Finally, Tristar claimed that Telebrands and Snow conspired to commit the fraudulent acts described. However, since the court found that Tristar's fraud claims were fatally flawed or otherwise preempted, there can be no actionable conspiracy claim either.

The Case is No. 3:24-cv-00238-MCR-HTC.

Judge: Rodgers, C.

Attorneys: Emma Kolesar (Fried, Frank, Harris, Shriver & Jacobson LLP) for Tristar Products Inc. David Smart Stone (Stone & Magnanini LLP) for Telebrands Corp.

Companies: Tristar Products Inc.; Telebrands Corp.

Cases: Patent USPTO FloridaNews