The complaint

Broadway Kleer-Guard Corp. v. Cottrell Paper Company, Inc., No. 3:26-cv-14432 (D.N.J.), is a 44-page verified complaint filed November 6, 2026, with a jury demand. The plaintiffs are Broadway Kleer-Guard Corp., doing business as Broadway Industries, and Broadway Holdings IX, LLC and Broadway Holdings XI, LLC, all of Monroe Township, New Jersey. The complaint describes Broadway Kleer-Guard as a manufacturer and distributor of paper and plastic packaging since 1945.

The defendants, whose organization, places of business, and ownership and member roles the complaint pleads on information and belief, are Cottrell Paper Company, Inc. and Mill 26, Inc. of Rock City Falls, New York, with two Cottrell principals; Adirondack Tissue Supply, LLC of Ballston Spa, New York, with its owner; Hemp Paper Company, LLC of Portland, Oregon and Hawaii Fibers, LLC of Honolulu, with two of their members; and two alleged partnerships, the Cottrell-Adirondack Partnership and the Cottrell-Hemp Paper Partnership. The complaint lists No. 3:24-cv-07898 (D.N.J.), an earlier suit between Broadway and the Cottrell defendants, as a related case.

The settlement and license

According to the complaint, Broadway and the Cottrell defendants signed a one-way non-disclosure agreement in June 2021, with Broadway as the disclosing party, in connection with a contemplated supplier relationship, and Broadway filed a provisional application on hemp paper bags in July 2021. Broadway sued the Cottrell defendants in July 2024 over the agreement. The parties settled under an agreement dated August 19, 2025, under which the Cottrell defendants assigned their ownership interest in the hemp paper bag patent to Broadway, two Cottrell principals were named as co-inventors, and Broadway granted Cottrell a non-exclusive, non-transferable license to make and sell 2, 4, 6, 8, and 10 pound flat bottom bags made from 100% hemp in defined markets such as cannabis dispensaries, schools, and online storefronts.

The complaint alleges that Cottrell transferred license rights to Adirondack and Hemp Paper without consent and, on information and belief, sold in markets and sizes outside the license; it points to Mill 26 listings on eBay and Etsy offering three-pound bags. It also alleges that Cottrell, before the settlement, disclosed Broadway's confidential information on hemp and wood pulp blend bags to Hemp Paper's principal. It points to a January 2025 book by that principal describing a partnership with Cottrell, and to co-branded ATS Warehouse X Mill26 bags marketed by Adirondack.

The patent

The complaint asserts U.S. Patent No. 12,752,991, titled Hemp Paper Bags, which issued October 6, 2026, from Application No. 18/669,107, filed May 20, 2024. The patent names Broadway Holdings XI, LLC as assignee, and the complaint alleges that Broadway Holdings XI owns all right, title, and interest in it. Claim 1 covers a paper bag of hemp paper comprising one hundred percent hemp, with a tensile MD strength and a tensile CD strength each from five to two hundred pounds per inch and a bursting strength from five to two hundred pounds per square inch. The complaint identifies claims 1, 3 to 5, and 12 to 14 as infringed, by way of illustration.

The counts

The Third Count, brought by Broadway Holdings XI, alleges that Adirondack, Hemp Paper, Hawaii Fibers, and the two partnerships directly infringe under 35 U.S.C. 271(a) by using, offering, and selling 100% hemp paper bags made by Cottrell, that, alternatively, three individual defendants induce infringement under 35 U.S.C. 271(b), and that the infringement is willful. The Eighth and Ninth Counts allege trade secret misappropriation under the Defend Trade Secrets Act, 18 U.S.C. 1836, and the New Jersey Trade Secrets Act against the Cottrell and Hemp Paper defendants and their partnership.

The remaining counts allege breach of the non-disclosure agreement and of the settlement and license, tortious interference with the license, intentional interference with economic relations, fraud in the inducement of the settlement, and, in the alternative to the trade secret counts, unfair competition.

The relief

The complaint asks for lost profits and an accounting, trade secret damages with exemplary damages, a constructive trust, a royalty of at least 10% on future sales, preliminary and permanent injunctions including one under 35 U.S.C. 283 against further infringement, patent damages of no less than a reasonable royalty under 35 U.S.C. 284 with enhancement for willfulness, partial rescission of the settlement's releases and royalty cap, punitive damages, interest, attorneys' fees, and costs.

The early filings

The docket shows three corporate disclosure statements filed November 6, 2026, and the AO 120 patent form and an issued summons on November 9, 2026. As of November 9, 2026, the USPTO's trial records show no PTAB proceedings on the patent.

What to watch next

Watch for service on the out-of-state defendants, any motion for preliminary injunctive relief, and answers or motions to dismiss.