Court: District Court, N.D. Illinois; February 9, 2017; Federal District Court
The memorandum outlines a lengthy patent infringement case involving plastic couplers, which has extended over ten years, producing 17 opinions, numerous orders, two trials, and a contempt hearing, with over 21,000 pages of docket entries. In 2012, a jury awarded Mr. Minemyer $1.5 million in damages, a decision affirmed by the Federal Circuit and unchallenged by the Supreme Court. In December 2011, prior to the first trial, the R-BOC defendants sought a declaration of non-infringement regarding their redesigned coupler, notably omitting any mention of the angle of the interior threads, which was previously determined to be approximately 80 degrees. Testimony revealed that Mr. Lundeen admitted the redesign did not alter the thread angle, thus infringing on the Minemyer patent. Despite this acknowledgment, in the current case, Mr. Lundeen retracted that admission, asserting that significant changes were made post-trial. He attempted to adjust thread angles but confirmed that many couplers remained unchanged and continued to be sold after the initial trial. The present action, tried in December 2014, also addressed Mr. Minemyer’s claims of the R-BOC defendants' contempt for failing to comply with a 2012 permanent injunction requiring the destruction of molds used in producing infringing products. Mr. Lundeen conceded that no molds were turned over despite his understanding of the injunction's requirements. The R-BOC defendants claimed to have redesigned the couplers in 2008 to mitigate infringement risks; however, Mr. Lundeen acknowledged that no actual changes were implemented at that time, contradicting their assertions of proactive compliance.
The argument that the 2008 redesign of a radial conduit coupler intentionally altered the interior thread angle is deemed unsupportable. Key points include the lack of disclosure about this angle change to Mr. Minemyer, his legal counsel, and the court from 2008 until mid-2012, despite multiple opportunities to do so. Notably, the complaint filed by R-BOC in December 2011 did not mention any redesign of the thread angle. Evidence contradicts the current theory, including Mr. Lundeen's early 2012 admission that no changes were made to the interior thread angles. The individual who allegedly made these changes did not testify, and the company owners remained silent on the matter for years. Ed Krajecki denied being informed about any thread angle changes by Mr. Lundeen, who provided inconsistent statements throughout the case. The defendants' prolonged silence regarding the alleged thread angle modifications contributes to the overall evidentiary context. Additionally, the document reflects on the lengthy litigation history surrounding the coupler, including two federal court cases and numerous motions, culminating in appeals that were ultimately unsuccessful. The narrative emphasizes the coupler’s significance despite its simplicity, highlighting its utility in the communications industry and the extensive legal proceedings it has spurred over a decade.
A lengthy legal dispute involving inventor John Minemyer and the R-Boc group has resulted in significant financial implications, including over a million dollars in damages and substantial legal fees borne by taxpayers. Minemyer filed suit against R-Boc, its associates, and Dura-Line for patent and trade dress infringement related to his 'good-luck piece.' While Minemyer faced setbacks, including summary judgment against his trade dress claims and the invalidation of several patent claims due to the on-sale bar, his patent infringement claims eventually proceeded to trial in February 2012.
In 2008, R-Boc claimed to have redesigned the accused couplers, altering the exterior surface from a groove to a waffled pattern and removing a sealing surface. However, Mr. Lundeen's testimony did not address any changes to the angle of the interior threads, which later became a contested issue. Minemyer learned of this alleged redesign during Lundeen's deposition but argued that the modifications were minor and did not avoid infringement. He sought to include the redesigned couplers as evidence of ongoing infringement, but the court denied this request. The trial ultimately proceeded without the redesigned couplers being considered by the jury.
R-Boc was found to have willfully infringed upon Mr. Minemyer’s couplers, which they had access to as distributors, leading to a jury award of over $1.5 million for Mr. Minemyer's lost profits. Despite clear evidence of intentional copying, the court overruled the jury's finding of willful infringement based on Federal Circuit case law. On July 7, 2012, a permanent injunction was issued, prohibiting the R-Boc defendants from making, selling, or using the infringing products, and requiring them to destroy all inventory and molds related to those products within thirty days.
The injunction specifically listed several part numbers of the infringing products. Although the defendants did not contest the clarity of the injunction, they filed appeals and requested a stay on judgment enforcement without posting a supersedeas bond, claiming financial strain from the bond requirement. However, the R-Boc defendants failed to comply with the injunction, particularly regarding the destruction of molds used for manufacturing the infringing products. They argued that they had retooled the molds in 2008, asserting that no molds existed to be turned over for destruction, which contradicted the explicit terms of the injunction and the evidence presented in the case.
Changes made to the interior threads of the molds in 2008 do not negate the R-BOC defendants' potential to modify these molds again to produce infringing products. The necessity for destroying these molds is emphasized to prevent future infringement, supported by 35 U.S.C. § 283, which allows courts to issue injunctions to safeguard patent rights. Previous cases, such as Johns Hopkins University v. CellPro, Inc. and Newspring Industrial Corp. v. Sun Gem Plastics Enterprise Co., underline the viability of injunctions that include the seizure of molds used for infringing products. The R-BOC defendants rely on testimony claiming that retooled molds cannot produce old infringing products, but this argument is dismissed as trivial and ineffective against a contempt finding. The significant part of the injunction required the defendants to surrender "all molds utilized in the production of Infringing Products," irrespective of their condition. The text argues that even if molds were damaged or rusted, they still constituted molds that had been used for infringement and thus should be turned over, reflecting a blatant disregard for the injunction. The defendants’ delay in notifying the court about the molds suggests an awareness of their culpability. Their assertion that the molds no longer existed due to minor design changes is characterized as absurd. Notably, the defendants failed to address the molds in their responses to earlier injunction requests, indicating a conscious avoidance of the issue, despite their legal representation recognizing the molds' complexity.
Mr. Minemyer’s counsel argued at trial that the molds involved had multiple parts, including a base, and that the original molds created by Mr. Backman for R-BOC were still in use for manufacturing infringing parts. Photographs presented revealed that these molds, which had not changed since their installation, were not provided as mandated by the injunction. Despite any potential ambiguities in the injunction, the R-BOC defendants could not unilaterally decide to proceed with manufacturing without compliance, especially since they had the molds and failed to ship them for destruction as ordered. This constitutes clear and convincing evidence of their violation of the injunction.
The discussion transitions to the standards for determining contempt in patent cases, referencing the Federal Circuit's decision in TiVo Inc. v. EchoStar Corp., which replaced the older KSM Fastening Systems analysis. The new two-step analysis requires a comparison between the newly accused product and the previously adjudged infringing product to ascertain if there is more than a colorable difference. If not, contempt proceedings are justified; if there is a colorable difference, a new trial on infringement is necessary. TiVo streamlined the analysis by merging the steps, emphasizing that the main question is whether the new product is sufficiently different from the infringing one to create reasonable doubt about the wrongfulness of the defendant’s actions.
Analysis must concentrate on the specific attributes of the newly accused product that were previously deemed infringing in a prior trial, particularly focusing on those features that satisfied the limitations of the asserted claims. If any elements previously found to infringe have been altered or removed, the court must assess whether these modifications are significant. A significant difference would render the new product more than just colorably different from the adjudged infringing product, making the question of actual infringement irrelevant and rendering contempt inappropriate. The burden lies with the patentee to show that the differences between the two products are merely colorable.
The term "colorable difference" has been criticized for its ambiguity but remains prevalent in patent law. Its application spans various areas, including contempt procedures and doctrines related to claim preclusion and design patent infringement. The determination of whether a modification is significant hinges on the nature of the products involved; modifications obvious to a skilled artisan may lead to a finding of no colorable difference, while nonobvious changes could indicate a more than colorable difference.
Moreover, while principles like encouraging legitimate design-around efforts are emphasized, the resolution of specific cases is complex and not strictly formulaic. Legal interpretation requires an understanding of purpose, as the technical language of law must be contextualized to avoid arbitrary outcomes.
The R-BOC defendants assert that they legitimately redesigned their couplers in 2008, claiming four specific changes: removal of a non-essential waffle pattern, elimination of the sealing surface in the coupler's center, addition of one or two interior threads to replace the removed sealing surface, and alteration of the angle of the interior threads. The waffle pattern is dismissed as a cosmetic change unrelated to infringement claims. The removal of the sealing surface and thread extension are logically connected, but the rationale behind the angle change is unclear and poorly explained. The defendants failed to provide adequate evidence or testimony regarding changes made to the thread angles, particularly concerning a mysterious figure, Mr. Calvacca, who was purportedly involved but did not testify. The timing of these changes remains ambiguous, with Mr. Minemyer’s counsel mockingly referring to the angle change as a 'Christmas miracle' due to its vague timeline. Throughout the litigation, the R-BOC defendants' descriptions of their design changes have varied, indicating a lack of clarity and consistency in their claims.
The comparison highlights that the B.C. Redesign lacks the 'sealing surface' element identified by the Plaintiff and his expert, Mr. Kaiser, as part of each accused B.C. coupler, with no other asserted changes. Mr. Lundeen, a key witness who attended all pretrial proceedings, testified in February 2012 that there were no changes to the interior thread angles, contradicting later claims that changes occurred post-trial on one model. He acknowledged during the current trial that he previously informed the jury there were no changes to thread angles in the 2008 redesign, despite being the most knowledgeable on the matter.
The R-BOC defendants claimed that the only changes justifying the assertion of a different construction were the inconsequential waffle pattern and the removal of the interior sealing surface. These claims were reiterated in their November 2010 motion to bar the Plaintiff from introducing evidence of infringement by the redesigned coupler. In November 2011, the defendants filed a declaratory judgment action asserting non-infringement of Mr. Minemyer’s ’726 patent, again citing the waffle pattern and the sealing land removal as the sole reasons.
Notably, the R-BOC defendants alleged changes to thread angles but did not disclose these details for nearly three years, raising questions about their credibility. Courts recognize the significance of failing to mention pertinent facts under circumstances that warrant disclosure, as demonstrated in relevant case law.
In Jenkins v. Anderson, the court addressed the principle of impeachment by omission, emphasizing that implausible or internally inconsistent testimonies are often dismissed by judges and juries. The case highlighted Mr. Lundeen's credibility issues, noting his inconsistent statements and evasive demeanor during testimony regarding changes to interior thread angles in a redesign. The court underscored the importance of a trial judge's ability to assess witness credibility based on demeanor and tone, as established in previous rulings. Lundeen's testimony was deemed unconvincing and implausible, particularly when he contradicted earlier statements about the timing of modifications. Ultimately, the court found that significant inconsistencies and the implausibility of Lundeen's explanations undermined his credibility, leading to a lack of belief in his testimony.
In 2008, a redesign led to changes in thread angles from 80 degrees to 75 degrees, contradicting prior testimony from Mr. Lundeen and fellow defendant Ed Krajecki, who stated no such changes were made. Lundeen claimed the angle change occurred without his request or knowledge, suggesting an inexplicable process. There was no documentation supporting any request for these alterations or their associated costs. The December 2011 measurements, conducted by David Nelson using a CT scanner on couplers provided by Lundeen, revealed thread angles ranging from 73.96 to 92.05 degrees, with many close to 80 degrees. Lundeen falsely testified that he only learned of angle changes after the first trial, despite having received Nelson's report before the trial, which was not disclosed to the defense until later. Evidence indicated that Lundeen influenced Nelson to alter measurements in the report, which was required to be provided in its original form during discovery for the first case.
Mr. Lundeen's testimony raises significant inconsistencies regarding the handling of a doctored report related to Mr. Minemyer's lawsuit. He claimed uncertainty about whether the altered report was disclosed to Mr. Minemyer's attorneys prior to the first trial and did not mention critical changes to thread angles during that trial. Lundeen's silence contradicts his claims of distress over the litigation, suggesting a lack of transparency. He persuaded Mr. Nelson to revise a measurement from 92 degrees to 79.88 degrees, which Nelson admitted was inaccurate, having actually measured a different angle. Despite acknowledging the accuracy of his original measurement, Nelson complied with Lundeen's instruction to alter the report without noting this change. Over two years after initial measurements, the R-BOC defendants filed an amended complaint asserting only two modifications to their couplers: the addition of a waffle pattern and the removal of a sealing land. Notably, no mention was made of any changes to the thread angles. These assertions remained consistent across various filings, despite opportunities to outline additional legitimate changes to their design, indicating a strategic choice in their legal narrative.
The R-BOC defendants failed to disclose significant changes to their product design, notably the angle of the interior threads, for over six years, only revealing this information in July 2014 during a motion for summary judgment. This omission is particularly striking given that the thread angle had been a contentious issue in prior litigation, with Mr. Lundeen asserting in 2012 that it was not part of the 2008 redesign. Despite filing multiple motions related to the redesign, the defendants consistently overlooked the angle change until their recent motion. The failure to mention these changes in pleadings constitutes evidentiary admissions, suggesting that no changes were made beyond those previously acknowledged: the waffle pattern, removal of the sealing land, and the replacement of the sealing land with continued threads. The defendants’ argument minimizing the significance of circumstantial evidence misinterprets its persuasive power, as established by the Supreme Court. Mr. Lundeen’s long silence on the thread angle, alongside his contractual obligations to disclose such changes, undermines his credibility and weakens the defendants' position, potentially qualifying these omissions as judicial admissions that negate any claims of design alterations to the threads.
The R-BOC defendants failed to address a critical issue regarding changes to thread angles in their declaratory judgment, which has been characterized as a deliberate and clear oversight. Mr. Minemyer raised this issue, but the defendants did not respond, potentially waiving any arguments they could have made. This lack of response generally leads to waiver, as established in precedent cases. Furthermore, testimony from Mr. Lundeen indicated that no changes to thread angles were made from at least 2008 to February 2012, providing strong evidence against any claims of redesign. The defendants' vague assertions about a redesign process lacked supporting documentation, such as emails or memos, to demonstrate a thoughtful and intentional change. The evidence suggests that there was no legitimate redesign in 2008 regarding the thread angles, contradicting the defendants' claims. The first reference to a redesign in their proposed findings appears only in a specific paragraph among a lengthy submission, indicating a lack of thorough documentation or consideration of any actual redesign efforts.
Modifications to the core inserts for the R-BOC defendants' redesigns began in September 2008, initially performed by Jerry Calvacca and his company, Freedom Tool, who allegedly made modifications such as cutting additional threads. However, Calvacca did not testify, and the R-BOC defendants lack admissible evidence of his or Freedom Tool's involvement, with claims that the company went out of business and Calvacca has since disappeared. The R-BOC defendants provided an invoice from a fellow defendant, Precision Custom Molders, which referred to extending threads on certain molds but did not support claims of redesigning the interior thread angles. The modifications were limited to a specific mold and did not indicate a comprehensive redesign. Additional invoices from early 2009 also did not mention Calvacca and covered extensions on other couplers, with the remaining modifications completed only by March 2012. Consequently, R-BOC defendants continued selling infringing couplers during the period between 2008 and March 2012. In November 2014, Walter Zdaniewicz testified about modifications but confirmed he did not begin work until 2012, contradicting claims about changes to thread angles, which Ed Krajecki also stated he had not requested.
The credibility of the R-BOC group's claims regarding changes to thread angles is called into question due to a lack of evidence and clear instructions. Mr. Zdaniewicz, a key witness, acknowledged that without specific guidance, no individual would arbitrarily alter the thread angles. Testimony revealed that Mr. Krajecki did not possess the necessary drawings or specifications to inform these changes, leading to reliance on existing mold dimensions. Zdaniewicz's inconsistent statements about the original threads and their status further undermine the R-BOC's assertions. He claimed that Mr. Krajecki desired an angle of around 15 degrees, a claim Krajecki denied, and Zdaniewicz's testimony does not address claims about alterations made between 2008 and 2012, which the court rejects. Measurements taken in April 2012 raised doubts about the timing of modifications, suggesting that the molds might not have been altered by the claimed date. Additionally, in January 2014, the R-BOC defendants revealed that no changes had been made to two sets of molds, contradicting earlier sworn statements made in court regarding modifications to all molds. The cumulative inconsistencies and revelations point to significant credibility issues in the R-BOC defendants' narrative.
It is challenging to assert that any legitimate "redesign" or "design-around" of the Minemyer patent claims, specifically Claim 12, occurred. Modifications intended to circumvent patent claims would likely have been meticulously planned and implemented uniformly across all accused device sizes in a short timeframe, rather than sporadically over months. The R-BOC defendants presented cross-sectional comparisons of their infringing couplers and the supposed 2008 redesigns, claiming significant differences. However, the inspection of these models does not substantiate their claims. Out of 16 examined models, 10 showed minimal changes, consisting of the addition of one or two threads, which does not constitute a significant modification. The remaining 6 models displayed noticeable changes, but these alterations were uneven, resulting in an imbalanced design with an off-center dead stop. R-BOC's counsel highlighted one example to illustrate the redesign, but discrepancies in changes across models were evident. The assertion that the minor addition of threads enhanced "pull-out strength" lacked credibility, especially since the added threads were primarily on one side, thus not effectively improving strength on the other. The installation method suggested by R-BOC’s counsel, involving a change in routine for workers, was unsupported by evidence, as there was no communication to users about altering installation practices.
Counsel for R-BOC initially suggested that no one would recognize the differences in their products, but later claimed that field workers were informed about the disparities. However, there was no evidence that customers or installers received any notice or instructions regarding changes in installation methods. R-BOC asserted that 10 of 16 models had offset dead stops and varying teeth, yet the offsets were minimally observable—no more than 1/16 inch, with one model at 1/8 inch—contrary to R-BOC's claims of significance. Furthermore, comparisons of redesigned and original models indicated a negligible difference in the number of threads, typically only two additional threads, and a one-thread difference at one end, again deemed insignificant.
Field instructions regarding variances in offsets appeared impractical, suggesting the changes were arbitrary rather than intentional. The R-BOC expert indicated these variances would not be communicated to workers. The evidence pointed to the original infringing models being uniformly designed, with consistent measurements and thread counts, while the redesigned models lacked a coherent design rationale. R-BOC failed to inform customers of any modifications to their couplers, which was a contractual obligation, and they continued using the same product identification numbers during the transition from infringing to redesigned couplers.
The evidence clearly established that the installation instructions for the couplers remained unchanged despite minor modifications, such as the addition of one or two interior threads or variations in thread angle. The defense expert admitted that these changes did not enhance performance in the field. Mr. Lundeen's attorney's claims that these modifications constituted significant structural changes were unconvincing. The R-BOC defendants only added threads gradually over four years without any systematic approach, and Mr. Lundeen acknowledged that there was no instruction to alter the thread angle during the 2008 redesign, which remained unchanged until at least February 2012. Furthermore, Mr. Lundeen had previously testified that the redesign did not involve changing the thread angles, indicating the minimal importance of these changes to the defendants. The modifications made did not lead to any functional improvements, as the redesigned couplers operated identically to the original infringing versions, remaining water-tight with no customer complaints. The redesign potentially offered only a marginal increase in theoretical strength that would be imperceptible in practical use. Notably, customers were never informed of these changes, and no new instructions were necessary for workmen to continue their tasks, demonstrating that the alterations had no real impact on either users or their operations.
The sealing land has been replaced by an infringing element, specifically the "approximately perpendicular" threads, which do not represent a significant modification. Referencing Ncube Corp. v. SeaChange Intern. Inc., it is highlighted that mere changes in function without altering the infringing nature of a product do not suffice to avoid liability. The R-Boc defendants acknowledged that they did not promote any changes to their customers, and both the original and "redesign" couplers were sold interchangeably. Under the TiVo framework, the critical question is whether the modified product significantly differs from the previously infringing product, and the evidence supports a conclusion that there are no substantial differences. This finding affects the R-Boc defendants’ attempts to revive previously rejected invalidity claims.
Moving to the second step of the TiVo analysis, if a court identifies no more than colorable differences, it must determine if the modified product continues to infringe the relevant claims. The evaluation must be conducted on a limitation-by-limitation basis, adhering to any prior claim construction. The burden lies with the patentee to demonstrate, by clear and convincing evidence, that the injunction has been violated, showing both that the newly accused product is not significantly different from the infringing product and that it infringes. This burden remains on the patentee even in cases of declaratory judgment, as established in Medtronic, Inc. v. Mirowski Family Ventures, LLC. Ultimately, parties redesigning previously infringing products may seek declarations of non-infringement while facing the implications of a permanent injunction from prior findings.
The standard of proof for proving infringement varies between contempt and declaratory judgment contexts under Federal Circuit precedent. In contempt cases, infringement must be established by clear and convincing evidence, while in declaratory judgment cases, the standard is a preponderance of the evidence. This discrepancy raises the potential for conflicting infringement findings in different cases.
The analysis of the R-BOC defendants' "redesign" couplers indicated that these devices are not more than colorably different from the previously infringing couplers. The TiVo precedent necessitates a further infringement analysis of these redesigns, despite existing case law suggesting that colorably different devices are essentially the same, thereby warranting collateral estoppel and a finding of infringement. Notable cases affirm this principle, stating that minor differences do not preclude a finding of infringement.
The R-BOC defendants made minimal modifications to their infringing couplers, primarily using the same molds and exhibiting unintentional or incidental changes to thread angles. Evidence suggests these changes were not deliberate attempts to avoid infringement of the Minemyer patent. Additionally, the adjustments made to sealing lands were inconsistent and did not reflect a true redesign. Variations in center stops also did not signify a substantial redesign as defined by the Federal Circuit. Overall, the R-BOC defendants' efforts appeared insufficient to demonstrate a departure from the infringing design.
The evidence indicates that the R-BOC defendants made minimal changes to their infringing couplers, as supported by expert testimony from Mr. Kaiser. He measured the angles of the cores used for both the original and redesigned couplers, consistently finding them around 79 to 80 degrees, with slight variations between 77 to 82 degrees. Mr. Kaiser explained that the angle difference of 5 degrees falls within acceptable manufacturing tolerances for plastic parts, which generally allow for a variation of five to ten-thousandths of an inch. He affirmed that the 75-degree threads still functioned equivalently to the 80-degree threads, confirming their classification as the same product despite slight angle differences.
Additionally, Mr. Kaiser’s testimony must be viewed alongside evidence highlighting the disorganized nature of the R-BOC defendants' redesign efforts, lacking a coherent plan or awareness of the angle adjustments being made. This includes testimony from Mr. Krajecki, a defendant, who demonstrated indifference toward the angles, suggesting a general neglect of the design process. Overall, the testimony collectively undermines the defendants' claims of a substantial redesign.
Mr. Lundeen's knowledge and opinion on the "redesign" couplers were deemed irrelevant as it was concluded that the angles of these couplers are "approximately perpendicular," thereby infringing claim 12 of Patent No. 6,851,726. The R-BOG defendants did provide counter-testimony, which is typical in federal court trials that involve expert witnesses, despite concerns regarding the credibility of such experts. The reliability of expert testimony has been a significant focus of judicial and scholarly discussion, with some experts viewed merely as advocates for those who hire them.
Anthony Storace, an expert for the R-BOC defendants, argued that a 75-degree angle would not be considered "approximately perpendicular" by someone skilled in thread design, which was irrelevant to the actual issue concerning mold making and plastics. Testimonies from Mr. Lundeen and Mr. Krajecki indicated that no true "redesign" had occurred. Storace's assertion that a sharp point would effectively cut into a conduit was criticized as circular reasoning, as the definition of "approximately perpendicular" was not substantiated. Evidence demonstrated that a 75-degree angle is functional and acceptable, countering Storace’s claim about the unacceptability of parts designed at that angle. The conclusion emphasized that tolerances depend on the specific application of the part, and minor variations in angle may not significantly affect performance.
The evidence indicates that the functionality of couplers remains unaffected by variations in interior thread angles, specifically between 75 and 80 degrees, as neither customers nor workmen expressed any dissatisfaction regarding these differences. Mr. Lundeen, who was unaware of any angle changes, and Mr. Krajecki, who viewed both angles as equivalent, further support this lack of concern. Additionally, measurements from the redesigned couplers revealed significant deviations in thread angles, ranging from 50.9 to 80.5 degrees across all sizes. Mr. Lundeen's failure to produce a potentially doctored report is significant and remains binding on the defendants, regardless of whether his counsel was at fault. While Mr. Sto-race’s testimony was deemed less relevant and credible compared to Mr. Kaiser’s, the overall evidence clearly demonstrates that the R-BOC defendants willfully violated an injunction from the first trial by producing couplers that were only colorably different from those previously found to infringe and by failing to provide the molds used for the infringing products. The molds included all parts necessary for manufacturing the couplers, indicating a comprehensive infringement.
The cores alone were insufficient to produce the infringing couplers identified by the jury in the initial trial, which continued to violate Claim 12 of Minemyer Patent No. 6,851,726. Despite minor tweaks to their "redesigned" couplers—likely occurring by chance rather than intentional redesign—the defendants continued to infringe the patent, as changes were made sporadically over several years, allowing original infringing couplers to be manufactured and distributed continuously. Mr. Minemyer is entitled to lost profits damages due to this ongoing infringement, with documented losses amounting to 1,117,187 based on expert testimony up to October 2014. Additionally, he is entitled to pre-judgment interest on these damages at a rate of the prime rate plus two percent, starting from February 21, 2009, as established in various precedents.
The R-BOC defendants do not contest the damage figure or expert testimony, leaving the determination of whether Mr. Minemyer is entitled to enhanced damages and attorney’s fees as the primary issue. He is clearly entitled to such fees under 35 U.S.C. 285, which allows for reasonable attorney fees in exceptional cases. The Supreme Court, in Octane Fitness, LLC v. ICON Health & Fitness, Inc., altered the standard for determining an "exceptional" case, stating it is now defined by a party's substantive strength or the unreasonable manner of litigation rather than requiring clear and convincing evidence of bad faith and baseless claims. District courts can exercise discretion based on the totality of circumstances without adhering to a specific evidentiary burden.
Patent-infringement litigation operates under the preponderance of the evidence standard, which balances the risk of error for both parties. Following the Supreme Court's recent guidance, the analysis of this case has changed, leading to the conclusion that it is exceptional, entitling Mr. Minemyer to attorney’s fees. Evidence shows that the R-BOC defendants intentionally copied Mr. Minemyer’s coupler and misrepresented their copied products as his. While the defendants claimed to have redesigned their couplers around late 2008, there is no credible evidence supporting this assertion. Their supposed redesign was not communicated to customers or linked to any performance improvements. The individual responsible for the alleged thread angle changes was untraceable and did not testify, raising doubts about the legitimacy of any redesign. The R-BOC defendants' admissions indicate uncertainty about their actions and lack of documentation to support their claims. Their belated mention of angle changes occurred years into the litigation, suggesting a lack of transparency that undermines their defense. The focus on thread angles has been prominent since the initial complaint was filed in 2007, and any genuine redesign would have been presented to the court much sooner. Overall, the defendants' silence on critical elements of their case speaks volumes against their credibility.
R-BOC did not mention the alleged change in thread angle until July 2014, despite claiming it occurred during a redesign in December 2008, leading to Mr. Minemyer's counsel labeling it a "Christmas miracle." The defendants claimed the molds no longer existed, but this assertion failed to address the injunction's requirements or evidence showing the molds included essential components like bases, housing, wiring, and tubing that remained unchanged since their installation. This argument was deemed irrelevant to the obligation to destroy the molds necessary for fabricating couplers. Given these circumstances, the case was characterized as exceptional, warranting a discretionary award of attorneys' fees under 35 U.S.C. § 285.
Regarding enhanced damages under 35 U.S.C. § 284, the court has discretion to increase damages up to three times the assessed amount. The Federal Circuit's standard for determining willfulness, established in In re Seagate Technology, requires the patentee to demonstrate that the infringer acted with knowledge of a high likelihood of infringement, which should have been obvious. This standard was applied in past rulings, and while it might not fully account for the potentiality of blatant copying, the Seagate precedent dictates that the accused's defense against infringement does not necessitate prior consideration.
Judge O’Malley, joined by Judge Hughes, dissented from the Federal Circuit's refusal to rehear Halo Electronics en banc, highlighting the requirement to maintain a separation between objective and subjective elements in assessing patent infringement claims. She noted that subjective bad faith should not influence the objective evaluation of a claim's basis, leading to constraints in determining willfulness. In the case of Minemyer Chapter I, the court was unable to find willfulness in the actions of the R-BOC defendants despite evidence of deliberate copying, as they were bound by the Seagate standard, which was later criticized by the Supreme Court in Halo for being overly rigid. The Supreme Court eliminated the objective prong of the Seagate test, arguing that it allowed infringers to avoid enhanced damages by merely presenting a reasonable defense, irrespective of their actual conduct. The dissent emphasized that an infringer should not escape liability by formulating a defense post-infringement, asserting that only defenses known to the infringer at the time of their conduct should be considered in willfulness analyses. The dissent references several cases to illustrate these points, asserting that the legal standards should align with common sense principles.
In Donnelly v. United States, the dissent highlighted that the Supreme Court's decision in Halo eliminated the need for a party to prove entitlement to enhanced damages by clear and convincing evidence, stating that patent infringement cases should adhere to a preponderance of evidence standard. The focus shifts to the R-BOC defendants' conduct, characterized by deliberate copying and intentional passing off, as well as their awareness of infringing actions. The jury's previous findings regarding "approximately perpendicular" angles must be considered, as the definition was not strictly closed at 80 degrees due to the patent's language and intended function. Following prior rulings, defendants need to be cautious when making couplers with molds used for infringing products, especially given the established range for "approximately perpendicular." Despite claims of legitimate design-around efforts, the R-BOC defendants failed to provide credible evidence to support their assertions, and their lack of communication regarding changes to thread angles or efforts to avoid infringement undermined their argument. The evidence presented does not support the idea that they consciously sought to modify their practices in response to the jury’s verdict or the patent in question.
The central issue in this case revolves around the angles of the interior threads, which have been contested for nine years. If the angles were genuinely redesigned significantly after 2008, the defendants, Mr. Lundeen and R-BOC, would have disclosed this in their filings; their failure to do so contradicts typical human behavior. Evidence suggests that there was no legitimate redesign and that the claim of such is not supported by the common understanding of the term in patent law. The overwhelming evidence indicates a high likelihood of infringement, known to the defendants, which implies bad faith, especially given their history of losing infringement cases.
Despite the now-discarded Seagate test, the evidence shows that the risk of infringement was either known or should have been obvious to the accused infringer. Additional factors, such as inconsistent testimonies regarding the redesign of angles, the lack of communication about any changes, and continued infringement, further support a finding of willful infringement. Enhanced damages are deemed appropriate, especially under the Halo decision. The defendants’ argument about producing coupler samples during a deposition does not counter the absence of any assertion regarding a redesign at that time, which would have been expected if such changes had occurred.
Mr. Lundeen testified under oath during the first trial in February 2012 that the R-BOC defendants made no changes to the thread angles of couplers. However, at the second trial, he claimed modifications occurred after the first trial and also suggested changes were made in 2008. Overall, his testimony indicates that no changes were intended or made regarding the angles. Mr. Krajecki, responsible for mold-making, supports this assertion. When the R-BOC defendants produced samples during deposition, they were uncertain and indifferent about any changes to the angles. If the R-BOC defendants argue that Mr. Lundeen lacks credibility, this point is valid; however, if they argue against enhanced damages, they miss the mark. The district court must determine if the case's conduct is egregious enough to justify enhanced damages, which may reach treble damages, as clarified in Halo. Enhanced damages can be warranted for misconduct that exceeds typical infringement. The Federal Circuit emphasizes that factors influencing damage enhancement align with willfulness considerations but in greater detail, particularly regarding the infringer's egregiousness. In this case, the R-BOC defendants' conduct is more culpable than usual, justifying an award of treble damages to Mr. Minemyer. There are no mitigating factors favoring the R-BOC group, who have repeatedly emphasized "design around activities," which actually undermine their position. Their behavior demonstrates a blatant disregard for infringement, particularly after a jury verdict and Federal Circuit ruling. While treble damages are the maximum penalty, this case stands out as significantly distressing. Additionally, the R-BOC defendants failed to comply with an injunction issued after their loss in the previous trial, choosing to ignore it without seeking clarification or making any arguments regarding compliance.
The permanent injunction previously issued will continue and be expanded to include redesigned couplers. Mr. Minemyer is tasked with drafting a new order within seven days, ensuring compliance with Rule 65(d)(1) of the Federal Rules of Civil Procedure. Meanwhile, the R-BOC defendants must adhere to the original injunction despite their trial argument claiming that the molds no longer existed prior to the injunction. Immediate turnover of certain components is required, reflecting this in the new draft order, and will be directed to the same recipient and location as previously specified. The molds involved are more complex than just the cores, as evidence indicated, with the jury confirming that the original couplers violated Claim 12 of Mr. Minemyer’s patent due to thread angle issues. The R-BOC group contended that their redesign, which allegedly altered the thread angles to avoid infringement, meant that the molds had ceased to exist before the injunction was issued. This defense was presented during the trial, where the jury determined the infringement status based on the angles of the threads.
The factory manager conducted a tour for children, explaining flamethrower manufacturing. During the tour, he became entangled in a jagged piece of steel strapping, which had been left on the factory floor. After freeing himself, he dramatically demonstrated his frustration by destroying the offending piece of strapping, which captivated the children. One child, Chrono, took a unique piece with two holes drilled in it as a good-luck charm, forming a strong psychological attachment to it.
The text transitions to a discussion about the 1990 Civil Justice Reform Act, enacted to address significant delays in civil litigation, attributing blame primarily to the judiciary according to a Harris poll. In a specific case, the parties involved filed 22 requests for extensions, primarily from R-BOC, with notable delays caused by Mr. Minemyer. A sixteen-month extension was granted due to Mr. Minemyer’s absence, followed by another month request. The passage acknowledges slow case progress without criticizing the attorneys involved. Additionally, it references Kurt Vonnegut's literary philosophy on storytelling and transactional moments, emphasizing the potential for lawyers to benefit significantly during negotiations.
Mr. Minemyer's claims against Mr. Grimsley/Dura-Line for inducing infringement were inadequately developed at trial and in subsequent briefs, being referenced only briefly. The essence of Minemyer's argument is that Grimsley/Dura-Line informed AT&T and Verizon they would cease selling R-Boc couplers due to infringement litigation, yet these companies continued to acquire the couplers from other distributors. The trial did not clarify how this situation constitutes inducement under 35 U.S.C. § 271(b), which requires proof of active encouragement of infringement. Minemyer must demonstrate that Grimsley/Dura-Line engaged in culpable conduct that led AT&T and Verizon to persist in selling the infringing couplers. The court noted that simply notifying customers of a cessation of sales does not equate to actively encouraging them to continue selling the product. Minemyer failed to provide sufficient evidence to establish this link, resulting in the court's ruling against finding Grimsley/Dura-Line liable for inducement. Additionally, there were procedural issues raised, including a motion to dismiss for lack of personal jurisdiction filed five years into the case and after a lengthy trial. The discussion also referenced the Supreme Court's overruling of the Federal Circuit's test for willfulness in a related case, suggesting that the outcome may differ under current legal standards. The excerpt alludes to a philosophical perspective on time, referencing Kurt Vonnegut, which underscores the complexities of the case and the parties' reluctance to disclose information. Finally, it notes that regional circuit law governs contempt proceedings not unique to patent law.
Counsel for the R-BOC defendants demonstrated a lack of understanding regarding the terms of the injunction, incorrectly asserting that it did not prohibit sales of products that were only colorably different from those found to infringe. In contrast, the injunction explicitly included the infringing products and any colorably different variants. The text references Kurt Vonnegut’s concept of "chrono-synclastic infundibulum," emphasizing the complexity of truths in legal contexts, similar to how patent law is addressed in 35 USC 289.
The document highlights the absence of testimony and supporting documents from Mr. Calvacca, despite his alleged pivotal role in the case regarding changes to thread angles. Mr. Lundeen’s consistent court attendance is noted, including an instance of appearing unnecessarily due to a misunderstanding about a motion's status. This behavior is juxtaposed against his apparent indifference towards the redesign evidence presented in the case. Critically, the December 2011 Complaint did not detail the alleged changes to thread angles associated with the 2008 redesign, contrasting sharply with the claims made later by R-BOC lawyers about intentional modifications to thread angles resulting from this redesign. The summary also points out discrepancies in references made by Minemyer’s counsel regarding trial testimony.
The lawyer argued that changes in thread angles, despite Mr. Lundeen's admissions to the contrary, originated in 2008. However, the court emphasized that statements from lawyers do not constitute evidence. Mr. Lundeen's inconsistent testimony suggested he was attempting to align it with his lawyer's theory, despite admitting ignorance about angle changes in 2008. He claimed that cores measured close to 75 degrees, implying that only a few cores changed to 80 degrees, yet failed to explain his long silence regarding these alleged changes. Furthermore, both Mr. Lundeen and his lawyers did not mention changes in thread angles in earlier court documents or the initial complaint filed in December 2011.
Mr. Lundeen's lawyer later acknowledged that as of June 2012, Mr. Lundeen had not requested any changes to the thread angles of 38 cores, yet claimed changes occurred without Mr. Lundeen's knowledge in November 2008. He also asserted that Mr. Lundeen consciously decided to alter thread angles in 2011, but failed to clarify his long silence on the issue. The court found it challenging to obtain clear explanations from the R-BOC lawyer. Relevant invoices indicated that thread extensions and modifications were documented in 2008 and 2012, but no angle specifications were provided for the reworked parts.
The toolmaker at WZ Tool likely retained the original thread angle of the part he received, as there was no incentive to change it unless directed to do so. Testimony from Mr. Storace supports that a part designed for an 80-degree angle would not be accepted if manufactured at 75 degrees. Toolmakers generally would not alter a thread angle chosen by the part's owner, as they lack knowledge of how such changes might affect functionality. Mr. Lundeen corroborated that he was unaware of any angle modifications prior to measurement. Although the "mate" for DXN 500b is absent from the court's evidence, comparisons can still be made with the complete original model, 500a. The TiVo court briefly noted this issue without further guidance. Concerns about expert testimony are highlighted, noting that experts can often be biased advocates for their employers. The R-BOC defendants claimed that coupler angles measuring approximately 75 degrees could not be considered perpendicular, a position deemed untenable. Mr. Minemyer's lawyer asserted that there was minimal change in the angles of the interior threads during the 2008 redesign, which Mr. Lundeen was surprised about, having never requested any angle alterations. The R-BOC defendants did not counter Mr. Minemyer's claims regarding damages or lost profits in their post-trial submissions and did not dispute his entitlement to pre-judgment interest, focusing only on enhanced damages and attorneys’ fees.
Arguments regarding lost profits or damages have been waived. A court's abuse of discretion occurs if its decision is unreasonable, arbitrary, based on an erroneous legal conclusion, or lacks evidentiary support. R-BOC argues that after-the-fact defenses are pertinent to analyzing willfulness, despite precedents like Hato and WBIP. The law must acknowledge the defendants' long-term intentional conduct and actions taken during trial. Parties are required to comply with injunctions or orders, regardless of their validity, as established in several key cases, including Celotex Corp. v. Edwards, Firefighters Local Union No. 1784 v. Stotts, and Pasadena Board of Education v. Spangler.
