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Georgia IP Litigation: June 2016

BLOGS: Georgia IP Litigation

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Wednesday, June 29, 2016, 7:12 AM

Modtruss Stumbles on “Same” Problem with Battlefrog Obstacles - Motion for Preliminary Injunctive Relief Denied

This post follows up on this post on Judge Ross’s Order of June 6, 2016, in which she allowed Modtruss, Inc. (“Modtruss”), to clarify its intent with regard to a prior motion for a temporary restraining order and preliminary injunction against Defendant, Battlefrog LLC (“Battlefrog”).  Escaping the  technical mooting of its motion by the filing of an intervening amendment, Modtruss accepted the Court’s invitation to adopt is prior briefing and arguments and Battlefrog similarly went along with the suggestion – thus positioning the motion for the current ruling.

Judge Ross described the underlying patent, U.S. Patent No. 8,418,425 issued on May 13, 2014, as protecting “beams, which allow for temporary structures to be efficiently constructed.”  Battlefrog incorporates rectangular beams in components on the obstacle course races it designs and operates.  The alleged infringing beams were referred to by the Court as the “Accused Obstacles.”  Two figures from the patent are depicted below:

A plaintiff seeking the extraordinary relief of a preliminary injunction must establish four factors: “that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and than an injunction is in the public interest.”  Quoting Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)).

In this case the Court focused on one disputed word in the asserted claim – “same.”  The patent covered beams “that the sides have a fastener hole pattern and the end plates have the same fastener hole pattern.”  The movant, Modtruss, argued that “same” meant “match.”  Judge Ross noted that the patent never mentioned the word match or otherwise sought to alter the ordinary meaning of the word “same,” which is “not different” and “exactly like . . . something else.”  Citing, e.g., Merriam Webster Dictionary, “same,” http://www.merriam-webster.com/dictionary/same (last visited June 22, 2016). 

Judge Ross noted: “Here, the Accused Obstacles’ end plate shows eight fastener hole openings, while there are six fastener hole openings on the side of the beams.”  The implication from the Order is that the six fastener hole openings on the side of the beams are the same as six of the eight fastener hole openings on the end plate, but that there are two extra holes.  It is unclear if Battlefrog escaped infringement by adding two extraneous holes or improved on the existing patent by providing alternate attaching configurations.  While the Court did not directly address equivalency, there is an implication that the specific addressing of the word “same” by the examiner may have precluded consideration of an equivalency argument.  The Court held there was no likelihood of success on the merits on patent infringement.

The Court next turned to the trade dress allegations, noting three necessary requirements for Modtruss to prove:  “(1) the defendant’s product is confusing similar to its product; (2) the similar features of the two products are primarily non-functional; and (3) the plaintiff’s product is distinctive.”  Miller’s Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312, 1322 (11th Cir. 2012).

Judge Ross noted that the primary distinctive characteristic of Modtruss’s product on which it relied for its trade dress claim was that its product was primarily a “sparkly aluminum” color, which the Court agreed was non-functional. Yet Modtruss’s evidence showed that it achieved its “sparkly brushed aluminum” finish through a unique process.  On the other hand, the evidence was that Battlefrog’s aluminum color was merely the raw aluminum.  In addition, both parties used different colors and Modtruss failed to establish that its “sparkly aluminum color” had acquired secondary meaning in the mind of the public.  Therefore, there was no likelihood of success on the merits on Modtruss’s trade dress claims.

The Court turned next to irreparable harm, noting that its analysis was effected by the failure of Modtruss to establish a likelihood of success on the merits of either of its substantive claims.  In addition, Judge Ross noted that Modtruss had raised safety concerns with Battlefrog’s product and potential harm to its reputation and goodwill from product failures.  However, the Court went over evidence that the product had been changed and no further safety failures had occurred, making this potential loss too remote and speculative.

In turning to Modtruss’s loss of market share arguments, the Court noted that Defendant does not sell the Accused Obstacles (but merely uses them in providing services) and, thus, Modtruss and Battlefrog are not competitors.  ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312, 1339 (Fed. Cir. 2012) (there was no irreparable harm where the parties did “not share a customer base”).  Modtruss’s loss of market share is from Battlefrog’s failure to purchase from Modtruss – a loss compensable by damages.  A pre-suit offer by Modtruss to license Battlefrog was also found to undercut its irreparable harm assertions. 

Due to potential cancellations of upcoming events and the necessity to reconstruct its obstacles, the Court found that the balance of the equities favored Battlefrog.  Similarly, the lack of likelihood of success on the merits prevented the public interest from favoring Modtruss.

In short, Modtruss failed to carry its heavy burden of persuasion for the extraordinary relief sought, and the Court denied the motion.

The order is Modtruss, Inc. v. Battlefrog LLC, Docket no. 44, 1:16-CV-1317-ELR, decided June 24, 2016, in the United States District Court for the Northern District of Georgia, Atlanta Division, entered by Judge Eleanor L. Ross.

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Monday, June 27, 2016, 10:09 AM

Judge Totenberg Grants Stay of Litigation Pending IPR Proceeding

ETS-Lindgren, Inc. (“ETS”), as the assignee of U.S. Patent No. 8,331,869 ("the '869 patent") pertaining to testing wireless devices, brought an infringement action against MVG, Inc. (“MVG”), on May 28, 2015.  MVG petitioned the Patent Trial and Appeal Baord (“PTAB”) almost a year later, on April 12, 2016, for inter partes review (“IPR”) of the '869 patent.  This filing was shortly followed by ETS’s motion to stay.

Judge Totenberg noted her discretion to stay the pending action pending the PTAB’s review.  See Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008).  The Order set forth the three factors to be considered by the Court:

            (1) “whether discovery is complete and a trial date has been set”;
            (2) “whether a stay will simplify the issues in the case”; and
            (3) “whether a stay would unduly prejudice or present a tactical disadvantage to the nonmovant.”

Id. (citing Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999)); accord Intellectual Ventures II LLC v. SunTrust Banks, Inc., No. 1:13-cv-02454-WSC, 2014 WL 5019911 (N.D. Ga. Oct. 7, 2014).

Noting that discovery was not complete, no depositions had been taken, no Markman hearing had been held, and a trial date had not bee set, Judge Totenberg found “intra-case timing weighs in favor of a stay.”  

The Court noted that simplification by the IPR could occur in three ways:  (1) claims could be found unpatentable; (2) the IPR could find anticipation or obviousness precluded one or more claims (binding MVG from relying on those defenses), or (3) a refusal to grant the IPR potentially because the claims are indefinite and “simply cannot be construed and compared to the prior art.”
According to the ruling, prejudice or disadvantage to the non-movant was either neutral of only slightly against a stay.  MVG did not have other counterclaims unrelated to patent validity and did not argue the presence of any witness location or retention issues.  The Court noted the quick resolution required of the PTAB and that the IPR had been initiated by MVG.  The Court did not feel any tactical disadvantages to MVG as a result of another case between the same parties proceeding before Judge Steve Jones was “sufficient to overcome the benefits of a stay in this case.”
The case was administratively closed following the entry of the stay.

The order is ETS-Lindgren, Inc. v. MVG, Inc., Docket no. 87, decided June 14, 2016, in 1:15-cv-03859-AT, in the United States District Court for the Northern District of Georgia, Atlanta Division, entered by Judge Amy Totenberg.

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Wednesday, June 15, 2016, 5:13 PM

Amendment Moots Motions for Both Parties without Specific Adoption of Prior Filings

The latest order in a patent case in the Northern District of Georgia delves into the procedural niceties of federal practice, illustrating both how form continues to have power over substance and how the Court can nevertheless point the parties to a viable, low-cost solution.

This case involves a complaint by Modtruss, Inc. (“Modtruss”), for willful patent infringement and related claims filed on April 22, 2016, along with a motion for a temporary restraining order and preliminary injunction.  Defendant, Battlefrog LLC (“Battlefrog”) filed a motion to dismiss prior to the May 25th hearing date set on the motion.  

The motion to dismiss was not ripe at the time of the May 25th hearing and was thus not addressed by the Court.  On June 3rd, Modtruss filed a response to the motion to dismiss and the parties jointly asked the Court to stay discovery until the motion to dismiss was decided.  Immediately thereafter, on the same day, Modtruss filed its “First Amended Complaint,” which added an additional claim for patent infringement, which almost mirrored an existing claim.

Judge Ross noted that the amended complaint was allowed as a matter of course pursuant to Fed. R. Civ. P. 15(a)(1)(B), but it effected an abandonment of the original pleading under Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1243 (11th Cir. 2007).  As the original pleading was a nullity, the Court found the motion to dismiss was rendered moot citing several cases including Graham v. Copco, NO. CIV.A. 13-00249-CG-B, 2013 WL 5287613, at *1 (S.D. Ala. July 10, 2013).  Judge Ross pointed out that the joint request for a stay of discovery until a moot motion was decided was inconsistent with the record as controlled by existing law.

The abandonment by amendment had the further effect of undermining the motion for TRO and preliminary injunction which had already been argued.  Although the amendment sought injunctive relief (and was almost identical to the original complaint), it did not adopt the original motion and no additional motion for injunctive relief was filed.

Recognizing that the procedural effects of the amended filing did not appear consistent with the intent of Modtruss’ filings, the Court directed the parties to provide clarification.  Defendant Battlefrog was required to respond to the amended complaint and directed to further file a notice on the docket, either that its motion to dismiss as originally filed applied to the amendment or that a new motion would be filed.  

Similary, Plaintiff Modtruss was directed to file a notice explaining whether its original motion for a TRO and preliminary injunction should be treated as unchanged by the amendment or whether Modtruss intended to file a separate motion for TRO and preliminary injunction.  Without further notice the Court stated that motion was moot.  If Modtruss adopted the original motion, Judge Ross informed the parties that she would treat the briefing as complete.

The Court then granted the requested stay of discovery to allow further clarification from the parties before proceeding with the case.

The ruling illustrates that an apparently innocuous filing can have unintended consequences, if a party does not provide for an exception to the general operation of existing procedural law.

The case is Modtruss, Inc. v. Battlefrog LLC, Docket no. 1:16-CV-1317-ELR, decided June 6, 2016, in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Eleanor L. Ross.

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