By Joseph Arshawsky, J.D.
Following a jury trial, the federal court in Chicago issued findings and conclusions pursuant to Rule 52(a), that the infringer of a patent for a TV mounting bracket, Crimson AV, LLC, did not prove that the patent owned by plaintiff Peerless Industries, Inc. was unenforceable as a result of inequitable conduct before the U.S. Patent and Trademark Office. Crimson did not establish materiality of disclosures allegedly withheld from the USPTO, and did not establish misconduct, nor did Crimson establish Peerless’s intent before the USPTO (Peerless Industries, Inc. v. Crimson AV, LLC, November 27, 2018, Lefkow, J.).
Peerless manufactures and sells audio-visual mounting equipment. Crimson, led by former Peerless executive Vladimir Gleyzer, competes in the same market. Peerless obtained U.S. Patent No. 7,823,850 ("the ’850 patent") describing a mounting bracket for flat-screen televisions. In general terms, the ’850 patent claims a bracket with ramps that displace the bracket (and thus the television) away from the wall mount when misaligned. In 2011, Peerless sued Crimson for, among other things, infringing the ’850 patent. The jury found for Crimson on all invalidity defenses, finding (1) claims 1–3 and 6–7 of the ’850 patent anticipated by a competitor’s prior-art bracket called the TRK50B; (2) all asserted claims obvious over the combination of the TRK50B and another competitor’s prior-art bracket called the VMPL2; and (3) all asserted claims invalid for failure to disclose the best mode of practicing the invention. The parties chose to proceed to a new damages trial. On the eve of trial, the parties agreed to a $40,000 stipulated finding of damages and that they could file post-trial motions. The pending motion was filed as a Rule 50 post-trial motion for judgment as a matter of law. Instead, the court issued findings of fact and conclusions of law, concluding that Crimson failed to establish its affirmative defense of inequitable conduct.
Findings of fact. Sometime around January 2005 while working at Peerless, William Lam invented a new mounting bracket for flat-screen televisions. The crux of Lam’s invention was the use of ramps on the brackets to provide tactile feedback to someone trying to attach a television to a wall mount. Lam’s invention included ramps that would push the bracket, and thus the television, away from the mount if the bracket was misaligned. The court found Lam’s testimony more credible than testimony supporting Crimson on the invention.
The USPTO rejected Peerless’s application as anticipated by an earlier patent application (the Bremmon reference). The USPTO reasoned that the Bremmon reference disclosed all the limitations of Peerless’s independent claim. But the USPTO also indicated that it would allow dependent claim 8 if rewritten in independent form. Peerless thus amended claim 1 to incorporate the limitations of claim 8 and rewrote several claims to be dependent on it. The USPTO then issued the ’850 patent on November 2, 2010.
The longitudinal surface. Because the USPTO determined that the invention was patentable over the Bremmon reference only with the limitation of a longitudinal surface included within the guiding surface, the parties devoted substantial attention to the function and construction of the longitudinal surface. In most embodiments of the ’850 patent, the longitudinal surface would hold a security screw. In general terms, a security screw can be tightened to lock the bracket in place and prevent it from pulling away from the mount after the bracket is properly aligned. On summary judgment, the court concluded that the longitudinal surface could be not only a single bridge plate, but also a box-fold construction.
Other brackets. The court looked at other prior art brackets. Peerless developed a custom mount for Activelight called the AL-101. The AL-101 had a mounting contact portion, side portions, ramps, and a security screw near the bottom. The security screw, however, was held in an out-turned tab—that is, not between the side portions.
Sanus, a competitor of Peerless, developed a bracket called the VMPL2. A physical VMPL2 was received as evidence. That bracket has a mounting contact portion, two side portions, and top and bottom ramped surfaces. It does not have a longitudinal surface.
Materiality. Crimson argued that Peerless committed inequitable conduct by (1) withholding four prior art references—the VMPL2, the AL-101, the ECN 6102, and the DFPF-220/320; (2) misrepresenting the state of the prior art in the figures submitted with the patent application; (3) misrepresenting the function and purpose of the longitudinal surface; and (4) failing to disclose the best mode. Crimson alternatively submitted that it need not prove materiality because Peerless committed affirmative egregious misconduct by filing a false inventor declaration. Crimson has not shown that any of these items was material, nor has it shown affirmative egregious misconduct.
Unsubmitted references. Crimson argued that the AL-101 is material because it contains lower ramps, side walls, and a security-screw system. The AL-101 is prior art because it predates Lam’s invention. But it is not anticipatory prior art because its "security screw system" is not a "longitudinal surface directly joining" either the side or ramped portions, instead using an out-turned tab. Crimson "adduced no evidence that could prove obviousness."
Like the AL-101, the VMPL2 predates Lam’s invention and contains a mounting contact portion, two side portions, and ramped surfaces. Unlike the AL-101, the VMPL2 contains no longitudinal surface, either connective or out-turned. Thus, in addition to the reasons why the AL-101 was not material, the VMPL2 was cumulative of the Bremmon reference. Crimson argued that the VMPL2 was material because the jury found the ’850 patent obvious over the combination of the VMPL2 and the TRK50B. That finding does not help Crimson because the court overrode it as a matter of law. The USPTO would not have found the ’850 patent obvious over the VMPL2.
Because the ECN6102 and D-FPF-220/320 brackets are not part of the trial record, Crimson has not proven that they are material. "To consider the offer of proof is to accept Crimson’s idealized version of its own argument, unimpeached and uncontradicted," the court said. "The court will not do so."
Prior art drawings. Crimson next argued that Peerless misled the USPTO about the state of the prior art in its drawings of what the parties have called the "Gennady Brackets." Crimson asserted that the Gennady Brackets, depicted without ramps in figures 1 and 2 of the ’850 patent, in fact had ramps. This restates Crimson’s theory that the ECN6102 is the real Gennady Bracket, which the court barred. Moreover, the court has credited Lam’s testimony that the Gennady Brackets lacked ramps. Because Crimson has not adduced credible evidence that Peerless misrepresented the state of the prior art, it has not proven any material misrepresentations.
Function and purpose of the longitudinal surface. Crimson next argued that Peerless pretended that the longitudinal surface performed a guiding function when in fact it only retained a security screw. Crimson’s argument is wrong on its own terms—the longitudinal surface performs a guiding function. But a properly aligned bracket does not need to be guided anywhere; the guiding function takes place beforehand. Crimson has not shown a material misrepresentation.
Best mode. Crimson claimed that Peerless failed to disclose that the best mode of practicing the invention was (1) to use a box-fold construction for the longitudinal surface instead of a single, welded bridge plate, and (2) to retain a safety screw in the longitudinal surface. Crimson has not satisfied its standard of proof. At most, Crimson presented evidence that the box fold was Peerless’s preferred embodiment of the ’850 patent, not Lam’s. Lam testified that a prototype used the single, welded bridge plate, and the difference between the bridge plate and the box fold was not one of function but of manufacturing cost, which is not the court’s concern in a best mode analysis.
Affirmative egregious misconduct. Finally, Crimson claimed that Peerless committed affirmative egregious misconduct when Lam filed an inventor declaration that failed to disclose the points above. Crimson has not shown affirmative egregious misconduct. Crimson has alleged nothing along the lines of the bribery, hush money, or manufactured evidence contemplated in the exception. Instead, Crimson argues that Lam filed a false affidavit when he said he had disclosed everything material. Crimson thus did not prove that Peerless committed affirmative egregious misconduct.
Intent. Crimson has not proven by clear and convincing evidence that Peerless specifically intended to deceive the USPTO. Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the USPTO does not prove specific intent to deceive. Yet Crimson alleged exactly that. Crimson produced no evidence of intent distinct from evidence of materiality. "Crimson’s rehearsal of the materiality evidence cannot and does not prove intent," explained the court.
This case is No. 1:11-cv-01768.
Attorneys: Andrew Michael Gross (Foley & Lardner LLP) for Peerless Industries, Inc. Joseph R. Marconi (Johnson & Bell, Ltd.) and Jacques M. Dulin (Innovation Law Group, Ltd.) for Crimson AV, LLC.
Companies: Peerless Industries, Inc.; Crimson AV, LLC
MainStory: TopStory Patent IllinoisNews
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