Gallant v. Telebrands Corp.

Decision Date22 December 1998
Docket NumberNo. Civ.A. 94-452(AJL).,Civ.A. 94-452(AJL).
Citation35 F.Supp.2d 378
PartiesPaul GALLANT, Wrebbit Toys and Games Mfrs. Inc. and 2798140 Canada, Inc., Plaintiffs, v. TELEBRANDS CORP., Telebrands Advertising Corp. and R.R. Donnelley & Sons Co., Defendants.
CourtU.S. District Court — District of New Jersey

Robert M. Goodman, C. Brian Kornbrek, Carpenter, Bennett & Morrissey, Newark, NJ, Marshall A. Bennett, Jr., Timothy R. Krogh, Marshall & Melhorn, Toledo, OH, for plaintiffs.

Peter D. Murray, Noram H. Zivin, Wendy E. Miller, Cooper & Dunham LLP, New York City, for Telebrands Corp., Telebrands Advertising Corp. and R.R. Donnelley & Sons Co.

Neil S. Cartusciello, Shanley & Fisher, Morristown, NJ, for Telebrands Corp., Telebrands

Advertising Corp. and R.R. Donnelley & Sons Co.

OPINION

LECHNER, District Judge.

This case involves a dispute over three dimensional puzzles. Plaintiffs Paul Gallant ("Gallant"), Wrebbit, Inc. (formerly Wrebbit Toys and Games Manufactures, Inc.) ("Wrebbit") and 2798140 Canada Inc. ("Canada Inc.") (collectively, the "Plaintiffs"), filed suit against the defendants Telebrands Corp., Telebrands Advertising Corp., and R.R. Donnelley & Sons Co. ("R.R.Donnelley") (collectively referred to as "Telebrands"), alleging, inter alia, violations of the Lanham Act, 15 U.S.C. § 1125(a), unfair competition and patent infringement in violation of 35 U.S.C. §§ 271, 281, 283, 284 and 285, and state law violations concerning unfair trade practices, N.J.S.A. § 56:8-1 et seq.

Currently pending is a motion to vacate (the "Motion to Vacate") an order and opinion of United States District Judge John W. Bissell ("Judge Bissell"), dated 4 March 1996 (the "4 March 1996 Order and Opinion"). The 4 March 1996 Order and Opinion granted partial summary judgment to the Plaintiffs on the ground that a three-dimensional puzzle sold by Telebrands, specifically, the "Telebrands Castle Puzzle," infringed upon United States Patent No. 5,251,900 (the "'900 Patent"), issued to Gallant on 12 October 1993.1 Included in the Motion to Vacate is a request of Telebrands for an independent hearing to construe the patent claims for trial, in accordance with the principles set forth in Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir.), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996) (the "Markman Hearing"). Also included in the Motion to Vacate is a request by Telebrands for attorneys' fees as a sanction for discovery violations of the Plaintiffs.2

For the reasons set forth below, the Motion to Vacate is granted; the request for a Markman Hearing is granted; the request for sanctions is granted.

Background
A. Facts3
1. The Parties

Wrebbit and Canada Inc. are Canadian companies which manufacture and sell three dimensional puzzles. Gallant, a Canadian businessman, possesses an ownership interest and management control in both Wrebbit and Canada Inc.

As mentioned, on 12 October 1993, Gallant was issued the '900 Patent for a "Three-Dimensional Puzzle Structure" (the "Invention"). The '900 Patent was assigned to Wrebbit and Canada, Inc., as the sole licensees for the manufacture and sale of three dimensional puzzles utilizing the patented structure. Wrebbit has manufactured and sold more than forty-five different three dimensional puzzles, including castle models, under the trademark "PUZZ-3D" (the "Wrebbit Puzzles").

In or about 1992, the Plaintiffs entered into an agreement (the "1992 Agreement") with Pierre Benoit ("Benoit"), a Canadian businessman, and certain companies, Distributions Muralex, Inc. ("Muralex"), Canovex Inc. ("Canovex") and 133064 Canada Inc., d/b/a Supertek International TV-Products ("133064 Canada Inc.") (collectively, the "Benoit Companies"). Pursuant to the 1992 Agreement, the Benoit Companies distributed the Wrebbit Puzzles from 1992 to 1994.

In May 1993, Benoit and Muralex entered into an independent agreement with Telebrands to produce and market three dimensional puzzles (the "1993 Agreement"). In February 1994, upon learning of the 1993 Agreement, Wrebbit terminated its relationship with Benoit. Pursuant to the 1993 Agreement, Telebrands, through Benoit, marketed and sold the Telebrands Castle Puzzle in 1994 and 1995. The Telebrands Castle Puzzle was manufactured for Telebrands by R.R. Donnelley.

2. The '900 Patent

Gallant filed a patent application in the United States on 22 June 1992 (the "U.S. Patent Application"). The U.S. Patent Application was modeled after a Canadian patent application Gallant previously filed on 9 September 1991 (the "Canadian Patent Application"). The initial claims and specification of the '900 Patent were drafted on behalf of Gallant by patent agent, Francois Martineau ("Martineau"). The '900 Patent summarized the Invention as follows:

Accordingly with the objects of the invention, there is disclosed a modular unit for use in a three-dimensional, self-standing, continuous puzzle structure, consisting of a planar, polygonal block defining first and second, opposite, main, flat faces, and a peripheral edge joining said first and second faces orthogonally relative thereto, at least one of said first and second faces forming an image destined to face externally of said puzzle structure; said block edge comprising: (a) first, dovetail joint means, for releasably anchoring complementary dovetail joint means of a second block edgewisely of the first-mentioned block within the plane of the second block; and (b) second, straight tenon and mortise joint means, for frictionally securing complementary tenon and mortise joint means of a third block edgewisely of the first-mentioned block within a plane substantially orthogonal to the third block; wherein said second joint means is characterized in that it specifically allows assemblage of a number of walls each made from a plurality of said modular units, and erection of a puzzle structure having a continuous external surface circumscribing an enclosure.

Preferably, third, straight tenon and mortise joint means are provided, for frictionally securing a pair of complementary tenon and mortise joint means from fourth and fifth blocks edgewisely of the first-mentioned block, the fourth block being orthogonal to the first block and the fifth block being orthogonal to both the first-mentioned block and the fourth block; wherein an image is formed on both said first and second faces of the first mentioned block....

Alternately, the invention also consists of the combination of a number of first and second modular units releasably interlocked with one another to form a three dimensional, continuous puzzle, each modular unit consisting of a planar, polygonal block defining first and second, opposite, main, flat faces, and a peripheral edge joining said first and second faces orthogonally relative thereto, at least one of said first and second faces of each block forming a small image which, combined with the images from corresponding faces of the other said blocks, form a continuous main image; each said block edge from each one of said first and second modular units comprising: (a) first dovetail joint means, releasably anchoring complementary joint means from a second said block edgewisely of the first mentioned block within the plane of the latter block; and each said block edge from each one of said second modular units further comprising: (b) second, straight tenon and mortise joint means, frictionally securing complementary joint means from a third block edgewisely of the first mentioned block within a plane substantially orthogonal to the latter block; wherein said second joint means is characterized in that it specifically allows assemblage of a number of walls each made of a plurality of said modular units, and erection of a puzzle structure having a continuous external surface circumscribing an enclosure.

Preferably then, in its assembled state, said puzzle forms a building structure defining a horizontal bottom base wall and vertical side walls interlocked with and edgewisely projecting from said base wall, the said enclosure being defined between said vertical side walls; and further including a large, cardboard-based roofing sheet, installed over the top edge defined by said vertical side walls, and means are provided for self-support of said roofing sheet thereon.

'900 Patent at col. two, line 25 to col. three, line 29.4 A section entitled "Detailed Description of the Invention" described the "innovative features" of the Invention. It stated, in relevant part:

The innovative features lie in the corner joints ... where the straight (U-Shape) mortise and tenon parts ... intervene to join two building blocks about two planes transverse to each other. Since the corner joints ... interlock modular units ... about transverse, preferably orthogonal planes, there is always a vertical wall edgewisely sitting against a substantially horizontal wall. This biases the straight mortise and tenon joint in interlocking state, under the bias of the vertical wall weight....

It is understood that such straight joints ... will enable erecting a building with it upright walls defining a continuous enclosure, i.e. that the lateral upright walls of the building can be interlocked in a continuous fashion around a closed inner chamber. In other words, straight joints ... will allow installation of all of the side walls, including the last side wall which closes the enclosures.

Id. at col. four, line 64 to col. five, line 22.

The first claim of the '900 Patent ("Claim One") set forth the basic structure covered by the patent:

A modular unit for use in a three dimensional, self-standing, continuous puzzle structure, consisting of a planar, polygonal block defining first and second, opposite, main, flat faces, and a peripheral edge joining said first and second faces orthogonally relative thereto, at least one of said first and second faces forming an image destined to face...

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