Peerless Indus., Inc. v. Crimson Av LLC, 11 C 1768
| Decision Date | 17 March 2015 |
| Docket Number | No. 11 C 1768,11 C 1768 |
| Parties | PEERLESS INDUSTRIES, INC., Plaintiff, v. CRIMSON AV LLC, and VLADIMIR GLEYZER. Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Hon. Joan H. Lefkow
Peerless Industries, Inc. has filed suit against Crimson AV LLC and Vladimir Gleyzer alleging patent infringement, trade dress infringement, tortious interference with contract, and conspiracy along with violations of the Illinois Trade Secrets Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, and the Illinois Uniform Deceptive Trade Practices Act. (Dkt. 55.)
Before the court are two separate motions for summary judgment: one by Crimson only, asking for summary judgment on invalidity or, in the alternative, unenforceability and another by both Crimson and Vladimir Gleyzer, asking for summary judgment on Peerless's trade dress infringement and Illinois Trade Secrets Act claims. (Dkts. 409, 426.) The court also considers Peerless's motion to strike. (Dkt. 448.) For the reasons stated below, Crimson's motions for summary judgment are granted in part and denied in part. Peerless's motion to strike is denied as moot.
Peerless Industries, Inc. ("Peerless") manufactures and sells audiovisual mounting equipment. Crimson AV LLC ("Crimson") competes with Peerless in the audiovisual mounting equipment industry. (Id.) At issue in this case are Peerless's mounts for flat panel televisions. (See id. ¶ 7-8.)
Peerless owns U.S. Patent No. 7,823,850 ("the '850 Patent"), entitled "mounting bracket." The bracket allows a flat panel television to be fixed to a wall. What is unique about this bracket, according to the '850 Patent, is that it is designed to warn an installer "when the mounting bracket and the remainder of the mount are not properly aligned." '850 Patent, 2:29-31.
The bracket includes "one or more ramping surfaces," which are configured so that if the bracket is positioned too high or too low, "one of the mount's retaining portions will come into contact with a ramp." (Dkt. 445 at 1); 850 Patent, 2:40-43. Thus, the possibility of misalignment is "greatly reduced." '850 Patent, 2:44-46.
The mounting bracket can take on a number of different forms. See, e.g., '850 Patent 3:31-32. One such form is depicted below.
Image materials not available for display.
In the above figures, 122 and 126 are the "ramping portions" and 14 and 16 are the "retaining portions." In Figure 6(A), the mounting bracket is too high. '850 Patent, 5:14-16. As the television moves toward the mount, the first retaining portion (14) comes into direct contact with the upper ramping surface (122). '850 Patent, 5:17-20. As a result, the television cannot be mounted upright, and the bracket (and the attached television) slide along the upper ramping surface. '850 Patent, 5:20-25. In Figure 6(B), the mounting bracket is too low. '850 Patent, 4:56-58. In this scenario, as the television comes toward the mount, the second retaining portion (16) comes into direct contact with the lower ramping surface (126) and the bracket slides alongthe lower ramping surface. '850 Patent, 4:58-67. In both instances, the bracket's use of ramping portions protects against misalignment.
In response to Peerless's allegations of infringement of the '850 Patent, Crimson filed a motion for partial summary judgment in January 2013. (Dkt. 134.) In its motion, Crimson argued that there was no genuine dispute of material fact as to whether its products infringed the claims at issue—claims 1-7 and claims 9-11. (See id.) Peerless filed a cross-motion, arguing that Crimson's products infringed the above claims and asking the court to enter judgment on invalidity as well. (Dkt. 170.)
The court entered judgment in Peerless's favor, finding that Crimson's products infringed claims 1-7 and claims 9-11 of the '850 Patent. (Dkt. 330 at 16.) The court, however, did not enter summary judgment as to invalidity. As the court explained, because the '850 Patent carries a presumption of validity, Peerless's motion for summary judgment with respect to invalidity was unnecessary. (Id.)
Crimson's third motion for summary judgment (the second of the two currently before the court) concerns Peerless's trade dress and trade secrets claims, which arise out of Peerless's agreement with its former manufacturer, Sycamore Manufacturing Co., Ltd. ("Sycamore"). Crimson and Gleyzer bring this motion together.
Gleyzer is a former Peerless executive. (Compl. ¶ 15.) While at Peerless, he served as Senior Vice President. (Id.) As Senior Vice President, he negotiated a supply agreement between Peerless and Sycamore, a manufacturer located in China. (Id.) Under the agreement, Peerless purchased mounting equipment and installation accessories manufactured by Sycamore.(Dkt. 439 ("Pl. L.R. 56.1") ¶ 2.) According to Peerless, Sycamore had no experience with AV equipment, so Peerless provided Sycamore with a specifications package, or "spec package," for each product that contained all the information Sycamore needed to manufacture the product. (Id. ¶¶ 2, 4-5.) Peerless also provided tooling. (Id. ¶ 15). Sycamore acknowledged that the packages included proprietary information and "promised to keep that information confidential even after the parties' relationship terminated." (Dkt. 438 at 1; Pl. L.R. 56.1 ¶ 3.) A few years later, Peerless decided to move its manufacturing operations back to the United States. (Pl. L.R. 56.1 ¶ 12.) Peerless claims that when it did, Sycamore hired Gleyzer, created Crimson, and started selling competing products manufactured using Peerless's proprietary information. (Dkt. 438 at 1; Pl. L.R. 56.1 ¶ 14) Crimson disputes Peerless's assertion that information Peerless sent Sycamore contained trade secrets and argues that, even if it did, there is no evidence that Crimson has misappropriated any trade secrets in manufacturing its products. (Dkt. 424 at 10-14.) This disagreement forms the basis of the parties' arguments over Crimson's motion for summary judgment on Peerless's trade secrets allegations.
Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). To determine whether any genuine fact issue exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Fed. R. Civ. P. 56(c). In doing so, the court must view the facts in the light most favorable to the non-movingparty and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 378, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007). The court may not weigh conflicting evidence or make credibility determinations. Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir. 2011).
The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must designate specific material facts showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000). If a claim or defense is factually unsupported, it should be disposed of on summary judgment. Celotex, 477 U.S. at 323-24.
Crimson asks the court to enter judgment declaring the '850 Patent invalid or, in the alternative, unenforceable. In support of its argument for invalidity, Crimson contends that the Patent was anticipated by prior art and is obvious. (Dkt. 412 at 6, 14.) Crimson also contends that Peerless failed to disclose the best mode for the guiding surface.2 (Id. at 10.) In support of its argument for unenforceability, Crimson accuses Peerless of engaging in inequitable conduct. (Id. at 20.)
Anticipation refers to the prior invention or disclosure of a claimed invention by another. See 35 U.S.C. § 102. It is grounds for invalidating a patent because it means that the claimed invention lacks novelty.
"Although § 102 refers to 'the invention' generally, the anticipation inquiry proceeds on a claim-by-claim basis." Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008). To anticipate a claim under 35 U.S.C. § 102,3 the prior art reference must first disclose each claim limitation, either expressly or inherently, so that a person of ordinary skill in the art could practice the invention without undue experimentation. ClearValue, Inc. v. Pearl River Polymers, Inc., 668 F.3d 1340, 1344 (Fed. Cir. 2012); Retractable Tech., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296, 1309 (Fed. Cir. 2011) (en banc). Disclosure of each claim limitation, however, is not enough—the Federal Circuit has "long held that '[a]nticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim.'" Finisar, 523 F.3d at 1334-35 (quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983)) (emphasis in original).
Anticipation is normally a question of fact, id. at 1334, but it "may be resolved on summary judgment if no...
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