Sloan Valve Company v. Zurn Industries, Inc. et al

Filing 713

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 1/7/2014:Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SLOAN VALVE COMPANY,

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Plaintiff,
v.

ZURN INDUSTRIES, INC., and
ZURN INDUSTRIES, LLC,

Defendants.

Case No. 10-cv-00204

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
Plaintiff Sloan Valve Company (“Sloan”) brings this patent infringement action against
Defendants Zurn Industries, Inc. and Zurn Industries, LLC (collectively, “Zurn”). Sloan now
moves for leave to amend its final infringement contentions. (R. 684, Mot.) Sloan seeks to
amend its Second Amended Final Infringement Contentions to reflect the Court’s November 20,
2013 Memorandum Opinion and Order, which addressed the parties’ cross-motions for summary
judgment. (R. 674, Summary Judgment Opinion and Order.) For the reasons discussed below,
the Court denies Sloan’s motion.
BACKGROUND
This case concerns U.S. Patent No. 7, 607, 635, entitled “Flush Valve Handle Assembly
Providing Dual Mode Operation” (the “‘635 Patent”), and the corresponding U.S. Patent
Application Publication No. 2006/0151729 (the “Published Wilson Patent Application”). On
January 13, 2010, Sloan commenced this action against Zurn seeking (a) damages and injunctive

relief for Zurn’s alleged infringement of the ‘635 Patent; and (b) provisional damages for Zurn’s
alleged making, sale and use of inventions that the Published Wilson Patent Application covers.
(R. 1, Compl., ¶¶ 34-38.) Both fact and expert discovery have closed and the Court has already
ruled on the parties’ cross-motions for summary judgment. (R. 674.) The Court has also
scheduled a trial date. (R. 695.)
On December 20, 2012, Sloan filed its Second Amended Final Infringement Contentions.
(R. 445.) In its Second Amended Final Infringement Contentions, Sloan contended, among other
things, that Zurn willfully infringed the ‘635 Patent. (Id., p. 16-18.) In support, Sloan contended
that Zurn intentionally copied the ‘635 Patent and continued to sell the infringing product even
after learning of Sloan’s patent rights. (Id.)
Sloan now moves, for the second time, to amend its Second Amended Final Infringement
Contentions.1 Sloan seeks to add what it asserts is new information that is relevant to its claim of
willful infringement. (Mot. at 1.) Specifically, Sloan seeks to add the following two paragraphs
to its final infringement contentions:
Insofar as claims 1, 4-8, 10, 11, 19, 28-31, 33 and 34 of the Wilson patent are
concerned, the opinion of counsel dated September 22, 2009 upon which Zurn
purported to rely in continuing its infringement was premised entirely on the
proposition that those claims were invalid are [sic] anticipated or obvious in light
of prior art flush valves. In its November 20, 2013 Memorandum Opinion and
Order, the Court found that (a) Zurn had failed to provide any expert report
substantiating the defenses raised in its pleading that any of claims 1, 4-8, 10-11,
19, 28-31, or 33-34 of the Wilson patent were invalid for either anticipation or
obviousness (Mem. Op. and Order, Dkt. 674 at 34), and (b) Zurn had actually
dropped any contention that any of those claims were invalid for anticipation or
obviousness from its invalidity contentions. Id. at 36. These findings establish
that when the rules of this Court required Zurn to provide real substantiation for
the opinion of counsel on which it purportedly relied that those claims of the
Wilson patent were invalid because the inventions described therein were obvious
or anticipated, Zurn was unable or unwilling do so. The Court has now found that
Zurn failed to provide a sufficient basis to raise even a genuine issue of material

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 Sloan previously moved for leave to amend its Second Amended Final Infringement Contentions on January 28,
2013. (R. 451.) The Court denied that motion. (R. 469.)   

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fact to present to the jury that t [sic] any of those claims were invalid for either of
the reasons on which its opinion of counsel was premised, much less to prevail on
either of those defenses.
The Court’s Memorandum Opinion and Order of November 30, 2013 further
found that no reasonable jury could have found that [sic] in favor of Zurn on
Zurn’s defenses that any of the claims of the Wilson patent were invalid for
violation of the patent law’s best mode or enablement requirements. Id. at 43, 46.
(R. 684-3, Sloan’s Proposed Third Amended Final Infringement Contentions, p. 16.)
LEGAL STANDARD
Local Patent Rule 3.4 provides that a party may amend its final infringement contentions
only by order of court “upon a showing of good cause and absence of unfair prejudice to
opposing parties made promptly upon discovery of the basis for the amendment.” L.P.R. 3.4; see
also Fujitsu Ltd. v. Tellabs Ops., Inc., Nos. 08 C 3379, 09 C 4530, 2012 WL 5444979, at *4
(N.D. Ill. Mar. 21, 2012). The purpose of the local patent rules regarding infringement
contentions is to “prevent a shifting sands approach to claim construction by forcing the parties
to crystallize their theories of the case early in litigation.” Fujitsu, 2012 WL 5444979 at *4
(internal quotations omitted). Furthermore, “[t]he purpose of infringement contentions is to
provide notice of the plaintiff’s theories of infringement early in the case because, in practice, it
is difficult to obtain such information through traditional discovery means, such as
interrogatories.” Id. (citing O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,
1365 (Fed. Cir. 2006). Local Patent Rule 3.4 provides one example of a circumstance that may
support a finding of good cause: a ruling on claim construction that is different from that
proposed by the party seeking amendment.
A party’s showing of good cause must also show diligence in amending the contentions.
See O2 Micro Int’l, 467 F.3d at 1366 (The “good cause” showing is not met “merely because
new evidence was revealed during discovery” without also showing diligence in amending the
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contentions.) In particular, the Local Patent Rules require the moving party “to proceed with
diligence in amending those contentions when new information comes to light in the course of
discovery.” Trading Techs, Int’l, Inv. v. BCG Partners, Inc., 10 C 715, 2011 WL 3946581 (N.D.
Ill. Sept. 2, 2011). In showing diligence, the relevant inquiry is not when the party learned about
the information, but when it could have made the discovery. Thermapure, Inc. v. Giertsen Co. of
Ill., 10 C 4724, 2012 WL 6196912 (N.D. Ill. Dec. 11, 2012). Determining whether a party has
satisfied the good cause requirement is within the court’s discretion. See MEMC Elec.
Materials, Inv. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1380 n.5 (Fed. Cir. 2005);
Speedtrack, Inc. v. Endeca Techs., Inc., Nos. 2012-1319, 2012-1402, 524 Fed. Appx. 651, 659
(Fed. Cir. Apr. 16, 2013) (Table) (Decisions enforcing local rules in patent cases are reviewed
for an abuse of discretion.”).
ANALYSIS
Sloan argues that the Court should allow it to include the two proposed paragraphs
addressing the Court’s Summary Judgment Opinion because Zurn’s “continued disregard of
patent rights” is relevant evidence. (R. 704, Reply at 5.) Sloan contends that Zurn’s refusal to
stop selling its accused product after the Court issued its Summary Judgment Opinion is further
proof of Zurn’s willful infringement of the ‘635 Patent. In support, Sloan cites three district
court opinions from outside this district for the proposition that “the post-filing conduct of an
accused infringer can support a finding of objective recklessness.” (Mot. at 3.) In addition to
being non-binding, none of these cases are persuasive.
In the first case that Sloan cites, the court allowed the plaintiff to amend its complaint to
allege willful infringement based on the defendant’s continued use of the allegedly infringing
patent even after the United States Patent Trade Office (“USPTO”) issued its Reexamination

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Certificate. Ultratech Int’l, Inc. v. Swimways Corp., 2009 WL 8590873 at *3 (M.D. Fla. Mar. 3,
2009). Here, Sloan already has pled willful infringement. Further, Sloan’s Second Amended
Final Infringement Contentions already address Zurn’s continued sale of the accused product
after the USPTO issued the ‘635 Patent in late 2009. (R. 445 at 18.) Sloan also cites two cases
addressing willful infringement where the defendant continued to sell the accused product after
the court granted the plaintiff’s motion for summary judgment on the issue of infringement.
Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 2008 WL 6873811 at *5 (C.D. Cal. Jan. 3,
2008) (finding that defendant “willfully infringed [plaintiff’s] patent when it continued to sell the
infringing frames after the Court granted [plaintiff’s] motion for summary judgment on the issue
of infringement”); Avocent Huntsville Corp. v. ClearCube Tech., Inc., 2006 WL 2109503 (N.D.
Ala. July 28, 2006) (finding that court’s granting of plaintiff’s motion for partial summary
judgment on infringement “may fall under the rubric of the ‘totality of the circumstances’ test,
tending to show [defendant’s] infringement was (and continues to be) willful”). Those cases,
however, address summary judgment rulings on the issue of infringement. Here, the relevant
portion of the Court’s summary judgment opinion addresses Zurn’s affirmative defenses of
anticipation, obviousness, best mode, and enablement. Sloan may not introduce evidence that
certain of Zurn’s affirmative defenses did not survive summary judgment.
Sloan also argues in its reply brief that “the jury is entitled to be informed that this Court
has determined that when the time came for Zurn to provide substantiation of the bases for the
opinion of counsel on which its claims to have been relying [sic], it failed to do so…” (Reply at
5.) As a threshold matter, undeveloped arguments and arguments raised for the first time in
reply brief are waived. Schomas v. Colvin, 732 F.3d 702, 708 (7th Cir. 2013) (undeveloped
arguments waived); United States v. Kennedy, 726 F.3d 968, 974 n. 3 (7th Cir. 2013)

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(“Arguments raised for the first time in a reply brief, however, are waived”); Bracey v. Grondin,
712 F.3d 1012, 1020 (7th Cir. 2013) (same). Accordingly, Sloan has waived this argument.
Even if the Court considered this argument, however, it is unpersuasive. The Court’s summary
judgment ruling is not relevant to the claims before the jury. Further, this is not the kind of
information, and certainly not the type of good cause, that the local patent rules require in order
to amend final infringement contentions.
Perhaps Sloan misunderstands the purpose of final infringement contentions. As
described above, “[t]he purpose of infringement contentions is to provide notice of the plaintiff’s
theories of infringement early in the case because, in practice, it is difficult to obtain such
information through traditional discovery means, such as interrogatories.” Fujitsu, 2012 WL
5444979 at *4. Further, the local patent rules require the plaintiff to file its final infringement
contentions after the close of fact discovery, but before claim construction and expert discovery.
See Judge Matthew F. Kennelly, Northern District of Illinois Adopts Local Patent Rules, 9 J.
MARSHALL REV. INTELL. PROP. L. 202 (Winter, 2010). Here, Sloan seeks to amend its final
infringement contentions after claim construction, after the close of expert discovery, and after
the Court’s ruling on the parties’ motions for summary judgment. The Court’s summary
judgment opinion on certain affirmative defenses in this case is not the type of information that is
highly relevant to final infringement contentions and certainly does not meet the good cause
standard that Local Patent Rule 3.4 requires. Rather, Sloan’s proposed amendments give
credence to Zurn’s argument that Sloan’s true intent is to inform the jury of the Court’s adverse
rulings on certain of Zurn’s affirmative defenses. This is not a proper use of final infringement
contentions.

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CONCLUSION
For the reasons discussed above, the Court denies Sloan’s Motion for Leave to Amend Its
Final Infringement Contentions.

Dated: January 7, 2014

ENTERED:

AMY J. ST. EVE
United States District Court Judge

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