Peerless Industries, Inc. v. Crimson AV, LLC

Filing 758

MOTION by Defendant Crimson AV, LLC for judgment Renewed Rule 50 Motion for Judgment As a Matter of Law (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P)(Ryndak, Peter)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
PEERLESS INDUSTRIES, INC.,
Plaintiff,

Case No. 1:11-cv-1768

vs.

Honorable Joan H. Lefkow

CRIMSON AV, LLC, and VLADIMIR
GLEYZER,

Magistrate Judge Susan Cox

Defendants.

DEFENDANT’S RENEWED RULE 50 MOTION FOR JUDGMENT
AS A MATTER OF LAW

TABLE OF CONTENTS
I.

BACKGROUND ................................................................................................................1

II.

STANDARD FOR JUDGMENT UNDER FRCP 50 ......................................................2

III.

ARGUMENT......................................................................................................................2
A.

Materiality ..............................................................................................................4
1.

But-For Materiality: The Broadest Reasonable Construction of the
Claims..........................................................................................................5

2.

But-For Materiality-Plaintiff’s Omissions to the PTO...........................5
a.
b.

AL-101 Brackets..............................................................................7

c.

Peerless Gennady/ECN 6102 Brackets............................................7

d.
3.

Sanus VMPL2 Brackets...............................................................5, 6

Peerless DFPF-220/320 Brackets ....................................................8

But-For Materiality: Plaintiff’s Misrepresentations to the PTO ..........9
a.
b.

B.

Misrepresentation to PTO that Gennady Brackets depicted in Prior
Art Had No Ramps bridge Plate or Safety Screw..........................10

c.
4.

Misrepresentation to PTO of Function of Bridge Plate ..................9

Misrepresentation to the PTO of the Best Mode ...........................11

Egregious Misconduct Before the PTO During Prosecution of ’850 ..12

Knowledge and Intent..........................................................................................15

1.

2.
IV.

Intent to Deceive Inferred from Withheld References and
Misrepresentations in Prosecution of ’850 Patent ................................16
Egregious Litigation Misconduct Supports Inference to Deceive.........24

CONCLUSION ................................................................................................................39

i

AUTHORITIES
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp.,
607 F.3d 817, 829 (Fed. Cir. 2010) ...........................................................................................3
Brasseler, U.S.A. I., L.P. v. Stryker Sales Corp.,
267 F.3d 1370, 1383 (Fed. Cir. 2001)............................................................................................23
DS Smith Plastics Ltd. v. Plascon Packaging, Inc.,
No. 15 C 5760, 2016 U.S. Dist. LEXIS 1167, at *8 (N.D. Ill. Jan. 6, 2016) ...........................3
Elk Corp. of Dallas v. GAF Bldg. Materials Corp.,
168 F.3d 28, 32 (Fed. Cir. 1999)....................................................................................................15
Energy Heating, LLC v Heat On-the-Fly, LLC,
2016-1559 (Fed. Cir. May 4, 2018) .........................................................................................13, 18
In re Sulfuric Acid Litigation,
231 F.R.D. 351, 363 (N.D. Ill. 2005).............................................................................................30
Intellect Wireless, Inc. v. Sharp Corp.,
45 F. Supp. 3d 839, 851 (N.D. Ill. 2014) .......................................................................................23
Lumen View Tech, LLC v. Findthebest.com, Inc.,
811. F. 3d 471, 483 (Fed. Cir. 2016)........................................................................................ 23-24
Ohio Willow Wood Co. v. Alps South, LLC.,
735 F.3d 1333, 1351 (Fed. Cir. 2013)..........................................................................12, 13, 15, 24
Orenshteyn v. Citrix Systems, Inc.,
341 F. Appx. 621 (Fed. Cir. 2004).................................................................................................23
Outside the Box Innovations, LLC v. Travel Caddy, Inc.,
695 D.3d 1285, 1294 (Fed.Cir. 2012)..................................................................................... 12, 13
Phillips Petroleum Co. v. U.S. Steel Corp.,
673 F. Supp. 1278, 1336 (D. Del. 1987),
aff’d, 865 F.2d 1247, 9 U.S.P.Q.2D (BNA) 1461 (Fed. Cir. 1989)..........................................2
Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co.,
324 U.S. 806, 818 (1945) ..........................................................................................................2
Reeves v. Sanderson Plumbing Prods.,
530 U.S. 133, 149 (2000).................................................................................................................2

ii

Regeneron Pharm., Inc. v. Merus N.V.,
864 F.3d 1343, 1350 (Fed. Cir. 2017)....................................................................................3, 4, 24
Rohm & Haas Co. v. Crystal Chem. Co.,
722 F.2d 1556, 1571 (Fed. Cir. 1983)............................................................................................13
Tart v. Ill. Power Co.,
366 F.3d 461, 464 (7th Cir. 2004) ...................................................................................................2
Therasense, Inc. v. Becton, Dickinson & Co.,
649 F.3d 1276, 1285 (Fed. Cir. 2011) ...................................................................... 3, 4, 13, 24

OTHER

37 CFR 1.56...............................................................................................................................2
18 U.S.C. § 1001............................................................................................................................21

iii

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
PEERLESS INDUSTRIES, INC.,
Plaintiff,
Case No. 1:11-cv-1768
v.
Honorable Joan H. Lefkow
CRIMSON AV, LLC,
Defendant.

DEFENDANT’S RENEWED RULE 50 MOTION FOR JUDGMENT
AS A MATTER OF LAW
Defendant, CRIMSON AV, LLC (“Crimson”), by and through undersigned counsel,
hereby moves this Honorable Court pursuant to FED. R. CIV. P. 50 for a judgment as a matter
of law on a finding of Inequitable Conduct (“IEC”) against Peerless in prosecuting U.S.
Patent 7,823,850 (“’850 Patent”, or “’850”). In support of its motion, Crimson states:
I. BACKGROUND
The ’850 Patent discloses a mounting bracket that affixes to the back of flat panel
televisions. The bracket allegedly provides a guiding surface claimed to indicate when a bracket
is not correctly aligned, i.e., “misaligned,” with a wall mount from which the bracket is to be
hung. (Trial Exh. D-1/90, attached as Exhibit A, p. 2.)
A jury trial was held in this case from June 13 through 24, 2016. During trial, Crimson
presented evidence in support of its position that the ’850 Patent was invalid and also
unenforceable due to Plaintiff’s inequitable conduct. During trial, Crimson filed a Rule 50
Motion on Plaintiff’s inequitable conduct. (Dkt. #589.) At the end of trial, the jury found the
’850 Patent invalid, and the Court did not rule on Crimson’s Rule 50 motion. (Trial Tr. pp. 152223.) On March 31, 2017, the Court granted in part Plaintiff’s Rule 50 Motion for Judgment as a
1

Matter of Law, holding that the evidence did not support the jury’s verdict finding the ’850
Patent invalid for obviousness and best-mode. (Dkt. #672, pp. 9-16.) The parties agreed to
$40,000 in damages and entered a stipulation of final judgment. (Dkt. #749.) Crimson now
renews its Rule 50 motion seeking a judgment that Peerless’ ’850 Patent is unenforceable due to
Plaintiff’s inequitable conduct.
II. STANDARD FOR JUDGMENT UNDER FRCP 50
A judgment as a matter of law should be entered against the non-movant when a party
has been fully heard on an issue, and there is no legally sufficient evidentiary basis for a
reasonable fact finder to find for the non-moving party on that issue. Reeves v. Sanderson
Plumbing Prods., 530 U.S. 133, 149 (2000). “Once the jury has spoken, the court is obliged to
construe the facts in favor of the party who prevailed under the verdict.” Tart v. Ill. Power Co.,
366 F.3d 461, 464 (7th Cir. 2004). “[T]he standard for granting summary judgment ‘mirrors’ the
standard for judgment as a matter of law, such that ‘the inquiry under each is the same.” Reeves,
530 U.S. at 150. “It therefore follows that, in entertaining a motion for judgment as a matter of
law, the court should review all of the evidence in the record.” Id.
III. ARGUMENT
Presenting a patent application before the United States Patent and Trademark Office
(“PTO”) requires the applicant to exercise the “highest duty of candor.” Phillips Petroleum
Co. v. U.S. Steel Corp., 673 F. Supp. 1278, 1336 (D. Del. 1987), aff’d, 865 F.2d 1247, 9
U.S.P.Q.2D (BNA) 1461 (Fed. Cir. 1989). This duty of candor is “an uncompromising duty
to report to [the PTO] all facts concerning possible fraud or inequitableness underlying the
applications in issue.” Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery
Co., 324 U.S. 806, 818 (1945). See also 37 CFR 1.56. This duty extends to “each individual
associated with the filing and prosecution of a patent application” to disclose to the PTO all

2

“information known to that individual to be material to patentability.” DS Smith Plastics Ltd. v.
Plascon Packaging, Inc., No. 15 C 5760, 2016 U.S. Dist. LEXIS 1167, at *8 (N.D. Ill. Jan. 6,
2016)(citing Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817, 829 (Fed.
Cir. 2010).).

To ensure compliance with this duty, the Supreme Court created the equitable
defense of inequitable conduct. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276,
1285 (Fed. Cir. 2011).

A patentee has committed inequitable conduct when it: (1)

misrepresented or omitted information material to patentability; and (2) did so with specific
intent to deceive the Patent Office. Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1350
(Fed. Cir. 2017). Once inequitable conduct is established as to a single claim, the entire patent is
unenforceable. Id.
Peerless committed inequitable conduct by deliberately withholding the following four
prior art references (hereinafter the “Withheld References”) from the PTO during the prosecution
of the ’850 Patent:
(1)
(2)
(3)
(4)

Sanus’s VMPL2 bracket;
AL-101 bracket;
Peerless’s Gennady/ECN 6102 Brackets; 1 and
Peerless’s DFPF-220/320 Brackets.2

The evidence shows that the Withheld References contained the three elements of the
’850 Patent claims (i.e. the back, side walls configured with ramps, and a safety retainer, such as
a bridge plate, or an equivalent bar or tab), either singly or in combination. Moreover, the
Withheld References each had the three critical elements arranged in the same way as recited in
1

Former Peerless engineer Gennady Plavnik testified that in 2004 - prior to Lam’s conception of the ’850
bracket on January 5, 2005, - he designed a universal bracket that was known internally at Peerless as
ENC #6102, or the “Gennady Bracket.” (Dkt. #602, p. 8; Trial Tr. 906-908.)
2

The D-FPF-320 was a distributor model. (Dkt. #302, p. 5). The RTFPF-220 was the retail version, and
was essentially identical to the D-FPF-320, but smaller. (Dkt. #302, p. 5).

3

the ’850 Patent claims. (Trial Exh. D-43/158, attached as Exhibit B; Trial Tr. 928.) The
evidence shows that Peerless had knowledge of the four Withheld References prior to filing the
provisional application for the ’850 Patent, but failed to disclose the references to the PTO.
In addition, Peerless committed inequitable conduct by deliberately making the following
misrepresentations to the PTO during the prosecution of the ’850 Patent:
(1)

(2)
(3)
(4)

Misrepresenting to the PTO that the Gennady Brackets depicted in prior art
Figures 1 and 2 of the patent application as having no ramps, bridge plate, or
safety screw;
Misrepresenting in the specification and to the PTO the function and purpose of
the bridge plate in the specification;
Misrepresenting the that the best mode was a bridge plate, by omitting disclosure
of the safety screw and box fold retainer from the specification; and
Filing false inventor Declarations to the PTO.

The ’850 Patent would not have issued but for the misrepresentations of the material
information set out above. Likewise, the only reasonable inference that can be drawn from
Plaintiff making the above misrepresentations to the PTO is intent to deceive it in order to obtain
the ’850 Patent.
A.

Materiality
Except in cases of “egregious misconduct,” the accused infringer must show “but-for

materiality,” meaning that “the PTO would not have allowed a claim had it been aware of the
undisclosed prior art.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291-92
(Fed. Cir. 2011). When determining materiality, the Court (1) gives the claims their broadest
reasonable construction; and (2) then determines whether, based on the broadest reasonable
construction, a reasonable patent examiner would have allowed the claims had he known of the
undisclosed prior art. Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1351 (Fed. Cir.
2017)(“Determining but-for materiality requires that the court place itself in the shoes of a patent
examiner and determine whether, had the reference(s) been before the examiner at the time, the

4

claims of the patent would have still issued.”) In determining the materiality of a reference, the
Court applies a preponderance of the evidence standard. Id. at 1350.
1.

But-For Materiality: The Broadest Reasonable Construction of the Claims

Here, the claim recites a “guiding surface including a longitudinal surface directly
joining” “the side portions to each other” (claim 1) or “the pair of first ramped surfaces to each
other” (claim 9). (Exhibit A, pp. 6-7.) The broadest reasonable construction of main claim 1 is
that it defines a mounting bracket having a back (to secure it to a television screen) with two
spaced-apart side walls, each of which is configured with a ramped surface, and which bracket
includes a “guiding” straight surface “connecting” the two side walls together. (Exhibit A, pp.
6-7.) Main claim 9 recites the same structure, in which the straight guiding surface connects the
first ramped surfaces of the side walls together. (Exhibit A, p. 7.)
On claim construction, the Court held that the phrase “longitudinal surface directly
joining” means “a straight surface connecting the two sides or ramps together that is not limited
to a single, unbroken surface.” (Dkt. #330, p. 14.) The Court also ruled that a 2-part box fold
satisfied the “straight surface” claim language construction. (Dkt. #330, pp. 14-16.)
Further, claim 11 recites the mounting bracket of claim 9 with a “second ramped surface
configured to contact one of the one or more retaining portions” during mounting. (Exhibit A, p.
7.) Though this language is excessively broad, claim 11 extends to any configuration of lower
ramps, regardless of whether those lower ramps are joined together by a longitudinal retaining
surface that extends between the lower ramps. Thus, the broadest reasonable construction of the
claims does not require that the straight surface be actually joined to both of the lower ramps.
2.

But-For Materiality-Plaintiff’s Omissions to the PTO
a. Sanus VMPL2 Brackets

5

The jury found Sanus VMPL2 bracket to be material prior art. (Trial Tr. 1522-23). Trial
testimony and exhibits showed that the VMPL2 mount includes brackets, each having a back and
side walls configured with both upper and lower ramps. (Trial Exhs. D-67/247, attached as
Exhibit C; D-48/182, attached as Exhibit D; D-70/252, attached as Exhibit E; Trial Tr. 995998.) The VMPL2 bracket had the lower ramps that Lam asserted in his Invention Disclosure
was the only inventive aspect of the ’850 Patent. (Id.; D-83/310, attached as Exhibit F, Trial Tr.
501-502; Dkt. #602, p. 6.)

The VMPL2 bracket also had a straight longitudinal bar

“connecting,” the side walls of the bracket within the meaning of this Court’s construction.
The VMPL2 longitudinal bar meets the Court’s definition of a “longitudinal surface,” in
that it is “a straight surface connecting the two sides or ramps together.” When in place, the
VMPL2 longitudinal bar bridged the space between the bracket side walls adjacent to its lower
ramps, thereby “connecting” them. Thus, under the broadest reasonable construction of the
claims, the VMPL2 individually covered all three elements of the combination ’850 Patent
combination, arranged in the same way.
One of the inventors, Lam, was familiar with the VMPL2 bracket in 2004. (Trial Tr. 993,
998-1001, 1230, 1235-1237; Exhibit E). In fact, the VMPL2 was mounted on the wall in his
work space at Peerless where the design team studied it. (Trial Tr. 1235-1237). The Examiner
did not have the VMPL2 to consider in combination with the other references known to the PTO
during prosecution of the ’850 Patent. Placing itself in the shoes of a patent examiner applying
the broadest reasonable construction of claims 1 and 9, the Court must find a reasonable patent
examiner would not have allowed the ’850 Patent claims had he or she known of the VMPL2
Withheld Reference. Therefore, the VMPL2 bracket is but-for material.

6

b. AL-101 Brackets
The evidence at trial showed the AL-101 mount was a custom manufactured mount that
Peerless sold to a company called Activelight in 2004. (Trial Tr. 823-825, 858-859, 906-907.)
The AL-101 brackets had the lower ramps Lam stated were the only inventive feature of the ’850
bracket, two side walls, and a security screw system. (Trial Tr. 860-863, 866-867; Trial Exh. D303, attached as Exhibit G.) The AL-101 brackets included out-turned safety screw retaining
tabs that extended outward from the lower ramps. (Exhibit G, p. 5-6; Trial Tr. 860, 863.) The
out-turned safety screw retaining tabs of the AL-101 fall within the language of claims 9 and 11;
claims 9 and 11 do not contain language that limits the configuration of the lower ramps to being
connected to each other by a longitudinal surface. (Exhibit A.)
Applying the broadest reasonable construction of the claims, the out-turned safety screw
retaining tabs are equivalent to in-turned safety screw retainer tabs. In-turned tabs form a box
fold, which the Court held were equivalent to the ’850 Patent bridge plate. It would be obvious to
a person skilled in the art that the outward-folding retaining tabs on the AL-101 could be folded
inward to form a box fold to hold the safety screw. Peerless did not disclose to the PTO the AL101 brackets or the box-fold embodiment in ’850 Patent. Had Peerless disclosed the AL-101, the
patent examiner would not have issued the patent as written, nor issue a claim as broad as claim
11. Therefore, the Court must find that, had the Examiner known of the AL-101 Withheld
Reference, he or she would have rejected the claims over the combination of the prior art box
fold and references of record, or the AL-101. AL-101 is thus but-for material.
c. Peerless Gennady/ECN 6102 Brackets
Peerless omitted disclosure of its own ECN 6102 Bracket, as that would have prevented
the issuance of ’850 Patent. Gennady Plavnik worked on the development of the bracket

7

depicted in Figure 3 of ’850 Patent. (Dkt. #602, p. 2.) Plavnik testified at trial that by the time
William Lam (i.e. the inventor of the ‘850 Patent) started working at Peerless, by late 2003, the
invention claimed by the ‘850 Patent was already developed. (Trial Tr. 903-908.) The ECN
6102 Bracket is a bracket Plavnik developed in the summer of 2004 while working at Peerless as
a manager of a bracket design project within its Design Group. (Dkt #602, p. 2; Exh. D-89/322,
attached as Exhibit H.) The Gennady/ECN 6102 had upper and lower ramps and a full width
bridge plate as shown in Figures 3 through 5 of ’850 Patent. The Gennady/ECN 6102 Bracket is
but-for material, because it has the three elements arranged in the same way as in the ’850
claims. Had the PTO Examiner been told about the Gennady/ECN 6102 Bracket by Brown, the
’850 claims would not have issued, as the Gennady/ECN 6102 Bracket has the bridge plate
missing from the Examiner’s combination. This is significant, because the incorporation of the
Gennady/ECN 6102 Bracket bridge plate into the claims is the only feature of ’850 that the
Examiner considered was inventive. (Trial Tr. 958-959.) Had the Examiner known about a prior
design that made use of an identical bridge plate that connected the two side walls of the mount,
he or she would not have allowed the ’850 Patent to issue. Therefore, the Peerless ECN 6102
Withheld Reference is but-for material.
d. Peerless DFPF-220/320 Brackets
The Peerless models DFPF-220/320 brackets were identical to the claimed ’850 bracket,
as they contained the Gennady/ECN 6102 Bracket’s bridge plate to connect two lower ramps of
either side wall. (Dkt #602, pp. 4-5; Trial Exh. D-94/327, attached as Exhibit I.) Peerless
distributed that DFPF-320 starting in early October 2004. (Dkt #602, p. 3, 5, 20-25; Exhibit I.)
The Examiner would not have issued the ’850 Patent had he been made aware of Withheld
Reference DFPF-220/320 brackets, because they incorporated all of the elements of the ’850

8

claims arranged in the same way. The Gennady/ECN 6102 and the D-FPF-220/320 bracket
design were therefore but-for material.
3.

But-For Materiality: Plaintiff’s Misrepresentations to the PTO
a.

Misrepresentation to PTO of Function of Bridge Plate

Marshall Brown, the patent attorney who prosecuted the ’850 Patent, misrepresented the
’850 Patent bracket’s operational purpose to use the bridge plate as a “guiding surface” to
indicate “misalignment” during slide-mounting televisions. That “guiding surface” language is
present in all the ’850 claims. (Trial Tr. 961.)3 Claiming the bridge plate as a “guiding surface,”
despite the fact that it does not actually function to guide anything into place is a
misrepresentation as to the nature of the claimed invention. (Trial Tr. 518-519, 1011-1012.)
Adding the bridge plate to the claims of ‘850 was but-for material to the issuance of the patent,
as the Examiner repeatedly refused to issue the patent until after the Peerless incorporated the
bridge plate into Claim 1 as a “guiding surface.” (Trial Tr. pp. 954-959, 961-962; Exhibit B, p.
15-19; 24-31, 38-42; 46-214.) Indeed, the Examiner said that he would allow claims only after
the addition of the bridge plate of claim 8 to the broad claims. (Exhibit B pp. 39-42.) In
response, Brown deliberately incorporated the “guiding surface” language into Claim 1 to
overcome the Bremmon reference. (Trial Tr. 954-959, 961-962; Exhibit B, pp. 15-19, 24-31, 3942.)
However, Lam testified at trial that it is incorrect to refer to the bridge plate as a “guiding
surface” because it did not “guide anything” while mounting a television. (Trial Tr. 518-519,
1011-1012.) Lam also testified that the primary function of the bridge plate was to hold the
safety screw, not to act as a guiding surface. (Trial Tr. 519, 1011-1012, 1015-1017.) Brown’s
3

That language was incorporated directly in main claims 1 and 9 and indirectly in the remainder of the
claims, as they were dependent from the main claims. (Trial Tr. 961-964; Exhibit A, pp. 14-15.)

9

amendment to the claims were but-for material, as the Examiner refused to issue the patent until
after Brown incorporated the bridge plate into the claims as a “guiding surface.” (Trial Tr. 961964.)
Describing the bridge plate to be a “guiding surface,” despite the fact that it does not
actually function to guide anything into place, is a false and a material misrepresentation as to
the nature of the claimed invention. Its purpose was to misdirect the Examiner’s search toward
sliding and guiding surfaces rather than the real function, safety screw retainers, of which there
were numerous embodiments in the prior art, known to Peerless and withheld from the
Examiner.
b. Misrepresentation to PTO that Gennady Brackets depicted in Prior Art Had
No Ramps bridge Plate or Safety Screw
Brown misrepresented the status of the prior art to the PTO by representing that Figures 1
and 2 of the ’850 Patent application contained an accurate depiction of the Prior Art. Figures 1
and 2 of the ’850 Patent represent to the PTO that upper and lower ramps, bridge plates, and
safety screws did not exist in the prior art, as it shows only:

(Exhibit A, p. 2.)
By including these figures in the’850 Patent applications, Brown misrepresented to the

10

PTO that Figures 1 and 2 were representative prior art as to which the invention was an
improvement at that time. (Trial Tr. 918-922, Exhibit B, pp. 183, 195; Trial Exh. D-233/492,
attached as Exhibit J, pp. 7, 19.) However, Figures 1 and 2 are a misrepresentation of the thenexisting prior art, as the Gennady Bracket, D-FPF-220/320, AL-101, and VMPL2 each clearly
contained upper and lower ramps to guide the retaining portion into the proper position during
the mounting process. And the Gennady Bracket and D-FPF-220/320 contained bridge plates
and safety screws. In turn, Lam’s Invention Disclosure falsely represented the status of the prior
art as Lam included the same Figures 1 and 2 in his invention disclosure, and omitted all of the
prior art references that embodied his design. (Trial Tr. 990-992; Exhibit F, pp. 1-7.) Had
Brown and Lam been honest about the elements of the prior art, the ’850 Patent never could have
issued.
c. Misrepresentation to the PTO of the Best Mode
Peerless failed to disclose to the PTO the best mode for the ’850 Patent and the fact that
the best mode was known in the art. At trial, Lam and Gleyzer testified that the best mode of the
invention claimed by the ’850 Patent was to use a box fold to retain the safety screw rather than a
bridge plate. (Trial Tr. 1005-1010, 1013-1014, 1260.) However, the specification of the ’850
Patent disclosed only welded bridge plates, or a longitudinal surface that could be “fastened in
other conventionally-known manners” (emphasis added), but does not explicitly state that the
box fold (not a mode of fastening, but rather a type of construction) was the best mode for
practicing the invention. (Exhibit A, p. 4.) Brown’s omission of the box fold as known in the
art was egregious, because in doing so Brown materially misrepresented the best mode of
practicing the ‘850 Patent to the patent examiner to secure the issuance of the ‘850 Patent over
the prior art.

11

Peerless also misrepresented the nature of the ‘850 Patent by omitting the safety screw
completely from the ’850 specification. Yet, Peerless disclosed it in the ’002 Patent application
filed about 6-months before the ’850 non-provisional application was filed in September 2005.
(Trial Tr. 919-921; Trial Exh. D-45/160 attached as Exhibit K, p. 2.) Thus, the failure to correct
the disclosure at the time of filing ’850 Patent in 2005 shows the omission was deliberate.
Rather, it appears that Peerless omitted the safety screw from the specification to support
Peerless’s misrepresentations that the bridge plate served a sliding or “guiding” function during
the mounting process.

Had the safety screw been disclosed, the Examiner would have

recognized that the safety screw interferes with sliding/guiding, and would have directed his
prior art search toward safety screw retainers. The Examiner would have considered the tabs of
the AL-101 brackets and the bar of the VMPL2 brackets to be equivalents to the bridge plate, as
safety screw retention was its real function, as Lam so testified at trial. Omitting the safety
screw was deliberate misdirection on the part of Peerless of material information from which we
can infer deceptive intent.
4.

Egregious Misconduct Before the PTO During Prosecution of ’850

Peerless, through Lam and Brown, also committed several affirmative acts of egregious
misconduct before the PTO while prosecuting the ‘850 Patent. Misrepresentations of counsel in
PTO proceedings are “tantamount to an unmistakably false affidavit,” and the lack of reasonable
explanation for the several misrepresentations constitute a “collective weight” of evidence that
“would support a finding of intent that is the single most reasonable inference.” Ohio Willow
Wood Co. v. Alps South, LLC., 735 F.3d 1333, 1351 (Fed. Cir. 2013); Outside the Box
Innovations, LLC v. Travel Caddy, Inc., 695 D.3d 1285, 1294 (Fed.Cir. 2012) (holding the filing
of a false declaration [as the inventors did here] to be equivalent to an “unmistakably false

12

affidavit.”). Indeed, for affirmative acts of egregious misconduct, such as filing an unmistakably
false affidavit, materiality is presumed. See Ohio Willow Wood Co., 735 F.3d at 1345;);
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1292 (Fed. Cir. 2011)(citing Rohm
& Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1571 (Fed. Cir. 1983)(stating “there is no
room to argue that submission of false affidavits is not material.”).); Outside the Box
Innovations, LLC, 695 F.3d at 1294 (holding the filing of a false declaration to be equivalent to
an “unmistakably false affidavit.”); Energy Heating, LLC v Heat On-the-Fly, LLC, 2016-1559
(Fed. Cir. May 4, 2018).
Here, the inventor of the ’850 Patent, William Lam, and the attorney who prosecuted the
’850 Patent on behalf of Peerless, Marshall Brown, committed egregious misconduct before the
PTO by submitting a Declaration at the time of filing that contained unmistakably false
statements, as to: the inventorship of the ’850 Patent; the existence of prior public knowledge,
readiness for patenting (i.e. made misrepresentations as to knowledge of prior sales of the
invention); the absence of no prior conception by another; the state of prior art; and the best
mode of the invention.
The Declaration submitted by the inventors, William Lam, Garry Monaco, and Dugan
O’Keene (“the Inventors”) represented to the PTO that the inventors did not know or believe:
‘that the same invention was ever known or used by others in the
[U.S.], or described in any printed publication in any country,’
before they invented it; and 2) “that the same invention was
patented or described in any printed publication in any country, or
in public use or on sale in the [US] for more than one year prior to
the filing date” of the application.
(Exhibit B, p. 204.) As shown at trial, Peerless made and sold brackets containing some or all of
the features claimed by the ’850 Patent by selling mounting solutions that utilized the Gennady
Bracket, including models D-FPF-320, RTFPF-220, and the AL-101 between May and October

13

2004. (Trial Tr. 449, 508, 824-825, 995-1001, 1005.) It is undisputed that Lam had knowledge
of the Gennady Bracket, D-FPF-220/320, and AL-101. (Trial Tr. 503, 508, 894, 898-899, 990991, 993, 995-996, 997-1001, 1230, 1235-1237.) Lam was also aware of the VMPL2 as early as
2004, which had identical ramps to the ramps claimed by the ’850 Patent. (Trial Tr. 898-899,
993, 995-996, 997-1001, 1230, 1235-1237.) As each of the aforementioned brackets were on
sale before October 14, 2004 (i.e. more than one year prior to the date provisional application
was filed on October 14, 2005), the inventors submitted an undeniably false declaration to the
PTO to secure the issuance of the ’850 Patent by swearing that they had no knowledge as to
whether the same invention was in use, or disclosed by others in any printed publication, or in
public use/on sale in the United States for more than one year prior to the filing date of the
application. (Exhibit B, p. 180.)
The inventors also made misrepresentations to the PTO as to the true inventors of the
’850 application in the Declaration they filed with the PTO. As part of the Declaration, the
inventors swore that they were the original, first, and joint inventors of the invention claimed in
the application. (Exhibit B, p. 204.) However, trial testimony shows that Plavnik was the
inventor of the bracket claimed by the ’850 Patent, as Plavnik developed the Gennady Bracket.
The Gennady Bracket disclosed every element of the’850 claims, from Lam’s allegedly
inventive ramps, to the bridge plate that the Examiner found to be the sole inventive feature of
the ’850 Patent. Further, Lam was aware of the Gennady Bracket, as he testified during trial that
his design was intended as an improvement upon the Gennady Bracket. (Trial Tr. 495.) Despite
this, the Declaration filed with the PTO only identified William Lam, Dugan O’Keene, and
Garry Monaco as the inventors, and not Plavnik. (Exhibit B, pp. 204-207.)

This

misrepresentation was never corrected with the PTO by Brown despite multiple opportunities,

14

and as such, constitutes another example of an undeniably false representation that Peerless made
to the PTO in prosecuting the ’850 Patent.
B.

Knowledge and Intent
Direct evidence of intent to deceive is rarely available, but the court may infer intent from

the surrounding circumstances. Elk Corp. of Dallas v. GAF Bldg. Materials Corp., 168 F.3d 28,
32 (Fed. Cir. 1999) (intent need not, and rarely can, be proven by direct evidence); Ohio Willow
Wood Co. v. Alps South, LLC, 753 F.3d 1333, 1349, 1351 (Fed. Cir. 2018) (the collective weight
of misrepresentations on materiality can support a finding of deceptive intent that is the single
most reasonable inference to be drawn from that evidence.)
The file wrapper for the ’850 Patent shows that Peerless did not disclose any of the
Withheld References to the PTO during the prosecution, despite the fact that the inventors named
in the ’850 Patent submitted an executed declaration with their patent application, in which they
acknowledged their duty to disclose material prior art to the PTO. (Trial Tr. 925; Exhibit B, pp.
19-20, 151-155, 157-159, 170-172, 205.) Further, the undisputed evidence at trial shows that
each of the Withheld References were within the knowledge of Peerless during the entire time
the ’850 application was prosecuted, and that Peerless knew that these Withheld References were
potentially barring because they existed more than one year prior to the filing of its provisional
application in October 2005. Peerless did not disclose the Withheld References to the PTO,
because had it done so, the ’850 Patent would not have issued. It is not credible that Brown
would NOT understand that; as a result it is clear the Peerless prior art was withheld to gain the
patent. Three of the four Withheld References were Peerless’ own products, not those of a third
party. The other was a bracket manufactured by a competitor, Sanus, which Peerless had in
possession for its designers and Lam to study. Although Peerless had ample opportunity to

15

explain these discrepancy during trial, it did not.
1. Intent to Deceive Inferred from Withheld References and Misrepresentations in
Prosecution of ’850 Patent
The VMPL2 bracket individually had all three elements of the combination ’850 Patent,
arranged in the same way. It had the lower ramps that Lam asserted in his Invention Disclosure
to be the only inventive aspect of the ’850 Patent. (Exhibit E; Exhibit F, p. 3-7; Trial Tr. 501;
Dkt. #602, p. 6.) Trial testimony shows Peerless had knowledge of the VMPL2 Withheld
Reference prior to the prosecution of the ’850 Patent. At trial Lam testified he was familiar with
the VMPL2 bracket in 2004. (Trial Tr. 998-1001.) It was mounted on the wall of his work space
at Peerless. Vladimir Gleyzer, the former head of product design at Peerless, testified that in
2004, the designers at Peerless, including Lam, studied a physical sample of a commercially
available VMPL2. (Trial Tr. 993, 1230, 1235-37.) In addition, Plavnik recognized the Sanus
VMPL2 depicted from his work experience at Peerless, because one was mounted on a wall in
the Design Department no later than mid-summer 2004. (Dkt. #602, p. 6.) Lam violated his
uncompromising duty of disclosure by not bringing it to the attention of the PTO. In light of the
above knowledge, the only inference that can be drawn from Plaintiff’s withholding the VMPL2
reference from the PTO is deceptive intent.
Likewise, in May of 2004, Plaintiff sold its AL-101 brackets, which also had the lower
ramps that Lam stated were the only inventive feature of the ’850 bracket. (Trial Tr. 908, 911;
824-25, Exhibit F.)

The AL-101 was manufactured by Peerless and shows Peerless had

knowledge of the ramps more than 1 year prior to its application for the ’850 Patent. Peerless
did not disclose the box fold embodiment in ’850. Had the Examiner known the key but-for
feature was known in the art, he would have rejected the claims over the combination of the prior
art box fold and references of record, or the VMPL2, had he been told about it by Peerless.

16

Therefore, the information withheld from the PTO was material, and the only inference that can
drawn from the failure to disclose the same is intent to deceive to PTO.
In addition, it is critically significant that Lam was fully familiar with the 2004 Gennady
Bracket that he depicted in Figures 1 and 2 of ’850 Patent. (Trial Tr. 1005; Dkt. #602, pp. 2-3;
Exhibit F; Exhibit H.) The Figures 1 and 2 Gennady Bracket had a full width bridge plate
identical to the bridge plate shown and claimed in the ’850 Patent. (Trial Tr. 503, 508, 894, 901902, 990-991.) After all, the Gennady Bracket is where Lam got the bridge plate from. Former
Peerless engineer Gennady Plavnik testified that in 2004, prior to Lam’s conception of the ’850
bracket on January 5, 2005, he designed a universal bracket that was known internally at Peerless
as ENC #6102, or the “Gennady Bracket.” (Trial Tr. 906-908; Dkt. #602, p. 8.) Lam testified
that he had knowledge of the Gennady Bracket at the time that he developed the ’850 bracket,
and designed his bracket to have lower ramps in an effort to “fix” the features of the Gennady
Bracket.4 (Trial Tr. 503, 508, 894, 990-991.) Lam claimed that he sought to improve the
Gennady Bracket by incorporating lower ramps below the bridge plate. (Trial Tr. 503, 508, 894,
990-991.)
The Gennady Bracket, misrepresented in ’850 Figures 1 and 2, was actually configured
as shown in Peerless drawing P0314546, dated 10/1/2004, drawn by Lam (Exhibit H, p. 2):

In his declaration, Plavnik testified that the Gennady bracket included a mounting contact
4

Lam’s representation to this Court was false, as Peerless’ drawing of the Gennady Bracket, P0314546,
reveals that it contained lower ramps connected by a bridge plate, as well as upper ramps. (Dkt #602, p. 2;
Exhibit H, pp. 1-8).

17

portion, two side portions that defined a receiving region (as in the ’850 bracket), upper and
lower ramped surfaces (seen configured in the side walls), and a bridge plate for a safety screw,
that extended longitudinally to join the two side walls together. (Dkt. #602, p. 2.) The Figures 1
and 2 Gennady Bracket bridge plate was identical to the longitudinal surface identified as
component 120 in the ’850 Patent (Tr. Trans. pp. 900, 901-902), since it was the source of
surface 120.
By no later than October 7, 2004, the Gennady bracket was ready for patenting, and
therefor “on sale” as a matter of law. Energy Heating, LLC v Heat On-the-Fly, LLC, 2016-1559
(Fed. Cir. May 4, 2018).

A prototype of the Gennady bracket was shipped to TechData

Company of Florida on August 31, 2004. (Dkt. #602, p. 8). A number of the Gennady Brackets
were sold to Wal-Mart in September of 2004, and three or four of the Gennady Brackets were
displayed at the CEDIA Trade Show in September of 2004. (Dkt. #602, p. 8.) Lam released the
Gennady Bracket for production on October 5, 2004. (Dkt. #602, p. 3.)

Peerless also

manufactured and sold iterations of the Gennady Bracket in its own mount models D-FPF220/320. The brackets for the D-FPF-220/320 mounts were configured as shown in the Peerless
Installation and Assembly Instructions for this model of its mounts, P0315646-651, dated
October 7, 2004, shown side-by-side with Lam’s October 1, 2004 drawing of the Gennady
bracket:

(Dkt. #602, pp. 4, 5; Exhibit H, pp. 3, 6). The mounting bracket of the D-FPF-220/320 hooked
18

onto the wall plate as shown in Peerless’ October 7 2004 Instructions:

(Exhibit I, p. 6). The enlarged view shows the bridge plate functioned to retain a safety screw
“DD,” more than a year prior to filing the’850 provisional application, Provisional Application
No. 60/727,105 (hereinafter “PR’105”). (Exhibit A, p. 1; Exhibit J, p. 1.)
Further, all three Peerless inventors unquestionably knew of the best mode box-fold
retainer design, as they made drawings of it in March 2005, more than six months prior to filing
the Provisional Application, PR’105, and over 18 months prior to filing the Regular Application
RA’343. (Trial Tr. 1461; Dkt. #602; D-Ex. 345/615, attached as Exhibit L.) They knew the box
fold design was superior to the welded bridge plate because Plaintiff had abandoned the bridge
plate by December 2004. They had several opportunities to correct the omission, but did not.
This pattern of knowing concealment demonstrates that Peerless acted with intent to deceive.
Trial evidence showed Figures 1 and 2 of ’850 omitted critical details which misled the
PTO Examiner. (Trial Tr. 961-962, 973, 976-980.) Plaintiff’s attorney, Brown drafted and
presented Prior Art Figures 1 and 2 and their description to the Examiner, misrepresenting them
as exemplary prior art to show the differences between that prior art and the alleged Lam
invention of ’850. Lam executed a Declaration under Oath that the disclosure in the application
was complete, true and correct. It was not.

19

Lam admitted that Figures 1 and 2 of ’850 depicted the 2004 Gennady Bracket, (Trial Tr.
508-509, 1005), yet it was incorrectly shown in ’850 without a lower ramp. This omission was a
material misrepresentation. Trial testimony showed that the 2004 Gennady Bracket contained a
lower ramp. (Trial Tr. 503, 508, 894, 901-02; Dkt. #602.) The deliberate omission of a lower
ramp in Figures 1 and 2 was intended to support Lam’s claim that his inventive concept was the
addition of a lower ramp to guide the bracket while mounting.

Yet, Lam had personal

knowledge that the AL-101, the VMPL2, the ECN 6102 and the 2004 Gennady Bracket all had
lower ramps.
Further, the ’850 Gennady Bracket Figures 1 and 2 omitted its bridge plate and safety
screw. Lam acknowledged that he obtained the bridge plate from the Gennady Bracket design.
(Trial Tr. 1004-05.) Had the bridge plate and safety screw been disclosed in Figures 1 and 2, the
claims of ’850 never would have issued. It is clear from the Examiner’s expressly-stated
“Reasons for Allowance” that he would have rejected the ’850 claims in view of Bremmon or
VMPL2, had Brown and Lam had correctly represented the Gennady Bracket in Figures 1 and 2
of the ‘850 Application, and informed the patent examiner as to the state of the other prior art.
(Exhibit B, pp. 15-19.) But the Examiner was deliberately kept in the dark about the true
features of the Gennady Bracket by Brown and Peerless, in order to gain allowance of the claims.
It is obvious that Brown knew that had Figures 1 and 2 been properly depicted to
correctly show the Prior Art Gennady Bracket features, no patent could be granted on the
brackets. The fact that Brown deliberately mischaracterized the prior art with the self-evidently
sole intent to obtain a patent is clear evidence of intent to deceive. It is self-evident that Figures
1 and 2 were created with no purpose other than to mislead the PTO as to the nature of the prior
art in order to obtain a patent.

20

Finally, the Patent Act requires that the patent application be filed in the name of the true
inventors. 35 USC 115 states:
Inventor’s oath or declaration.
(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—
An application for patent that is filed under section 111(a) . . . shall include, or be
amended to include, the name of the inventor for any invention claimed in the
application. Except as otherwise provided in this section, each individual who is
the inventor or a joint inventor of a claimed invention in an application for patent
shall execute an oath or declaration in connection with the application.
A false oath is a violation of 18 U.S.C. § 1001. All three inventors signed a Declaration under
Oath on October 14, 2005. (Exhibit A; Exhibit B, pp. 204 – 207.) Lam declared under oath that
he was an original and first inventor of the lower ramp and the bridge plate, in spite of the fact
that neither was true. He knew in 2004 that numerous prior art brackets had lower and upper
ramps: his own D’595 bracket design; the VMPL2; the AL101; the DFPF-220/320 and the 6102
Bracket shipped to TechData; and the Gennady/Figs 1/2 brackets. Lam also knew the 2004
Gennady Bracket had a full width bridge plate. Lam showed the Jury that he signed a false oath
when he acknowledged at Trial that he obtained the bridge plate element of his ’850 design from
the prior art Gennady Bracket. (Trial Tr. 508-09, 1005.) He never told that to the PTO.
Further, Lam specifically stated under Oath in the Declaration that the specification “sets
forth the best mode contemplated by me of carrying out the invention.” That was false. The best
mode of carrying out the invention was the box fold. However, the ’850 patent does not disclose
it. Clearly, the inventors had knowledge that the description in ’850 was in error and the
drawings were incomplete, but even though they had ample opportunity, neither they nor Brown
did anything to correct the ‘850 application, as was their uncompromising, continuing duty.
Plaintiff’s attorney Brown, before filing the patent application, was charged by statute
with the duty to conduct a “reasonable and competent inquiry.” He did not discharge his duty.

21

The bracket is simple. It has only 3 elements: a back, side walls, and a bridge plate. Brown’s
duty was to ask each inventor what his contribution to the bracket was. Had Brown asked that
simple, basic question, he would have learned that the bridge plate came, not from any one of the
three, but rather from the prior work of Gennady Plavnik. But, Plavnik is not a named inventor,
even though the bridge plate is the critical, but-for element of the combination that made the
bracket patentable. The reason is simple: Plavnik’s work was a prior art bar that Brown did not
want to acknowledge, so Plavnik was cut out of the inventorship equation.5
Brown also knew from Lam’s Invention Disclosure, that Lam’s sole inventive
contribution was the lower ramp, not the bridge plate. (Exhibit F; Trial Tr. 501.) Further, Brown
knew from having filed the D’595 application more than a year earlier on September 21, 2004
and the D’537 application more than two-years prior on August 8, 2003,6 that other brackets
besides the ‘850 Patent used lower ramps. (Trial Tr. 969-72; Trial Exh. D-216/475, attached as
Exhibit M; D-217/476, attached as Exhibit N.) Thus, Brown knew or should have known that if
the lower ramp was Lam’s only contribution, he was not an inventor because lower ramps were
old in the art. Nothing else being different, it is not an inventive contribution to add a prior art
lower ramp to well-known bracket designs. Brown had to know about the VMPL2, the AL-101,
the ECN 6102, the Gennady Bracket (as it wound up in Figures 1 and 2, albeit misrepresented)
and the D-FPF-220/320 brackets.
Equally significant, upon the Examiner indicating that by adding the bridge plate the
combination, the claims would be allowable, Brown immediately should have gone back to the
inventors to determine which one of them was responsible for that critical, but-for element. Had
he done so, and had Lam been as candid as he was in discovery deposition and at Trial, Brown
5

Brown could have filed during this litigation for correction of inventorship to add Plavnik, but did not
do so.
6
Both D’537 and D’595 are public documents.

22

would have learned that Lam took the bridge plate from the 2004 Gennady Bracket, and that it
was a statutory bar, necessitating abandonment of the ’850 application. He clearly did neither.
That studied refusal to timely investigate and take action is indicative of an intent to deceive.
Brasseler, U.S.A. I., L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1383 (Fed. Cir. 2001).
No party is ever “reasonably justified” in making false statements to the Patent Office or
to the court. Intellect Wireless, Inc. v. Sharp Corp., 45 F. Supp. 3d 839, 851 (N.D. Ill. 2014).
The collective weight of evidence in this case shows that Plaintiff acted with specific intent to
deceive the PTO, as Plaintiff was only able to obtain the ‘850 Patent by making material false
representations about the purpose of the bridge plate and withholding material, baring prior art.
These are exemplary of Peerless’ PTO misconduct, and demonstrate that the only
reasonable inference is that of deceptive intent, as Peerless engaged in a pattern of lack of candor
before the PTO, making factual representations that were contrary to the true information
Peerless clearly knew it could not disclose, because then no patent would issue.
Further, Peerless failed to engage in adequate pre-suit investigation before bringing its
patent infringement claim against Crimson. Inadequate pre-suit investigation, or pre-suit due
diligence under FRCP Rule 11, followed by filing of a baseless suit, supports deceptive intent as
being the most reasonable inference. Here, there is absolutely no evidence of any investigation
by Peerless of correct inventorship, prior art known to the inventors, or prior art products
available to the trade, most significantly those ready for patenting, on sale or sold by Peerless.7
See Orenshteyn v. Citrix Systems, Inc., 341 F. Appx. 621 (Fed. Cir. 2004); Lumen View Tech,
LLC v. Findthebest.com, Inc., 811. F. 3d 471, 483 (Fed. Cir. 2016) (a key factor would be a pre7

It is significant to note that Peerless is a Non-Practicing Entity, having not made brackets coming within
the scope of P’850 since early 2006, even before filing RA’343 which matured into P’850. Peerless
changed its mounting design, shown but not claimed in ’850, to one in which the tilt mechanism was part
of the bracket, copying a Sanus mount design.

23

suit validity analysis). Accordingly, the obvious failure, and indeed refusal, to do due diligence
leads to an inescapable inference of intent to deceive the PTO.
2. Egregious Litigation Misconduct Supports Inference to Deceive
Post Therasense, the Federal Circuit recognized that instances of litigation misconduct
also support an inference by the Court that the patentee acted with intent to deceive the PTO.
Regeneron Pharms., Inc. v. Merus N.V., 864 F. 3d 1343 (Fed. Cir. 2017). In Regeneron, the
court sanctioned the patentee, and pointed to nine instances of litigation misconduct, drawing an
adverse inference as to specific intent to deceive the PTO. Id. at 1356. The collective weight of
misrepresentations on materiality can support a finding of deceptive intent that is the single most
reasonable inference to be drawn from that evidence. Ohio Willow Wood Co. v. Alps South, LLC,
735 F.3d 1333, 1351 (Fed. Cir. 2013). Particularly relevant here are the Regeneron instance of
failure to produce conception and reduction to practice documents, failure to include a key
document from an inventor in its document production, misrepresented to the Court that its
production was complete, and, after being ordered to confirm whether it had complied with an
order compelling production, falsely representing to the Court that it had complied. As in
Regeneron, Plaintiff’s litigation misconduct in this case was designed to obfuscate its
prosecution omissions and misrepresentations. Discovery compliance would have resulted in
Peerless producing to Crimson the very evidence it hid from the PTO.
The incontrovertible evidence in this case shows Plaintiff repeatedly defrauded the PTO
in prosecuting the ’850 Patent application, and then actively worked to suppress evidence of that
fraud from the very beginning of this litigation in violation of the initial disclosures required by
the Local Patent Rules.

Plaintiff knew it could not produce to Crimson documents and

information it withheld from the PTO in prosecution of the ’850 Patent, and had no intention of

24

doing so. Plaintiff brought this suit to distract and delay Crimson’s entry into the market, and
conducted discovery to that end.
As an initial matter, Plaintiff failed to produce the Invention Disclosure within 14 days as
required by LPR 2.1. After numerous motions to compel production, it ultimately produced
some of these documents at the deposition of Marshall Brown on November 14, 2013, 3½ years
late, and only after the Court limited Crimson’s statutory invalidity defenses rendering Plaintiff’s
late production of LPR 2.1(a) documents essentially meaningless. Timely disclosure of the
Withheld Gennady/ECN 6102 Brackets and Withheld DFPF-320/220 Brackets along with 2004
sales and public disclosure documents would have short-circuited Plaintiff’s patent case and its
litigation strategy to harass, delay, distract and ultimately bar Crimson’s entry into the AudioVisual Mount market.
Had Peerless complied with LPR 2.1(a), it would have produced documents in 2011
showing Peerless failed to disclose to the PTO that Gennady Plavnik was the true inventor of the
mounting bracket claimed by the ’850 Patent application and that it was ready for sale no later
than October 7, 2004, which would have barred the issuance of the ’850 Patent.
To further deny meaningful discovery to Crimson, Plaintiff did not “separately identify
by production number which documents correspond to each [numbered] category” as required by
LPR 2.1. Further, a history of the discovery in this case, provided below, shows Plaintiff
engaged in a game of hide-and-seek during discovery that effectively delayed Crimson’s ability
to discover the evidence that Plaintiff had defrauded the PTO to obtain the ’850 Patent.
Certainly, in light of the totality of Plaintiff’s discovery misconduct in this case, the only
inference that can be drawn from the aforementioned instances of Plaintiff’s egregious litigation
misconduct is one of intent to deceive.

25

Not only did Plaintiff fail to comply with this Court’s LPRs, it falsely represented to
Crimson and to this Court that it produced documents responsive to LPR 2.1(a)(1) and (2) in
production numbers P0004276, P0004280-4354, P0004668-05215, P0005318-5623, P00056585759, P0005760-5895, and P0003087-P0008978. (See Peerless’ Rule 26.1(a) Initial Disclosures,
attached as Exhibit O, p. 5.)
Under LPR 2.1(a), within 14 days of Crimson’s Answer, Plaintiff was required to
produce or make the following available for inspection and copying along with its Initial
Disclosures:
(1) all documents concerning any disclosure, sale or transfer, or
offer to sell or transfer, of any item embodying, practicing or
resulting from the practice of the claimed invention prior to the
date of application for the patent in suit. …;
(2) all documents concerning the conception, reduction to practice,
design, and development of each claimed invention, which
were created on or before the date of the application for the
patent in suit …;
Peerless did not do so.
Plaintiff delayed the depositions of inventors William Lam and Dugan O’Keene until
mid-December 2012, after the deadline for the Final Invalidity Contentions in January 2012. On
December 12, 2012 and December 13, 2012, during Crimson’s respective depositions of
O’Keene and Lam, Crimson began to get evidence confirming its suspicion that Plaintiff was
hiding information.

During those depositions Crimson learned there may have been an

undisclosed inventor of the ’850 Patent: “Genady,” whose last name O’Keene and Lam
professed they did not recall. At his deposition, William Lam testified that he “copied” the
functional bridge plate and safety screw features of the ’850 Patent bracket Figure 3 from
“Genady.” O’Keene drew into Figure 1 of ’850 Patent the safety screw and its retaining bridge

26

plate that Lam admitted he had copied. Subsequent investigation led Crimson to believe that
reference to “Genady” was in fact Dr. Gennady Plavnik, who headed Plaintiff’s New Products
Development Group at the time Lam and O’Keene were working on adapter brackets under Dr.
Plavnik’s direction. However, Crimson did not locate any drawings made by Dr. Plavnik during
his tenure at Peerless, from January 1, 2004 through February 2005. When it became clear
Plaintiff was withholding key evidence from discovery, Crimson independently identified and
located Dr. Plavnik. Crimson ultimately secured evidence and a written Declaration from him as
to his inventorship of the ’850 bracket and Plaintiff’s prior work in 2004 on brackets having all
the features of ‘850 claims that were clearly ready for sale, and/or sold by October 7, 2004. (Dkt.
#602.)
On January 29, 2013, Crimson issued its Third Request for Production of Document and
Inspection of Tangible Things. Crimson requested production of the prototypes of the ’850
Patent bracket, and its predecessor designs, sample brackets that appeared to be prototypes or
“any item embodying, practicing or resulting from the practice of the claimed invention” or
related to the development of the claimed invention. In addition, Crimson sought, pursuant to
LPR 2.1(a), all documents concerning the conception, reduction to practice, design and
development and the actual brackets shown or prototypes thereof.

In addition, Crimson

requested documents relating to the concealment by Plaintiff of the best mode of the invention as
identified by the inventors in their depositions on December 12 and 13, 2012. This best mode
embodiment was not disclosed in ’850 Patent, but was disclosed in the related, co-pending
applications that resulted in the ’002 Patent application, which disclosure in ’002 Patent was
identified by the inventors as the disclosure missing from ’850 Patent. The inventors also
testified that they did not tell Plaintiff’s counsel to not disclose it in ’850 Patent.

27

On February 6, 2013, Crimson issued a Rule 30(b)(6) deposition notice seeking to take
the deposition of Marshall Brown on March 13, 2013, and seeking production of certain
documents related to the patent prosecution of the ’850 Patent and documents related to
Plaintiff’s due diligence in filing the patents as well as due diligence related to the Complaints in
this lawsuit. Mr. Brown was the Foley & Lardner attorney involved in the prosecution of the
’850 application, Though Mr. Brown was not trial counsel in this matter, Plaintiff, continuing its
litigation strategy of delaying and then refusing to provide required and relevant information,
objected to every request stating the requested prosecution documents were protected by
attorney-client privilege and work product immunity.
On February 26, 2013, less than two months before the close of discovery, Plaintiff
produced, in an un-organized document dump, more than 221,000 pages of new documents.
Even aside from the dubious timing of Plaintiff’s document “dump,” Plaintiff’s production did
not comply with its obligations under the Fed. R. Civ. P. 34. Amazingly, Plaintiff’s document
dump still did not contain the requested documents concerning the conception, reduction to
practice, design, development, sale or transfer of the claimed invention.
On February 28, 2013, Plaintiff filed a Cross-Motion for Summary Judgment on patent
validity. (Dkt #170.)

In its Response, on April 5, 2013, Crimson submitted a declaration

prepared by Dr. Plavnik. (Dkt #192-1.) On April 11, 2013, Plaintiff’s counsel stated in open
court, that to Reply to Crimson’s Response, it needed to take the deposition of Dr. Plavnik. That
very day, Plaintiff issued two subpoenas for Dr. Plavnik’s deposition, a subpoena to testify and a
separate subpoena for production of documents in his possession.
On April 10, 2013, after months of trying to arrange the deposition of Marshall Brown,
Crimson filed a motion to compel his deposition as well as production of related prosecution

28

documents. (Dkt #198.) Peerless refused to produce prosecution documents, arguing they were
privileged, and that Crimson should be estopped from discovering them because Crimson had
already filed its motion for summary judgment. (Dkt #210, pp. 1-5).
Further on April 17, 2013, after months of delaying the deposition of Plaintiff’s 30(b)(6)
designee, the Court compelled the deposition of Nicholas Belcore.8 At his deposition, and five
days before the discovery deadline, Plaintiff produced a binder of additional documents without
any bates numbers. The first page in the binder asserted without corroboration that the ’850
Patent invention was first conceived on January 5, 2005, and was constructively reduced to
practice on January 25, 2005. However, Plaintiff produced no documentation supporting those
assertions.
Plaintiff’s gamesmanship continued on April 19, 2013, when three days before the end of
discovery, Plaintiff abruptly withdrew its subpoena of Dr. Plavnik, as well as its subpoena for the
production of documents. Later that day, given Plaintiff’s continued refusal (for over two years)
to provide the most basic information on the origination of the ’850 Patent, with the looming
discovery deadline, Crimson filed a motion to compel production of documents still not
produced on the origination of the ’850 Patent (Dkt #213) and a motion to compel Dr. Plavnik’s
deposition (Dkt #214). In its response, Plaintiff did not deny that it failed to comply with LPR
2.1(a). Instead, Plaintiff argued Crimson was estopped from seeking such documents because
Crimson had already filed a motion for summary judgment. (Dkt #225, pp. 1-3.)
On April 19, 2013, Crimson also filed a motion for sanctions seeking redress for
Plaintiff’s dumping over 210,000 unorganized pages of documents onto Crimson less than two
8

Crimson previously moved to compel Plaintiff’s deposition pursuant to their 30(b)(6) deposition notice
served January 31, 2012. (Dkt #154). The Court granted that motion. (Dkt #157.) Crimson initially set
the deposition of Peerless’ 30(b)(6) designee, Belcore, for February 21, 2012. After a number of
objections by Peerless, the Peerless was finally compelled to produce Belcore for a deposition.

29

months before the close of discovery. (Dkt #212, pp. 10-12.) Crimson also sought sanctions
because Peerless did not answer key interrogatories relevant to Plaintiff’s Rule 30(b)(6) witness
until two days after the witness, Nicholas Belcore, was deposed, despite the fact that those
interrogatories were directly relevant to Belcore’s testimony. In its response, Plaintiff did not
deny that it dumped over 210,000 pages of documents on Crimson in the final two months of
discovery, merely alleging it was not improper.9 (Dkt #224, pp. 4-6.) Further, Crimson brought a
supplemental motion for sanctions on April 22, 2013, after Plaintiff dumped another 30,000
pages of documents on Crimson on the day that discovery closed, April 22, 2013. (Dkt #215, p.
3). Similarly, Peerless did not deny engaging in this conduct, but instead denied that its conduct
was a “document dump,” denied that its conduct was improper, and argued that the delayed
production of these documents was, somehow, Crimson’s fault. (Dkt #226, pp. 1-3.) The
magistrate judge, Susan Cox, ruled in Crimson’s favor on the other issues raised in Crimson’s
motions for sanctions, but did not address Peerless’s conduct in engaging in document dumps.
(Dkt #235.)
On May 8, 2013, the Court denied without prejudice Crimson’s motions to compel the
production of documents from Marshall Brown and to compel production of documents on the
origination of the ’850 Patent. The Court reasoned that the information would not be needed if
the Court were to grant Crimson’s motion for summary judgment on invalidity of the ’850
Patent. The Court granted Crimson’s motion to compel the deposition of Gennady Plavnik. (Dkt
#234.)
On May 31, 2013, Crimson was finally allowed to depose Gennady Plavnik.
9

In re Sulfuric Acid Litigation, 231 F.R.D. 351, 363 (N.D. Ill. 2005) (“Noranda is not at liberty under the
federal rules to dump massive amounts of documents, which they concede have ‘no logical order to
them,’ on their adversaries and demand that they try to find what they are looking for.”). Ultimately the
total dumped on Crimson was 315,779 documents.

30

Importantly, Plavnik testified the drawings Plaintiff produced, dated March 3, 2005 through midApril 2005, were not the first drawings of the claimed invention; that, in fact, the origination of
the designs of those drawings dated back to the summer of 2004, when he created them, and
would be found in several “ECN” files in the Peerless’ SolidWorks database. Crimson had
sought those drawings during discovery. However, Plaintiff failed to produce them, despite
repeated requests.
During and after the Plavnik deposition, Crimson requested Peerless produce the specific
documents Dr. Plavnik referenced at his deposition, including the Withheld Gennady/ECN 6102
drawings and the Withheld RFPF-320/220 information. Though knowing Crimson had just
learned of these references and other conception and design documents, Peerless again refused to
produce them, arguing this time the requests “were made after the April 22, 2013 close of
discovery and were untimely.” (Dkt. #297-9, p. 2.) After a hearing on Crimson’s motion to
compel (Dkt. #297) production of those documents, on July 23, 2013, the Court ordered Peerless
to produce “any and all documents relating to the origination of the invention” and further
admonished Plaintiff, stating:
If there are drawings or documents that reflect, as [Dr. Plavnik]
testified, an origination date that occurred before March 3 of 2005
and you are not producing those, then you will be barred as a
discovery sanction from saying at trial, unless you can show me
that the documents were either destroyed, which happens, or for
some reason can’t be produced, which happens. But you’re going
to have to say something at that point under verification because I
don’t understand how Mr. Plavnik can testify that there is all kinds
of stuff that goes back to January, I guess, of the prior year, and
there is nothing that’s been produced. So I’m warning you.
(Hearing Tr. from July 23, 2013, 10).10

10

Subsequent to the July 23, 2013 hearing, it was discovered that Peerless was withholding documents
showing that it had invented the ‘850 Patent on October 7, 2004. (Exhibit G, p. 1; Exhibit H, p. 1.

Exhibit I.)
31

On September 30, 2013, the Court denied Crimson’s Motion for Summary Judgment on
Non-Infringement, and granted Plaintiff’s Motion for Summary Judgment of Infringement. (Dkt
#329.) Those rulings triggered the next round of discovery motions seeking documents from
Plaintiff on the origination date of the ’850 Patent. On October 2, 2013, the Court reinstated
Crimson’s motion for partial summary judgment of invalidity (Dkt #193.) but barred Crimson
from maintaining invalidity defenses that it failed to timely disclose – those being the statutory
“on-sale bar doctrine” and Plaintiff’s failure to name inventor. (Dkt #331.)
On October 11, 2013, Crimson filed a renewed motion to compel seeking the documents
Plaintiff was required to produce pursuant to LPR 2.1(a), along with origination documents
Plaintiff still not produced, and to compel the deposition of Mr. Brown. (Dkt #333, 1-4.) Plaintiff
responded by blatantly misrepresenting the contents of its initial document production to this
Court, as it argued that it produced these documents in compliance with Rule 2.1(a) and
identified these documents in its Initial Disclosures. If so, they were deceptive and intentionally
misleading, as they were dated March 2005, not when actually made in 2004.
Further, Plaintiff’s response made numerous misrepresentations to this Court, as
identified in Crimson’s reply, as Plaintiff’s document production still did not contain any sales or
Plavnik documents from 2004 or 2005. (Dkt #354, pp. 4-7.)
On October 24, 2013, the magistrate judge, Susan Cox, noted Plaintiff’s
misrepresentations on this issue, stating:
As we previously noted, Crimson quite unusually filed a motion
for summary judgment prior to the close of discovery. But we also
emphasized that discovery was never stayed, so there was, in fact,
no reason for plaintiff to have refused production of documents.
Plaintiff now, oddly, claims that it produced everything.
(Dkt #359, p. 3.) Judge Cox then ordered Plaintiff to produce all requested documents, to

32

identify where certain documents are located, to state under verification if a document does not
exist, and, most significant, to state under verification, that it has produced everything. (Dkt
#359, pp. 3-4). The Court also noted that Plaintiff changed its position as to why the deposition
of Brown should not be compelled, and ruled that Crimson was entitled to depose Brown. (Dkt
#359, p. 4.) Ultimately, the Court granted Crimson’s motion, and ordered Plaintiff to produce the
documents on or before November 1, 2013, and to depose Brown on or before November 15,
2013. (Dkt #359, p. 4.)
Despite Judge Cox’s unequivocal ruling in Crimson’s favor, Plaintiff failed to comply
with Judge Cox’s order. Instead, Plaintiff produced 283 pages of documents and the verification
of John Potts on November 4, 2013 that it had produced “everything.” That was not the case
however as the November 4 production indicated Plaintiff had additional responsive documents
on the origination of the ’850 Patent. Further, in his verification, John Potts inexplicably
testified that in 2011 and 2012 Peerless had conducted a “comprehensive search for documents
potentially relevant to this action,” and had identified the information for products that practiced
the patent-in-suit, but did not produce those documents until February 26, 2013. (Dkt #370-8, p.
2.) Plaintiff gave no reason for the delay between the time that it had located those documents in
the system and the time that it had allegedly produced all the documents that it had in its
possession, nor did it provide any justification for the withholding the documents until February
26, 2013, and then purportedly including them in a 221,000 page dump on Crimson seven weeks
before discovery ended.
Most importantly regarding the Withheld References ECN 6102 and DFPF320/220, in
Peerless’ November 4, 2013 production, it for the very first time produced a document,
P0314546, showing the ECN 6102 bracket was ready for patenting by October 1, 2004, i.e., that

33

is singly covered all three elements of the combination ’850 Patent, and moreover it was an on
sale bar. The duplicity of Plaintiff lay in its having produced to Crimson before the end of
discovery, document P007948, which showed the same bracket but on a drawing dated March 3,
2005, misleading Crimson that the drawing was post-conception and not a bar. (See Document
P007948, filed under seal as Exhibit P.)11
Peerless’ November 4, 2013 production also included documents: P0314589, showing the
bracket shipment to TechData on August 31, 2004; P0315646 – 651, the Installation and
Assembly instructions for the Withheld D-FPF-320 Reference mounts dated October 7, 2004,
showing the brackets were ready for patenting more than a year prior to filing ’850 Patent. All
these belatedly-produced documents were outside the statutory bar grace period and critically
more relevant than the earlier-produced documents. Had these documents been timely produced
in 2011 instead of after motion to compel and orders of Court to produce in late 2013 (after the
deadline for Crimson’s Final Contentions), Crimson would have directed its discovery
productively, instead of wandering around in a fog of misdirection. That is a prime example of
Plaintiff’s misconduct during litigation, as to which the only reasonable inference is deceptive
intent.
Crimson filed a third motion to compel, to contest the insufficiency of Plaintiff’s
production, which this Court granted. (Dkt #370.) During the hearing on Crimson’s motion to
compel, Plaintiff again attempted to limit the scope of discovery and Plaintiff’s counsel made
several representations in open court that Plaintiff had already produced all documents
responsive to Crimson’s requests – that Plaintiff had no more documents and that its Verification
supported that position. (Dkt. #381-4, Hearing Tr. from December 3, 2103 4:5-6; 5:8-10; 6:2011

The October 1, 2004 date for the drawings is consistent with Dr. Plavnik’s insistence that the P007948
drawing had an original date earlier than March 2005. The documents show that Plavnik was correct.

34

21; 8:7-9.) However, the Court noted, “[i]t seemed pretty clear from this motion (Dkt. #370) that
there are – that there have been documents withheld.” (Dkt. #381-4, Hearing Tr.,15:16-17.)
On December 3, 2013, Judge Cox ordered Plaintiff, again, “to produce documents
itemized in Crimson’s motion, including all 6102 documents, prototypes, and all documents
previously ordered to be produced.” (Dkt #377.) Despite repeated representations that it had
produced everything, on December 13, 2013, Plaintiff produced yet another 2,246 pages of
documents and finally made a bracket available for inspection at its counsel’s office even though
Peerless had verified that no brackets existed.12 On December 18, 2013, Plaintiff inexplicably,
and without notice, produced another 840 pages of documents.
Further, it is apparent that Peerless did not actually produce all of the documents that it
had in its possession relevant to the ’850 Patent. Each of the verifications provided by Peerless
were factually inadequate. In the case of the Potts’ declaration, his verification was clearly false,
as Peerless continued to produce additional discovery that contradicted Peerless’ claims that it
had fully complied with Crimson’s discovery requests. (Dkt #381, pp. 2-3.)
In light of these deficiencies, Crimson’s counsel wrote to Peerless’ counsel on December
31, 2013, to ask Peerless to verify the completeness of Peerless’ discovery, to conduct a requestby-request verification, and to correct several errors in Peerless’ document production. (Dkt.
#381-6, pp. 1-3.) Peerless’ counsel ignored Crimson’s request for verification of completeness,
but, in obvious misdirection, did respond by specifically contesting each of the other identified

12

Crimson inspected the bracket, but Peerless refused to identify the bracket, despite repeated requests
made by Crimson. Peerless’ counsel represented to Crimson’s counsel, in open Court on March 4, 2014
on Crimson’s motion to extend time to file its invalidity motion for summary judgment, that Peerless
would respond to Crimson’s questions about the bracket. It did not do so. Crimson again wrote to
Peerless on March 10, 2014 asking Peerless to identify, among other things, the bracket model and when
it was manufactured. Peerless did not respond.

35

deficiencies from Crimson’s letter. (Dkt. #386-1, pp. 1-3.)13
As set forth in Crimson’s renewed motion for sanctions, filed on January 15, 2014,
Plaintiff never provided Crimson with verification that its document production was complete,
and never even verified that it properly preserved the evidence relevant to this case, even after
Crimson explicitly demanded such a verification in writing. (Dkt #381; Dkt. #381-6, pp. 1-3;
Dkt. #386-1, pp. 1-3).
Further, a verification provided by Berkley on January admits that the information
Crimson sought was removed from Peerless’ computer system, as Berkley testified:
The results of clicking on “Documentation” for ECN 6102 are
shown in P0314804. Clicking on each of the hyperlinks shown in
P0314804 results in an error, an example of which is shown on the
bottom of P0314804. The underlying files appear to have been
moved or deleted from the hyperlinked location. (Emphasis
added)
(Dkt. #381-5, p. 3.)
As noted on the face of the document referenced by Berkley’s verification, the document
produced in P0314804, critical documents were deleted. Peerless’ response to Crimson’s fifth
motion to compel later contended that these documents were not deleted, and that it produced
these allegedly deleted documents on January 16, 2014. (Dkt. #386.) So either Berkley lied that
they were deleted, or Peerless lied that they were not. However, beyond Peerless’ unsupported
statements, Peerless produced no evidence by way of verification or otherwise that the
documents numbered P0315646 to P0315682 are actually the documents that were deleted from
Peerless’ system. There was then, and still is now, no way for this Court or Crimson to verify
Peerless’ claim.
13

Crimson details the full extent of Peerless’s bad faith discovery conduct in its Renewed Motion for
Sanctions for Plaintiff’s Failure to Comply with This Court’s Discovery Orders. (Dkt. #381.) As the
arguments set forth in Crimson’s motion are still applicable to the present case, Crimson fully
incorporates its motion for sanctions as though fully set forth therein. (Dkt. #381.)

36

On January 16, 2014, after yet another verification falsely claimed that Peerless had no
more documents to produce, Peerless at last produced some 2004 Plavnik documents, however
limited. Peerless produced pre-bar “instruction sheets relating to Peerless model DFPF-320
brackets.” These documents should have been produced in 2011 as part of Peerless’ initial
disclosures and productions under LPR 2.1. These documents establish, without doubt that a
reasonable Examiner would have found the ’850 Patent invalid as a matter of law pursuant to
§102(b).
The belatedly-produced Installation and Assembly instruction sheets (P0315646-651)
clearly showed the Peerless model DFPF-320 brackets; that they were ready for sale, being
“Approved” by Peerless’ Mark Berens prior to the statutory bar date; that the sheets carried a
“Patent Pending,” notice; and that they were drawn by “WPL,” that is, William Phong Lam, the
principal inventor. Peerless did not produce to Crimson any documents from 2004 from Berens
or Lam, or about any patent application that may have been pending at the time (in October
2004), so the patent pending notice was false, or was reference to the ’850 application then in
process of being written, but not filed until over a year later.
The production of the DFPF-320 Installation and Assembly instruction documents
indicates at the very least that Lam and Berens should have had LPR 2.1 discovery-responsive
information on their respective hard drives. Yet, none were produced. Peerless engaged an ediscovery consultant, which should have run proper searches across all of Peerless’ databases,
not just the ECN database. Responsive documents existed in other databases (where Peerless
found some of them), and likely the hard drives of Lam, Plavnik, Berens, and others who worked
in the Peerless Design Group in 2004. However, Peerless did not produce anything from those
hard drives from the 2004 period. Peerless decided to conduct a belated search only in mid-

37

January 2014, and it refused to verify that it conducted a proper search and that its production
was complete. Peerless ignored the Court’s orders and admonishments. Peerless’ hide-and-seek
approach to discovery is clear intent to deceive. It prejudiced Crimson because this case would
have been resolved earlier had Peerless produced all responsive documents in 2011 under the
LPRs, which it was obligated to do.
Peerless has still failed to produce huge swaths of evidence relevant to Crimson’s
inequitable conduct defense. Peerless never produced the entirety of the work e-files of Plavnik,
or Lam’s work e-files on the ECN 6102 project, including SolidWorks drawings files. Despite
Plavnik’s testimony that the Gennady Bracket was on display at the CEDIA show in September
of 2004, Peerless produced no list of Peerless’ employees that attended the show, did not identify
what brackets were displayed at the show, and did not produce the promotional materials handed
out by Peerless. Further, Crimson was only able to obtain some of the information pertaining to
Plavnik because it obtained these documents from Plavnik, who was hesitant to cooperate with
Crimson.

Peerless also failed to produce any information related to the AL-101 sales to

ActiveLight in May 2004, the shipment of ECN 6102 Brackets to TechData in August of 2004,
or the sales and shipment information of the DFPF-320 and RTFPF-220 from October through
December of 2004. Likewise, Plaintiff produced only fragmentary evidence of the sales of
brackets that occurred in 2005. This is the evidence Peerless was required to produce at the start
of this litigation under LPR 2.1(a), but did not. Peerless deliberately refused to comply with the
LPRs, and has never produced these documents.
Additionally, Peerless engaged in egregious over-litigation and re-litigation to bury
Crimson in paperwork, e.g. bringing motions that the TRK50B bracket was not prior art on at
least 4 separate occasions, including twice after the Court ruled that it was. Peerless counsel

38

raised that contention the 4th time at the Jury Instruction phase.
Peerless made a mockery of the Federal Rules and the LPRs pertaining to discovery, by
deliberately withholding material document production and opposing deposition discovery until
after close of discovery, then falsely claimed it would be unfairly prejudiced if Crimson was
permitted to rely on Peerless’ belatedly produced documents. That claim is absurd, as the
evidence Peerless (successfully) sought to exclude were Peerless’ own documents relating to
work done by its employees in 2004, of which it was fully aware, and that it should have
produced under the LPRs and Crimson’s Requests, as repeatedly ordered by the Court. The
numerous instances of Plaintiff’s litigation misconduct set out above demonstrates an inference
of intent to deceive.
IV. CONCLUSION
The conclusion is inescapable. Peerless carried its intent to deceive the PTO into this
Court by engaging in litigation misconduct: deliberate selection of evidence to only post-2004
documents; hiding critically relevant evidence; delay through meritless objection and outright
disregard of requests and court orders; and specious claims of prejudice by Crimson’s defenses.
The collective weight of this litigation misconduct is conclusive that the single most reasonable
inference to be drawn is that Peerless had, and continues to have, an intent to deceive.
The collective weight of the evidence amply supports the Court’s finding of deceptive
intent that is the single most reasonable inference that can be drawn from that evidence. In view
of the materiality of the withheld references, the Court is respectively urged to grant Crimson’s
motion and declare the ‘850 Patent to be unenforceable as a matter of law based on Peerless’
Inequitable Conduct.

39

Dated: May 23, 2018
Respectfully submitted,
CRIMSON AV, LLC and
VLADIMIR GLEYZER
By:

Joseph R. Marconi (#1760173)
Victor J. Pioli (#6256527)
Peter R. Ryndak (#6238006)
JOHNSON & BELL, LTD.
33 W. Monroe Street, Suite 2700
[phone]
#5200111

40

/s/ Peter R. Ryndak

CERTIFICATE OF SERVICE

I hereby certify that on May 23, 2018 I have electronically filed the foregoing with the
Clerk of the Court using the CM/ECF system which sent notification of such filing to all parties
of record.

/s/

41

Peter R. Ryndak