Loggerhead Tools, LLC v. Sears Holdings Corporation

Filing 389

MEMORANDUM Opinion and Order Signed by the Honorable John W. Darrah on 11/15/2016. (bg, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LOGGERHEAD TOOLS, LLC,
Plaintiff,
v.
SEARS HOLDING CORPORATION, et al.,
Defendants.

)
)
) Case No. 12-cv-9033
)
) Judge John W. Darrah
)
)
)

MEMORANDUM OPINION AND ORDER
Plaintiff, LoggerHead Tools, LLC, filed a Second Amended Complaint against
Defendants, Sears Holdings Corporation and Apex Tool Group, LLC. The Second Amended
Complaint alleges, inter alia, four counts of willful patent infringement of United States Patents
No. 6,889,579 (the “‘579 Patent”), in Counts I and II, and No. 7,992,470 (the “‘470 Patent”), in
Counts III and IV. Defendants filed a Motion for Summary Judgment of Noninfringement or
Invalidity, which was granted in part and denied in part. Plaintiff has filed a Motion to
Reconsider [379] the Court’s order granting summary judgment for Defendants on willfulness.
For the reasons more fully discussed below, Plaintiff’s Motion to Reconsider [379] is denied.
BACKGROUND
Plaintiff is an Illinois limited-liability company with its principal place of business in
Illinois. Sears Holding Corporation is a Delaware corporation with its principal place of
business in Illinois. Apex Tool Group, LLC is a Delaware limited-liability company with its
principal place of business in Maryland. The ‘579 Patent and the ‘470 Patent are titled
“Adjustable Gripping Tool” and are assigned to Plaintiff. Plaintiff asserts willful patent
infringement of the ‘579 Patent and the ‘470 Patent against both Defendants based on
Defendants’ Max Axess Locking Wrench (the “MALW”) product.

The parties filed cross-motions for summary judgment on the issue of infringement.
Plaintiff’s Motion for Summary Judgment of Infringement [264] was denied. Defendants’
Motion for Summary Judgment of Noninfringement or Invalidity [277] was denied on the basis
of noninfringement and invalidity but granted as to a lack of willful infringement.
LEGAL STANDARD
“Motions for reconsideration serve a limited function: to correct manifest errors of law
or fact or to present newly discovered evidence.” Caisse Nationale de Credit Agricole v.
CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996). A manifest error “is not demonstrated by
the disappointment of the losing party”; it is the “wholesale disregard, misapplication, or failure
to recognize controlling precedent.” Oto v. Metropolitan Life Ins., 224 F.3d 601, 606 (7th Cir.
2000) (internal quotation marks omitted).
ANALYSIS
Plaintiff raises three objections to the Court’s ruling on willfulness: that the decision was
based on grounds outside the adversarial issues presented, that there were manifest errors of law,
and that there were manifest errors of fact.
Plaintiff first argues that the question of subjective willfulness was raised outside of the
adversarial issues presented. However, Plaintiff was the first to call attention to the new standard
for willful infringement and merely argued that the objective evidence Defendants presented was
no longer enough to foreclose willfulness. See (Dkt. 301, pp. 14-15.) Plaintiff did not argue that
Defendants’ conduct was subjectively willful or present any facts in their Statement of
Additional Facts showing evidence that it was. Plaintiff now argues that it has evidence showing

2

willful infringement; but that evidence could, and should, have been raised in the response brief
and Statement of Additional Facts. Marmi E. Graniti D’Italia Sicilmarmi S.p.A. v.
Universal Granite & Marble, 757 F. Supp. 2d 773, 781 (N.D. Ill. 2010) (holding a motion to
reconsider is not “a vehicle to raise new arguments, introduce evidence that could and should
have been adduced earlier, or reargue that which was previously considered”).
Plaintiff also argues that Defendants improperly raised subjective willfulness for the first time in
their reply brief; the arguments regarding subjective willfulness were first made in the reply
because Plaintiff raised the argument in its response. See Novosteel SA v. U.S., Bethlehem Steel
Corp., 284 F.3d 1261, 1274 (Fed. Cir. 2002) (“reply briefs reply to arguments made in the
response brief”). Plaintiff raised the issue that the test for willful infringement had changed; the
Court did not raise the issue itself outside of the adversarial process.
Plaintiff correctly points out that the incorrect legal standard was applied. The
Supreme Court made clear that a preponderance of the evidence standard is applicable to
willfulness and enhanced damages. Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1934
(2016). However, the point remains that Plaintiff did not present any facts showing Defendants’
conduct was “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or
̶ indeed ̶ characteristic of a pirate.” Halo Elecs., Inc., 136 S. Ct. at 1932. Three of Plaintiff’s
Statement of Additional Facts touched on willful infringement. Plaintiff presented an e-mail in
which: “Defendants asked for an Apex employee to ‘please study this design and determine how
difficult it may be to make a Craftsman version of this tool with similar or better performance
that does not infringe upon LoggerHead’s patents.’” (PSOF, ¶ 1) (emphasis added). Plaintiff’s
additional facts included an Apex employee testifying that reverse engineering is “taking a
3

product apart and redesigning it or replicating the design.” (Id. ¶ 2.) Plaintiff also noted that
Apex conducted tests on the Bionic Wrench and noted things such as “construction, operation,
dimensions, max generated user torque on different hex mandrel sizes, for what size mandrels
the jaws would rotate over the mandrel corners.” (Id. ¶ 3.) None of these facts show that
Defendants’ conduct was “willful, wanton, malicious, bad-faith, deliberate, consciously
wrongful, flagrant, or ̶ indeed ̶ characteristic of a pirate.” Halo Elecs., Inc., 136 S. Ct. at 1932.
The e-mail, in fact, shows that Defendants were trying to avoid infringing the patents at issue.
Plaintiff also argues that the Court incorrectly gave dispositive weight to Apex’s
consultation with a patent attorney. Ongoing consultation with a patent lawyer remains a
consideration and is “highly probative evidence of good faith.” Braun Inc. v. Dynamics Corp. of
Am., 975 F.2d 815, 822 (Fed. Cir. 1992) (citing Radio Steel & Manufacturing Co. v. MTD
Products, Inc., 788 F.2d 1554, 1559 (Fed. Cir. 1986)). As previously discussed, Apex consulted
with a patent attorney on several occasions throughout the design process. (DSOF ¶ 30.) And
patent counsel issued a noninfringement opinion before this litigation began. (Id.) Plaintiff
disputes this fact by stating that the opinions of the patent attorney came before the MALW was
finalized: “Apex’s Opinion Counsel stated he offered two opinions, a letter on March 8, 2012
and an email on June 1, 2012. . . . Final production drawings of the MALW are dated
October 24, 2012, over three months after Apex’s opinion counsel stated he last provided an
opinion.” (Id.) However, Plaintiff never argued that the design the patent attorney signed off on
and the final design were different in any material respect. This is not dispositive evidence of a
lack of willfulness, but it is highly probative evidence; and, as previously discussed, Plaintiff

4

presented no evidence showing subjective or objective willfulness. 1 There was simply no
evidence that either of Defendants’ conduct was egregious or willful misconduct.
Halo Elecs., Inc., 136 S. Ct. at 1934.
Plaintiff also argues that willfulness should be decided by a jury. The Federal Circuit has
held that a factual question of willfulness should be decided by a jury. WBIP, LLC v. Kohler
Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (citing Richardson v. Suzuki Motor Co., 868 F.2d
1226, 1250 (Fed. Cir. 1989) (“Absent sufficient basis for directing the verdict, Richardson has
the right of jury determination of this factual question. Willfulness of behavior is a classical jury
question of intent. When trial is had to a jury, the issue should be decided by the jury.”)).
However, “the right to a jury trial exists only when there is some genuine issue of material fact to
be determined.” Keeby v. Cohn, 40 F. App’x 290 (7th Cir. 2002) citing (Fid. & Deposit Co. v.
United States, 187 U.S. 315, 319–21 (1902); United States v. Stangland, 242 F.2d 843, 848 (7th
Cir. 1957)). As discussed above, there is no genuine issue of material fact to be determined on
the subject of willfulness.

1

In response to one of Defendants’ facts, Plaintiff stated: “during the course of design
and testing, Apex abandoned certain key elements that it or its attorney had previously identified
as identical to the Buchanan Patent for purposes of creating an allegedly non-infringing
alternative.” (Id. ¶ 29.) However, that does not mean that those elements were changed to more
closely follow the Bionic Wrench design.
5

CONCLUSION
Plaintiff’s Motion to Reconsider [379] the Court’s order, granting summary judgment for
Defendants on willfulness, is denied.

Date:

11/15/2016

/s/
JOHN W. DARRAH
United States District Court Judge

6