Blue Gentian, LLC v. Tristar Products, Inc.
Filing
545
OPINION. Signed by Judge Noel L. Hillman on 1/15/2020. (rtm, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BLUE GENTIAN, et al.,
Plaintiffs,
CIVIL NO. 13-1758 (NLH/AMD)
v.
OPINION
TRISTAR PRODUCTS, INC., et
al.,
Defendants.
APPEARANCES:
DAVID S. STONE
BRADFORD W. MULLER
STONE & MAGNANINI LLP
100 CONNELL DRIVE, SUITE 2200
BERKELEY HEIGHTS, NJ 07922
Attorneys for Plaintiff Telebrands Corp.
GEORGE C. JONES
MCELROY, DEUTSCH, MULVANEY & CARPENTER, LLP
1300 MOUNT KEMBLE AVENUE
PO BOX 2075
MORRISTOWN, NJ 07962-2075
and
EDWARD F. MCHALE
KENNETH W. COHEN
ANDREW D. LOCKTON
MCHALE & SLAVIN, P.A.
2855 PGA BOULEVARD
PALM BEACH GARDENS, FL 33410
Attorneys for Blue Gentian, LLC and National Express, Inc.
1
EDWARD PAUL BAKOS
NOAM JOSEPH KRITZER
BAKOS & KRITZER
147 COLUMBIA TURNPIKE
FLORHAM PARK, NJ 07932
Attorneys for Defendant Tristar Products, Inc., Wal-Mart
Stores, Inc. d/b/a Sam’s Club, and Sam’s Wholesale Club.
J. STEVEN BRAUGHMAN
MEGAN RAYMOND
PAUL, WEISS, RIFKIND, WHARTON & GARRISON, LLP
2001 K STREET, NW
WASHINGTON, DC 20006-1047
Attorneys for Defendant Tristar Products, Inc.
HILLMAN, District Judge
Presently before the Court is the issue of whether Gary
Ragner, a non-party, should be deemed a co-inventor, pursuant to
35 U.S.C. § 256, of certain patents-in-suit held by Michael
Berardi.
The Court held a multi-day hearing taking testimony
and admitting certain documents and exhibits into evidence.
All
parties have been well-represented and the Court has benefitted
from both the oral advocacy and tutorials at the hearing and the
thoughtful and extensive pre- and post-hearing submissions.
For
the reasons stated below, this Court finds Gary Ragner is a coinventor of the Michael Berardi patents-in-suit.
BACKGROUND
This case has a lengthy and complicated factual and
procedural history.
At one time, three different judges
2
presided over suits related to the contested patents and matters
are still pending before the undersigned and a district judge in
the Newark vicinage.
In lieu of recounting those details, which
have been penned by this Court and others numerous times over
the years of this litigation, this Court will focus on only the
details relevant to the consideration of the matter disposed of
in this Opinion.
On July 28, 2017, Defendants moved under Federal Rule of
Civil Procedure 42(b) for a hearing on correction of
inventorship for the Berardi patents-in-suit pursuant to 35
U.S.C. § 256.
On January 30, 2018, this Court granted
Defendants’ request to hold a hearing to determine whether Gary
Ragner should be added as a co-inventor on the Berardi patentsin-suit.
Discovery for the hearing ensued and all other pending
matters have been staying pending resolution of Defendant’s
motion. 1
1
On July 19, 2019, the parties designated several matters,
including this case, for mediation: Telebrands Products, Inc.,
et al. v. National Express, Inc., et al., 1:13-cv-7752;
Telebrands Corp. v. Ragner Tech. Corp., et al., 1:15-cv-3163;
Ragner Tech. Corp., et al., v. Telebrands Corp., 1:15-cv-8185;
Telebrands Corp. v. Ragner Technology Corp. et al., 1:16-cv3474; Telebrands Corp. v. Ragner Tech. Corp., et al., 1:16-cv3594; Blue Gentian, LLC v. Tristar Prods., Inc., 1:13-1758; Blue
Gentian, LCC, et al. v. Tristar Prods., Inc., 1:13-cv-7099; and
Ragner Tech. Corp., et al. v. Berardi, et al., 1:15-cv-7752. In
light of the resolution of the pending motion, the parties will
be directed to file on the docket a letter within 20 days
setting forth their position regarding a possible global
resolution of all pending matters through private mediation.
3
On September 5-7, 2018, January 29 and 30, 2019, and April
30, 2019, this Court commenced a hearing on correction of
inventorship (the “Inventorship Hearing”).
At the Inventorship
Hearing, the Court received the live testimony of Gary Ragner,
Robert de Rochemont, Jr., Margaret Combs, Keith Mirchandani,
Ajit Khubani, Bala Iyer, Manish Israni, Cheryl Berardi, and
Michael Berardi.
On May 29, 2019, the parties submitted post-hearing briefs.
On June 12, 2019, the parties submitted responsive post-hearing
briefs.
On June 26, 2019, the parties presented closing
arguments to the Court.
The issues have been fully briefed and
are ripe for adjudication. 2
As noted, the issue currently before the Court stems from a
larger dispute between the Plaintiffs, Blue Gentian, National
Express, and Telebrands Corp., and the Defendants, Tristar
Products, and Wal-Mart Stores.
Plaintiffs market, promote,
distribute, and sell a garden hose known as the “XHose.”
Gentian owns several patents related to the XHose.
Blue
Defendants
also produce and promote a garden hose known as the “Flex~Able
Hose.”
In a matter not currently before the Court, Plaintiffs
2
There are two motions pending before the Court: a motion to
disregard Plaintiffs’ unauthorized June 12, 2019 filing, and a
motion for expedited consideration of motion to disregard
Plaintiffs’ unauthorized June 12, 2019 filing. Through this
Opinion and accompanying Order, the Court will deny those
motions.
4
allege that Defendants have infringed on Plaintiffs’ patents for
the XHose.
In this proceeding, Defendants allege that Gary Ragner, a
non-party to this case, co-invented the XHose with Blue
Gentian’s principal, Michael Berardi.
Defendants therefore
argue that six of Blue Gentian’s patents should be corrected to
reflect Gary Ragner’s inventorship. 3
The bulk of the evidence relevant to determining
inventorship comes from a single three to four-hour meeting held
on August 23, 2011.
The relevant facts before, after, and
including this meeting are discussed below.
A. The Expandable Garden Hoses in Question
a. The XHose
The XHose is a lightweight, expandable garden hose.
The
length and width of the XHose changes depending on the amount of
water running through it.
The XHose features an elastic inner
tube that acts as both a water conduit and a retracting force.
Blue Gentian owns all intellectual property rights in and
related to the XHose, including U.S. Patent No. 8,291,941 and
U.S. Patent No. 8,291,942.
Michael Berardi is listed as the
3
The six patents belonging to Michael Berardi and Blue Gentian
are discussed in this opinion. Four of these patents are
utility patents: U.S. Patent No. 8,291,941, U.S. Patent No.
8,291,942, U.S. Patent No. 8,479,776, and U.S. Patent No.
8,757,213. Two of these patents are design patents: U.S. Patent
No. D722,681, and U.S. Patent No. D724,186.
5
inventor of the XHose on these patents.
Blue Gentian granted
National Express and exclusive license to use, sell, import,
market, promote and distribute the XHose.
b. The Flex~Able Hose and Pocket Hose
Though not relevant to this opinion, the Court notes that
the Flex~Able Hose and Pocket Hose are also lightweight,
retractable hoses available for consumer distribution and use.
c. The MicroHose
Gary Ragner and Robert de Rochemont created an expandable
hose called the “MicroHose.”
When the Ragner Technologies team
and Michael Berardi met, Ragner and de Rochemont used a
prototype of the MicroHose to demonstrate their product.
Ragner
described this prototype is a “cutdown version” of the
MicroHose, featuring a small diameter, elastic vinyl hose, wire
coil for biasing, and a nylon or polyester valley cord 4 epoxied
to each end for reinforcement.
According to Ragner, the valley
4
The MicroHose is similar to the flexible hose found on a common
household vacuum cleaner. When collapsed, the circumference of
the hose appears uniform. When expanded, the hose forms a
three-dimensional wave-like pattern of peaks and valleys. The
valley cord winds around the hose through the “valleys,”
reinforcing the outer strength of the hose to prevent bursting,
something all developers known to the Court and many users have
experienced with the water pressure typically used with garden
hoses. Importantly, Ragner testified that he told Berardi at
the August 23 meeting, testimony the Court credits as both
credible and consistent with other evidence in the case, that
the valley cord was only one way to prevent bursting. Another
way was the use of a full outer cover made of fabric.
6
cord’s purpose was both to double the amount of pressure the
hose could handle and to help the hose hold its shape.
Ragner
testified that this prototype did not expand radially, nor did
the internal surgical tube in the MicroHose prototype serve as a
conduit for water.
To date, no version of the MicroHose has
been manufactured or sold commercially.
As will be elaborated below, Ragner testified that at the
August 23 meeting the attendees discussed “prototype 2” of the
MicroHose.
The parties agree that this prototype was not
physically present at this meeting.
According to Ragner,
prototype 2 is a vacuum hose with a surgical tube inside.
As
Ragner described, the internal surgical tube is epoxied to each
end of the MicroHose prototype to act as a retracting force.
B. Michael Berardi’s Background and Knowledge
Prior to the August 23 Meeting
Michael Berardi is an accomplished songwriter and video
producer.
During his time at CBS Records and Born Music, he
copyrighted over 150 songs.
Michael Berardi also has
significant experience with the direct marketing industry and
co-owns Berardi Productions with his wife, Cheryl.
Together,
Cheryl and Michael Berardi have produced hundreds of television
commercials.
Despite having no technical background, prior to patenting
the XHose, Michael Berardi had applied for two patents and
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taught himself how to edit and produce commercials.
Michael
Berardi credits his creative thinking and experience working in
his father’s hardware store for his success inventing new
products.
During his eleven years as an employee and three
years as a manager at his father’s hardware store, Michael
Berardi testified that he sold and repaired various products,
including garden hoses.
In either late July or early August 2011, an acquaintance,
Thomas Moran, told Michael Berardi about a potential investment
opportunity in a product called the MicroHose.
Based on this
conversation, Michael Berardi testified that he searched the
Internet to learn more about the MicroHose and Ragner
Technologies.
Through this search, Michael Berardi found a news
article about Ragner Technologies that contained a video
demonstration of a MicroHose prototype.
Michael Berardi
testified that after watching the video, he thought the
MicroHose was “a very neat product” that “could be a fantastic
Direct Response TV product.”
Michael Berardi watched the video
three to four times, zooming in to see parts of the hose
demonstration more closely.
Michael Berardi testified that right after watching the
video demonstration of the MicroHose, he experienced a “eureka
moment” in his community gym.
After looking at certain gym
equipment, Michael Berardi was struck by the idea of running
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water through a tube similar to the ones used in the resistance
bands at the gym.
Michael Berardi testified that “it kind of
reminded me I guess maybe of the expanding hose that Ragner had
invented” and that he wondered “what would happen if I put water
through this?”
Michael Berardi told Cheryl Berardi about his idea for a
new hose.
Cheryl Berardi responded that they should “not put
any energy there” because they already planned to meet with
Ragner Technologies.
Michael Berardi agreed with Cheryl
Berardi’s assessment that it would be easier to work with a
completed product.
Michael Berardi also stated that he was in
the middle of pursuing two other large projects during this time
period.
Ultimately, Michael Berardi did not take any steps to
create the hose he imagined following his eureka moment but
retained a “nebulous concept” for his hose.
Soon after Berardi watched the online video demonstration
of the MicroHose, an agent from Ragner Technologies, Margaret
Combs, contacted him about setting up an investment meeting on
August 23, 2011.
On August 16, 2011, Ragner Technologies sent
Michael Berardi and other meeting attendees a username and
password to access a website containing a business plan and
three-year cash flow analysis.
9
C. Gary Ragner’s Background and Knowledge Prior to the
August 23 Meeting
Gary Ragner is an engineer and co-founder of Ragner
Technologies.
He holds a Bachelor of Science in physics and a
master’s degree in mechanical and aerospace engineering.
Ragner
also completed coursework in fluid dynamics and has seventeen
years of experience designing hoses, for both vacuums and
outdoor use.
Ragner holds several dozen patents for various
inventions in the energy, aerospace, and electronic fields,
among others.
Since the mid-1990s, Ragner has co-invented with his
current business partner, Robert de Rochemont.
Together Ragner
and de Rochemont approached Combs, a retired business executive,
about taking on various administrative, advisory, and management
responsibilities within Ragner Technologies.
Eventually,
Margaret Combs became the CEO and a 10% equity partner in Ragner
Technologies.
Beginning in 2004, Ragner and de Rochemont began buying
supplies and experimenting with hose designs.
Since September
2005, Ragner and de Rochemont have held U.S. Patent No.
6,948,527 for a “pressure-actuated linearly retractable and
extendible hose.”
On January 30, 2006, Ragner and de Rochemont
applied for U.S. Patent No. 8,776,836 for a “linearly
retractable pressure hose structure.”
10
This patent was granted
on July 15, 2014, after being published in 2013.
After working
on a similar design for a retractable vacuum hose, Ragner
testified that he thought this design could apply to garden
hoses as well.
By August 2011, de Rochemont and Ragner had
created between eighteen and twenty prototypes of the MicroHose.
D. The August 23 Meeting
This meeting is particularly important to the determination
of co-inventorship.
This meeting was the sole interaction
between Michael Berardi and Gary Ragner.
The Court draws its
facts regarding this meeting from the hearing record and
documents before it.
this meeting.
The parties contest certain details of
These disputed details will be acknowledged and
discussed below.
Michael and Cheryl Berardi hosted this meeting at their
home in Palm Beach Gardens, Florida starting around 10:00 AM on
August 23, 2011.
The attendees were:
(1)
Michael Berardi, principal of Blue Gentian and coowner of Berardi Productions;
(2)
Cheryl Berardi, co-owner of Berardi Productions and
wife of Michael Berardi;
(3)
Ed Kelly, owner of National Express;
(4)
Gary Ragner, CEO and founder of Ragner Technologies;
(5) Robert de Rochemont, former Executive Vice President
of Quality Assurance and current CEO of Ragner Technologies;
(6) Margaret Combs, former CEO and current equity partner
of Ragner Technologies;
11
(7)
Greg Jansen, a “money finder” for Ragner Technologies;
and
(8) Vince Simonelli, a “money finder” for Ragner
Technologies.
The parties agree that the primary purpose of this three to
four-hour meeting was to secure a $3 million investment for
Ragner Technologies to build machines that could manufacture the
MicroHose.
Earlier in the week, Combs, de Rochemont, and Ragner
had concluded a similar meeting with a different investor in
Boca Raton, Florida.
Combs testified that the Ragner
Technologies team expected that Ed Kelly would be the primary
investor.
However, as both parties testified, Kelly, who has since
passed away, seemed more interested in pursuing a licensing
agreement rather than an investment arrangement.
During this
meeting, Kelly proposed manufacturing the MicroHose in Taiwan or
China to reduce production costs.
Ragner opposed this idea and
expressed concerns about protecting his intellectual property.
After the discussion of licensing, both parties testified that
Kelly seemed disinterested in the remainder of the meeting and
stayed relatively silent.
The attendees next discussed Ragner Technologies’ finances.
As Combs presented and explained Ragner Technologies’ business
plan and cash flow, Michael Berardi testified that he realized
12
the MicroHose would not make a successful direct response TV
product (“DRTV product”).
Because Ragner Technologies estimated
that the cost of manufacturing a single MicroHose would be
between ten and twenty dollars, the MicroHose would likely be
priced at approximately eighty dollars.
Ragner Technologies’
manufacturing plan and cost structure made the MicroHouse
unattractive in the DRTV market.
According to Michael Berardi,
a DRTV product would ideally be priced at around thirty dollars.
The attendees then had lunch and turned their discussion to
the machinery involved in producing the MicroHose.
The Ragner
Technologies team used large posters with graphics and photos to
illustrate the process for manufacturing the MicroHose, or
“Process 17.”
According to the Ragner Technologies team, these
visual aids were meant to explain both the manufacturing process
and the internal structure of the MicroHose.
Michael Berardi
testified that during this portion of the meeting his “eyes
started spinning” and Ragner lectured “like a professor” for a
half-hour about the production process.
Here, the parties disagree on the other topics the
attendees discussed.
Ragner testified that he remembers one
question being asked: “[Michael Berardi] asked whether we could
replace the spring with elastic.”
Ragner stated he remembers
thinking “that was kind of astute of him to realize that you
could replace the retracting means with something else.”
13
According to Ragner, he told Michael Berardi that it was
possible to use elastic and that the first two prototypes of the
MicroHose relied on internal elastic surgical tubes.
Ragner
also testified that he told Michael Berardi that Ragner
Technologies had opted not to continue with this design for the
MicroHose because it was not durable enough.
Ragner further
explained to Michael Berardi that the prototypes with elastic
had burst during some of their demonstrations.
As Ragner
described, this conversation was brief, and Michael Berardi
seemed satisfied with Ragner’s answers.
Combs testified that she did not hear this conversation, as
she was not close enough to Ragner and Michael Berardi.
De
Rochemont testified that he also did not hear any of this
conversation between Ragner and Michael Berardi.
De Rochemont
has severe hearing loss and “miss[es] most of what people are
talking about.”
Usually, de Rochemont relies on lip reading to
understand conversations.
In contrast, Michael Berardi testified that he did not
discuss elastic with Ragner, but that Ragner may have mentioned
the term “elastomer” during his explanation of the manufacturing
process.
Michael Berardi testified that he “remember[s]
questions being asked but doesn’t remember specific questions.”
Cheryl Berardi similarly testified that Michael Berardi did not
ask about replacing the spring with elastic and that there was
14
no discussion of earlier prototypes of the MicroHose.
Cheryl
Berardi also said that she would sometimes leave the meeting to
get food or drinks.
According to Cheryl Berardi, she remained
able to hear the conversation thanks to her home’s open concept
floor plan.
Near the end of the meeting, the attendees moved outdoors
for a live demonstration of the MicroHose prototype.
Ragner
described this prototype as “a cutdown version of the
MicroHose.”
This version “only had a valley cord in the valley
of the hose for reinforcement, and essentially a small diameter
vacuum hose, stretch hose, with two ends on it that had fittings
for a garden hose.”
Michael Berardi testified that he held the hose and used it
briefly.
Michael Berardi further testified that he asked to
keep the prototype.
Ragner declined to let Michael Berardi keep
the model, saying that it “wasn’t really a working prototype
because the materials were not strong enough to hold the PSI of
the water.”
During the demonstration, Michael Berardi asked a
question about the materials used in the prototype and whether
this prototype was a final version of the MicroHose.
The attendees disagree about how well the prototype
performed during this demonstration.
Ragner testified that it
performed “very well” and expanded to about five times its
original length before retracting back to its original size.
15
Combs testified that the prototype performed “exactly the way it
was supposed to.”
In contrast, Michael Berardi described the
prototype’s performance as “disappointing” because “[i]t didn’t
expand much and it didn’t contract much.”
Cheryl Berardi
testified that the hose “didn’t move a lot” and “when the water
turned off, it did not contract well.”
The meeting attendees also dispute the extent to which a
non-disclosure agreement (NDA) was discussed and agreed upon.
The Ragner Technologies team does not contend that Michael
Berardi or Ed Kelly signed an NDA agreement before, during, or
after the August 23 meeting.
Combs testified that Ragner
Technologies typically asked parties to sign an NDA in advance
of meetings.
However, she testified that because this meeting
was scheduled at the last minute, she had not sent an NDA in
advance of the August 23 meeting.
Combs also testified she did
not bring her computer, which contained the up-to-date version
of Ragner Technologies’ NDA.
Instead, Combs asserts that she
broached the topic of an NDA at the outset of the meeting.
According to Combs, after a tour of the Berardis’ home, she
asked if the Berardis and Kelly would agree to keep the meeting
confidential and sign an NDA.
Combs testified that Michael
Berardi and Ed Kelly nodded, and the meeting continued.
Michael Berardi testified that the Ragner Technologies team
knew of the meeting time and location in advance of August 23,
16
2011.
According to Michael Berardi, Combs informed them as they
were walking out the door that she would send an NDA.
Michael
Berardi testified he only shrugged in response because he “knew
that there was no way [he] was going to deal with these people.”
On August 25, 2011, Combs emailed an NDA to Michael Berardi and
Ed Kelly.
Neither responded to her email nor signed an NDA.
E. Events Following the August 23 Meeting
Michael Berardi testified that he left the August 23
meeting feeling “surprised and disappointed.”
Michael Berardi
testified that he had retained his “nebulous idea” about his own
hose and quickly started experimenting to make a cost effective,
expandable hose.
To build on the “little idea [he] had
germinating in [his] head,” Michael Berardi purchased supplies
for his new hose at Home Depot, Wal-Mart, and Sports Authority
and started experimenting a day after meeting with Ragner
Technologies.
During his first attempt at making an expandable garden
hose, Michael Berardi testified he “didn’t really know . . .
what [he] was doing” but had “some concept, some idea of maybe
what would happen.”
For his first attempt at creating his
retractable hose, Michael Berardi purchased a two-and-a-halfinch drainage pipe for pools to serve as the outer layer of his
hose.
Within a day or two, Michael Berardi had developed his
first prototype: a flat vinyl hose with an internal elastic
17
tube.
In this version of Michael Berardi’s hose, the internal
elastic tube was connected to the external vinyl hose at each
end and did not expand radially.
According to Michael Berardi,
“the water in that first one didn’t go through the hose . . . it
was outside the inner tube.”
According to Michael Berardi, this
prototype ultimately burst during testing.
This failed prototype was “not [Michael Berardi’s] final
thought process as to how the final product would be made.”
As
Michael Berardi continued to experiment between August 24 and
early November 2011, he adjusted the materials used in his hose.
As he was unable to find webbing at the hardware and sporting
goods stores he initially visited, Michael Berardi ordered it
off the Internet and used both PVC pipe and clamps to insert an
inner tube into the webbing.
Michael Berardi, with the help of Cheryl Berardi,
documented his attempts to build on his “seed idea” for an
expandable garden hose suitable for direct TV response
marketing.
Together, the Berardis created dozens of videos
documenting the inventive process of the XHose.
Later, when
they made a commercial for the XHose, Michael Berardi testified
he “might have subconsciously remembered some of the things that
[Gary Ragner] said” in his video for the MicroHose.
Michael
Berardi continued by explaining that “there are things on mine
that are new and things on his [Gary Ragner’s] that, you know,
18
were similar.”
failed.
As he testified, many of these experiments
However, on November 2, or 3, 2011, Michael Berardi
succeeded in making a fifty-foot prototype of what would
eventually become the XHose.
On November 4, 2011, Michael
Berardi and Blue Gentian filed for a patent, which eventually
became Patent ‘941.
When asked about the invention, Cheryl Berardi testified
that “nothing that was used to create the XHose was used
discussed at that [the August 23] meeting.”
During the
inventorship hearing before the Court, Michael Berardi testified
that he did not use anything that Gary Ragner told or showed him
when inventing his hose.
Ragner testified that Michael
Berardi’s first prototype was “almost identical to what [he]
described to him, minus the wire biasing spring.”
Ragner was
struck by the fact that Michael Berardi used “the same diameter
I kind of conveyed to him in prototype 2.”
ANALYSIS
A. Subject Matter Jurisdiction and Standing
This Court has subject matter jurisdiction over this matter
pursuant to 28 U.S.C. § 1338(a) (“The district courts shall have
original jurisdiction of any civil action arising under any Act
of Congress relating to patents, plant variety protection,
copyrights and trademarks.”).
Under 35 U.S.C. § 116, patent
applications must include the names of all inventors.
19
If a
patent names persons who are not inventors (misjoinder) or omits
persons who are inventors (nonjoiner), 35 U.S.C. § 256 “provides
two methods for correction: (1) the Director of the United
States Patent and Trademark Office may correct the patent upon
application of all parties and assignees; or (2) ‘[t]he court
before which such matter is called in question may order
correction of the patent on notice and hearing of all the
parties concerned.’” Polyzen, Inc. v. RadiaDyne, L.L.C., 2012 WL
4049841 at *2 (E.D.N.C. 2012).
For the Court to have jurisdiction over an action for
correction, § 256 requires notice and an opportunity for all
parties to be heard.
Stark v. Advanced Magnetics, Inc., 119
F.3d 1551, 1553 (Fed. Cir. 1997).
In contrast to proceedings
before the Director of the United States Patent and Trademark
Office, § 256 does not require that all inventors and assignees
agree for a district court to have subject matter jurisdiction.
In this case, all parties were given notice and an opportunity
to be heard.
B. Motion Opinion Standard
“Rule 52(a)(3) provides that the court is not required to
state findings or conclusions when ruling on a motion unless the
rules provide otherwise.”
Ambrose v. Krause Publications, Inc.,
354 Fed.Appx. 711, 713 (3d Cir. 2009).
Nevertheless, when “the
district court is presented with conflicting positions of
20
substance as to how it should exercise its discretion . . . it
is salutary practice to give the litigants, either orally or in
writing, at least a minimum articulation for the reasons of its
decision.”
State Farm Mut. Auto. Ins. Co. v. Midtown Medical
Center, Inc., 388 Fed.Appx. 125, 129 (3d Cir. 2010) (quoting
Interpace Corp. v. City of Phila., 438 F.2d 401, 404 (3d Cir.
1971)).
This Opinion constitutes the Court's Findings of Fact and
Conclusions of Law pursuant to Rule 52(a)(3).
See Pierre v.
Hess Oil Virgin Islands Corp., 624 F.2d 445, 450 (3d Cir. 1980)
(holding that to be in compliance with Rule 52(a), findings of
fact and conclusions of law do not need to be stated separately
in a court's memorandum opinion); see also Ciolino v. Ameriquest
Transp. Services, Inc., 751 F. Supp. 2d 776, 778 (D.N.J. 2010)
(issuing an opinion which constituted the court’s findings of
fact and conclusions of law).
C. Correction of Inventorship Standard and Burden of Proof
In a § 256 proceeding to correct inventorship, “the
inventors as named in an issued patent are presumed to be
correct.”
Hess v. Advanced Cardiovascular Sys., Inc., 106 F.3d
976, 980 (Fed. Cir. 1997) (citations and internal quotation
marks omitted).
In addition to this presumption, courts have
also recognized the “temptation for even honest witnesses to
reconstruct, in a manner favorable to their own position, what
21
their state of mind may have been years earlier.”
Id. (citing
Amax Fly Ash Corp. v. United States, 514 F.2d 1041, 1047
(1975)).
In recognition of this temptation, the claimed
inventor must “meet a heavy burden of proving his case by clear
and convincing evidence.”
Au New Haven, LLC v. YKK Corp., 2019
WL 2996473 at *5 (S.D.N.Y. 2019) (citing Finkelstein v. Mardkha,
495 F. Supp. 2d 329, 337 (S.D.N.Y. 2007)).
To satisfy this standard, a claimed inventor must provide
evidence corroborating his testimony concerning conception of
the invention.
Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352,
1358 (Fed. Cir. 2004); Ethicon, Inc. v. U.S. Surgical Corp., 135
F.3d 1456, 1461 (Fed. Cir. 1998).
Finally, “[t]he determination
of whether a person is a joint inventor is fact specific and no
bright-line standard will suffice in every case.”
Fina Oil &
Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. Cir. 1997).
D. Correction of Inventorship
a. Conception
Conception is a term of art in patent law and “the
touchstone of inventorship.”
Burroughs Wellcome Co. v. Barr
Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994) (citing Sewall
v. Walters, 21 F.3d 411, 415 (Fed. Cir. 1994)); Finkelstein, 495
F.Supp.2d at 337.
A person can be a joint inventor only if he
or she contributes to the conception of the claimed invention.
See Eli Lilly, 376 F.3d at 1359.
22
Courts have recognized that “the line between actual
contributions to conception and the remaining, more prosaic
contributions to the inventive process that do not render the
contributor a co-inventor is sometimes a difficult one to draw.”
Id.
However, the Court is not entirely without guidance as to a
working definition of “conception.”
Conception is “the
formation in the mind of the inventor, of a definite and
permanent idea of the complete and operative invention, as it is
hereafter to be applied in practice.”
Burroughs, 40 F.3d at
1228 (quoting Hybritech Inc. v. Monoclonal Antibodies, Inc., 802
F.3d 1367, 1376 (Fed. Cir. 1986)).
Conception has also been
defined as “the complete performance of the mental part of the
inventive act.”
Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir.
1985).
The mental act of conception is complete when “the idea is
so clearly defined in the inventor’s mind that only ordinary
skill would be necessary to reduce the invention to practice
without extensive research or experimentation.”
Burroughs, 40
F.3d at 1228; see Sewall, 21 F.3d at 415 (“Conception is
complete when one of ordinary skill in the art could construct
the apparatus without unduly extensive research or
experimentation.”).
An idea is sufficiently defined when an
inventor has a “specific, settled idea, a particular solution to
the problem at hand, not just a general goal or research plan he
23
hopes to pursue.”
Burroughs, 40 F.3d at 1228 (citing Fiers v.
Revel, 984 F.2d 1164, 1169 (Fed. Cir. 1993)).
Conception of an
invention, therefore, must include every feature of a claimed
invention.
See Coleman, 754 F.2d at 359.
This analysis
requires that an inventor can describe his or her invention with
particularity.
Burroughs, 40 F.3d at 1228.
Plaintiffs argue that Gary Ragner could not have
contributed to the conception of the XHose because Michael
Berardi had already conceived of a hose with an elastic tube
inside a fabric cover during his “eureka moment” in his
community gym.
However, by his own admission, at the time that
Michael Berardi and Gary Ragner met, Michael Berardi did not
have a definite and permanent idea of the complete and operative
XHose.
Instead, he had a “nebulous concept” or “seed idea” for
an expandable garden hose derived simply from his exposure to
the Ragner Technologies video.
On August 23, 2011, Michael Berardi had not completed the
mental part of the inventive act.
Moreover, his idea was not so
clearly defined that it only took ordinary skill to produce the
XHose.
Developing the XHose required extensive experimentation.
Michael Berardi testified that it took almost two and a half
months of experimentation to create a fifty-foot prototype of
the XHose.
Michael Berardi did not have a specific, settled
idea, but rather a general goal of creating an expandable garden
24
hose that could succeed as a DRTV product.
Similarly, Michael
Berardi did not yet have solution to a problem, or even a
research plan to follow for the creation of the XHose.
In fact,
he testified that while making his first prototype, he “didn’t
really know what [he] was doing” and had not settled on a “final
thought process” for how to produce his hose.
At the time that Michael Berardi and Gary Ragner met,
Michael Berardi’s idea for a hose did not yet include every
feature of his invention.
Michael Berardi’s inventive process
demonstrates that his idea for the XHose was indeed “nebulous,”
as he described it.
Michael Berardi testified he “didn’t really
know . . . if [he] was going to put the water through the hose”
when he made the first prototype of the XHose.
During the two
and a half months following his meeting with Ragner, Michael
Berardi changed both the materials and the design for the XHose.
Furthermore, even if one credits it, Michael Berardi’s
conversation with his wife following his “eureka moment” does
not illustrate that Michael Berardi could describe his invention
with particularity, but rather that he was enthusiastic about
the idea.
The Court finds that because Michael Berardi did not have a
conception of the XHose prior to the August 23 meeting, it is
possible that Gary Ragner contributed to the conception of the
XHose.
25
b. Collaboration
Title 35, United States Code, Section 116 allows for a
patented invention to be the work of two or more joint
inventors.
Ethicon, 135 F.3d at 1461 (citing 35 U.S.C. § 116).
“Joint inventorship under section 116 can only arise when
collaboration or concerted effort occurs.”
at 1359.
Eli Lilly, 376 F.3d
To be added to a patent, an alleged inventor must show
that his or her labor were “conjoined with the efforts” of the
listed inventors.
Id.
While it is difficult to precisely define collaboration for
the purpose of joint inventorship, the Federal Circuit in
Kimberly-Clark Corp. provides a helpful explanation:
For persons to be joint inventors under Section 116,
there must be some element of joint behavior, such as
collaboration or working under common direction, one
inventor seeing a relevant report and building upon it
or hearing another’s suggestion at a meeting.
973 F.2d 911, 918 (Fed. Cir. 1992).
In other words, “joint
inventorship arises only ‘when collaboration or concerted effort
occurs - that is, when the inventors have some open line of
communication during or in temporal proximity to their inventive
efforts.’”
Falana v. Kent State Univ., 669 F.3d 1349, 1358
(Fed. Cir. 2012) (quoting Eli Lilly, 376 F.3d at 1359).
On the
other hand, the Federal Circuit in Kimberly-Clark Corp. further
articulated that:
26
Individuals cannot be joint inventors if they are
completely ignorant of what each other has done until
years after their individual independent efforts. They
cannot be totally independent of each other and be joint
inventors.
973 F.2d at 918.
Though joint inventors must have knowledge of his or her
co-inventor’s efforts, these cases stop short of requiring an
intent to invent.
In CODA Dev. S.R.O. v. Goodyear Tire & Rubber
Co., the Federal Circuit considered whether dismissal of a
correction of inventorship claim at the motion to dismiss stage
was appropriate.
916 F.3d 1350, 1353 (Fed. Cir. 2019).
In that
matter, the defendant, through General Motors Corp., expressed
an interest in plaintiff’s self-inflating tire (“SIT”)
technology.
Id.
The plaintiff met with the defendant and
allegedly “shared novel, proprietary, and confidential
information concerning its SIT technology.”
Id. at 1354.
At a second meeting a few months later, the plaintiff
allowed the defendant to examine a working prototype, which the
defendant photographed without the plaintiff’s permission.
Id.
A few months later, the defendant applied for a patent “entitled
‘Self-Inflating Tire Assembly.’”
Id.
The plaintiff claimed
this invention was at least in part what the plaintiff had shown
the defendant during their meetings.
Id.
Eleven other patents
were issued to the defendant on similar technology thereafter.
Id. at 1355.
The Federal Circuit opined that this set of
27
allegations was sufficient to support a correction of
inventorship claim, and specifically was enough to show
collaboration.
Id. at 1359-60.
In reaching this decision, the
Federal Circuit took into account the defendant’s prior
failures, eagerness to meet with the plaintiff, unauthorized
photography of a functional prototype, the timing of a more
distance relationship with the plaintiff, and an accusation from
a former employee as evidence that the plaintiff’s correction of
inventorship claim was plausible.
Id. at 1359.
While there may be slight factual differences between the
situation described in CODA Dev. S.R.O. and the current facts,
the Court finds that the facts are sufficiently similar to
support a finding of collaboration in this matter.
Michael
Berardi saw relevant and excruciatingly detailed graphics and
photographs at his meeting with Ragner Technologies.
These
disclosures encompassed Ragner’s novel, proprietary, and
confidential information concerning Ragner Technologies’
MicroHose most, if not all, of which had been set forth in
Ragner’s pending patent applications.
Though Michael Berardi did not photograph the prototype he
was shown, he did hold and use it, even asking to keep it.
Berardi clearly relied upon the prototype and Ragner’s oral
suggestions about alternative methods for building an expandable
hose in building his own.
After Michael Berardi applied for his
28
patent for the XHose in November 2011, Ragner recognized these
inventions as being related to what he had shown Michael Berardi
in the August 23 meeting.
Moreover, Michael Berardi had neither
attempted nor failed to make an expandable hose prior to meeting
with Ragner Technologies and he admitted he was eager to meet
with Ragner Technologies about its expandable hose.
After the meeting, neither Ed Kelly nor Michael Berardi
responded to Margaret Combs’ email regarding an NDA, and the
parties never communicated again, suggesting a more distant
relationship.
These facts are not are favorable to Plaintiff.
The Court credits the testimony of Combs that she had secured an
oral commitment from those at the meeting, including Berardi,
for the post-meeting signing of an NDA.
Her post-meeting
conduct corroborates that testimony.
An NDA was never signed not because the parties had not
agreed to it but rather because the investor part of the group
was not interested in investing in a machine to build a product
that could be built more cheaply overseas.
had no reason to sign an NDA after the fact.
And Michael Berardi
Despite the oral
agreement that had been reached, the Court is convinced Berardi
left the meeting intent on using what he had learned in it to
flesh out his nebulous idea and build a flexible hose for
himself.
29
Plaintiffs argue that because Gary Ragner did not intend to
invent a garden hose when he met with Michael Berardi, he could
not have collaborated in creating the XHose.
Plaintiffs further
point to the fact that Ragner did not think that he had invented
a new garden hose when he left the August 23 meeting as evidence
that he did not collaborate with Michael Berardi.
The Court
rejects Plaintiff’s argument that there must be an intent to
invent or expectation of having invented for collaboration, as a
legal matter to occur.
The issue is not Ragner’s intent but
Berardi’s and his level of knowledge before and after the
meeting.
The Court finds on the evidence presented that as a matter
of law Gary Ragner collaborated with Michael Berardi to invent
the patents in question.
c. Contribution
A person can be listed as an inventor only if he or she
contributes to the conception of the claimed invention.
Oil & Chem. Co., 123 F.3d at 1473.
Fina
However, the statute
providing for joint inventorship does not set an explicit lower
limit on “the quantum or quality of the inventive contribution
required for a person to qualify as a joint inventor.”
35 U.S.C. § 116.
Id.; see
Title 35, United States Code, Section 116
allows for inventors to apply for a patent jointly event though
“(1) they did not physically work together or at the same time;
30
(2) each did not make the same type or amount of contribution,
or (3) each did not make a contribution to the subject matter of
every claim of the patent.”
35 U.S.C. § 116.
A joint inventor
does not need to make a contribution of the same type or amount
of the named inventor, nor does a joint inventor need to make a
claim to every claim of a patent.
See Finkelstein, 495
F.Supp.2d at 337-38 (quoting Ethicon Inc., 135 F.3d at 1460).
contribution to one claim is enough.
A
See id.
To qualify as a joint inventor, a person’s contribution
must be “not insignificant in quality, when that contribution is
measured against the dimension of the full invention.”
& Chem. Co., 123 F.3d at 1473.
Fina Oil
Merely “explaining to the
inventors what the state of the art was and supplying a product
to them for use in their invention” is not a sufficient
contribution to establish joint inventorship.
Hess, 106 F.3d at
980 (holding that a person who did “no more than a skilled
salesman would do” and did not conduct any research and
development work had not contributed to an invention).
Similarly, “exercising ordinary skill in the art to reduce an
idea to practice” does not constitution a contribution.
Finkelstein, 495 F.Supp.2d at 416.
See
A person who provides “well-
known principles or explains the state of the art without ever
having ‘a firm and definite idea’ of the claimed combination as
31
a whole” cannot be named a joint inventor.
Ethicon, 135 F.3d at
1460 (quoting Hess, 106 F.3d at 981).
Defendants do not contend that Ragner physically worked
with Michael Berardi in creating the XHose.
Defendants
similarly do not contend that Ragner and Michael Berardi did
their work at the same time.
Defendants also do not argue that
Ragner and Michael Berardi made the same amount or type of
contribution.
Defendants instead argue that Michael Berardi
contributed nothing to the invention of the XHose.
According to
Defendants, Ragner contributed at least one of the following
concepts to the conception of the XHose: “(1) inner and outer
tubes attached only at the ends; (2) a fabric outer tube, and
(3) an elastic inner tube that can provide force to retract the
hose, including without a metal spring.”
Plaintiffs counter that Ragner did not contribute to
Michael Berardi’s invention. 5
Plaintiffs highlight that all the
MicroHose prototypes Ragner and de Rochemont had created before
August 23 relied on a wire or some type spring for biasing.
Plaintiffs deny that the conversation between Ragner and Michael
Berardi about replacing the spring component with elastic ever
5
Plaintiffs also assert that the Court is required to engage in
claim construction prior to determining inventorship. The Court
has declined to do so and need not do so in order to determine
that Defendants have met the standard to show that Ragner is a
co-inventor of the Berardi patents-in-suit.
32
occurred.
Plaintiffs emphasize that Michael Berardi never saw,
held, or used prototype 2 of the MicroHose, but instead saw a
prototype that differs greatly from the XHose.
At most,
Plaintiffs allege that Ragner contributed valuable information
that was already part of the prior art in hose manufacturing.
Plaintiffs argue that the novel information that Ragner
claims to have disclosed during the meeting was covered by his
previous patent, U.S. Patent No. 6,948,527.
Therefore,
according to Plaintiffs, everything Ragner described to Michael
Berardi was already part of the art.
Ragner testified that in
lay terms, patent ‘527 discloses several elements that are also
found in the XHose: (1) hoses with inner and outer layers; (2)
hoses that include an inner layer wrapped in an outer layer; and
(3) hoses with an inner layer wrapped in an outer layer that is
not attached to the inner layer except at the end of the hose.
The Court finds that Ragner made a significant contribution
to the invention of the XHose.
In the course of his meeting
with Michael Berardi, Cheryl Berardi, and Ed Kelly, Ragner did
more than merely explain the state of the art and supply a
product for their use.
According to Michael Berardi’s
testimony, Ragner acted more “like a professor” than a skilled
salesman during his explanation of the MicroHose production
process.
Ragner shared the fruits of his own research and
development work on expandable garden hoses for over a half-hour
33
during this investment meeting.
He created and presented visual
aids to explain both the manufacturing process and internal
structure of the MicroHose, exercising more than ordinary skill
in the art.
Given his years of experience working on hoses and his
eighteen to twenty prototypes of the MicroHose, the Court finds
that Ragner had a clear and definite picture of the expandable,
retractable garden hose he described as prototype 2.
Ragner’s
decision not to pursue this design further does not reflect a
lack of a clear or definite idea.
Rather, Ragner’s continued
innovation reflects a rejection of a design that, in Ragner’s
view, exhibited an unacceptable propensity to burst under high
water pressure.
Without engaging in claim construction, the Court does not
find that everything Ragner disclosed was covered by Patent
‘527.
Ragner testified that he told Michael Berardi it was
possible to make an expandable garden hose without using a
spring to bias the hose, testimony the Court credits.
Patent
‘527 relies on a spring for biasing, whereas Michael Berardi’s
patents do not.
Berardi Patent ‘941 uses the absence of a
spring as a means of distinguishing itself from Ragner Patent
‘527.
If the presence of a biasing spring is what distinguishes
Michael Berardi’s patents from Ragner’s patent, then by
34
disclosing that a biasing spring was not necessary, Ragner could
not have been disclosing information already in the art.
The Court finds that Ragner contributed to the invention of
the XHose by sharing information that was not previously
available to Michael Berardi about designs for a retractable
hose.
d. Corroboration
When considering whether an alleged inventor’s testimony is
corroborated, a Court must “bear in mind the purpose of
corroboration, which is to prevent fraud, by providing
independent confirmation of the inventor’s testimony.”
Kridl v.
McCormick, 105 F.3d 1446, 1450 (Fed Cir. 1997); see Mycogen
Plant Sci., Inc. v. Monsanto Co., 61 F.Supp.2d 199, 240 (Fed.
Cir. 1999).
“There is no single formula that must be followed
in proving corroboration.”
(CCPA 1969).
Berry v. Webb, 412 F.2d 261, 266
By the same token, there is no single type of
corroborating evidence.
Finkelstein, 495 F.Supp.2d at 337
(citing Trovan, Ltd. v. Sokymat SA, Irori, 299 F.3d 1292, 1303
(Fed Cir. 2002)).
Typically, courts have allowed for “proof by circumstantial
evidence” and have not required “an over-the-shoulder observer
or corroboration of every factual issue.”
154 F.3d 1321, 1330 (Fed. Cir. 1998).
Cooper v. Goldfarb,
Corroborating evidence
includes contemporaneous documentary evidence, oral testimony of
35
others, and circumstantial evidence.
Finkelstein, 495 F.Supp.2d
at 337.
Of these types of relevant evidence, only the inventor’s
testimony must be corroborated before it can be considered.
Price v. Symsek, 998 F.2d 1187, 1196 (Fed. Cir. 1993).
In
contrast, physical exhibits do not require corroboration.
Id.
The Federal Circuit has referred to documentary or physical
evidence as “the most reliable proof that the inventor’s
testimony has been corroborated.”
Martek Biosciences Corp. v.
Nutrinova Inc., 579 F.3d 1363, 1375 (Fed. Cir. 2009) (citing
Sandt Tech. Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344,
1350-51 (Fed. Cir. 2001)).
This evidence is particularly
reliable because physical evidence is usually “created at the
time of conception or reduction to practice,” eliminating the
“risk of litigation-inspired fabrication or exaggeration.”
Sandt Tech. Ltd., 264 F.3d at 1351.
The Federal Circuit applies a “rule of reason” test to
determine whether the inventor’s testimony has been
corroborated.
Id.
The Court will therefore “examine, analyze,
and evaluate reasonably all pertinent evidence when weighing the
credibility of an inventor’s story.”
F.2d 1236, 1239 (Fed. Cir. 1991).
Holmwood v. Sugavanam, 948
In Price v. Symsek, the
Federal Circuit listed several factors bearing on the inventor’s
credibility and whether the inventor’s testimony is adequately
36
corroborated: “(1) the delay between the event and the trial,
(2) interest of corroborating witnesses, (3) contradiction or
impeachment, (4) corroboration, (5) the corroborating witnesses’
familiarity with details of alleged prior structure, (6)
improbability of prior use considering state of the art, (7)
impact of the invention on the industry, and (8) relationship
between witness and alleged prior user.”
998 F.2d at 1195 n. 3.
Defendants offer several physical exhibits to corroborate
Ragner’s testimony.
These exhibits include: Ragner
Technologies’ business plan, a version of the MicroHose
prototype similar to the one used for demonstration at the
meeting, a color drawing of Process 17, 6 instructions for
potential investors written by Ragner, and U.S. Patent No.
8,776,836.
The business plan, drawing, and instructions all
discuss “knitted reinforcement” or “fiber reinforcement” on the
outside of the hose.
Ragner’s Process 17 drawing also
references an expandable hose with an elastic tube that provides
6
Michael Berardi testified that he was not sure if the process
17 drawing he was shown during his deposition or during this
hearing was the exact document he saw during the August 23
meeting. Michael and Cheryl Berardi both testified that the
drawing they saw during the meeting at their house was in color.
Michael Berardi contests that the document at the meeting did
not have pictures or graphics. The exhibit was entered into
evidence with both parties’ acquiescence. The Court finds on
the evidence presented at the hearing that the document entered
into evidence is either the graphic shown at the meeting or is
not materially different.
37
retracting force.
The prototype Ragner used to demonstrate the
MicroHose features an inner and outer tube attached only at the
ends.
The Court agrees with Defendants that U.S. Patent No.
8,776,836 corroborates Ragner’s testimony.
Patent ‘836, which
was filed in 2006, but not published until 2013, memorializes
Ragner’s knowledge about retractable garden hoses when he
attended the August 23, 2011 meeting.
However, because this
patent was not published until 2013, this information was not
publicly known at the time Ragner and Berardi met and discussed
the MicroHose.
Again, without engaging in claim construction, the Court
finds that Patent ‘836 corroborates Ragner’s testimony that he
had previously designed a hose with these three features: (1)
inner and outer tubes connected only at the ends; (2) a fabric
outer tube made of nylon or polyester; and (3) an elastic inner
tube to provide biasing force without the need for a spring.
This prior knowledge corroborates Ragner’s testimony that he was
prepared to, and did in fact, discuss these features with
Michael Berardi at the August 23 meeting.
The fact that Patent
‘836 later entered the public domain does not bar a finding of
co-inventorship, especially given that this information was “not
contemporaneously available to an ordinary skilled artisan”
during the meeting in question.
Cf., CardiAQ Valve Techs. v.
38
Neovasc Inc., 708 Fed. Appx. 654, 660 (Fed. Cir. 2017)
(unpublished).
Furthermore, Michael Berardi’s first prototype also
corroborates Ragner’s testimony.
Ragner testified that he was
struck by the similarity between what he had described to
Michael Berardi as prototype 2 and Michael Berardi’s first
prototype.
Both prototypes featured elastic running through the
middle of a larger, a two-and-a-half-inch diameter hose.
In
both prototypes, water could not run through the internal
elastic element.
Perhaps even more telling is that this initial prototype
did not seem to match Michael Berardi’s own alleged conception
of his hose.
Michael Berardi’s first version appears to more
closely match Ragner’s description of prototype 2 than his
original idea for a hose.
During his “eureka moment,” Michael
Berardi contemplated running water through an elastic tube like
the ones he saw in his community gym.
idea he first implemented.
However, this was not the
Instead, Michael Berardi started his
inventive process with the design that Ragner testified he
shared with Michael Berardi just days before.
Because these exhibits are physical evidence created at the
time of conception or reduction to practice, there is no risk of
litigation-inspired fabrication or exaggeration.
The Court
finds that these exhibits corroborate Gary Ragner’s testimony.
39
Next, the Court will take into account all the pertinent
evidence when weighing the credibility of Ragner’s story.
Using
the factors from Price, the Court will examine whether each
witness’s testimony corroborates Ragner’s invention story.
A long delay between the events in question and testimony
may undermine the reliability of an alleged inventor’s
testimony.
See Woodland Trust v. Flowertree Nursery, Inc., 148
F.3d 1368, 1371-72 (Fed. Cir. 1998).
However, when an alleged
inventor relies on contemporaneous documents and demonstrates a
strong recollection of the subject matter, his or her testimony
is bolstered.
Ceats, Inc. v. Continental Airlines, 2012 WL
12886830 at *7 (E.D. Tex. 2012).
In this case, all the
corroborating and contradictory witnesses are testifying about
events that occurred in 2011 or earlier.
It has been several
years since this meeting has occurred but, in some cases, the
witnesses have had access to contemporaneous documents.
An interested witness is a “named party, an employee of or
assignor to a named party, or [a person who] otherwise is in a
position where he or she stands to directly and substantially
gain by his or her invention being found to have priority over
the patent claims at issue.”
Id. (citing Thomson S.A. v.
Quixote Corp., 116 F.3d 1172, 1176 (Fed. Cir. 1999)); see
Netscape Comms. Corp. v. ValueClick, Inc., 704 F.Supp.2d 544,
555-56 (E.D. Va. 2010) (discussing the requirements for
40
corroborating interested and disinterested witnesses’
testimony).
As will be discussed below, several of the
witnesses offering corroborating or contradicting testimony are
interested witnesses.
1. Margaret Combs’ Testimony
Though Ragner Technologies no longer employs Combs, she has
retained a 10% equity in the company.
Combs is an interested
witness for purposes of corroborating Ragner’s testimony.
Combs testified that she was not close enough to Ragner and
Michael Berardi to overhear a conversation about prototype 2 or
any alternative designs for an expandable hose.
Combs’
testimony neither contradicts nor corroborates Ragner’s
testimony.
2. Robert de Rochemont’s Testimony
De Rochemont is currently the CEO of Ragner Technologies.
De Rochemont is an interested witness for the purposes of
corroborating Ragner’s testimony.
De Rochemont testified that due to his hearing loss, he,
like Combs, was not able to hear Ragner and Michael Berardi’s
conversation.
De Rochemont’s testimony neither contradicts nor
corroborates Ragner’s testimony.
3. Keith Mirchandani’s Testimony
As an owner of Telebrands, Keith Mirchandani is an employee
of a named party.
Because Telebrands also produces an
41
expandable hose, Mirchandani likely has an interest in the
outcome of this inventorship hearing.
Mirchandani is an
interested witness for the purposes of corroborating Ragner’s
testimony.
Mirchandani testified that Ragner relayed his conversation
with Michael Berardi to him later.
Mirchandani testified that
Ragner told him that Ragner had shared with Michael Berardi that
a spring may not be necessary for a retractable hose.
However,
Mirchandani was not present at the meeting to witness this
conversation himself.
Furthermore, Mirchandani did not learn of
the MicroHose until September 2012 when he began pursuing
licensing agreements for an expandable hose.
It is therefore
unlikely that Mirchandani is familiar with the details of the
MicroHose structure or prototype 2.
The Court finds that Mirchandani’s corroboration is weak at
best.
4. Cheryl Berardi’s Testimony
Cheryl Berardi is an employee of a named party, Blue
Gentian.
Cheryl Berardi does not stand to gain if Ragner is
named as a co-inventor of these patents.
therefore an interested witness.
Cheryl Berardi is
Though Cheryl Berardi may not
stand to gain if Ragner is named as a co-inventor, she is not
without an incentive to reconstruct the events of August 23 in a
manner favorable to her position.
42
Cheryl Berardi and Blue
Gentian stand to benefit from Michael Berardi remaining the sole
inventor of the XHose.
Cheryl Berardi’s testimony partially contradicts Ragner’s
testimony.
Cheryl Berardi testified that the meeting attendees
did not discuss elastic or any previous models of the MicroHose
during the August 23 meeting at her home.
Cheryl Berardi also
testified that she was not paying attention to all parts of the
meeting and would at times leave the room.
The Court finds
Cheryl Berardi’s contradictory testimony unpersuasive.
5. Michael Berardi’s Testimony
Michael Berardi is an employee of a named party, Blue
Gentian.
However, Michael Berardi does not stand to gain if
Ragner is named as a co-inventor of these patents.
Michael
Berardi is therefore an interested witness as defined above.
Like Cheryl Berardi, Michael Berardi also has an interest in
reconstructing the events of the August 23 meeting in a manner
more favorable to himself.
Michael Berardi and Blue Gentian
have an interest in remaining the sole owners of the six patents
in question.
Michael Berardi’s testimony both contradicts and
corroborates Ragner’s testimony.
Michael Berardi contradicted
Ragner’s testimony by claiming that while they may have
discussed “elastomers,” at the August 23 meeting, they did not
discuss “elastic.”
However, Michael Berardi also testified that
43
he did ask Ragner about the materials used in the MicroHose
prototype during the demonstration portion of the meeting.
Michael Berardi stated that while he did remember some questions
being asked during the Ragner Technologies team’s explanation of
Process 17, he could not remember any specific questions.
This
account does not preclude the possibility that Ragner’s
testimony about his conversation with Michael Berardi was
accurate.
To the extent their testimony conflicts, after
observing their demeanor and after reviewing all the evidence as
a whole, the Court views Ragner’s testimony on this issue the
most credible.
Furthermore, while Ragner maintains that Michael Berardi
took most, if not all, of his idea for the XHose from Ragner
Technologies, Michael Berardi partially concedes that he “may
have subconsciously remembered” some elements of Ragner’s video
for the MicroHose during his inventive process.
Michael Berardi
also admitted that his original idea for the XHose “kind of
reminded me I guess maybe of the expanding hose that Ragner had
invented.”
Michael Berardi’s testimony is particularly relevant for
corroboration.
As the only inventor currently listed on the six
patents in suit, Michael Berardi is very familiar with the
details of the technology used in the XHose.
Michael Berardi
also held and used a prototype of the MicroHose at the August 23
44
meeting.
During the three to four-hour meeting at his house,
Michael Berardi listened to Ragner lecture “like a professor”
about manufacturing the MicroHose.
Michael Berardi is therefore
familiar with the details of both inventions.
Ragner Technologies attempted to establish an ongoing
business relationship with Ed Kelly and Michael Berardi.
Following the August 23 meeting, it became clear, at least to
Michael Berardi, that this business relationship would not move
forward.
As mentioned above, the prospect of a business
relationship lasted from late July 2011, to August 23, 2011.
When Margaret Combs emailed Ed Kelly and Michael Berardi about a
non-disclosure agreement on August 25, 2011, she did not receive
a response.
Ragner Technologies and Michael Berardi never met
again.
After considering all pertinent evidence, the Court finds
that Ragner’s testimony is adequately corroborated both by
physical and circumstantial evidence.
Although he was seeking
investors not a collaborator, when Gary Ragner made his
elaborate and thorough presentation at the August 23 meeting, he
conveyed to Michael Berardi key elements of the eventual product
known as the XHose, more specifically, as Defendants contend:
(1) inner and outer tubes attached only at the ends; (2) a
fabric outer tube, and (3) an elastic inner tube that can
45
provide force to retract the hose, including without a metal
spring.
When, as here, “inventors have some open line of
communication during or in temporal proximity to their inventive
efforts” co-inventorship can occur.
Falana, 669 F.3d at 1358.
Michael Berardi may be a resourceful and inventive person, but
here his creation of the XHose occurred only because of the
immediately preceding insight, inventiveness, prior detailed
experimentation, design, help, and guidance, albeit short-lived,
of Gary Ragner.
Conclusion
Gary Ragner came to the August 2011 meeting well-prepared
as an experienced engineer and inventor of flexible and
expandable hoses.
Ragner had not only experimented with various
designs, he had built several prototypes (including one he
brought and demonstrated at the meeting) and had taken the
further step of designing a machine to build them.
the machine is to explain the product.
To explain
His expertise and years
of work were on full display.
In a practical sense, however, Ragner was ill-prepared for
the hastily arranged version of “Shark Tank” he encountered in
Michael Berardi’s home.
Berardi, as creative in other milieus
as he may have been, hosted the meeting not as an experienced
engineer but because of his understandable eagerness to learn
46
about and exploit commercially the product he had seen in the
Ragner Technology online video.
He left the meeting having been
taught something he did not know before the meeting - the key
design principles of an expandable and flexible hose as outlined
about.
He simply went on, in short time, to build, using the
information he had learned, a cheaper and simpler version of the
invention Ragner disclosed at the meeting and one, importantly,
containing each of its key components.
Accordingly, for the reasons discussed above, Defendants
have shown through clear and convincing evidence that Gary
Ragner contributed to the conception of the XHose and should be
named an co-inventor.
The Court will grant Defendants’ motion
for a correction of inventorship.
An accompanying Order will be entered directing a
correction of inventorship for the patents in suit.
Orders
denying Defendants’ motion to disregard Plaintiffs’ unauthorized
June 12, 2019 filing, and motion for expedited consideration of
motion to disregard Plaintiffs’ unauthorized June 12, 2019
filing will also be entered.
s/ Noel L. Hillman
At Camden, New Jersey
NOEL L. HILLMAN, U.S.D.J.
Dated: January 15, 2019
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