Kenall Mfg. Co. v. Cooper Lighting, LLC

KENALL MANUFACTURING COMPANY, Plaintiff, v. COOPER LIGHTING, LLC,and EATON CORPORATION, Defendants.

17 C 4575

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

April 16, 2019

Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER

Kenall Manufacturing Company brought this suit against Cooper Lighting, LLC and Eaton Corporation (together, "Cooper"), alleging patent infringement and breach of contract in connection with certain of Cooper's lighting products. Doc. 1. The patent infringement claims are directed only against two specific categories of Cooper products defined in the parties' July 2007 Settlement and License Agreements—the Subject Single Products and the Subject Continuous Products, referred to together as the Subject Products. Id. at ¶¶ 69-88. In June 2018, the court dismissed the patent infringement claims except for those directed against Subject Single Products that Cooper sold after April 1, 2008. Docs. 86-87 (reported at 338 F. Supp. 3d 841 (N.D. Ill. 2018)). Cooper moves for an order clarifying that the surviving patent infringement claims are limited to those directed against a fixed set of Cooper products identified in the July 2007 Agreements—and not claims against the LED products, which Cooper developed after entering into the Agreements and which, unlike the specific products identified in the Agreements, have LED lamps rather than fluorescent lamps. Doc. 145.

Resolution of this motion turns on whether: (1) as Cooper submits, the term "Subject Single Products" includes only the fixed set of Cooper products identified in the July 2007 Agreements; or (2) as Kenall submits, the term also includes Cooper's LED products. The License Agreement defines the term "Subject Single Products" as follows:

Whereas, Cooper has heretofore engaged in the manufacture and sale of the Cooper Fail-Safe Harmony VR Linear Series products, namely, ... (b) its 8" and 12" Linear Single products shown and/or referred to in the Cooper website documents (eight sheets) and additional photographs (three sheets) attached as Exhibit B hereof, such products being referred to herein as the "Subject Single Products" and incorporated herein by reference ... .

Doc. 1-1 at p. 35. Exhibit B, in turn, sets forth specifications for two Cooper product families—the "HVL Single 8" Linear Harmony VR 14W-108W Fluorescent" products, and the "HVL Single 12" Linear Harmony VR 28W-216W Fluorescent" products, each available in a variety of configurations identified in the specifications—as well as photos of some of those products. Id. at pp. 57-68. Cooper contends that, under this definition, Subject Single Products encompass only the specific products identified in Exhibit B. Doc. 145 at 11-20. Kenall responds that the definition also encompasses Cooper's LED products that, although developed after the Agreement's execution, are classified by Cooper as part of the two product families identified in Exhibit B and that, according to Kenall, "retain[] the essential characteristics of the product[s]" in those product families. Doc. 156 at 3-15.

I. Judicial Admissions and Forfeiture

Kenall contends at the outset that Cooper's amended answer, Doc. 93, and brief opposing Kenall's first set of Rule 12(c) motions, Doc. 68; see 338 F. Supp. 3d at 851 (denying those motions), make "judicial admissions" that "all the accused products are Subject Products," thus foreclosing Cooper's current position that the accused LED products are not Subject Single Products. Doc. 156 at 3-6. "A judicial admission is a statement ... that negates a factual claim that the party making the statement might have made or considered making." Robinson v. McNeil Consumer Healthcare, 615 F.3d 861, 872 (7th Cir. 2010). "[I]n order to qualify as [a]judicial admission[]," the statement "must be deliberate, clear and unambiguous." Ibid. (internal quotation marks omitted). The statements identified by Kenall are not judicial admissions.

First, Kenall points to ¶ 36 of Cooper's amended answer. Doc. 156 at 5-6 & n.1. In response to the complaint's allegation in ¶ 36 that "Kenall has not at any time asserted, and does not now assert, the Subject Patents against Cooper products other than the Subject Products," Cooper answered: "Defendants admit that Kenall has not asserted infringement of the Subject Patents by Defendants other than as set forth in the [earlier lawsuit that led to the Settlement and License Agreements] and its current Complaint." Doc. 93 at ¶ 36. That answer admits that Kenall has not asserted the Subject Patents other than in its two lawsuits, while deferring to the License Agreement's definitions and the complaint's allegations as to whether the complaint asserts the Subject Patents only against Subject Products. Ibid. Kenall submits that by making a partial admission without specifically denying the other allegations in ¶ 36 of the complaint, Cooper in fact admitted the remaining allegations, too. Doc. 156 at 5 n.1. Kenall is incorrect.

True enough, Rule 8(b)(6) provides in pertinent part that "[a]n allegation ... is admitted if a responsive pleading is required and the allegation is not denied." Fed. R. Civ. P. 8(b)(6). But Cooper's answer includes a general denial, stating that Cooper "den[ies] each and every allegation contained in the Complaint that was not specifically admitted above." Doc. 93 at p. 25. Accordingly, ¶ 36 of Cooper's answer admits only what it says it admits and nothing else. See Fed. R. Civ. P. 8(b)(3) ("A party that does not intend to deny all the allegations must either specifically deny designated allegations or generally deny all except those specifically admitted.") (emphasis added). Paragraph 36 of Cooper's answer therefore does not contradict Cooper's current position that LED products are not Subject Single Products. Indeed, Cooper'sanswer denies every allegation in the complaint suggesting that the LED products are Subject Single Products. Doc. 93 at ¶¶ 71, 73, 75, 80.

Next, Kenall points to Cooper's Rule 12(c) opposition brief, in which Cooper argued that Kenall "asserts infringement [only] for products covered in the License Agreement" given that ¶ 36 of the complaint alleges that the patent infringement claims are "limited to the Subject Patents and [are] against only Subject Products." Doc. 68 at 5, 7 (citing Doc. 1 at ¶ 36). Cooper's use of Kenall's concession that all the accused products are covered by the License Agreement to defend against Kenall's patent infringement claims does not amount to a deliberate, clear, and unambiguous admission that the Agreement's definition of Subject Single Products includes the LED products. The issue discussed in Cooper's brief was not which products fell into which category, but whether Kenall, by granting Cooper a license, had "relinquished its right to sue Cooper for patent infringement," leaving it with only a contractual remedy for Cooper's alleged breaches of the Agreement. 338 F. Supp. 3d at 845.

Kenall also cites Cooper's original answer—which the amended answer superseded—in arguing that Cooper acknowledged "that there is 'no disput[ing]'" that the LED products are Subject Single Products. Doc. 156 at 5-6 (alteration in original) (citing Doc. 34 at pp. 3-4, which is the redacted version of Doc. 30 at pp. 3-4). The pages of Cooper's original answer cited by Kenall consist of responses to jurisdictional allegations that have nothing to do with the definition of Subject Single Products, and no form of the words "no disput[ing]" appears either there or anywhere else in the answer. Doc. 30 at pp. 3-4, ¶¶ 7-12.

For these reasons, Kenall fails to establish that Cooper made judicial admissions that the LED products are properly characterized as Subject Single Products. Kenall argues in the alternative that Cooper forfeited its position that the LED products are not Subject SingleProducts by failing to press it in opposing Kenall's Rule 12(f) motion to strike Cooper's affirmative defenses. Doc. 156 at 7-9; see Docs. 123-124 (reported at 354 F. Supp. 3d 877 (N.D. Ill. 2018)) (granting in part the motion). But given that Kenall's Rule 12(f) motion did not mention LED products, Doc. 97, and that the court's June 2018 ruling had already limited Kenall's patent infringement claims to those directed against Subject Single Products, 338 F. Supp. 3d at 851, it would not have made sense for Cooper to argue in its Rule 12(f) opposition brief that LED products are not Subject Single Products. Cooper therefore did not forfeit its argument that LED products are not Subject Single Products.

II. Merits

The License Agreement is governed by Illinois law. 338 F. Supp. 3d at 847; 354 F. Supp. 3d at 882, 884; Doc. 1-1 at p. 41, § 14 (Illinois choice-of-law provision). "The basic rules of contract interpretation under Illinois law are well settled. In construing a contract, the primary objective is to give effect to the intention of the parties." Right Field Rooftops, LLC v. Chi. Cubs Baseball Club, LLC, 870 F.3d 682, 689-90 (7th Cir. 2017). "A court must initially look to the language of a contract alone, as the language, given its plain and ordinary meaning, is the best indication of the parties' intent." Id. at 690 (quoting Gallagher v. Lenart, 874 N.E.2d 43, 58 (Ill. 2007)). "Moreover, because words derive their meaning from the context in which they are used, a contract must be construed as a whole, viewing each part in light of the others." Gallagher, 874 N.E.2d at 58. "If the words in the contract are clear and unambiguous, they must be given their plain, ordinary and popular meaning." Right Field Rooftops, 870 F.3d at 690 (quoting Cent. Ill. Light Co. v. Home Ins. Co., 821 N.E.2d 206, 213 (Ill. 2004)). By contrast, "[i]f the language of the contract is susceptible to more than one meaning, it is ambiguous," and in that event "a court may consider extrinsic evidence to ascertain the parties' intent." Gallagher, 874 N.E.2d at 58.

Reading the License Agreement as a whole, Subject...