Mcafee Enters., Inc. v. Ashley Entm't Corp.

McAFEE ENTERPRISES, INC. Plaintiff, v. ASHLEY ENTERTAINMENT CORPORATION Defendant.

16-cv-2618

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

July 29, 2016

Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER

Plaintiff McAfee Enterprises, Inc. brings this action against Defendant Ashley Entertainment Corporation for alleged infringement of Plaintiff's patented drum stroke counting machine, United States Patent No. 6,545,207 ("the '207 patent"). R. 1. Plaintiff's patented product, which makes use of the '207 patent, is called the "Drumometer" (also referred to herein as "the patented product"). Plaintiff alleges Defendant's product—the iRock Digital Practice Drum Pad (the "iRock" or the "infringing product")—infringes on the '207 patent. Id. Defendant has moved for summary judgment, arguing that the complaint should be dismissed as moot. Defendant's theory is that Plaintiff cannot establish a right to recover either damages or injunctive relief. As a result, Defendant contends, "this case has effectively become moot and should be dismissed in its entirety." R. 16 at 9. In the alternative, Defendant states, "the court should strictly limit discovery proportional to any remaining, unresolved issues." Id. For the reasons that follow, the Court denies Defendant's Motion for Summary Judgment without prejudice.

LEGAL STANDARD

A court appropriately grants summary judgment when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Under Rule 56, "the mere existence of some alleged factual dispute between the parties will not defeat [a] . . . motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A material fact is a fact which "might affect the outcome of the suit." Id. at 248; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (summary judgment is proper when a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case"). A genuine dispute occurs when "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. Specifically, compliance with the patent marking statute "is properly decided upon summary judgment when no reasonable jury could find that the patentee either has or has not provided [either] actual [or constructive] notice" to defendants of their infringement. Gart v. Logitech, Inc., 254 F.3d 1334, 1339 (Fed. Cir. 2001). At the summary judgment stage, the court must view the evidence in the light most favorable to the non-movant. Anderson, 477 U.S. at 255.

BACKGROUND

In 2003, the U.S. Patent and Trademark Office issued Plaintiff Patent No. 6,545,207 for its Electric Drum Stroke Counting Machine. R. 1 ¶ 3. Plaintiff later used the '207 patent to develop and sell a drum stroke counting machine called the Drumometer. The Drumometer measures the speed at which a drummer plays by counting the number of times the drummer can strike a sensor with drum sticks within a limited amount of time. R. 1-1. Plaintiff marked both the Drumometer itself and the Drumometer's box with the word "PATENTED," but did not place the patent number on either. R. 16-1; R. 16-2. Instead, Plaintiff placed the patent number on the instruction manual included inside the box. R. 16-3.

In 2010, Plaintiff granted a license to Ahead Products, Inc. to use the '207 patent for a similar product called "the Ahead Metronome Pad" (also referred to herein as "the licensed product"). R. 21-2 at 2 (¶ 4). Shortly thereafter, Ahead Products, Inc. began selling the licensed Ahead Metronome Pad. Id. Ahead Products, Inc. marks the '207 patent number on the back of the Ahead Metronome Pad. Id. at 3 (¶ 5).

At some point, Plaintiff learned that Defendant was selling a product called the iRock Digital Practice Drum Pad, which includes many features similar to those of the Drumometer, such as a strike sensor, timer, and strike counter. R. 1 at ¶¶ 6-15. Plaintiff thereafter filed this infringement lawsuit. On June 8, 2016, Defendant moved for summary judgment, claiming that Plaintiff failed to comply with the marking requirements for the Drumometer or its packaging, as set forth in 35 U.S.C. § 287(a). R. 16 at 1. Specifically, Defendant claims that 35 U.S.C. § 287(a) requires both the word "patented" and the corresponding patent number to appear on either the article or its package, and that Plaintiff's failure to put the patent number on either the patented product or the box means it has not provided constructive notice of its patent. In addition, Defendant contends, Plaintiff concedes that it did not provide Defendant actual notice of Plaintiff's claim of infringement until Plaintiff filed the complaint in this case. R. 16 at 2, 8; R. 21 at 2. Having failed to provide either constructive or actual notice prior to the filing of the complaint, Defendant argues, Plaintiff cannot recover for any pre-filing damages it may have suffered. Finally, Defendant represents that, once Defendant received notice of the infringement through the filing of the complaint, it stopped selling the infringing product. R. 16 at 8; R. 16-5 ¶ 4, 6. Therefore, Defendant contends, Plaintiff has not suffered any damages after the complaint was filed and is not entitled to injunctive relief. In short, Defendant argues, because Plaintiff cannot recover any damages and is not entitled to an injunction, the Court should dismiss Plaintiff's lawsuit as moot. R. 16 at 5-9.

DISCUSSION

Defendant's summary judgment motion asks the Court to resolve the following issues:

A. WHETHER PLAINTIFF PROVIDED CONSTRUCTIVE NOTICE OF ITS PATENT RIGHTS BY MARKING THE PRODUCT IN COMPLIANCE WITH SECTION 287(a)

The marking statute provides as follows:

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

35 U.S.C. § 287(a). Pursuant to this provision, a patentee's right to recover damages in an infringement suit is limited to those acts of infringement that occurred after the patentee gave the alleged infringer "'notice of infringement.'" Gart, 254 F.3d at 1345 (quoting § 287(a)). The statute permits either constructive or actual notice. Id. Constructive notice is accomplished by marking the article or its packaging in compliance with the statute. Id. Defendant argues that Plaintiff did not comply with the marking requirement, and therefore failed as a matter of law to give constructive notice of its patent. As a result of this failure, Defendant argues, Plaintiff cannot recover damages for Defendant's infringing sales prior to the date this lawsuit was filed.

1. WAS PLAINTIFF REQUIRED TO MARK THE PATENTED PRODUCT WITH THE PATENT NUMBER?

The purpose of the marking statute is to provide notice to the public concerning "the status of the intellectual property embodied in an article of manufacture or design." Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 162 (1989); see also Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 387, 397 (1936) (observing that the notice requirement is designed "for the information of the public"); Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1446 (Fed. Cir. 1998) ("to provide notice in rem"); Rutherford v. Trim-Tex, Inc., 803 F. Supp. 158, 161 (N.D. Ill. 1992) (discussing the Supreme Court's "long-standing focus on the notice effected by the method of marking the patented article rather than on the precise mechanistic compliance with the statute"). For this reason, the marking statute generally is construed to allow some discretion in the patentee to alternatively mark its product (by marking the product's packaging, for example), particularly when the product in question is small. See Sessions v. Romadka, 145 U.S. 29, 50 (1892) ("It is not altogether clear that the stamp could not have been made upon the smaller sizes [of truck catches]; but, in a doubtful case, something must be left to the judgment of the patentee, who . . . affix[ed] a label to the packages in which the fasteners were shipped and sold."). This is true regardless of whether it is physically possible to place the patent number on the article itself. See Metrologic Instruments, Inc. v. PSC, Inc., 2004 WL 2851955, at *20 (D.N.J. Dec. 13, 2004) ("a sizable line of cases [ ] stand for the proposition that placing patent numbers on the associated packaging complies with the marking statute even though it is physically possible to place the patent number on the article itself").

Defendant argues that strict compliance with the statute by marking the product itself nevertheless is required when the product has markings or printing on it already (in this case, the word "PATENTED"). The statute provides that marking the product itself is not required "when, from the character of the article, this can not be done." 35 U.S.C. § 287(a). Courts have held that this language does not mean that it must be physically infeasible to mark the product itself, and that, instead, it also includes situations where feasibility of marking is called...