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3m Innovative Properties Company, A Delaware Corporation, 3m Unitek v. Tp Orthodontics

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


January 11, 2011

3M INNOVATIVE PROPERTIES COMPANY, A DELAWARE CORPORATION, 3M UNITEK CORPORATION, A CALIFORNIA CORPORATION, AND 3M COMPANY, A DELAWARE CORPORATION, PLAINTIFFS,
v.
TP ORTHODONTICS, INC., AN INDIANA CORPORATION, DEFENDANT.

The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

ORDER Re: Plaintiffs' Motion to Enforce the Consent Judgment [16] On January 4, 2011, Plaintiffs' Motion to Enforce the Consent Judgment [16] came on for regular calendar before this Court. The Court, having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:

The Court hereby DENIES Plaintiffs' Motion to Enforce the Consent Judgment Order.

I. Background On September 20, 1994, Plaintiffs 3M Innovative Properties Company, 3M Unitek Corporation, and 3M Company (hereinafter, "Plaintiffs") were issued United States Patent No. 5,348,154 (hereinafter, "the 154 Patent"). The 154 Patent is directed to orthodontic or dental appliances that are coated with curable or tacky material and the packaging of these appliances. The 154 Patent also discloses a kit with a tray-based package designed to provide organization and storage of sets of these appliances.

Claim 1 of the 154 Patent is comprised of four elements, and provides as follows: an article comprising a) "a tray having at least two holes," b) "at least two substrates each having only one well with an opening only at the top thereof and a top surface that is removably retained in the hole of the tray," c) "a lid releasably attached to the top surface thereof," and d) "an orthodontic appliance having a tacky substance on an exterior surface" positioned in such a way that it does not separate from the appliance upon removal from the well. [Pls.' Corrected Compl. Ex. A.] Elements a and b are specifically at issue here in this Motion.

On January 25, 2010, Plaintiffs filed a Complaint against Defendant TP Orthodontics, Inc, (hereinafter, "Defendant") alleging a cause of action for Patent Infringement [1]. Plaintiffs filed a Corrected Complaint for Patent Infringement on January 26, 2010, claiming that Defendant's product, the Invu with Readi-Base Pre-Applied Adhesive kit (hereinafter, "Invu Kit"), infringed on one or more claims of the 154 Patent [6].

On May 7, 2010, the Parties filed a Stipulation to Entry of Consent Judgment [13]. This Stipulation stated that the Parties had agreed to settle all claims in this Action, and requested that the Court enter the Consent Judgment Order filed with this Stipulation.

On May 13, 2010 this Court entered the Consent Judgment Order [14]. In this Order, the Court stated that Plaintiffs had exclusive license in the 154 Patent, and that Defendant acknowledged and agreed it had infringed on the 154 Patent in manufacturing, using, offering for sale and selling the Invu Kit as articles that incorporate every element of claims of the 154 Patent, in violation of 35 U.S.C. § 271. [Consent Judgment Order 2.] Accordingly, the Court issued a permanent injunction against Defendant, enjoining Defendant from making, using, offering to sell, selling or importing into the United States any articles that infringe on the 154 Patent. [Id.] This Court retained jurisdiction for purposes of enforcing the terms of the Consent Judgment and Settlement Agreement. [Id.]

After this Order was issued, Defendant began marketing and selling a new, modified Invu Kit (hereinafter, "current Invu Kit") that is thermoformed from a sheet of plastic and now consists of two elongated, open-ended channels or slots. [Decl. Intagliata ¶¶ 3,9.] Each channel includes a bottom wall and two upstanding walls. According to Defendant, one of these walls includes "pod positioning ridges to assist in locating each pod according to the prescribed tooth position," and the bottom of each hole contains a layer of sticky material that assists in holding an inserted pod in place. [Def.'s Opp. 5-6]

On December 3, 2010, Plaintiffs filed this present Motion, arguing the modified device still infringes on the 154 Patent [16].

II. Analysis

A. Legal Standard If a patent owner is "confronted with another possible infringement by [the enjoined infringer] in the form of a modified device," the patent owner can "seek to invoke the power of the court to punish the adjudged infringer for contempt in violating the court's injunctive order." KSM Fastening Sys., Inc. v. H.A. Jones Co., Inc., 776 F.2d 1522, 1524 (Fed. Cir. 1985).

However, the Federal Circuit has held that before the district court can make a finding that the party is in "contempt of an injunction in a patent infringement case, [the court] must address two separate questions." Abbott Labs. v. TorPharm, Inc., 503 F.3d 1372, 1380 (Fed. Cir. 2007)(citing KSM Fastening Sys., Inc., 776 F.2d at 1532).

First, the court must determine "whether a contempt hearing is an appropriate forum in which to determine whether a redesigned device infringes, or whether the issue of infringement should be resolved in a separate infringement action." Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1349 (Fed. Cir. 1998). In order to do so, the court must compare the accused, modified device with the original, infringing device in light of the patent claims at issue in the action. See Tivo Inc. v. Dish Network Corp., 640 F. Supp. 2d 853, 869 (E.D. Tex. 2009).

A contempt hearing is only appropriate if the differences between these two devices are merely colorable. Additive Controls & Measurement Sys., Inc., 154 F.3d at 1349. Differences are more than colorable when there are "substantial open issue[s] with respect to [the modified device's] infringement." KSM Fastening Sys., Inc., 776 F.2d at 1532. When this is the case, "the presence of such disputed issues creates fair doubt that the decree has been violated," and a determination as to whether a party is in contempt due to the modified device's possible infringement is inappropriate. Id. However, if the court finds that the modified device represents no more than a colorable change from the infringing device, contempt proceedings are appropriate and the court can proceed to the second step: the contempt hearing itself. Id.

The second step requires a comparison between the modified device and the patent claims to determine if those products do in fact infringe on the original, patented device. See id. The patent owner, as the movant, "must show by clear and convincing evidence that the modified device falls within the admitted or adjudicated scope of the claims and is, therefore, an infringement." Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 1569 (Fed. Cir. 1995). However, the patent owner must show that the modified device contains "merely 'colorable' changes of the infringing [device]." Id. at 1525. Therefore, "[e]ven if the [modified] product may infringe the patent, as long as it is more than "colorably different" the infringement should not amount to a contempt nor should it be tested in contempt proceedings." Siebring v. Hansen, 346 F.2d 474, 477 (8th Cir. 1965).

B. Plaintiffs' Motion

Plaintiffs argue Defendant is in violation of the Consent Judgment Order because Defendant's current Invu Kit, though modified from the original, infringing Invu Kit, still infringes on each element of Claim 1 of the 154 Patent. Specifically, Plaintiffs assert that the channels in the current Kit still constitute "holes" within the meaning of Claim 1 of the 154 Patent, and that the substrates or pods in the current Kit are still removably retained by these "holes." Plaintiffs contend Defendant is therefore in violation of the permanent injunction issued in the Consent Judgment Order, and request that the Court find Defendant to be in civil contempt as a result of this violation.

Defendant in turn contends that the current Invu Kit does not violate the Consent Judgment Order, because it is structurally and functionally distinct from the first, infringing Invu Kit. Defendant argues that the current Invu Kit does not infringe on every element of Claim 1 of the 154 Patent, as it does not include any "holes" because the two elongated open-ended channels with ridges on the sides cannot be considered "holes" within the meaning of Claim 1 of the Patent. Defendant also argues that the substrates or pods in the current Invu Kit are not removably retained by any sort of hole in violation of Claim 1 of the 154 Patent, as the substrates or pods in the current Invu Kit are now held in place by an adhesive that is applied to the bottom of the channel in order to aid in the retention of the substrates or pods.

The Court finds that based on the test set forth by the Federal Circuit in KSM Fastening Systems, Inc. v. H.A. Jones Company, Inc., this Motion is not the appropriate forum in which to determine whether Defendant's current Invu Kit infringes on Plaintiffs' 154 Patent.

When applying the first step of the KSM Fastening Systems, Inc., test, a comparison of the current Invu Kit with the original, infringing Invu Kit in light of the Claim 1 elements of the 154 Patent supports a finding here that the differences between these two products are more than colorable, as "substantial open issues" exist with respect to whether the current Invu Kit infringes on the 154 Patent. KSM Fastening Sys., Inc., 776 F.2d at 1532. As such, this type of a proceeding is inappropriate, and the issue of Defendant's alleged infringement with respect to the current Invu Kit should be resolved in a separate infringement action.

Specifically, Defendant has redesigned its product so that the current Invu Kit now has elongated, shallow channels that run the length of the tray instead of the square cut outs or holes that were present in the original, infringing Invu Kit. The current Invu Kit also now contains adhesive on the bottom of these channels to keep the substrates or pods in place in an attempt to avoid the substrates or pods from being removably retained in the current Invu Kit. Although some similarities still exist between the two Kits, the fact that Defendant redesigned the tray to contain these different elements supports a finding here that the differences between the two Kits are more than colorable and raise substantial open issues of infringement. See Arbek Mfg., Inc., 55 F.3d at 1570.

Moreover, the Court finds that expert and other testimony would be helpful here in determining whether the current Invu Kit infringes on all the elements of Claim 1 of the 154 Patent, as it is unclear at this juncture whether the current Invu Kit is a tray having at least two "holes" with the susbtrates or pods being removably retained in one of these alleged holes in the tray. See id. (noting that "[t]he modifying party generally deserves the opportunity to litigate the infringement question at a new trial, particularly if expert and other testimony subject to cross-examination would be helpful or necessary.") Neither Party has submitted sufficient evidence or expert testimony to enable the Court to make a determination as to these issues, and therefore factual issues remain as to whether Defendant's current Invu Kit infringes on the 154 Patent. See Liquid Dynamics Corp. v. Vaughn Co., Inc., 2008 WL 4643428, *3-5 (N.D. Ill. 2008).

Accordingly, the differences between the current Invu Kit and the original, infringing Invu Kit are more than colorable here, as substantial open issues of infringement are present. Therefore, the Court finds that this Motion is not the appropriate forum in which to determine whether Defendant's current Invu Kit infringes on the 154 Patent, in violation of the Consent Judgment Order. /// /// ///

III. Conclusion For the reasons heretofore stated, the Court DENIES

Plaintiffs' Motion to Enforce the Consent Judgment Order.

IT IS SO ORDERED.

20110111

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