Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 1 of 18 PageID #:5677
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 1 of 18 Page|D #:5677
`
`7
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHER DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`THE CHAMBERLAIN GROUP,
`
`INC.,
`
`Plaintiff,
`
`v.
`
`TECHTRONIC INDUSTRIES CO.,
`LTD., TECHTRONIC INDUSTRIES
`NORTH AMERICA,
`INC., ONE
`WORLD TECHNOLOGIES,
`INC.,
`OWT INDUSTRIES,
`INC., ET
`
`TECHNOLOGY (WUXI) CO. LTD.,
`and RYOBI TECHNOLOGIES,
`INC.,
`
`Case No.
`
`16 C 6097
`
`Judge Harry D. Leinenweber
`
`Defendants.
`
`_b/4c/“.5”./C)
`
`MEMORANDUM OPINION AND ORDER
`
`Before
`
`the Court
`
`is Plaintiff Chamberlaini Group,
`
`Inc.’s
`
`Motion
`
`for
`
`a Preliminary Injunction [ECF No.
`
`8].
`
`For
`
`the
`
`reasons stated herein,
`
`the Court grants the Motion.
`
`I.
`
`BACKGROUND
`
`The Plaintiff,
`
`the Chamberlain Group,
`
`Inc.
`
`(“CGI”), based
`
`in Illinois, entered the Garage Door Opener
`
`(“GDO”) market
`
`in
`
`1958.
`
`Nine years
`
`later it
`
`introduced what was
`
`to become the
`
`market
`
`leading GDO,
`
`the Liftmaster.
`
`CGI has become well known
`
`for ‘its development of
`
`safety measures
`
`and other
`
`innovative
`
`technologies
`
`and currently is the owner of approximately 350
`
`patents.
`
`Currently GCI’s Liftmaster
`
`is
`
`the
`
`number—one
`
`professionally installed GDO
`
`and
`
`its GDOS
`
`are present
`
`in a
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 2 of 18 PageID #:5678
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 2 of 18 Page|D #:5678
`
`majority of garages
`
`in America.
`
`CGI has approximately a -
`
`market share in the GDO market.
`
`It also is the leader in the
`
`sale of ancillary products.
`
`In 2003, CGI
`
`filed an application for
`
`a patent entitled
`
`Movable
`
`Barrier Operators
`
`Status
`
`Condition
`
`Transception
`
`Apparatus
`
`and Method, which was granted in 2007
`
`as Patent
`
`No. 7,224,275 (the “‘275 patent”).
`
`The invention was described
`
`\V
`
`as
`
`a moveable barrier
`
`operator
`
`[with]
`
`a wireless
`
`status
`
`condition data
`
`transmitter
`
`that wirelessly transmits
`
`status
`
`condition messages to one or more remote peripherals.”
`
`The
`
`‘275
`
`patent was
`
`to become
`
`the basis
`
`for CGI's
`
`subsequent product
`
`called. MyQ Technology.
`
`The MyQ technology allows
`
`the owner,
`
`using a CGI smartphone app,
`
`to monitor and control the status of
`
`the GDO remotely.
`
`In 2006, CGI
`
`filed an application for
`
`a patent entitled
`
`Barrier Movement Operator Battery Backup
`
`and Power Equipment
`
`Battery Charging Center, which was granted.
`
`in 2009 as Patent
`
`No. 7,635,966 (the “‘966 patent”).
`
`The invention was described
`
`as a battery back-up for a barrier movement operator, which is
`
`capable of being used to power tools often stored in garages.
`
`The Defendants, Techtronic Industries Co. Ltd., Techtronic
`
`Industries North America,
`
`Inc., One World Technologies,
`
`Inc.,
`
`OWT Industries,
`
`Inc., Et Technology (Wuxi) Co. Ltd.,
`
`and Ryobi
`
`Technologies,
`
`Inc.
`
`(collectively,
`
`“TTI”) sell products under an
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 3 of 18 PageID #:5679
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 3 of 18 Page|D #:5679
`
`extensive portfolio of manufacturing
`
`brand
`
`names
`
`and
`
`also
`
`provide
`
`products
`
`for
`
`sale
`
`by
`
`third parties.
`
`TTI
`
`has
`
`considerable expertise in designing and selling power
`
`tools and
`
`accessories and owns a broad portfolio of intellectual property,
`
`including
`
`lithium-ion
`
`battery
`
`technology
`
`for
`
`portable,
`
`rechargeable batteries and battery charging stations.
`
`GDOS make
`
`up only a small portion of TTI’s sales since it only recently
`
`extended into the GDO market.
`
`In May of this year, TTI unveiled the Ryobi GDO, which it
`
`commenced
`
`selling through Home Depot's physical
`
`and on-line
`
`stores.
`
`CGI contends that
`
`the Ryobi GDO embodies the patented
`
`ideas expressed in its ‘275 and ‘966 parents.
`
`The Ryobi GDO
`
`includes a battery pack feature which is removable and can be
`
`used to power more than 70 Ryobi branded tools.
`
`The Ryobi GDO
`
`also includes a
`
`systenl
`
`for
`
`sending status updates wirelessly.
`
`When used in conjunction with the Ryobi smartphone app,
`
`the user
`
`is
`
`allowed
`
`to monitor
`
`and
`
`control
`
`the Ryobi GDO’s
`
`status
`
`remotely,
`
`similar
`
`to CGI’s MyQ
`
`system.
`
`At
`
`the
`
`time
`
`TTI
`
`introduced its Ryobi
`
`GDO,
`
`Home Depot was CGI’s - -
`
`customer and accounted for approximately - of CGI’s retail GDO
`
`sales.
`
`As
`
`a result of
`
`the introduction of
`
`the Ryobi GDO at Home
`
`Depot, CGI experienced an initial drop in sales
`
`for
`
`the two
`
`months succeeding the introduction.
`
`Since that time, Home Depot
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 4 of 18 PageID #:5680
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 4 of 18 Page|D #25680
`
`reduced the price for
`
`the CGI GDO products which apparently
`
`caused a substantial
`
`increase in sales of CGI’s products.
`
`Home
`
`Depot
`
`retains
`
`sole
`
`authority to set pricing.
`
`Home Depot
`
`initially funded the price decrease but
`
`then requested that CGI
`
`provide
`
`it with
`
`a
`
`rebate
`
`to
`
`absorb
`
`some
`
`of
`
`the price
`
`differential.
`
`CGI
`
`initially did so, but
`
`subsequent efforts
`
`between CGI and Home Depot
`
`to agree on a fixed rebate broke down
`
`so that CGI
`
`is not
`
`funding any price decrease decided upon by
`
`Home Depot.
`
`CGI publishes manufacturer's suggested pricing but
`
`has no authority to enforce any specific pricing with regard to
`
`Home Depot.
`
`There was no sales information available as
`
`to
`
`current sales of CGI’s products at Home Depot subsequent
`
`to the
`
`week ending July 24, 2016.
`
`II.
`
`GENERAL RULES FOR PRELIMINARY INJUNCTION
`
`CGI
`
`has
`
`filed this
`
`suit
`
`to
`
`enforce
`
`its
`
`intellectual
`
`property rights concerning,
`
`among others,
`
`the ‘275 and the ‘966
`
`patents.
`
`They have now moved for
`
`a preliminary injunction to
`
`restrain TTI
`
`from selling its Ryobi GDOS and related products.
`
`To obtain a preliminary injunction the patent holder must
`
`establish four propositions:
`
`first,
`
`that
`
`it
`
`has
`
`a
`
`strong
`
`likelihood of success on the merits;
`
`second,
`
`that it is likely
`
`to suffer irreparable harm but for a preliminary injunction and
`
`therefore it has no adequate remedy at
`
`law;
`
`third,
`
`that equity
`
`heavily favors
`
`an
`
`injunction,
`
`i.e.,
`
`that
`
`the
`
`harm to the
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 5 of 18 PageID #:5681
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 5 of 18 Page|D #:5681
`
`plaintiff greatly outweighs the harm to defendant; and,
`
`fourth,
`
`that
`
`the public
`
`interest weighs
`
`in favor of
`
`a preliminary
`
`injunction.
`
`See, Abbott Laboratories v. Sandoz,
`
`lnc., 544 F.3d
`
`1341, 1344 (Fed. Cir. 2008).
`
`While at trial a defendant need prove invalidity by clear
`
`and convincing evidence, at
`
`the preliminary injunction stage the
`
`accused infringer need only show that
`
`there is a “substantial
`
`question
`
`as
`
`to
`
`the
`
`patent’s
`
`invalidity or
`
`infringement.”
`
`Lifescan Scotland V. Shasta Iechn.,
`
`734 F.3d 1361,
`
`1366
`
`(Fed.
`
`Cir. 2013).
`
`Irreparable harm: can assume
`
`a number‘ of different
`
`forms,
`
`including lost Harket
`
`share, price erosion,
`
`lost goodwill
`
`and
`
`downstream sales.
`
`See, Robert Bosch LLC v. Pyon Mfg. Corp., 659
`
`F.3d 1142,
`
`1151
`
`(Fed. Cir.
`
`2011).
`
`The mere possibility of
`
`irreparable harnx is inconsistent with the characterization of
`
`injunctive relief
`
`as
`
`an extraordinary remedy and
`
`requires
`
`a
`
`“clear showing” that a plaintiff is entitled to relief. Winter
`
`v. Natural Resources Defense Council,
`
`Inc.,
`
`555 U.S.
`
`7,
`
`22
`
`(2008).
`
`III.
`
`THE PATENTS IN SUIT
`
`A.
`
`The ‘275 Patent
`
`Claim 1: A moveable barrier operator comprising:
`a controller having a plurality of potential operational status
`conditions
`defined,
`at
`least
`in part,
`by
`a plurality of
`operating states;
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 6 of 18 PageID #:5682
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 6 of 18 Page|D #:5682
`
`a movable barrier
`controller;
`
`interface that
`
`is operably coupled to the
`
`is operably
`that
`a wireless status condition data transmitter
`coupled to the controller, wherein the wireless status condition
`data transmitter transmits a status condition signal that:
`corresponds ix)
`a present operational status condition defined,
`at
`least
`in part,
`by at
`least
`two operating states from the
`plurality of operating states; and comprises an identifier that
`is at
`least relatively unique to the movable barrier operator,
`such that
`the
`status condition signal
`substantially uniquely
`identifies the movable barrier operator.
`
`1 wherein.
`Clainm 5: The movable barrier operator of claini
`plurality of operating states includes at least one of:
`moving a movable barrier in a first direction;
`moving the movable barrier in a second direction;
`reversing movement of the movable barrier;
`halting movement of the movable barrier;
`detecting a
`likely presence of an obstacle to movement of
`movable barrier;
`
`the
`
`the
`
`detecting a likely proximal presence of a human;
`receiving a wireless remote control signal;
`receiving a wireline remote control signal;
`receiving a learning mode initiation signal;
`a lighting status change;
`a vacation mode status change;
`
`detecting a likely proximal presence of a vehicle;
`and receiving an operating parameter alteration signal.
`
`B.
`
`The ‘966 Patent
`
`Claim 9: A battery charging apparatus, comprising:
`a battery charging station in electrical communication with a
`rechargeable battery and in electrical communication with a head
`unit of
`a barrier movement operator
`for supplying power
`to at
`least one
`rechargeable battery,
`the at
`least one
`rechargeable
`battery being
`removably
`connectable
`to electrically powered
`equipment other
`than and physically separate or separable from
`the
`barrier movement
`operator
`to
`provide
`power
`to
`the
`electrically powered
`equipment;
`and
`circuitry electrically
`connected to the battery charging station to supply power
`from
`the at least one rechargeable battery to the head unit.
`Claim 14: The battery charging apparatus of claim 9, wherein the
`electrically powered equipment comprises a tool.
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 7 of 18 PageID #:5683
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 7 of 18 Page|D #:5683
`
`IV.
`
`INFRINGEMENT OF THE ‘275 PATENT
`
`TTI
`
`has
`
`a difficult
`
`task to demonstrate
`
`the
`
`lack of
`
`infringement by its Ryobi GDO since its technical expert, Dr.
`
`Madisetti, did not examine the Ryobi GDO.
`
`On
`
`the other hand,
`
`CGI’s
`
`technical expert, Dr. Rhyne
`
`(“Rhyne”), purchased a Ryobi
`
`GDO and dismantled it and, with the assistance of CGI engineers,
`
`conducted extensive testing.
`
`Their testing included the use of
`
`Wireshark protocol
`
`analyzer, which
`
`constitutes
`
`a method
`
`of
`
`capturing
`
`data
`
`as
`
`it
`
`is
`
`being
`
`transmitted by
`
`the Ryobi
`
`controller over WiFi
`
`link using the Ryobi
`
`router
`
`to a Media
`
`Access Control
`
`(MAC) address.
`
`From the results of the Wireshark
`
`analysis,
`
`Rhyne was
`
`able
`
`to demonstrate
`
`the
`
`type
`
`of data
`
`transmitted and the addressee.
`
`Based on his examination and
`
`experience, Rhyne concluded that
`
`the Ryobi GDO met each of
`
`the
`
`elements of Claim 1 of
`
`the ‘275 patent.
`
`Rhyne explained that
`
`the
`
`crux
`
`of his
`
`infringement
`
`analysis
`
`revolved around
`
`the
`
`concept of
`
`the GDO controller being self-aware,
`
`i.e.,
`
`that
`
`it
`
`did. not
`
`rely upon any external
`
`sensors
`
`to obtain the status
`
`conditions of
`
`the GDO,
`
`and which it was able to transmit upon
`
`request.
`
`Such status conditions include garage door open/shut,
`
`and garage lights on/off.
`
`According to his testimony, Rhyne’s
`
`examination of
`
`the Ryobi GDO demonstrated to him that
`
`the GDO
`
`obtained
`
`and
`
`transmitted similar
`
`data without
`
`the
`
`aid
`
`of
`
`external sensors.
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 8 of 18 PageID #:5684
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 8 of 18 Page|D #:5684
`
`Rather
`
`than examine
`
`the Ryobi
`
`GDO
`
`and dispute Rhyne’s
`
`findings, TTI’s expert, Dr. Madisetti
`
`(“Madisetti”,
`
`took issue
`
`with Rhyne’s
`
`interpretation of
`
`some of
`
`the terms of Claim 1 of
`
`the ‘275 patent.
`
`In particular, Madisetti contended that Rhyne
`
`incorporated into his interpretation of Claim 1
`
`the concept of a
`
`“self-aware” controller, which does not
`
`appear
`
`in the claim
`
`language.
`
`This is important because Madisetti argued that it is
`
`clear from the specific language of Claim l,
`
`and reinforced by
`
`the
`
`language of dependent Claim 5,
`
`that
`
`the controller of
`
`Claim 1
`
`is
`
`not
`
`totally self-aware,
`
`because many
`
`of
`
`the
`
`activities set forth in dependent Claim 5,
`
`such as detecting the
`
`presence of an obstacle,
`
`the proximal presence of a human,
`
`and
`
`the proximal presence of
`
`an vehicle must
`
`include the use of
`
`external sensors.
`
`Therefore self—awareness is not a limitation
`
`on the claim.
`
`This contention by Dr. Madisetti is more material
`
`to
`
`the
`
`issue
`
`of
`
`invalidity
`
`rather
`
`than
`
`the
`
`issue
`
`of
`
`infringement.
`
`Rhyne
`
`responded to this criticism by pointing out
`
`that
`
`dependent Claim 2 distinguishes itself from Claim 1 by adding to
`
`Claim 1,
`
`“a condition status sensor that
`
`is operably coupled to
`
`the controller.” Therefore the only reasonable way to reconcile
`
`the difference between Claim.
`
`1
`
`and Claint
`
`2
`
`is that Claim l
`
`eschews condition sensors in favor of a controller that does not
`
`rely on
`
`external
`
`sensors.
`
`With
`
`respect
`
`to the
`
`list
`
`of
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 9 of 18 PageID #:5685
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 9 of 18 Page|D #:5685
`
`operational states that do appear
`
`to require external sensors,
`
`Rhyne
`
`responded
`
`that
`
`the
`
`author
`
`appeared
`
`to
`
`include
`
`such
`
`operational
`
`states
`
`so
`
`as
`
`to claim such
`
`states which might
`
`through future invention be able to be sensed by the controller
`
`without external sensors.
`
`Based on the foregoing,
`
`the Court at
`
`this time finds that
`
`CGI has established a
`
`likelihood of
`
`success
`
`on the issue of
`
`infringement of Claim 1 of the ‘275 patent by the Ryobi GDO.
`
`As
`
`the Court has
`
`indicated,
`
`the crux of
`
`the issue is the
`
`‘275
`
`patent’s description of
`
`a
`
`self—aware controller
`
`in Claim 1.
`
`Rhyne’s
`
`testimony on this point was convincing,
`
`and Madisetti,
`
`who did not examine the Ryobi GDO, did not effectively rebut
`
`evidence that
`
`it piggybacked on
`
`the
`
`‘275’s description of
`
`a
`
`self—aware
`
`controller
`
`defined by
`
`a plurality of
`
`operating
`
`states.
`
`V.
`
`ALLEGED INVALIDITY OF THE ‘275 PATENT
`
`TTI
`
`argues
`
`that without
`
`disagreement
`
`from CGI,
`
`that
`
`controllers,
`
`moveable
`
`barrier
`
`interfaces,
`
`and wireless
`
`transmitters were all well
`
`known
`
`in the art prior
`
`to the
`
`issuance of
`
`the ‘275 patent.
`
`Also, without disagreement
`
`from
`
`CGI, wireless transmitters, WiFi,
`
`the smart phone app, and smart
`
`phones are not
`
`covered by the patent
`
`in suit.
`
`TTI
`
`further
`
`argues that a number of prior references either include all of
`
`the
`
`limitations
`
`of
`
`the
`
`‘275
`
`claims
`
`or
`
`anticipated them.
`
`

`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 10 of 18 PageID #:5686
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 10 of 18 Page|D #:5686
`
`Specifically, Dr. Madisetti relied on Menard, Tazuna and several
`
`other patents that described capabilities such as
`
`raising" and
`
`lowering moveable barriers through the use of controllers that
`
`wirelessly transmitted various states of
`
`the moveable barriers.
`
`In response, Dr. Rhyne was able to show that
`
`in each reference,
`
`unlike with the ‘275 patent,
`
`the controller relied upon external
`
`sensors in order
`
`to receive the information to be transmitted
`
`wirelessly.
`
`Further, Rhyne was able to show that
`
`two prior art
`
`references,
`
`Morris
`
`and
`
`Chang,
`
`specifically
`
`involved
`
`communications between external sensors and the GDO controller,
`
`which then transmitted wirelessly the information so received
`
`from the
`
`sensors.
`
`Thus
`
`he
`
`argued
`
`the
`
`examiner
`
`clearly
`
`understood that
`
`the prior art
`
`covered the use of external
`
`sensors to communicate states or statuses to the controller and
`
`still approved the issuance of the ‘275 patent.
`
`In other words,
`
`the only way to distinguish the ‘275 patent
`
`from the prior art
`
`was
`
`for the examiner
`
`to conclude that
`
`the ‘275 patent does not
`
`rely on external sensors.
`
`Because none of
`
`the prior art
`
`suggested by Dr. Madisetti
`
`taught
`
`the concept of
`
`the “self-aware” controller, TTI has not
`
`raised a
`
`“substantial
`
`question
`
`as
`
`to
`
`invalidity.”
`
`See,
`
`Amazon.com V. Barnesandnoble.com, 239 F.3d 1343, 1359 (Fed. Cir.
`
`2001).
`
`..]_O_
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 11 of 18 PageID #:5687
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 11 of 18 Page|D #:5687
`
`VI. WHETHER THE RYOBI GDO INFRINGES THE ‘966 PATENT
`
`TTI’s argument as to non-infringement of the ‘966 patent
`
`is
`
`two—fold. First, it points out that the Ryobi GDO does not sell
`
`a battery with its GDO;
`
`the battery is sold separately.
`
`Thus it
`
`argues
`
`that
`
`the Ryobi
`
`GDO does not
`
`include
`
`“at
`
`least
`
`one
`
`rechargeable battery.”
`
`Second, TTI argues that Claim 9 does not
`
`provide for
`
`the use of
`
`the battery as
`
`a backup, but
`
`as
`
`an
`
`alternate source for powering the barrier movement operator.
`
`First,
`
`the dispute as to Claim 9:
`
`CGI
`
`responds by showing
`
`that TTI’s advertisements all
`
`focus
`
`on the fact
`
`that
`
`its GDO
`
`includes a battery recharge station and that there are available
`
`for
`
`sale batteries
`
`that
`
`can be
`
`recharged in the
`
`recharging
`
`station that can also be used to operate power tools.
`
`CGI also
`
`argues that while Claim 9 does not specifically state that
`
`the
`
`battery is a backup source, nevertheless the “summary of
`
`the
`
`invention at column 1,
`
`line 54 and 55 clearly state that
`
`the
`
`invention is directed to a
`
`system including a
`
`rechargeable
`
`battery backup.” The “detailed description,
`
`column 3,
`
`lines 19-
`
`26 states
`
`‘a
`
`rechargeable battery backup is provided for use
`I
`
`with a barrier movement operator.”
`
`Furthermore,
`
`figure 6
`
`to
`
`the ‘966 patent shows the method of utilization of the removable
`
`rechargeable battery, which clearly shows
`
`its role as a backup
`
`power source.
`
`-11..
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 12 of 18 PageID #:5688
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 12 of 18 Page|D #25688
`
`As
`
`to TTI’s other
`
`argument,
`
`the law suggests
`
`it
`
`is of
`
`little import whether TTI sells the backup battery in the actual
`
`box with
`
`the Ryobi
`
`GDO.
`
`As
`
`CGI pointed out
`
`in closing
`
`arguments, TTI sells the battery alongside the system,
`
`and this
`
`coupled with the design of
`
`a
`
`rechargeable station integrated
`
`into
`
`the
`
`Ryobi
`
`GDO
`
`could
`
`constitute
`
`potential
`
`direct
`
`infringement, or at
`
`least contributory infringement.
`
`See, e.g.,
`
`Ricoh Co. V. Quanta Computer Inc., 5505 F.3d 1325, 1337-39 (Fed.
`
`Cir. 2008).
`
`This
`
`is especially true given the evidence that
`
`TTI’s
`
`advertising juxtaposed both
`
`the battery and
`
`the
`
`GDO
`
`together,
`
`and that at one
`
`time TTI gave new purchasers of
`
`a
`
`Ryobi GDO a free battery.
`
`In short,
`
`the facts above demonstrate
`
`a
`
`likelihood that TTI’s Ryobi GDO also infringes Chamberlain's
`
`‘966 patent.
`
`VII.
`
`ALLEGED INVALIDITY OF THE ‘966 PATENT
`
`TTI further argues that
`
`the ‘966 patent was well known in
`
`the prior art,
`
`specifically citing the Peplinski
`
`and Weik
`
`patents.
`
`Peplinski describes the use of one or more batteries
`
`to provide backup power
`
`to the GDO in the event of an electric
`
`power outage. Weik provides two different scenarios regarding
`
`power
`
`sources or
`
`lack thereof.
`
`First, where
`
`a
`
`fire door
`
`is
`
`powered. by .AC and there is a power outage,
`
`the fire door
`
`is
`
`equipped with a socket which will allow a portable battery to be
`
`plugged into power
`
`the fire door.
`
`The battery is portable and
`
`-12-
`
`

`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 13 of 18 PageID #:5689
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 13 of 18 Page|D #25689
`
`is brought
`
`to the
`
`scene
`
`by
`
`a
`
`service person.
`
`The
`
`second
`
`scenario is where the fire door does not have AC power and a
`
`battery is permanently installed to operate the fire door.
`
`It
`
`seems clear
`
`that neither prior art
`
`reference standing
`
`alone covers the ‘966 patent.
`
`But Dr. Madisetti testified that
`
`a person having ordinary skill in the art would combine the two
`
`references,
`
`such that
`
`the Peplinski battery would be removable
`
`as described in Weik.
`
`This is essentially an argument
`
`that
`
`the
`
`combination was obvious.
`
`In response, Dr. Rhyne argued that neither Peplinski nor
`
`Weik describe a
`
`removable battery that
`
`can be used to power
`
`other devices and that
`
`the situation they seek to remedy is not
`
`relevant
`
`to the
`
`‘966 patent.
`
`To argue against obviousness,
`
`Rhyne pointed to one of TTI’s
`
`own documents describing “new
`
`innovation opportunities” in which it outlined possible steps to
`
`expand its tool market.
`
`One of the ideas listed on the document
`
`was a removable GDO battery that would be compatible in certain
`
`Sears power tools.
`
`He
`
`took the document
`
`to be a form of praise
`
`of the concept behind the ‘966 patent.
`
`A patent
`
`is not necessarily invalid simply because it was
`
`obvious “to explore a new technology or general approach that
`
`seemed to be
`
`a promising field of experimentation, where
`
`the
`
`prior art gave only general guidance as to the particular form
`
`of
`
`the
`
`claimed
`
`invention or
`
`how to achieve
`
`it.”
`
`In
`
`re
`
`-13-
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 14 of 18 PageID #:5690
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 14 of 18 Page|D #:569O
`
`O’Farrell, 853 F.2d 894,
`
`903
`
`(Fed. Cir. 1988).
`
`It may well be
`
`that the combination in question was obvious;
`
`this case is young
`
`and the record is not yet fully developed.
`
`Registered patents
`
`are
`
`presumed valid,
`
`and TTI
`
`has
`
`not
`
`raised a
`
`substantial
`
`question at
`
`this juncture as
`
`to the
`
`‘966 patent’s invalidity
`
`based on obviousness or any other argument.
`
`VIII.
`
`IRREPARABLE HARM
`
`The Federal Circuit has held that
`
`irreparable harm requires
`
`a showing that, absent an injunction,
`
`the patentee is likely to
`
`suffer irreparable harm, and that a causal nexus exists relating
`
`‘the alleged harm to the alleged infringement.
`
`See, Apple Inc.
`
`v.
`
`Samsung' Electronics Co.,
`
`735 F.3d 1352,
`
`1360
`
`(Fed. Cir.
`
`2013).
`
`The question is whether
`
`the allegations of
`
`harm. are
`
`pertinent
`
`to the
`
`injunctive relief analysis or whether
`
`the
`
`patentee
`
`is merely
`
`seeking
`
`“to
`
`leverage
`
`its
`
`patent
`
`for
`
`competitive gain beyond.
`
`that which the inventive contribution
`
`and value
`
`of
`
`the patent warrant.”
`
`Apple
`
`Inc.
`
`V.
`
`Samsung
`
`Electronics Co.,
`
`695 F.3d 1370,
`
`1374
`
`(Fed. Cir. 2012).
`
`As was
`
`testified to by CGI’s economic expert, Christopher Bakewell,
`
`the
`
`types of harm that
`
`can occur
`
`from infringement
`
`by a direct
`
`competitor are lost sales and market share, price erosion,
`
`and
`
`loss of
`
`future sales,
`
`customer
`
`relationships,
`
`referrals,
`
`and
`
`accessories.
`
`_l4_
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 15 of 18 PageID #:5691
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 15 of 18 Page|D #25691
`
`The evidence produced at
`
`the hearing demonstrated that
`
`the
`
`Ryobi GDO is a <direct competitor‘
`
`to the CGI GDO in the Home
`
`Depot market.
`
`They both are
`
`targeting customers who want
`
`“connected” GDOs,
`
`i.e.,
`
`those connected by the controller
`
`to
`
`smart
`
`phones
`
`through wireless
`
`transmissions.
`
`The
`
`evidence
`
`further showed that GDOs are relatively inelastic,
`
`since people
`
`normally are only in the market for GDOS if they are building a
`
`new home
`
`or garage or
`
`their existing GDO
`
`is
`
`in need
`
`of
`
`replacement.
`
`At
`
`the time of TTI’s product
`
`launch in May, 2016,
`
`CGI had an approximate - market
`
`share of
`
`the GDO market.
`
`Genie had an approximate - of the market and “others” had the
`
`balance, approximately - Moreover, prior to the Ryobi
`
`launch,
`
`Home Depot accounted for approximately - of CGI’s retail sales
`
`of GDOs.
`
`While sales data of the Ryobi GDO were not available,
`
`the
`
`data did show a marked reduction in CGI sales immediately after
`
`the product
`
`launch.
`
`The evidence also showed that, after Home
`
`Depot made a significant unilateral reduction in price for CGI’s
`
`signature unit,
`
`sales
`
`increased dramatically for
`
`the next
`
`5
`
`weeks.
`
`This fact alone suggests that
`
`the launch of
`
`the Ryobi
`
`GDO has caused price erosion.
`
`The evidence further showed that
`
`Home Depot has requested that CGI contribute to the cost of
`
`the
`
`price reduction through the form of rebates.
`
`CGI was willing to
`
`do
`
`so
`
`on
`
`a
`
`short-term basis,
`
`but negotiations
`
`for
`
`a more
`
`._15_
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 16 of 18 PageID #:5692
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 16 of 18 Page|D #25692
`
`permanent arrangement at
`
`this time had fallen through.
`
`The
`
`Court finds that there is clear evidence of price erosion caused
`
`by the Ryobi product
`
`launch.
`
`While
`
`there is no clear evidence
`
`that
`
`there will be
`
`a
`
`reduction in CGI’s market
`
`share, nevertheless basic economic
`
`reasoning dictates that it should be suspected.
`
`Assuming that
`
`the Ryobi
`
`introduction at Home Depot
`
`is successful
`
`(there is
`
`some circumstantial
`
`evidence
`
`that
`
`it
`
`is successful,
`
`such as
`
`preferential product
`
`location.
`
`and advertising in Home Depot),
`
`there has to be some loss of market share on CGI’s part.
`
`Since
`
`the product is relatively inelastic,
`
`a sale of a Ryobi GDO most
`
`likely comes at
`
`the expense of one of
`
`the other brands.
`
`Since
`
`CGI has almost —:imes the market share of Genie, one would
`
`expect
`
`that for every four Ryobi GDOS sold by Home Depot -
`
`would be lost by CGI and - by Genie.
`
`The evidence also showed the sale of accessories are a very
`
`profitable part of
`
`the GDO market
`
`and that accessory sales
`
`accounted
`
`for
`
`approximately - of
`
`CGI’s
`
`gross
`
`profit.
`
`Consequently,
`
`loss
`
`of market
`
`share
`
`of
`
`GDOs would
`
`have
`
`a
`
`substantial
`
`impact on the overall gross profit picture.
`
`There
`
`is a substantial
`
`risk of
`
`loss of market
`
`share, profits,
`
`and
`
`price erosion that would be directly connected to the entry of
`
`the TTI Ryobi GDO.
`
`The Court
`
`thus finds that CGI will suffer
`
`irreparable harm if a preliminary injunction is not granted.
`
`-16-
`
`

`
`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 17 of 18 PageID #:5693
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 17 of 18 Page|D #25693
`
`The Court pauses for an important note:
`
`the above analysis
`
`regarding irreparable harm bears only on the Court's ultimate
`
`decision on CGI’s
`
`‘275 patent.
`
`That is because, as at least two
`
`witnesses noted at
`
`the hearing, CGI’s GDOs currently do not
`
`practice
`
`the
`
`‘966 patent
`
`relating to the
`
`removable
`
`backup
`
`battery.
`
`CGI has not
`
`sold commercially a GDO including the
`
`technology behind that patent.
`
`That necessarily means that
`
`the
`
`concerns regarding market share, price erosion, and lost profits
`
`have no applicability as to the ‘966 patent.
`
`CGI
`
`therefore has
`
`not proven irreparable harm based on infringement of
`
`the
`
`‘966
`
`patent.
`
`IX.
`
`THE BALANCE OF HARDSHIPS
`
`The evidence showed that
`
`the GDO market
`
`is not significant
`
`from TTI’s perspective.
`
`TTI has a multibillion dollar business
`
`of which GDOs constitute no more
`
`than one percent of
`
`its
`
`business.
`
`Prior to May of
`
`this year it had not sold a single
`
`GDO, and since the Court has agreed to hold the trial as early
`
`as February 2017,
`
`a delay of
`
`four months, while harmful, would
`
`not be critical to the health of TTI.
`
`On the other hand, GDOs
`
`are the core business of CGI
`
`and a
`
`loss would. be much more
`
`serious 11> CGI
`
`than jj: would be 133 TTI.
`
`The Court
`
`therefore
`
`finds that balance of hardships favors CGI. Certainly if TTI
`
`is
`
`successful at trial,
`
`a
`
`judgment of money damages would redress
`
`any wrong an injunction might
`
`impose.
`
`-17..
`
`

`
`Case: 1:16-cv-06097 Document #: 107 Filed: 09/15/16 Page 18 of 18 PageID #:5694
`Case: 1:16—cv—O6097 Document #2 107 Filed: 09/15/16 Page 18 of 18 Page|D #:5694
`
`X.
`
`THE PUBLIC INTEREST
`
`While
`
`increased competition arguably is
`
`in the public
`
`interest,
`
`nevertheless
`
`protecting
`
`the
`
`interests
`
`of
`
`patent
`
`holders is also in the public interest because a strong, viable
`
`patent
`
`system inevitably leads to increased innovation.
`
`Here,
`
`as in Apple Inc. V. Samsung Electronics Co., 809 F.3d 633,
`
`647
`
`(Fed. Cir. 2015),
`
`an injunction would not keep some
`
`lifesaving
`
`drug off the market;
`
`rather it would make the marketing of GDOs
`
`more orderly and
`
`allow a
`
`final
`
`resolution of
`
`the
`
`issue of
`
`infringement and invalidity.
`
`XI.
`
`CONCLUSION
`
`For
`
`the
`
`reasons
`
`stated herein,
`
`the Court grants CGI’s
`
`Motion for
`
`a Preliminary Injunction [ECF No. 8].
`
`The Court's
`
`decision relates to the finding that CGI has carried its burden
`
`in requesting a preliminary injunction only as
`
`to the
`
`‘275
`
`patent.
`
`IT IS SO ORDERED.
`
`
`
`Harry D. Leinenweber, Judge
`United States District Court
`
`Dated:
`
`SE? \ 5 Z016
`
`_18._