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T&M Inventions LLC v. Acuity Brands Lighting Inc.

United States District Court, E.D. Wisconsin

June 1, 2016

ACUITY BRANDS LIGHTING, INC. et al., Defendants.


          William C. Griesbach, Chief Judge

         Plaintiff T&M Inventions, LLC (“T&M”) brought this interference action under 35 U.S.C. § 291 (pre-America Invents Act)[1] against Defendants Acuity Brands Lighting, Inc. and ABL IP Holding LLC (together “Acuity”), seeking to invalidate U.S. Patent No. 8, 793, 944 held by Acuity (the ‘944 Patent). T&M’s claims were tried to the Court October 26-28, 2015. The parties filed post-trial briefs and the case is ready for decision. For the reasons below, I find T&M is entitled to the relief it seeks and judgment will therefore be entered that the ‘944 Patent is invalid.


         This is an inventorship dispute concerning an improved system for mounting skylights and other loads to the roofs of metal buildings. T&M filed this lawsuit alleging that its members Michael J. McLain and Timothy Pendley, who are long-time employees of Bay Industries, Inc. and Bay Insulation Systems, Inc. (together “Bay”), first conceived the invention at issue in the Fall of 2006, months before Bay entered into a distributorship agreement with Sunoptics Prismatic Skylights (“Sunoptics”) for the sale of skylights in connection with metal building fabrication. Sunoptics was a California skylight manufacturing company owned by Jerome “Jerry” Blomberg and his sons Jim and Tom Blomberg. T&M alleges Pendley and McLain began looking for a manufacturer of the “parts and pieces” for their invention in late 2007. T&M alleges Pendley and McLain first offered the opportunity to their employer, Bay, which ultimately declined the offer but authorized Pendley and McLain to independently pursue commercial opportunities for the invention. Pendley and McLain then offered Sunoptics the opportunity to manufacture the invention. T&M alleges Sunoptics expressed interest and permitted Pendley, who lived in Madera, California, some two hours from Sunoptic’s Sacromento facility, to build a full-scale mock-up on Sunoptics’ property for the purpose of finalizing production specifications and drawings, and to allow for photographs to be taken for installation manuals and marketing materials. The assembly of the mock-up took place in March and April 2008 directly outside the office of Jerry Blomberg and with the assistance of Sunoptics employee Scott Weaver. T&M alleges Weaver made no inventive contribution to Pendley and McLain’s invention.

         In April 2008, T&M alleges Pendley and McLain met with Sunoptics representatives to view the assembled mockup of the invention. After the viewing, T&M alleges Tom Blomberg told Pendley that Jerry Blomberg was going to patent McLain and Pendley’s invention. According to T&M, Pendley and McLain were upset but felt they owed a duty to their employer, Bay, not to overreact and damage the contractual relationship between Bay and Sunoptics. Later that evening, T&M alleges McLain told Sunoptics representatives that at the very least, Pendley’s name would be on any patent application, and Jerry Blomberg agreed.

         A provisional patent application was filed in October 2008 naming Jerry Blomberg and Pendley as co-inventors. A non-provisional application was filed October 2009 (the ‘176 Application) naming Jerry Blomberg, Pendley and McLain as co-inventors, but still not Weaver. T&M alleges the three named co-inventors entered into an agreement pre-filing of the ‘176 Application to assign their rights to the invention to a single entity. That entity was to grant Sunoptics the exclusive rights to manufacture and Bay the exclusive rights to sell the invention. Ultimately, however, the parties were unable to come to agreement on the nature of the entity to which they were to assign their rights and how they would divide the profits. In November 2010, T&M alleges Sunoptics paid T&M approximately $20, 000 on over $200, 000 worth of sales of the invention claimed in the ‘176 Application.

         On February 23, 2011, Sunoptics was acquired by Acuity. Acuity also acquired Jerry Blomberg’s rights to the ‘176 Application. After a series of failed attempts to negotiate a royalty on future sales with Acuity, T&M chose to seek independent patent protection of Pendley’s and McLain’s contributions to the invention claimed in the ‘176 Application. T&M filed applications that would issue as U.S. Patent Nos. 8, 438, 798, 8, 438, 799, 8, 438, 801, and 8, 763, 324 (the T&M Patents). Acuity likewise filed an application that would become the ‘944 Patent, in which Jerry Blomberg and Scott Weaver were named as co-inventors.

         T&M asserts its patents interfere with the ‘944 Patent and that Pendley and McLain are the sole inventors of the subject matter claimed in the patents at issue. T&M further contends that because Pendley and McLain conceived the invention before Blomberg and Weaver, T&M has priority over Blomberg and Weaver. Accordingly, T&M seeks judgment declaring that the T&M Patents and ‘944 Patent are interfering patents and that the ‘944 Patent is invalid.


         “[T]he first step in any interference proceeding under § 291 is the evaluation of whether an interference-in-fact exists under the two-way test.” Medichem, S.A. v. Rolabo, S.L., 353 F.3d 928, 934 (Fed. Cir. 2003). The “two-way test” has been described as follows: “for two claims to interfere, each claim must anticipate or render obvious the other; failure of either claim to anticipate or render obvious the other defeats the test for interfering patents.” Genetics Institute, LLC v. Novartis Vaccines and Diagnostics, Inc., 655 F.3d 1291, 1302 (Fed. Cir. 2011).

         When patents interfere, the “presumption of validity” does not apply and the plaintiff’s burden to prove invalidity is by a preponderance of the evidence. Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1169 (Fed. Cir. 2006). A patent is invalid if the named inventor did not invent the subject matter claimed in the patent but instead “derived” the invention from another. 35 U.S.C. § 102(f); Creative Compounds, LLC v. Starmark Laboratories, 651 F.3d 1303, 1313 (Fed. Cir. 2011). Establishing derivation requires proving “prior conception of the invention by another and communication of that conception to the patentee.” Creative Compounds, 651 F.3d at 1313 (quoting Eaton Corp. v. Rockwell Int’l Corp., 323 F.3d 1332, 1334 (Fed. Cir. 2003)).

         A patent is also invalid if another establishes “priority of invention” over the named inventor. 35 U.S.C. § 102(g). “Priority goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive the invention and that it exercised reasonable diligence in later reducing that invention to practice.” Price v. Symsek, 988 F.2d 1187, 1190 (Fed. Cir. 1993). If parties simultaneously reduce an invention to practice, priority goes to the party who was the first to conceive. McParland v. Beall, 45 App. D.C. 162, 165 (D.C. Ct. App. 1916).


         At trial, Acuity did not contest T&M’s contention that the T&M’s Patents interfered with the claims of the ‘944 Patent. Indeed, it is clear that the patents at issue claim the same invention. Specifically, I find Claim 1 of T&M’s ‘798 Patent interferes with Claims 1-9 of the ‘944 Patent; Claim 1 of T&M’s ‘799 Patent interferes with Claims 1-9 of the ‘944 Patent; and Claim 1 of the ‘324 Patent interferes with Claims 1, 2, 3, 5, and 9 of the ‘944 Patent. Am. Compl. ¶ 46, ECF No. 6; Pl.’s Exs. ...

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