United States District Court, E.D. Wisconsin
METAL CRAFT OF MAYVILLE, Inc., d/b/a SCAG POWER EQUIPMENT, Inc., Plaintiff,
THE TORO COMPANY and EXMARK MANUFACTURING Co., Inc., Defendants.
DECISION AND ORDER
ADELMAN DISTRICT JUDGE
5, 2016, M craft of Mayville, Inc., d/b/a Scag Power
Equipment, filed this lawsuit and simultaneously moved for a
preliminary injunction precluding The Toro Company and Exmark
Manufacturing from making, using, selling, and offering to
sell lawnmowers with platform suspension systems that
infringe on Scag’s patent, U.S. Patent No. 8, 186, 475.
On August 1, Judge Pepper signed an order for Judge Randa
granting Scag’s motion on the condition that Scag post
adequate security. On August 3, this case was reassigned to
Magistrate Judge Duffin. On August 4, defendants appealed
Judge Randa’s order granting the motion for a
preliminary injunction. On August 8, this case was reassigned
to me due to non-consent.
motions are currently pending: (1) defendants’ motion
to dismiss for failure to state a claim, (2)
defendants’ expedited motion to stay the entry of the
preliminary injunction until defendants’ pending motion
to dismiss and appeal have been decided, (3)
plaintiff’s expedited motion to set bond and enter an
injunction order, (4) defendants’ motion for leave to
file a declaration, and (5) plaintiff’s motion for
leave to file a reply in support of its motion to set a bond
and for entry of a preliminary injunction. In the second
motion, defendants argue that I should stay entry of the
injunction until I decide their motion to dismiss. Defendants
are correct that if the amended complaint fails to state a
claim, then the injunction never should have been issued.
Judge Randa, however, obviously thought that the plaintiffs
do have a valid claim, otherwise he never would have granted
the motion for a preliminary injunction. To clear up any
lingering confusion, I will address the motion to dismiss
now, using Judge Randa’s reasoning as a backdrop.
Motion to dismiss.
considering a motion to dismiss in a patent case, district
courts apply the substantive law of the regional circuit.
McZeal v. Sprint Nextel Corp., 501 F.3d 1354,
1355-56 (Fed. Cir. 2006). To survive a Rule 12(b)(6) motion,
a complaint must include a “short and plain statement
of the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). This means that the
complaint must contain “sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged. Mann
v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013).
Well-pleaded facts are accepted as true, and all reasonable
inferences are drawn in favor of the non-moving party.
Randa found that plaintiff was likely to succeed in proving
infringement. In opposition, defendants emphasized the
limitation in claims 11, 14, and 21 that the operator
platform supports “an entire body of an operator”
during use. Defendants argued that the accused mowers do not
infringe because they have steering controls connected to the
chassis, not the suspended operator platform, which means
that the platform does not support the rider’s arms and
hands. Judge Randa disagreed, finding that “attaching
the steering controls to the suspended operator platform is
merely a preferred embodiment in the specification.”
Decision and Order, ECF No. 30, at 5. Moreover, since other
dependent claims have “express language
directed to the inclusion of steering controls connected to
the operator platform, ” the doctrine of claim
differentiation “‘gives rise to a presumption
that the limitation in question is not present in the
independent claim.’” Id. at 7 (quoting
Retractable Tech., Inc. v. Becton, Dickinson &
Co., 653 F.3d 1296, 1312 (Fed. Cir. 2011) (Rader, C.J.,
dissenting in part)). Accordingly, Judge Randa agreed with
plaintiff that “the fact that the defendants’
lawnmowers have steering controls attached to the chassis, as
opposed to the operator platform, is not a defense to
infringement. A person having ordinary skill in the art would
understand the ‘entire body’ limitation in
reference to how a person sits in an ordinary chair.”
pursued the same line of argument in their motion to dismiss.
Like Judge Randa, I am not persuaded. As to the remaining
arguments in their motion to dismiss, defendants attempted to
incorporate them by reference in their opposition to the
motion for a preliminary injunction. Def.’s Br. in
Opp., ECF No. 22, at 10 n.2. Judge Randa did not address
those arguments. I will do so now.
argue that their mowers do not infringe claims 11 and 14
because they do not have a “front linkage, ” let
alone a linkage connected between the chassis and the
“front portion” of the operator platform.
See Howe Dec., ECF No. 21, Ex. A, ‘475 Pat.,
col.12, 11.6-9 (claiming “a suspension system
connecting the operator platform to the chassis, the
suspension system including (i) a front linkage that extends
angularly between the chassis and a front portion of the
operator platform . . . .”); Id., col.12, 14.
30-31 (claiming “a linkage system connecting the front
portion of the operator platform to the front portion of the
chassis . . . .”). Defendants argue that the “front
portion” is meant to be a “foot support
tier.” This, again, is only a preferred embodiment from
the specification. Defendants also assert that the
“linkage” required by claims 11 and 14 cannot
include a spring or strut, as in the accused lawnmowers. Once
again, the linkage shown in the specification is a preferred
embodiment. Decision and Order, ECF No. 30, at 6
(“‘Even when the specification describes only a
single embodiment, the claims of the patent will not be read
restrictively unless the patentee has demonstrated a clear
intention to limit the claim scope using ‘words or
expressions of manifest exclusion or
restriction’”) (citing Liebel-Flarsheim Co.
v. Medrad, Inc., 358 F.3d 898, 906 (Fed. Cir. 2004)).
also brought claims for indirect/induced infringement and
willful infringement. Defendants argue that plaintiff failed
to plausibly allege knowledge. See Warsaw Orthopedic,
Inc. v. NuVasive, Inc., __ F.3d __, 2016 WL 3124704, at
*1 (Fed. Cir. June 3, 2016) (“proof of induced
infringement requires not ‘only knowledge of the
patent’ but also ‘proof the defendant knew the
[induced] acts were infringing’” (quoting
Commill USA, LLC v. Cisco Sys., Inc., __ U.S. __,
135 S.Ct. 1920, 1926, 1928 (2015))); K-Tec, Inc. v.
Vita-Mix Corp., 696 F.3d 1364, 1378 (Fed. Cir. 2012)
(elements for willful infringement). Plaintiff alleges that
defendants knew that their mowers infringed the ‘475
patent prior to the instant suit being filed. Am. Compl., ECF
No. 16, ¶¶ 78-79, 98-99. This is enough to state a
claim, especially combined with a plausible claim for direct
Motion to stay.
the motion to dismiss is now resolved, the only remaining
aspect of this motion is the defendants’ request to
stay the entry of the preliminary injunction pending appeal.
Federal Rule of Civil Procedure 62(c) provides that a
district court may grant a stay pending appeal following
entry of an order granting an injunction. “To determine
whether to grant a stay, [courts] consider the moving
party’s likelihood of success on the merits, the
irreparable harm that will result to each side if the stay is
either granted or denied in error, and whether the public
interest favors one side or the other.” In re
A&F Enters., Inc. II, 742 F.3d 763, 766 (7th Cir.
2014). If an appeal has no merit, the request for a stay
should be denied. Cavel Int’l, Inc. v.
Madigan, 500 F.3d 544, 547 (7th Cir. 2007). If, however,
the appellants have some chance of success on appeal, courts
apply a “sliding scale” approach, under which I
weigh the likelihood of success and extent of irreparable
harm to be suffered by appellants against the harm likely to
be suffered by appellees if a stay is entered. Id.
context, the likelihood of success relates to “those
matters that properly will be before the Federal Circuit on
appeal of the preliminary injunction order.” Abbott
Labs. v. Sandoz, Inc., 500 F.Supp.2d 846, 849 (N.D. Ill.
2007). Judge Randa held, as discussed above, that plaintiff
is likely to succeed on the merits of their infringement
claims because the defendants failed to raise a substantial
question on infringement. Judge Randa also rejected
defendants’ arguments that certain prior art, including
a heavy-duty truck with a driver’s compartment and the
combination of a truck with a motorcycle shock, were
anticipatory references. Decision and Order, ECF No. 30, at 8
(“Defendants offer no reason, and the Court cannot
imagine one, that a person of ordinary skill in this field
would combine a motorcycle shock with a suspended truck cab
and come up with a suspended operator platform.”). As
to the remaining factors for the issuance of injunctive
relief, Judge Randa found that (1) the harm suffered by
plaintiff is irreparable because of the loss of exclusivity
and brand-loyal customers in the market for lawnmowers with
suspended operator platforms; (2) plaintiff being forced to
compete against its own patented invention outweighs the harm
to defendants, primarily loss of sales; and (3) the public
interest favors the issuance of an injunction because it
promotes the market incentive of encouraging innovation
through the patent system. Id. at 9-12.
with Judge Randa’s reasoning. Assuming, without
deciding, that defendants have demonstrated some likelihood
of success on appeal, the sliding scale approach still
results in denial of the motion. Defendants complain, once
again, about lost sales and revenues, but this is not
irreparable harm. Moreover, as Judge Randa noted, “the
harms identified by the defendants are those associated with
losing a patent infringement lawsuit. At the preliminary
stage, Rule 65(c) is designed to provide adequate security in
the event that the defendants were wrongfully
enjoined.” Id. at 12. Issuance of the stay
would also substantially injure plaintiff for the reasons
identified in Judge Randa’s opinion. “It is
undisputed that prior to defendants’ entry into the
market, [plaintiff] owned about 100% of the market share for
lawnmowers with suspended operator platforms.
‘Exclusivity is closely related to the fundamental
nature of patents as property rights [and] is an intangible
asset that is part of a company’s reputation . . .
.’” Id. at 10 (internal citation
omitted). Finally, the public interest lies in enforcing
plaintiff’s right to capitalize on its patent, not
protecting and allowing continuing infringement by
defendants. “The public can continue obtaining the
patented suspension system from [plaintiff], or it can obtain
other non-infringing mowers from the defendants.”
Id. at 12.
Motion to set bond ...