Vanguard Products Group, Inc. v. DIAM USA, INC.

527 F. Supp. 2d 747, 2007 U.S. Dist. LEXIS 95710, 2007 WL 4556946
CourtDistrict Court, N.D. Illinois
DecidedMay 16, 2007
Docket05 C 1323
StatusPublished

This text of 527 F. Supp. 2d 747 (Vanguard Products Group, Inc. v. DIAM USA, INC.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vanguard Products Group, Inc. v. DIAM USA, INC., 527 F. Supp. 2d 747, 2007 U.S. Dist. LEXIS 95710, 2007 WL 4556946 (N.D. Ill. 2007).

Opinion

AMENDED MEMORANDUM OPINION AND ORDER

ELAINE E. BUCKLO, District Judge.

Plaintiffs Vanguard Products Group, Inc. and Telefonix, Inc. (collectively “plaintiffs”) claim defendants Diam USA, Inc. and Diam International Inc. (collectively “defendants” or “Diam”) infringe all claims of U.S. Patent No. 6,799,994 (“the '994 Patent”), by making, using, importing, offering to sell and/or selling within the United States cord reel management devices (“the accused device”). Defendants have filed motions for summary judgment for noninfringement and patent invalidity, and a motion to bar plaintiffs’ damages claim. 1 Plaintiffs have filed a motion for summary judgment for infringement. For the following reasons, plaintiffs’ motion for summary judgment for infringement is *750 granted, and defendants’ motions are denied.

I.

This is a patent dispute among competitors who sell theft-reduction systems for the retail display and sale of electronics. These theft-reduction systems permit retailers to display electrically powered hand-held devices, such as camcorders or digital cameras, while simultaneously reducing the risk of theft. As described in the '994 patent abstract, the patent is for

A cord management apparatus that provides for the convenient management of cords associated with the retail display of small electronic devices, such as video cameras. The apparatus comprises a multi-conductor cable, a mounting member for mounting the electronic device, an adapter for connecting the cable to the electronic device, and a base member for removably holding the mounting member. The base member is fastened to a display rack or counter. A plurality of adaptors are provided so that the apparatus may be used with a wide variety of devices that may have different connection requirements.

Specifically, the invention is comprised of (1) a power source, (2) alarm box, (3) cord reel, (4) first (retractable) cable assembly, (5) mounting member, and (6) a second (modular) cable assembly to secure the displayed electronic device. (-See PL Resp. to Def. Mot. at Exh. 4.) Power travels through the invention and into the displayed device in the same order in which the parts are identified.

This theft-reduction system works as a result of electronic signals. Power travels from the power source through the invention and into the displayed device, allowing customers to operate and evaluate the powered displayed device while extending it away from the display. Because there is an electronic signal from the alarm box to the displayed device, if a customer removes the device or cuts the retractable cable, an alarm sounds alerting store personnel. If a display is changed and a different device with different power requirements is placed in the display, the second cable assembly is replaced with a different cable assembly that has the appropriate power requirement for the newly displayed device. The remaining parts remain unchanged.

Plaintiffs consist of the technology company (Telefonix, Inc.) founded by Paul Burke, the inventor of patent '994, and the exclusive licensee of the patent with rights to sue for patent infringement (Vanguard Products Group, Inc.). Plaintiffs are in the business of selling their product to large retail stores such as Wal-Mart, Circuit City, Best Buy, and Sears. Defendants Diam, and their predecessors, were in the business of selling display furniture or fixtures with integrated security systems made by other companies, such as plaintiffs. Defendants claim that in 2002 they realized plaintiffs’ system was inadequate, as it is limited to providing three voltage levels, whereas the market began to demand dozens of voltages to power the growing number of hand-held electronic devices. As a result, defendants decided to develop and manufacture their own technology, which they introduced in November 2002. Plaintiffs filed the complaint in this action in March 2005.

II.

An infringement analysis involves two steps. J & M Corp. v. Harley-Davidson, Inc., 269 F.3d 1360, 1366 (Fed.Cir.2001). First, a court must determine as a matter of law the scope and meaning of the claims through claim construction. Id. Second, the construed claims must be compared to the allegedly-infringing device. Id. Summary judgment is appropriate where the record shows that there is no genuine is *751 sue of material fact and that the moving party is entitled to judgment as a matter of law. Lexington Ins. Co. v. Rugg & Knopp Inc., 165 F.3d 1087, 1090 (7th Cir. 1999); Fed.R.Civ.P. 56(c). I must construe all facts in the light most favorable to the non-moving party and draw all reasonable inferences in favor of that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

A. Claim Construction

In claim construction, the terms of the claim must be given the ordinary and customary meaning that the terms would have to a person of ordinary skill in the art at the time of the filing date of the patent application. Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed.Cir.2005). In construing claims, I must first examine the intrinsic evidence, i.e., “the patent itself, including the claims, the specification and, if in evidence, the prosecution history.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.Cir.1996). The specification of a claim provides the “primary basis” for construing disputed claim language, because it contains the inventor’s statutorily required “full” and “exact” description of the claimed invention. Phillips, 415 F.3d at 1315-16 (citations omitted) (specification “is the single best guide to the meaning of a disputed term”).

The patent’s prosecution history should also be considered, if in evidence. Id. at 1317. This generally consists of the complete record of the proceedings before the Patent and Trademark Office (“PTO”) and the prior art cited during the patent’s examination. Id. Like the specification, “the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention.” Id. However, the prosecution history is not conclusive; as it “represents an ongoing negotiation between the PTO and the applicant, rather than the final product of that negotiation, it often lacks the clarity of the specification and thus is less useful.” Id.

I may also consider extrinsic evidence during the claim construction process. Extrinsic evidence “consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.” Id. (quoting Markman v. Westview Instruments, Inc.,

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527 F. Supp. 2d 747, 2007 U.S. Dist. LEXIS 95710, 2007 WL 4556946, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vanguard-products-group-inc-v-diam-usa-inc-ilnd-2007.