Webastro Thermo & Comfort N. Am., Inc. v. Bestop, Inc.

323 F. Supp. 3d 935
CourtDistrict Court, E.D. Michigan
DecidedAugust 9, 2018
DocketNo.16-13456
StatusPublished
Cited by6 cases

This text of 323 F. Supp. 3d 935 (Webastro Thermo & Comfort N. Am., Inc. v. Bestop, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webastro Thermo & Comfort N. Am., Inc. v. Bestop, Inc., 323 F. Supp. 3d 935 (E.D. Mich. 2018).

Opinion

R. STEVEN WHALEN, UNITED STATES MAGISTRATE JUDGE

Before the Court is Plaintiffs' Motion for an Order Sanctioning Defendant for Making Material Misrepresentations of Fact to the Court [Doc. # 37], which has been referred for hearing and determination under 28 U.S.C. § 636(b)(1)(A). I held a status conference regarding this motion of December 5, 2017, and conducted an evidentiary hearing on January 23, 2017, following which the parties filed supplemental briefs. For the reasons and under the terms set forth below, the Plaintiffs' motion will be GRANTED.

I. FACTS

This is a patent case. Plaintiffs allege that Defendant Bestop, Inc. ("Bestop") infringed its U.S. Patent No. 9,346,342 (the "342 patent") by presenting a device it called the "Sunrider for Hardtop." Bestop filed a motion to dismiss [Doc. # 11] alleging that the 342 patent was invalid because the device at issue was prior art, due to its public disclosure during Bestop's presentation to Fiat Chrysler Automotive Group ("FCA") prior to the Plaintiffs' patent application. Appended to Bestop's motion as Exhibit C was the Declaration of David A. Smith, Bestop's Director of Engineering. Mr. Smith stated that after producing and designing prototypes of the device, he prepared a Power Point presentation for FCA and presented it, along with a prototype, at the FCA facility on February 5, 2015. Specifically, Mr. Smith stated in his declaration that on that date he gave a printed copy of the presentation to Tony Carvello at FCA. Smith Declaration , ¶ 7. Attached to Mr. Smith's Declaration in support of the motion to dismiss as Exhibit 1was a copy of the Power Point presentation. Id. , Doc. # 11, Pg. ID 105-110. That document did not contain a footer stating that "[d]isclosure or duplication without consent is prohibited" or any other notation indicating that the presentation was to be treated as confidential, not public.

Appended to Plaintiffs' motion for sanctions is the declaration of Eric P. Carnevale, and attorney for Webasto. Mr. Carnevale states that in response to a document subpoena, FCA produced copies of the Power Point presentation that it had received from Bestop. Carnevale Declaration , Doc. # 37, Pg. ID 596-597. The Power Point presentation that FCA produced is appended as Exhibit A to the Carnevale Declaration, and filed under seal [Doc. # 40]. Every page of that Power Point presentation, with the exception of the cover page, has a footer stating, "Disclosure or duplication without consent is prohibited," unlike the copy that Bestop submitted with its motion to dismiss, which did not contain the footer.1

*937Appended to Bestop's response to the motion for sanctions [Doc. # 43] is the declaration of Bestop's attorney, Jeffrey A. Sadowski. Mr. Sadowski stated in his Declaration that in the course of finalizing Mr. Smith's declaration for the motion to dismiss, he worked from a native (electronic) Power Point, and that to file it with the Court, he converted this native version to a .pdf version. Sadowski Declaration , Doc. # 43, Exhibit A, ¶¶ 2-5, Pg. ID 917. He stated that the conversion process caused the deletion of "some fine print at the bottom of some of the pages." Id. ¶ 6, Pg. ID 917-918. He expressed uncertainty as to how the deletion occurred, but that since that time, dozens of changes have been made to the software, and "[t]he error cannot be currently duplicated after the bug fixes and other changes that are now in place." Id. ¶ 7, Pg. ID 918. Mr. Sadowski stated that neither he nor Mr. Smith noticed the deletion, and that the deletion "was performed unintentionally during the processing of the documents for filing or submission by email." Id. ¶ 9, Pg. ID 918. Finally, Mr. Sadowski's Declaration states that the Smith Declaration that was submitted with Bestop's motion to dismiss "specifically declared that consent was given to FCA to use the PowerPoint disclosure, as well as the prototype of the product that was publically disclosed to FCA, in a further public showing at Moab, Utah on Jeep vehicles. The Smith Declaration indicates that FCA took the Powerpoint presentation and viewed the prototype publically without any confidentiality or nondisclosure agreement whatsoever." Id. ¶ 11, Pg. ID 918-919.2

On January 13, 2018, 10 days before the scheduled evidentiary hearing, Mr. Sadowski filed a second Declaration [Doc. # 58]. He states that after he received Webasto's Reply Brief [Doc. # 44], he undertook further investigation, and found that the Power Point presentation had been scanned to him, and that 47 minutes later, he transmitted the scanned document to Richard Hoffman (an attorney for Plaintiff). Second Sadowski Declaration , Doc. # 58, ¶¶ 3-4. He also states that someone handed him a hard copy of the Power Point presentation, and that this copy did not have the non-disclosure footer. Id. , ¶ 5. He states that when he filed Bestop's motion to dismiss, he was not aware that his office had more than one copy of the presentation. Id. , ¶ 6. Mr. Sadowski indicates that when he and Mr. Smith were working on Mr. Smith's declaration, they worked from the native version of the Power Point, and that they believed that was the version that was used as Exhibit 1 the Declaration, when in fact they used the version that had been emailed to Richard Hoffman (i.e., the scanned version). Id. , ¶¶ 8-9. He states that neither he nor Mr.

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Bluebook (online)
323 F. Supp. 3d 935, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webastro-thermo-comfort-n-am-inc-v-bestop-inc-mied-2018.