The opinion of the court was delivered by: Ronald A. Guzman, District Judge
MEMORANDUM OPINION AND ORDER
Defendant, Natural Sciences Industries, Ltd., ("NSI"), has filed
written objections to Magistrate Judge Levin's Report and Recommendation
("R & R") entered on June 12, 2002. In his R & R Magistrate Judge
Levin considered a motion for preliminary injunction filed by the
Plaintiff, For Your Ease Only, Inc., ("FYEO"), against Natural Science
Industries, Inc., ("NSI") seeking equitable relief from an alleged
infringement of its `211 patent. He recommended that this Court grant the
injunction. For the reasons set forth below, this Court declines to adopt
the R & R.
This matter arises out of NSI's alleged infringement of FYEO's U.S.
Patent No. 6,325,211. The `211 patent covers a series of products in
FYEO's Fill-A-Bowl® line. The Fill-A-Bowl® is a transparent
decorative bowl consisting of a smaller inner bowl within a larger outer
bowl with a hollow perimeter region between the two bowls. The hollow
perimeter is divided into sections by a series of dividers. Because the
bottom of the bowl is easily removable, the hollow region can be filled
with decorative items (even perishable items, such as candy, dried
freeze-dried vegetables, etc.), allowing the user to change the
appearance of the bowl for different occasions.
Lori Greiner, President of FYEO, began selling her decorative bowls in
early 2000 and applied for a patent on June 2, 2000. As a result, Ms.
Greiner was issued a patent that is currently being re-examined and is
not at issue in this case, U.S. Patent No. 6,253,918. The first patent
did, however, allow Ms. Greiner to file a continuation application on
January, 9, 2001, which resulted in the issuance of the `211 patent
before this Court. Ms. Greiner later assigned the `211 patent to FYEO.
The Fill-A-Bowl® has enjoyed great success on QVC, reaching "key
item" status and over 300,000 sales. In addition, Ms. Greiner has sold
her line of products in retail stores, A.C. Moore & Crafts, in
particular. Although the Fill-A-Bowl tested well at A.C. Moore, FYEO lost
the contract to NSI and its less expensive BeautiFills Product line in
April 2002. The BeautiFills line is very similar to the Fill-A-Bowl®
NSI argues that it has raised a substantial question that the `211
patent is invalid because Ms. Greiner intentionally misled the Patent
Office while prosecuting the patent. Specifically, NSI claims that Ms.
Greiner withheld information regarding the prior art. It charges that
Greiner did not properly disclose the Joly Marion bowl to the Patent
Office. NSI further alleges that Greiner amended her patent claims in
response to the patent Examiner's concerns, but the amended claims, while
distinguishing the claimed Fill-A-Bowl structure from the prior art in
the possession of the Examiner, did not in any way distinguish the
Fill-A-Bowl from the Joly Marion bowl which Greiner had not fully
disclosed. Thus, NSI reasons that because Ms. Greiner had the Joly Marion
bowl in her possession while she was amending her patent claims to
differentiate her invention from the prior art in the Examiner's
possession but not differentiating it from the Joly Marion bowl, her
failure to disclose the bowl must have been intentional. Mem. Opp. to
Pl.'s Mot. Prelim. Inj. At 4-5.
When a motion for preliminary injunction is the subject of an R &
R, the district court is required to conduct a de novo review of those
portions of the magistrate judge's R & R to which specific written
objections have been filed. See 28 U.S.C. § 636 (b)(1)(B);
Fed.R.Civ.P. 72(b). Nevertheless, de novo review does not require a de
novo hearing; the district court is not required to conduct another
hearing to review the magistrate judge's findings and credibility
determinations. See United States v. Raddatz, 447 U.S. 667, 675 (1980);
Goffman v. Gross, 59 F.3d 668, 671 (7th Cir. 1995); United States v.
Severson, 49 F.3d 268, 273 (7th Cir. 1995). Rather, the district court
has discretion to "accept, reject, modify, in whole or in part, the
findings or recommendations made by the magistrate judge."
28 U.S.C. § 636 (b)(1)(C)(2002). If the district court is satisfied
with the magistrate judge's findings and recommendations, it may in its
discretion treat those findings and recommendations as its own. Raddatz,
447 U.S. at 675.
Standard for Preliminary Injunction
The law of the Federal Circuit Court of Appeals governs the issuance of
preliminary injunctions for patent infringement under 35 U.S.C. § 283.
See Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1451 n. 12
(Fed. Cir. 1986). Under the law of the Federal Circuit, the decision to
grant a preliminary injunction is within the
sound discretion of the
district court. See Amazon.com, Inc., v. Barnesandnoble.com, Inc.,
239 F.3d 1343, 1350 (Fed. Cir. 2001). The moving party has the burden of
showing four factors: "(1) a reasonable likelihood of success on the
merits, (2) irreparable harm if an injunction is not granted, (3) a
balance of hardships tipping in its favor, and (4) the injunction's
favorable impact on the public interest." Id. No single factor is a
sufficient condition for an injunction, but the first two factors
— a reasonable likelihood of success and irreparable harm —
are necessary conditions. See id. FYEO's Likelihood of Success on the
Of the four preliminary injunction factors, NSI objects only to the
magistrate judge's finding that FYEO has a reasonable likelihood of
success on the merits. (See Def.'s Objections at 1.) In order to succeed
on the merits at trial, FYEO will have to prove that NSI infringed upon
the `211 patent, and the patent must withstand NSI's challenges to its
validity. See Amazon.com, Inc., 239 F.3d at 1350. Therefore, for the
purposes of this motion, if NSI raises a substantial question regarding
infringement or validity of the `211 patent — that is, if it raises
a defense that FYEO cannot prove "lacks substantial merit" — then
the preliminary injunction should not issue. Amazon. com, Inc., 239 F.3d
at 1350-51 (quoting Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361,
1364 (Fed. Cir. 1997)).
NSI does not object to the magistrate judge's finding that its
BeautifFills line likely infringes upon the `211 patent. (See Def.'s
Objections at 1.) Rather, NSI objects to the finding that its invalidity
defense lacks substantial merit. NSI raises two main invalidity
challenges: the first alleges that the `211 patent is obvious, the second