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FOR YOUR EASE ONLY, INC. v. NATURAL SCIENCE INDUSTRIES

November 1, 2002

FOR YOUR EASE ONLY, INC., AN ILLINOIS CORPORATION, PLAINTIFF,
V.
NATURAL SCIENCE INDUSTRIES, LTD., A NEW YORK CORPORATION, DEFENDANT.



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.

I. BACKGROUND*fn1

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 flowers, 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® Product line.

Prosecution History

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.

DISCUSSION

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 Merits

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 alleges ...


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