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AERO PRODUCTS INTERNATIONAL, INC. v. INTEX RECREATION CORP.

May 11, 2005.

AERO PRODUCTS INTERNATIONAL, INC., a Florida corporation, and ROBERT B. CHAFFEE, an individual, Plaintiffs,
v.
INTEX RECREATION CORPORATION, a California corporation; QUALITY TRADING, INC., a California corporation; and WAL-MART STORES, INC., a Delaware corporation, Defendants.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

The Plaintiffs, Aero Products International, Inc. ("Aero") and Robert B. Chaffee, filed suit against the Defendants, Intex Recreation Corporation ("Intex"); Quality Trading, Inc.; and Wal-Mart Stores, Inc. A jury trial was held, and Defendants were found to have willfully infringed Plaintiffs' patent, United States Patent No. 5,367,726 ("the '726 patent"), for a valve used in an inflatable air mattress and for violating Plaintiffs' trademark. Thereafter, an injunction issued on September 15, 2004, preventing Intex from selling any products that: (1) violate the '726 patent and (2) contain certain product numbers.

This matter comes before the Court pursuant to Plaintiffs' Motion for Contempt against Intex, for violation of the September 15, 2004 injunction. In answer to Plaintiffs' motion, Intex admitted that it sold products with the numbers set out in the injunction. The Court, in a memorandum opinion and order dated December 15, 2004, ordered Intex to cease and desist selling products bearing those numbers and set the matter for a hearing on Plaintiffs' motion to hold Intex in contempt. Aero Prods. Int'l v. Intex Recreation Corp., No. 02 C 2590, 2004 WL 2958688 (N.D. Ill. Dec. 16, 2004). Specifically, Plaintiffs claim Intex is in contempt by violating the injunction by: (1) manufacturing a new mattress that incorporates a valve which infringes the '726 patent and (2) selling products bearing product numbers prohibited by the injunction. Plaintiffs seek a reasonable royalty on sales of the new mattress. Plaintiffs also seek treble damages and attorneys' fees in bringing this contempt motion for these violations; Plaintiffs have already been awarded double patent damages and attorneys' fees in bringing suit for Intex's violation of the '726 patent. Aero Prods. Int'l v. Intex Recreation Corp., No. 02 C 2590, 2004 WL 1696749 (N.D. Ill. July 15, 2004).

  BACKGROUND

  To properly consider Plaintiffs' first claim, a limited review of the '726 patent is necessary. Claim 9 of the '726 patent provides:
An inflatable support system, comprising:
an inflatable body having an interior, an exterior, and inflation input for transfer of air between the interior and the exterior; and
a one-way valve, disposed between the interior and the inflation input, for controlling the transfer of air, providing a substantially hermetic seal under low pressure conditions, such valve including:
a circular lip, disposed peripherally in the passageway and protruding radially inward, having a first surface generally facing the interior, defining a valve seat; a flexible circular diaphragm, having an interior surface generally facing the interior and an outer surface facing away from the interior mounted for axial movement in the passageway away from and against the valve seat in respectively open and closed positions of the valve, so that an outer annular region of the outer surface of the diaphragm engages against the valve seat in the closed position; and
a generally circular coupling defining the passageway, the coupling having an open end defining the inflation input and a flared end, contiguous therewith, providing the circular lip, so that the (i) coupling at the open end has a smaller internal diameter than at the flared end and (ii) the diaphragm can be pushed axially to open the valve by reaching into the open end of the coupling.
Claim 12 provides:
An inflatable body comprising:
an inflatable bladder having an interior and an inflation input;
a one-way valve disposed between the interior and the inflation input providing a substantially hermetic seal under low pressure conditions, such valve including:
a passageway having a generally circular cross section and a first end in communication with the interior and a second end in communication with the inflation input;
a circular lip, disposed peripherally in the passageway and protruding radially inward, having a first surface generally facing the interior, defining a valve seat;
a flexible circular diaphragm, having an inner surface generally facing the interior and an outer surface facing away from the interior, mounted for axial movement in the passageway away from and against the valve seat in the respectively open and closed positions of the valve, so that (i) the act of inflation of the bladder under low pressure is sufficient to cause axial motion of the valve into the open position to permit the large influx of air and (ii) following inflation of the bladder, air pressure created in the interior the bladder by inflation thereof causes an outer annular region of the outer surface of the diaphragm to be urged into engagement against the valve seat to provide a complete hermetic seal when the valve is in the closed position; and
  stiffening means for reducing flexing of the diaphragm except in its outer annular region. The Court, before the jury trial, construed the disputed terms of the '726 patent as follows: (1) "the open end" is the end where air used to inflate the air mattress enters the passageway; (2) "the inflation input" is where air enters the passageway; (3) "the generally circular coupling" is a coupling that is generally circular and is formed by an open end that is contiguous with the flared end; (4) "the passageway" is a way that allows passage of air to and from the interior of the bed; (5) "axial movement in the passageway" means that some axial movement of the diaphragm must be possible in the passageway, and the axial movement need not be contained entirely within the passageway; (6) "reaching into the open end of the coupling" means that the diaphragm is able to be pushed axially by reaching one's finger, or another element, into the open end of the coupling; (7) the "circular lip" is a lip that is circular that juts from the surrounding surface towards the interior of the passageway; (8) "protruding radially inward" means that the lip is positioned towards the center of the device in question and remains placed along the whole radius throughout the whole piece; (9) a "substantially hermetic seal" is a seal that is nearly or largely impervious to air; and (10) "complete hermetic seal" means a seal that does not require any additional parts to retain nearly or largely all of the air in the bed. Aero Prods. Int'l v. Intex Recreation Corp., No. 02 C 2590 (Markman Ruling), 2004 WL 407028 (N.D. Ill. Jan. 28, 2004).

  ANALYSIS

  Contempt Proceedings Regarding the "G1" Mattress

  Plaintiffs seek a finding of contempt holding Intex liable for infringing the '726 patent with a product designated as the "G1" mattress. This product, as so identified, was not the subject of the jury trial and verdict for Plaintiffs. According to Plaintiffs, Intex manufactured an air mattress that incorporates a valve that also infringes the '726 patent because the new valve is materially identical to the accused device at issue in this litigation.

  Intex contends Plaintiffs should have raised the issues concerning the G1 valve at trial. According to Intex, Plaintiffs learned of the existence of the new valve in July 2003 and were provided a sample of the G1 valve in the Fall of 2003. Plaintiffs were provided with a sample of an Intex air mattress that used the G1 valve on February 5, 2004. Discovery in this matter closed on September 26, 2003; and the trial began on February 18, 2004. Litigation of this product with the then-pending claims of infringement of the '726 patent would have required additional discovery, trial preparation and, therefore, an extension of the discovery closure date and rescheduling of the jury trial to a later date. This would have been contrary to the ends of justice and unfair to Plaintiffs, as the case had been filed almost twenty-two months earlier and the trial date had been set for fourteen months. Therefore, Plaintiffs are not barred from proceeding now against Intex on the G1 valve on this basis.

  To hold Intex in contempt, the patentee must prove, by clear and convincing evidence, that "the modified device falls within the admitted or adjudicated scope of the claim and is, therefore, an infringement." Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 1569 (Fed. Cir. 1995) (Arbek Mfg.) (citation omitted). This involves two issues. First, a contempt hearing must be "an appropriate forum in which to determine whether a redesigned device infringes, or whether the issue of infringement should be resolved in a separate infringement action." Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1349 (Fed. Cir. 1998) (Additive Controls) (citation omitted). This analysis compares the original infringing product and the redesigned device; if "substantial open issues of infringement" exist with the redesigned device, then contempt proceedings should not be used. Additive Controls, 154 F.3d at 1349 (citation omitted). Expert witness testimony may be considered in making this finding. See Additive Controls, 154 F.3d at 1349. Second, if contempt proceedings are appropriate, it must be determined whether the redesigned device infringes the patent. Additive Controls, 154 F.3d at 1349 (citation omitted).

  Intex argues that there are substantial open issues of infringement because the terms "interior" and "exterior," as used in claims 9 and 12 of the '726 patent, have not been construed. Intex also argues that other substantial open issues of infringement exist because (1) the placement of the pump in the G1 design is completely within the mattress, while the pump was not placed inside the mattress in the previous design; (2) the G1 design lacks the passageway structure of the infringing device; (3) the G1 design lacks the coupling structure of the infringing device; (4) the cam structure of the G1 design is completely changed from the design of the infringing mattress; and (5) the stiffener in the G1 valve actually contacts the valve seat to hold the flexible diaphragm in place, whereas, in the infringing valve, the flexible diaphragm held itself in place with no other assistance.

  Construing new terms at this stage does not preclude the use of contempt proceedings. "The presence of a new issue, however — even a new issue of claim construction — does not necessarily require that a separate infringement action be brought to determine whether the accused device infringes the patent in suit. Contempt proceedings are appropriate as long as the new issue does not raise a substantial question of infringement." Additive Controls, 154 F.3d at 1350 (emphasis added). Plaintiffs argue that the term interior is the region where air is retained when the mattress is inflated. Intex offers no alternative definition with respect to the '726 patent but, instead, offers that the only plausible definition of the term relates to placement of certain parts of the G1 design reside inside or outside of the inflatable body. This analysis, though, is pertinent to whether the G1 device actually infringes the '726 patent and not the construction of the term interior. As such, the ordinary and accustomed meaning of the term interior is best construed as the place where the pressure exists when the inflatable body is inflated. See K-2 Corp. v. Salomon S.A., 191 F.3d 1356, 1362 (Fed. Cir. 1999) (K-2). By extension, the ordinary and accustomed meaning of the term "exterior" is best construed as the place to which inflating air may be drawn or to which air may be released.

  The changes made by Intex are not essential to the device and do not involve the claims of the '726 patent. Additive Controls, 154 F.3d at 1350. The shape and location of the pump are irrelevant in determining whether the redesigned valve is substantially similar to the old valve, and nothing in the claims implicates the placement of the pump design. A comparison of the G1 valve and the infringing valve reveals they both have similar passageways and generally circular couplings. Furthermore, whether a cam mechanism holds the movable portion of the valve is not relevant; nothing in the claims requires a cam mechanism to be used in any regard with the valve. Finally, nothing in the claims discloses a seating function; moreover, the flexible diaphragm in the G1 valve is held in place against the valve seat to create a seal in the closed position, as is the infringing valve.

  Based on the above, Plaintiffs have demonstrated by clear and convincing evidence that no substantial open issues of infringement exist with the redesigned device; therefore, a contempt proceeding is an appropriate method to determine ...


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