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Horizon Hobby, Inc. v. Ripmax Ltd.

October 15, 2009

HORIZON HOBBY, INC., PLAINTIFF (AT TRIAL),
v.
RIPMAX LTD., DEFENDANT (AT TRIAL).



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

This case is before the court for ruling on the Renewed Motion for Judgment as a Matter of Law (#181) filed by Ripmax Ltd. (Ripmax), and the Motion for Costs and Bill of Costs (#186) filed by Horizon Hobby, Inc. (Horizon Hobby). Following this court's careful and thorough review of all of the arguments and documents presented by the parties, Ripmax's Renewed Motion for Judgment as a Matter of Law (#181) is DENIED and Horizon Hobby's Motion for Costs and Bill of Costs (#186) is GRANTED in part and DENIED in part. Horizon Hobby is awarded costs in the total amount of $83,555.33.

BACKGROUND

A jury trial was held in this case on June 2, 2009, through June 5, 2009. During trial, Horizon Hobby presented evidence in support of its position that United States Patent No. 6,983,128 (the '128 patent) issued to Ripmax was invalid due to anticipation and due to obviousness. Ripmax presented evidence in support of its position that the '128 patent was valid. At the close of all the evidence, Ripmax filed a Motion for Judgment as a Matter of Law (#169) pursuant to Rule 50(a) of the Federal Rules of Civil Procedure. Horizon Hobby orally requested judgment as a matter of law under Rule 50(a). This court denied both motions, finding that the case should be allowed to proceed to the jury on the issues presented. This court noted that, in its 11 years as a federal judge, it had never seen a jury with seven bachelor's degrees, most of which were bachelor's plus. This court noted that the jury consisted of two jurors with a high school education, one with a two-year associate's degree and the remaining seven with bachelor's plus degrees. This court had earlier noted that there was a well-educated jury to decide the case and that the members of the jury were taking notes and listening.

On June 5, 2009, the jury returned a verdict (#177). The jury found that Horizon Hobby had proven by clear and convincing evidence that claims 1 and 15 of the '128 patent are invalid due to anticipation in view of a German patent, Brendel DE 19502839 (DE '839). The jury also found that Horizon Hobby had proven by clear and convincing evidence that Claims 1, 2, 3, 4, 5, 6, 7, 8, 12, 14, and 15 of the '128 patent would have been obvious to a person of ordinary skill in the art at the time the invention was made. The jury indicated that it considered six prior art references in its evaluation of obviousness. These references were: DE '839; Brendel DE 19705502 (DE '502); Rosenhagen U.S. Patent No. 4,334,221 (the '221 patent); Gaishin U.S. Patent No. 4,177,426 (the '426 patent); Song U.S. Patent No. 5,499,388 (the '388 patent); and Futaba Drivelink 2000 Radio Remote Control System Model VSD-2001 Manual.

This court stated that it was in agreement with the jury that Horizon Hobby had proved by clear and convincing evidence that Claims 1 and 15 of the '128 patent are invalid due to anticipation in view of DE '839. This court therefore entered judgment on the jury's verdict as to Claims 1 and 15. This court also stated that it agreed that there was clear and convincing evidence to support the jury's finding that Claims 1, 2, 3, 4, 5, 6, 7, 8, 12, 14, and 15 of the '128 patent would have been obvious to a person of ordinary skill in the art at the time the invention was made in light of all of the references listed on the jury verdict. This court therefore entered judgment on the jury's verdict as to these claims. Accordingly, this court found the '128 patent invalid. On June 8, 2009, a written Judgment (#178) was entered in favor of Horizon Hobby and against Ripmax.

ANALYSIS

I. RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW

On June 22, 2009, Ripmax filed a Renewed Motion for Judgment as a Matter of Law and Memorandum in Support (#181). Ripmax argued that it was entitled to judgment as a matter of law pursuant to Rule 50(a) because there was an insufficient evidentiary basis for a reasonable jury to find the claims of the '128 patent invalid on the grounds of anticipation or obviousness. Specifically, Ripmax argued that the evidence presented at trial made it clear that certain critical claim limitations of the '128 patent were not disclosed in DE '839. Ripmax also argued that there was an absence of clear and convincing evidence of a motivation to combine the prior art references which would support a conclusion of the obviousness of the claims of the '128 patent.

On July 9, 2009, Horizon Hobby filed a Memorandum in Opposition to Ripmax's Renewed Motion for Judgment as a Matter of Law (#188). Horizon Hobby argued that Ripmax's renewed motion failed to articulate any meaningful basis to discount the jury verdict in this case. Horizon Hobby argued that the verdict on anticipation was well supported by the evidence presented to the jury, including the testimony of the inventor of the '128 patent, Elliot Wright.*fn1 Horizon Hobby also argued that the jury verdict on obviousness rested on three potentially invalidating combinations of prior art, all of which were presented to the jury with clear evidence reflecting the motivation to combine. Horizon Hobby also argued that Ripmax did not come close to establishing a basis for disturbing the jury's verdict. Horizon Hobby noted that the jury was educated, attentive, knowledgeable and engaged and deliberated thoughtfully for eight hours before reaching its decision.

Rule 50(a)(1) provides that judgment as a matter of law should be entered only if "the court finds that a reasonably jury would not have a legally sufficient evidentiary basis to find for the party on that issue." In the Seventh Circuit, judgment as a matter of law under Rule 50(a) is appropriate if reasonable persons could not find that the evidence justifies a decision for a party on an essential element of its claim. Deimer v. Cincinnati Sub-Zero Prods, Inc., 58 F.3d 341, 343 (7th Cir. 1995). The evidentiary record as a whole should be examined to determine whether there was sufficient evidence from which a reasonable jury could have returned its verdict. Marshall v. Teske, 284 F.3d 765, 770 (7th Cir. 2002). In making this determination, the court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in its favor. See David v. Caterpillar, Inc., 324 F.3d 851, 858 (7th Cir. 2003).

This court was, of course, present during the jury trial in this case and has, in addition, reviewed the transcripts from the jury trial. Following this careful and thorough review, this court agrees with Horizon Hobby that the evidence presented at trial supports the jury's verdict. This court first notes, as it did at trial, that the jury in this case was well-educated, very attentive, and clearly capable of reaching a reasonable verdict. This court also notes that the testimony of Dr. Thomas Fuja, Horizon Hobby's expert witness, was clear, concise, and convincing and was made easier for the jury to comprehend by Horizon Hobby's use of diagrams and other explanatory graphics. Dr. Fuja provided a clear explanation of each patent discussed and which claims in the '128 patent were, in his opinion, included in the prior art and, therefore, anticipated or obvious. This court further notes that the testimony of Ripmax's expert, Dr. Kourosh Parsa, was not as clear or as well explained and was, at times, defensive and less forthcoming than the testimony of Dr. Fuja. As a consequence, Dr. Parsa came across as less knowledgeable regarding the patents he was testifying about at trial.*fn2 This court concludes that a reasonable jury could certainly accept the testimony presented by Horizon Hobby, including the testimony of Dr. Fuja, over the testimony presented by Ripmax and reach the conclusion that Horizon Hobby had proven, by clear and convincing evidence, that the '128 patent was anticipated by DE '839 and was obvious based upon the listed prior art references.*fn3 This court reached the same conclusion as well.

II. MOTION FOR COSTS

On July 8, 2009, Horizon Hobby filed a Motion for Costs and Bill of Costs (#186). Horizon Hobby also filed, under seal, the Declaration of Laura E. Krawczyk in Support of Horizon Hobby's Motion for Costs and Bill of Costs, with supporting exhibits (#187). Horizon Hobby sought costs in the total amount of $150,604.39.

On July 22, 2009, Ripmax filed, under seal, its Objection to Horizon Hobby's Motion for Costs and Bill of Costs (#189), with attached supporting exhibits. Ripmax does not dispute that Horizon Hobby is the prevailing party and has not argued that Horizon Hobby is not entitled to recover its costs in this case. Instead, Ripmax has argued that Horizon Hobby is entitled to no more than $55,585.89 in recoverable costs.

Rule 54(d)(1) provides that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs--other than attorney's fees--should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). The Seventh Circuit has stated that there is, therefore, a presumption that the prevailing party will recover costs. See Beamon v. Marshall & Ilsley Tr. Co., 411 F.3d 854, 864 (7th Cir. 2005). However, in taxing costs, this court must consider whether the costs requested are recoverable and whether the amount requested is reasonable. See Majeske v. City of Chicago, 218 F.3d 816, 824 (7th Cir. 2000). Allowable costs in most cases are limited to the categories listed in 28 U.S.C. § 1920. See Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987); Republic Tobacco Co. v. N. Atl. Trading Co., 481 F.3d 442, 447 (7th Cir. ...


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