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Fellowes, Inc v. Acco Brands Corp

November 10, 2011

FELLOWES, INC., PLAINTIFF,
v.
ACCO BRANDS CORP., DEFENDANT.
FELLOWES, INC., PLAINTIFF,
v.
ACCO BRANDS CORP., AND ROYAL APPLIANCE MFG. CO. D/B/A TTI FLOOR CARE NORTH AMERICA, AND TECHTRONIC INDUSTRIES CO. LTD., DEFENDANTS.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

At issue in this ruling are the fate of two patent infringement actions that this Court has previously found to be related. Plaintiff Fellowes, Inc. (hereinafter, "Fellowes") seeks to consolidate these cases. Defendants in the later-filed case, Techtronic Industries Co. Ltd. and Royal Appliance Manufacturing Co., doing business as TTI Floor Care North America, (hereinafter, collectively, "Royal") oppose consolidation and instead seek their dismissal from the case or to sever and transfer the action against them to the Northern District of Ohio. For the reasons stated herein, Royal's Motion to Dismiss, or in the Alternative, to Sever and Transfer the claims against it in Case No. 11 C 4229, is granted. The claims against Royal are transferred to the Northern District of Ohio. Fellowes' Motion to Consolidate Case No. 10 C 7587 with Case No. 11 C 4229 is granted in part, and all claims against remaining Defendant ACCO Brands Corp. (hereinafter, "ACCO") are consolidated.

I. BACKGROUND

This ruling involves a tangled thicket of four cases in two jurisdictions involving three manufacturers of paper shredders. First, in November 2010, Royal brought a declaratory judgment action against Fellowes in the Northern District of Ohio, Case No. 10 C 2604 (hereinafter referred to as "Royal 1"). In that case, Royal sought a declaratory judgment of invalidity and non-infringement of a Fellowes patent, the '822 patent, which relates to technology meant to prevent jams in paper shredders. Fellowes unsuccessfully sought a stay of that litigation pending reissue of its patent.

Subsequently, the U.S. Patent and Trademark Office issued the '468 patent, which is a continuation of the '822 patent with additional claims. Just after midnight on the day that patent issued, June 21, 2011, Royal filed a second declaratory judgment in the Northern District of Ohio, seeking a declaration of invalidity and non-infringement of that patent in Case No. 11 C 1276 (hereinafter, "Royal 2.") Royal acknowledges that it did so because it wanted the dispute over the anti-jam technology to remain in the Northern District of Ohio.

Later that same day, on June 21, 2011, Fellowes filed a Complaint in this Court against Royal and ACCO Brands Corp. That suit, Case No. 11 C 4229, which was initially assigned to Judge Gary Feinerman, accuses both companies of infringing the '468 patent (hereinafter, "Fellowes 2"). (Fellowes 1 is discussed below.) After Royal moved to sever or dismiss it from that case, Fellowes subsequently amended its Complaint to allege that ACCO also has infringed the '822 patent. (Fellowes and Royal dispute whether this amendment was timely, but that issue is ultimately immaterial to resolving the present dispute.)

Previously, Fellowes had filed suit against ACCO accusing it of infringing four other patents - the '823, the '954, the '009, and the '293. These patents relate to anti-jam technology, shredder bin level sensing, or shredder ergonomics. In that suit, Case No. 10 C 7587, which was assigned to this Court, only ACCO was named as a defendant (hereinafter, "Fellowes 1").

In August 2011, this Court entered a finding of relatedness between Fellowes 1 and 2, and Fellowes 2 was reassigned from Judge Feinerman's docket to that of this Court. Fellowes seeks to consolidate Fellowes 1 and 2. ACCO does not oppose this move, provided that the scheduling order is modified so that its disclosures do not have to proceed on a pace faster than that set out in the Local Patent Rules. Royal opposes consolidation and maintains that the claims against it should be heard by the federal court in Ohio. The Court must now determine whether the cases should be consolidated, and if so, whether Royal should remain in the case or if the claims against it should be severed and transferred to the Northern District of Ohio.

In the Ohio cases, Royal has moved to consolidate Royal 1 and Royal 2, while Fellowes has asked the court to consolidate those cases and transfer them to this Court. According to the parties, Judge Donald C. Nugent, presiding over the Ohio cases, has indicated a desire to wait and see how this Court rules on the pending motions.

After this motion was fully briefed, an additional wrinkle was added when Fellowes filed another suit against Royal in this Court, No. 11 C 6565 ("Fellowes 3"), which alleges that certain Royal products infringe its '796 patent, which is a patent concerning "anti-jitter technology" in paper thickness detectors. This case is pending before Judge Virginia M. Kendall. This Court requested and received supplemental briefing from the parties as to the impact of Fellowes 3 on the instant actions.

Royal's position is that Fellowes 3 should have no impact on the pending motion because there is relatively little efficiency to be gained by consolidating the claims against Royal and ACCO into a single, unwieldy proceeding. Royal intends to move to transfer Fellowes 3 to the Northern District of Ohio for the same reasons it has moved to transfer the present case.

Fellowes' position is that Fellowes 3 provides even more support for its position that the cases against ACCO and Royal should be heard as one consolidated action before this Court. The '796 patent in Fellowes 3, it contends, has the same inventor as the '468 patent, Tai Matlin ("Matlin"). Two of the same Royal shredder models that are accused of infringing the '468 patent in Fellowes 2 also are accused of infringing the '796 patent in Fellowes 3.

Ultimately, however, while these similarities might support consolidating Fellowes 3 with the pending actions against Royal, this Court is not being asked to decide that issue, and could not, as that case is pending before another judge. The real question before this Court is the efficiency that would be gained from hearing Fellowes' claims against ACCO and Royal in a single, consolidated proceeding.

For reasons the Court will explain subsequently, the Court agrees with Royal that the best resolution is for the dispute between Fellowes and Royal to proceed in the Northern District of Ohio while the dispute between Fellowes and ...


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