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Pet Product Innovations, LLC, et al v. the Paw Wash

September 25, 2012

PET PRODUCT INNOVATIONS, LLC, ET AL., PLAINTIFFS,
v.
THE PAW WASH, L.L.C., DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Pet Product Innovations brings the present Motion to Alter or Amend Judgment pursuant to Federal Rule of Civil Procedure 59(e), asking this Court to vacate in full its summary judgment Order of June 5, 2012. See Pet Product Innovations, LLC v. Paw Wash, LLC, No. 11 C 7182, 2012 WL 2022038 (N.D. Ill. June 5, 2012). Pet Product Innovations argues that this Court's Order of June 5, 2012 was defective for a number of reasons and thus requires that the Court vacate it in its entirety. In its Order of June 5, 2012, this Court granted Paw Wash's motion for summary judgment and held that the doctrine of res judicata barred Pet Product Innovations from maintaining its claims of non-infringement and invalidity against Paw Wash in this Court because the issues of infringement and invalidity of the '391 Patent, the patent-in-suit, raised in this case were already adjudicated by a court of competent jurisdiction and reduced to final judgment. See Pet Product Innovations, 2012 WL 20222038 at *7.The Court also held that the injunction previously issued by the District Court for the Western District of Missouri enjoining Paw Plunger, LLC, Pet Product Innovations' privy, from manufacturing or selling its Paw Plunger product applied to Pet Product Innovations as well and therefore that Pet Product Innovations was likewise enjoined from manufacturing and selling the Paw Plunger device. See Pet Product Innovations, 2012 WL 20222038 at *2, *7 (citing The Paw Wash, LLC v. Paw Plunger, LLC, No. 08-0113-CV-W-GAF (W.D. Mo. Feb. 15, 2008)).

Pet Product Innovations attacks this Court's prior Order on numerous grounds. First, Pet Product Innovations contends that the dismissal of its claims that were not the subject of Paw Wash's summary judgment motion was an error of law. Second, it argues that failing to decide a pending motion to file a supplemental amended complaint before deciding Paw Wash's motion for summary judgment was also an error of law. Third, Pet Product Innovations contends that a substantial and controlling intervening change in the governing law alters the outcome of Paw Wash's summary judgment motion with respect to the issue of res judicata. Fourth, Pet Product Innovations argues that this Court neglected to follow controlling Federal Circuit precedent in ruling on its declaratory judgment claims of invalidity and non-infringement of the '391 Patent with respect to the issue of res judicata.

Fifth, Pet Product Innovations argues that the Court committed legal error by failing to follow controlling Federal Circuit precedent by enjoining it, consistent with the injunction issues by the District Court in Missouri against Pet Product Innovations' privy, from manufacturing and selling the Paw Plunger device. For the following reasons, Pet Product Innovations' Motion to Alter or Amend Judgment is granted in part and denied in part. The dismissal of Pet Product Innovations' claims that were not the subject of Paw Wash's summary judgment motion was a clerical error, and therefore the Court grants Pet Product Innovations' Motion with respect to that claim, and the case will be reinstated on Pet Product Innovations' third, fourth, and fifth claims for relief. All other claims advanced by Pet Product Innovations to Alter or Amend Judgment are denied.

I. The Legal Standard

Pet Product Innovations brings its Motion to Alter or Amend Judgment under Rule 59(e) of the Federal Rules of Civil Procedure. A Rule 59(e) motion must be brought no later than 28 days after the entry of judgment in a civil matter. See Fed. R. Civ. P. Rule 59(e). The Court entered judgment in this case on June 5, 2012, and the Plaintiff brought its Motion to Alter or Amend Judgment on July 3, 2012, exactly 28 days after the entry of judgment and in time for the Court to construe the instant Motion as arising under Rule 59(e).

Under Federal Rule of Civil Procedure 59(e) a district court may entertain "[a] motion to alter or amend a judgment." Fed. R. Civ. P. 59(e). Motions to alter or amend a judgment under Rule 59(e) are routinely referred to as motions for reconsideration. Motions to reconsider should be granted only in rare circumstances. See Bank of Waunakee v. Rochseter Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (quoting Above the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)) (". . .the motion to reconsider should be equally rare."). A party moving for reconsideration bears a heavy burden. See Caisse Nationale de Credit Agricole v. CBI Industries, Inc., 90 F.3d 1264, 1270 (7th Cir. 1996). A motion for reconsideration is not an appropriate vehicle for relitigating arguments that the court previously rejected or for arguing issues that could have been raised during the consideration of the motion presently under reconsideration. See Id. Motions for reconsideration are utilized for a very limited purpose: to correct manifest errors of law or fact, to present newly discovered evidence, or where there has been an intervening and substantial change in the controlling law since the submission of the issues to the court. See Cosgrove v. Bartolotta, 150 F.3d 729, 732 (7th Cir. 1998); Publishers Resource, Inc. v. Walker-Davis Publications, Inc., 762 F.2d 557, 561 (7th Cir. 1985) (quoting Keene Corp. v. International Fidelity Ins. Co., 561 F. Supp. 656, 665-666 (N.D. Ill. 1982), aff'd and adopted in relevant part, 736 F.2d 388, 393 (7th Cir. 1984)).

A district court reviews its prior judgment under Rule 59(e) to determine whether "there exists a manifest error of law or fact so as to enable the court to correct its own errors and thus avoid unnecessary appellate procedures." Divane v. Krull Elec. Co., Inc., 194 F.3d 845, 847 (7th Cir. 1999) (citing Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir.1996)); see also Obriecht v. Raemisch, 517 F.3d 489, 494 (7th Cir. 2008). It is well-settled that a motion to reconsider is not a proper vehicle to advance arguments or legal theories that could and should have been made before the district court entered judgment or to present evidence that was available earlier. See Sigsworth v. City of Aurora, 487 F.3d 506, 512 (7th Cir. 2007) (citing LB Credit Corp. v. Resolution Trust Corp., 49 F.3d 1263, 1267 (7th Cir. 1995)); Anderson v. Flexel, Inc., 47 F.3d 243, 247-248 (7th Cir. 1995); King v. Cooke, 26 F.3d 720, 726 (7th Cir. 1994). Instead, a Rule 59(e) motion must establish either a clear manifest error of law or fact, present newly discovered evidence, or present a significant change in the controlling law since the issues in the case were presented to the court for consideration and judgment. See LB Credit Corp., 49 F.3d at 1267 (quoting FDIC v. Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986)). A manifest error of law is the "disregard, misapplication, or failure to recognize controlling precedent." Oto v. Metropolitan Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F. Supp. 1063, 1069 (N.D. Ill. 1997)). The decision to grant a Rule 59(e) motion lies in the sound discretion of this Court, and its ruling is reviewed deferentially and will only be disturbed upon a showing that the Court abused that discretion. See Matter of Prince, 85 F.3d 314, 324 (7th Cir. 1996); Billups v. Methodist Hosp., 922 F.2d 1300, 1305 (7th Cir. 1991).

II. Discussion

A. Issues Outside the Scope of Paw Wash's Summary Judgment Motion

On June 5, 2012, this Court granted Paw Wash's motion for summary judgment and terminated the case. Paw Wash had only moved for summary judgment on Pet Product Innovations' claims of patent invalidity and non-infringement. It was the intention of this Court to only grant summary judgment in favor of Paw Wash as to those counts on which it moved for judgment as a matter of law.*fn1 The Court did not intend to grant summary judgment in favor of Paw Wash on Pet Product Innovations' third, fourth, and fifth counts for relief alleging claims of false advertising, as Paw Wash did not move for summary judgment on those claims. This Court's Order did not address those claims, and the Court did not state that it was entering summary judgment in favor of Paw Wash on those claims, nor dismissing them. It was a clerical error that the case was terminated after the Order granting summary judgment in favor of Paw Wash on the issues of non-infringement and invalidity was issued. Therefore, the case is reinstated and Pet Product Innovations may proceed on its false advertising claims against Paw Wash. Thus, Pet Product Innovations' Motion to Alter or Amend Judgment is granted on this single issue; the Court should not have accidentally terminated its false advertising claims and should have only granted summary judgment in Paw Wash's favor on those counts for which it moved for judgment as a matter of law-which was the intention of this Court as is clearly demonstrated and evidenced by its Order of July 5, 2012. See Pet Product Innovations, 2012 WL 20222038 at *7.

Pet Products Innovations also argues that it was legal error for the Court to grant summary judgment in favor of Paw Wash while there was a motion to file a supplemental amended complaint pending before the Court. The motion to file a supplemental amended complaint was filed after Paw Wash moved for summary judgment against Pet Product Innovations on non-infringement and invalidity with respect to the Paw Plunger device. (Doc. 41). In the motion to file an amended complaint, Pet Product Innovations requested leave to add a single count for a declaration of non-infringement of the patent-in-suit based on Plaintiff Zeus's recent offers for sale of another canine footbath product. Pet Product Innovations cites no legal authority for the proposition that it is inappropriate for a court to decide a motion for summary judgment while a later-filed motion to file a supplemental complaint is pending. In any event, there is no need in the present case for Pet Product Innovations to amend its Complaint to include another product, "the Paw Clean," in this litigation. Paw Wash provided Pet Product Innovations with a covenant-not-to-sue, thus divesting this Court of jurisdiction over any such claim. See Dow Jones & Co., Inc. v. Ablaise Ltd., 606 F.3d 1338, 1345-1348 ("a covenant not to sue for patent infringement. . .eliminates any case or controversy between the parties"). Because the issues on summary judgment were the invalidity and non-infringement of the '391 Patent covering the Paw Plunger, it was not an error to decide the motion for summary judgment without first deciding the later-filed motion to file a supplemental amended complaint for a declaration of non-infringement of an entirely different product. Because of the covenant-not-to-sue that Paw Wash has provided to Pet Product Innovations, the motion to file a supplemental amended complaint is moot because the claim that Pet Product Innovations sought leave to add was for non-infringement only and therefore the covenant divested the Court of jurisdiction over the claim for lack of an existing case or controversy.*fn2

B. Intervening Change in the Law

Pet Product Innovations contends that the Federal Circuit's recent decision in Aspex Eyewear v. Marchon Eyewear, Inc., 672 F.3d 1335 (Fed. Cir. 2012), which was issued after the parties' period for briefing the motion for summary judgment in this case had passed, represents a significant and controlling change in the law with respect to res judicata as to patent claims and therefore requires the Court to vacate its prior res judicata holding. Pet Product Innovations argues that Aspex holds that res judicata cannot be applied in a second patent infringement suit where the products at issue in the second suit were made and sold only after initiation of the first suit. In Aspex the Federal Circuit did hold that res judicata does not bar an action with respect to accused products that were made or sold after the patentee's earlier actions against the same competitors alleging infringement of the same patent. See Id. at 1342 (citing Young Eng'rs, Inc. v. U.S. Int'l Trade Comm'n, 721 F.2d 1305, 1316 (Fed. Cir. 1983) ("With respect to patent litigation, we are unpersuaded that an 'infringement claim,' for purposes of claim preclusion, embraces more than the specific devices before the court in the first suit."); Cordis Corp. v. Boston Scientific Corp., 635 F. Supp. 2d 361, 369-370 (D. Del. 2009) (claim preclusion will not bar a second suit for damages for conduct occurring after the first judgment); Williams v. Gillette Co., 887 F. Supp. 181, 183-185 (N.D. Ill. 1995) (because second lawsuit seeks damages only for infringement after the dismissal of the first, it is not barred by res judicata); MGA, Inc. v. Centri--Spray Corp., 699 F. Supp. 610, 614 (E.D. Mich. 1987) ("if the plaintiff claimed that different products infringed the patent in suit, the prior adjudication would not act as a bar to the subsequent claim")). The court held that "in order for a particular claim to be barred, it is necessary that the clam either was asserted, or could have been asserted, in the prior action. If the claim did not exist at the time of the earlier action, it could not have been asserted in that action and is not barred by res judicata." See Aspex, 672 F.3d at 1342. The court held that infringement suits against products that were made and sold after an earlier action was brought are not barred by res judicata in subsequently filed suits even where the design of the products are essentially the same as the design of the products that were the subject of prior actions. See Id. Thus Aspex stands for the rather unremarkable proposition that res judicata does not bar a patentee from instituting a second infringement action against an adjudged infringer where that party develops and sells a new infringing product after resolution of an earlier lawsuit. Indeed, Aspex rested its analysis on what it described as "well-settled principles" of law. See Id. at 1342-1343 (citing Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322 (1955) (a prior judgment "cannot be given the effect of extinguishing claims which did not even then exist and which could not possibly ...


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