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Kolcraft Enterprises, Inc. v. Chicco USA, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 6, 2019

CHICCO USA, INC. d/b/a ARTSANA USA INC., Defendant. Model Exh. Description Images



         Plaintiff Kolcraft Enterprises owns United States Patent No. 7, 376, 993 (the '993 Patent), which covers methods and apparatuses related to infant play gyms. Kolcraft accused Artsana USA, Inc. of infringing this patent with its own line of infant play gyms. After many years of litigation, including before the Patent & Trademark Office, the parties took the case to trial in August 2018. The jury returned a verdict in favor of Kolcraft on all claims and awarded $3, 245, 213.10 in damages. Artsana now moves for judgment as a matter of law, or, in the alternative, a new trial. For its part, Kolcraft moves for a permanent injunction, prejudgment interest, enhanced damages, attorneys' fees, and post-judgment interest. For the reasons explained below, Artsana is denied judgment as a matter of law. The Court also denies Artsana's motion for a new trial, but the motion does present a very close question on whether to remit the damages award. Ultimately, the Court concludes no. Kolcraft's motions for a permanent injunction, prejudgment interest, and post-judgment interest are all granted. But the Court denies Kolcraft's motions for enhanced damages and attorneys' fees.

         I. Background

         A. The '993 Patent

         Kolcraft, a manufacturer of baby products, began developing its Travelin' Tot play gym and play-yard product in October 2001. Trial Tr. at 150:21-151:3. To state the obvious (at least to parents), play gyms are arches from which toys dangle. R. 438.6, '993 Patent col. 1 ll. 53-62. Two Kolcraft employees-Pete Myers and Joe Sejnowski-were initially tasked with designing the product. Trial Tr. at 151:19-23. According to Kolcraft's President and CEO, Tom Koltun, Myers came up with the idea to give the play gym four legs that were all connected to a central hub, which allowed the user to fold the legs down and place the play gym into a carry bag for easy transportation. Id. at 153:6-16. The play gym could also be connected to a play yard, a play mat, or a bassinet, which was a unique combination of features in the market. Id. at 154:1-9. Kolcraft used a Chinese manufacturer, Lerado, to manufacture the product. Id. at 186:18-23. The Travelin' Tot launched in December 2002. Id. at 153:22-25.

         Later on, Kolcraft decided to pursue a patent for the Travelin' Tot product and filed an application in May 2003. Id. at 155:6-24, 156:9-11. The application listed both Myers and Sejnowski as inventors. Id. at 157:7-18. Kolcraft added the words “patent pending” to the product's packaging, id. at 158:14-18, although the '993 patent did not issue until May 2008, id. at 156:12-13. But by that point, Kolcraft had pulled the Travelin' Tot product from the market. Id. at 158:11-13.

         The '993 patent included 31 claims, although only Claims 28-31 and Claim 20 are at issue in this case. Claim 28 describes a method for using the play gym, specifically:

         A method comprising:

securing a play gym at least partially above at least one of a bassinet and a play yard;
removing the play gym from at least one of the bassinet and the play yard;
securing the play gym to a mat apart from the play gym and the bassinet;
removing the play gym from the mat; and
collapsing the play gym, wherein collapsing the play gym comprises:
pulling a leg of the play gym in a direction away from a hub; and
pivoting the leg into a stored position.

'993 Patent col. 10 ll. 6-18. Claims 29-31 depend on Claim 28, and describe specific methods of collapsing the play gym for storage. Id. col. 10 ll. 19-27.

         Claim 20, on the other hand, describes an apparatus (rather than a method), specifically:

an apparatus comprising
a floor mat;
a play gym to suspend an object above the floor mat;
at least one connector to couple the play gym to the floor mat; and
at least one fastener to couple the floor mat to at least one of a play yard and a bassinet,
wherein the at least one connector comprises a plurality of connectors, and the play gym comprises:
a hub; and
at least two legs, each of the legs having a first end coupled to the hub and a second end dimensioned to be removably coupled to a respective one of the connectors, wherein the at least two legs are pivotably coupled to the hub,
wherein the connectors are pivotably coupled to the mat.

R. 247, Def. Claim 20 Claim Const. Br. at 3.[1]

         B. Artsana's Original Lullaby Play Gym

         In 2003, a rival manufacturer of baby products, Artsana (doing business as Chicco at the time), decided to look into designing and producing its own play yard. Trial Tr. at 502:3-503:1. It reached out to Lerado for help because Mark Messner, the Vice President of Marketing and Product Development at Chicco, id. at 499:23-25, had previously worked with the company on various stroller designs for Chicco, id. at 504:7-10. Messner was aware that Lerado was designing products for other companies at the time. Id. at 505:4-14. After Messner reached out, Lerado employees showed him a design for a play yard that he believed to have been created by Lerado. Id. at 505:15-20. The Lerado employees referred to the design as an “open item, ” which, to Messner, meant any customer who wanted to use the design could purchase it. Id. at 505:15-20, 506:18-25. Artsana first started selling its play yard-the Lullaby-in 2005. Id. at 507:5-7.

         The parties dispute when Kolcraft first notified Artsana that it believed the Lullaby was infringing the '993 patent. Artsana asserts that it was first notified when Kolcraft served its Complaint in June 2009. Trial Tr. at 507:8-22. Kolcraft, on the other hand, put forth evidence that Kolcraft CEO Tom Koltun called Artsana's CEO, Greg Mansker, several months before the lawsuit was filed-in March or early April 2009-to give him a “heads up” that Kolcraft believed that the Lullaby was infringing the patent. Id. at 159:13-161:15. Koltun testified that he told Mansker he should look into licensing the product from Kolcraft. Id. at 169:1-10. According to Koltun, Mansker eventually called him back and told him Artsana's lawyers advised against licensing, but also that he wanted to avoid litigation. Id. at 168:2-169:10. Koltun testified that, after that conversation, he felt like he had no choice but to sue Artsana. Id. at 169:11-13.

         B. The 2009 Lawsuit and Fallout

         Kolcraft sued both Artsana and Graco (another manufacturer of baby products) for patent infringement in June 2009. R. 1, Compl. Koltun explained at trial that Kolcraft discovered Graco's infringing product, Baby Einstein, after it began investigating the market for similar products following his conversation with Koltun. Trial Tr. at 170:12-23. The Complaint initially accused Artsana of infringing claims 1-12 and 18-21, while it accused Graco of infringing claims 22 and 23. Compl. ¶¶ 8, 9. Shortly after the suit was filed, Kolcraft and Graco settled and negotiated a license for the '993 patent, which included a 5% royalty on the allegedly infringing Baby Einstein product. Trial Tr. at 171:8-18. Artsana, on the other hand, requested that the Patent & Trademark Office (PTO) reexamine the validity of Kolcraft's patent, which delayed the litigation between the parties. Id. at 177:19-23. The Court detailed the lengthy procedural history of the reexamination process in the first claim construction opinion. R. 216, 9/2/16 Claim Const. Order at 2-4. To summarize, the Patent Trial and Appeal Board eventually affirmed the patentability of Claims 28-31 and Kolcraft amended Claim 20 to be an independent claim. Id. In April 2012, Kolcraft issued its Initial Infringement Contentions in this case, alleging that in addition to the claims originally asserted in its Complaint, Artsana had also infringed Claims 28-31. Id. at 3.

         At the same time as the PTO was reexamining the '993 patent, Artsana made several changes to the “Original Design” of the Lullaby product, purportedly to avoid infringing the '993 patent. These changes are described and depicted below:


Original Design


PTX-7 includes a hub and four legs. The legs are coupled to the hub via a securing pin. The leg connects to the floor mat via the opposite end. The top side of the floor mat includes fabric pockets that each receive a separate leg. The leg is secured via a snap connection.

R. 301, Def.'s SOF ¶¶ 8-10

(Image Omitted)

First Redesign


DTX-296 includes a hub and four legs. It includes the same hub that was used in PTX-7, meaning the legs are coupled to the hub via a securing pin. This redesign replaced the snap connectors with hook and latch fasteners. It also replaced the fabric pockets with D-rings held within the folds of fabric straps. The legs connect to the mat by passing the hook and loop fastener on the end of the leg through the opening of the D-ring and folding the leg's fastener back upon itself.

Id. ¶¶ 15-17

(Image Omitted)

Second Redesign

PTX-8, PTX-9

PTX-8 and PTX-9 have a redesigned hub that eliminated the securing pin used in earlier designs. The legs can be removed from then locked position in the hub but remain attached through tethers between the sleeves encasing the legs and the bottom of the hub. It incorporated the same type of connection between the legs and the mat as DTX-296.

Id. ¶¶ 20-26

(Image Omitted)

         Despite these changes, Kolcraft proceeded with the litigation and the case eventually went to trial in the fall of 2018. Kolcraft argued at trial that the original Lullaby design, as well as all of the redesigns, infringed Claims 20 and 28-31 of the '993 patent. Trial Tr. at 108:22-109:4. Kolcraft also argued that Artsana induced its customers to infringe Claims 28-31, id. at 109:15-17; Artsana contributed to that infringement, id. at 110:1-3; and Artsana infringed the patent willfully, id. at 110:19-20. Both parties presented fact and expert witnesses at trial, including damages experts. Both of the damages experts opined on a hypothetical reasonable royalty rate to award Kolcraft if the jury found Artsana liable. Kolcraft's expert estimated a reasonable royalty rate of 5.8%. Id. at 578:21-24. Artsana's expert estimated a reasonable royalty rate of 2% at the very, very most. Id. at 870:17-20.

         At trial's end, the jury found for Kolcraft on all claims, concluding that all of the accused products infringed each asserted Claim of the '993 patent. R. 413, Verdict Form. Indeed, the jury found in favor of Kolcraft on all 55 special interrogatories. Id. It awarded Kolcraft $3, 245, 213.10, which equates to a 7% royalty rate on Artsana's sales of the Lullaby products. Verdict Form at 7. The parties now bring a series of post-trial motions. Artsana asks for judgment as a matter of law under Rule 50 on all of Kolcraft's claims. R. 398, Def.'s 50(a) JMOL; R. 407, Def.'s Renewed 50(a) JMOL; R. 432, Def.'s 50(b) JMOL. In the alternative, Artsana requests a new trial under Rule 59. R. 430, Def.'s Mot. New Trial. For its part, Kolcraft has filed motions for a permanent injunction, R. 438, Pl.'s PI Mot., enhanced damages and attorney's fees, R. 440, Pl.'s Mot. Enhanced Damages, and prejudgment interest, R. 423, Pl.'s Mot. Prejudgment Int.

         II. Legal Standards

         A. Rule 50

         Under Rule 50(a) of the Federal Rules of Civil Procedure, a district court may enter judgment against a party who has been fully heard on an issue during a jury trial if “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a). The Court “must construe the facts strictly in favor of the party that prevailed at trial.” Schandelmeier-Bartels v. Chi. Park Dist., 634 F.3d 372, 376 (7th Cir. 2011). “Although the court examines the evidence to determine whether the jury's verdict was based on that evidence, the court does not make credibility determinations or weigh the evidence.” Id. And the Court “can strike a piece of evidence from its weighing process only if reasonable persons could not believe it because it contradicts indisputable physical facts or laws.” Mejia v. Cook County, Ill., 650 F.3d 631, 633 (7th Cir. 2011) (cleaned up).[3] Put another way, “[d]iscrepancies arising from impeachment, inconsistent prior statements, or the existence of a motive” will not render testimony excludable. Whitehead v. Bond, 680 F.3d 919, 926 (7th Cir. 2012) (cleaned up).

         B. Rule 59

         A court may grant a motion for a new trial under Rule 59 if the verdict is against the clear weight of the evidence or the trial was unfair to the moving party. Clarett v. Roberts, 657 F.3d 664, 674 (7th Cir. 2011). “In passing on a motion for a new trial, the district court has the power to get a general sense of the weight of the evidence, assessing the credibility of the witnesses and the comparative strength of the facts put forth at trial.” Mejia, 650 F.3d at 633 (cleaned up). The district court, however, may not simply substitute its judgment for the jury's. “Since the credibility of witnesses is peculiarly for the jury, it is an invasion of the jury's province to grant a new trial merely because the evidence was sharply in conflict.” Whitehead, 680 F.3d at 928. The standard for granting a new trial is thus relatively high and a motion requesting as much will only be granted “when the record shows that the jury's verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks our conscience.” Id. at 927-28.

         C. Permanent Injunction

         “A plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 156-57 (2010) (cleaned up). These principles apply equally to disputes arising under the Patent Act. eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).

         D. Prejudgment Interest

         If a defendant is found liable for infringement, the Court will often award prejudgment interest, which is the rule, not the exception. Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 655-56 (1983). “An award of prejudgment interest serves to make the patentee whole because the patentee also lost the use of its money due to infringement.” Crystal Semiconductor Corp. v. TriTech Microelectronics Intern, Inc., 246 F.3d 1336, 1361 (Fed. Cir. 2001). Any justification for withholding the award must bear a relationship to the award of prejudgment interest itself. Gen. Motors, 461 U.S. at 655.

         E. Enhanced Damages, Fees, and Post-Judgment Interest

         Finally, § 284 of the Patent Act allows courts to “increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. District Courts, then, have discretion to decide whether to award enhanced damages and in what amount. Halo Elecs. v. Pulse Elecs., 136 S.Ct. 1923, 1931-32 (2016). The Supreme Court, though, has clarified that enhanced damages are reserved for “egregious cases of culpable behavior.” Id. at 1932. The Court also has discretion to award attorneys' fees and post-judgment interest. 35 U.S.C. § 285; 28 U.S.C. § 1961.

         III. Analysis

         A. Defendant's Rule 50 Motions

         Artsana currently has three motions for judgment as a matter of law pending before this Court. First, Artsana made two pre-verdict motions under Rule 50(a), R. 398 and R. 407, on which the Court reserved ruling. Second, Artsana brought one post-verdict motion under Rule 50(b). R. 432. Typically, the issues addressed in a party's post-verdict motion mirror those addressed in its pre-verdict motion, because a post-verdict Rule 50(b) motion “can be granted only on grounds advanced in the pre[-]verdict motion.” Fed.R.Civ.P. 50, Advisory Comm. Notes. 2006 Am. Here, in its post-verdict briefing, Artsana abandons two of its pre-verdict arguments for judgment as a matter of law: (1) Kolcraft failed to establish damages prior to June 3, 2009, Def.'s ...

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