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Rehco, LLC v. Spin Master, Ltd.

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

October 28, 2019

REHCO, LLC, Plaintiff,
v.
SPIN MASTER, LTD., Defendant.

          MEMORANDUM OPINION AND ORDER

          John Robert Blakey United States District Judge

         Before the Court is Defendant Spin Master's combined claim construction brief and renewed motion for summary judgment [230]. For the reasons explained below, the Court grants the request for additional claim construction, but denies the motion for summary judgment.

         A. Background & Procedural History

         Plaintiff Rehco, LLC and Defendant Spin Master, Ltd both are in the business of making toys - in particular, remote controlled toys. Rehco and Spin Master collaborated at times, but their relationship soured, and Rehco sued Spin Master on March 26, 2013 for patent infringement and breach of contract. See [1].

         Rehco's second amended complaint [37], which is the operative complaint, alleged breach of two agreements (a radio-controlled helicopter agreement and a rechargeable radio-controlled airplane development agreement) and infringement of two patents (U.S. Patent No. 7, 100, 866 and U.S. Patent No. 6, 612, 893). See Id. Spin Master filed a counterclaim alleging that Rehco breached the parties' helicopter and airplane agreements; Spin Master also sought a declaratory judgment that Rehco had no right, title, or interest in the ‘893 patent, and it claimed a right to attorneys' fees based upon Rehco's bad faith assertion of an infringement claim as to that patent. See [78]. The Court dismissed the ‘893 patent infringement claim on March 17, 2014, see [86], leaving just the claim of infringement as to the ‘866 patent. In that claim, Rehco alleges that Spin Master directly infringes at least claims 1, 2, 10, 11 and 12 of the ‘866 patent by making, using, offering for sale, selling and/or importing auto hover toys that infringe the ‘866 patent. [37], ¶ 30. Alternatively, Rehco alleges that Spin Master indirectly infringed claims 1, 2, 10, 11 and 12 when it induced others to use the infringing products in a manner that violates one or more claims of the ‘866 patent. Id. at ¶ 31.

         The parties engaged in extensive discovery and filed claim construction briefs, ultimately asking the Court to construe specific terms in claim 1, which recites:

1. A vehicle having a means for propelling in a vertical direction, further comprising:
a transmitter positioned on the bottom of said vehicle for transmitting a signal from the vehicle downwardly away from said vehicle;
a receiver positioned on the bottom of said vehicle for receiving said signal as it is bounced off of a surface, defined as a bounced signal; and
a control system that automatically sets a speed of the propelling means in response to the receiver, said control system having a
first means to set the speed of the propelling means to a first speed when the receiver receives the bounced signal and the control system having a second means to set the speed of the propelling means to a second speed when the receiver does not receive the bounced signal, the first speed being predefined as a speed that causes the vehicle to gain altitude and the second speed being predefined as a speed that causes the vehicle to lose altitude.

[37-4], p. 16 (‘866 Patent, col. 7, line 55-col. 8, line 6) (emphasis added). With regard to the “means for propelling in a vertical direction” element, the parties stipulated that the function is “propelling in a vertical direction” and the structure is “a single rotor assembly and a separate counter-torque assembly, or a counter-rotating assembly, and equivalents thereof.” See [104]. The parties asked the Court to construe: “first means to set the speed of the propelling means to a first speed when the receiver receives the bounced signal” and “second means to set the speed of the propelling means to a second speed when the receiver does not receive the bounced signal.” Id. And they offered conflicting constructions. The parties did not ask the Court to construe any other claim terms or language.

         Based upon the parties' submissions, the Court issued its claim construction ruling, [125], adopting Rehco's proposed construction of the disputed claim language, as follows:

400">

first means to set the speed of the propelling means to a first speed when the receiver receives the bounced signal”

Function: to set the speed of the propelling means to a first speed when the receiver receives the bounced signal

Structure: Circuit Board 136 programmed to set the speed of the propelling means to a first speed when the receiver receives the bounced signal or equivalents thereof

400">

“second means to set the speed of the propelling means to a second speed when the receiver does not receive the bounced signal”

Function: to set the speed of the propelling means to a second speed when the receiver does not receive the bounced signal

Structure: Circuit Board 136 programmed to set the speed of the propelling means to a second speed when the receiver does not receive the bounced signal or equivalents thereof

         [125], at p. 25. After the Court construed the disputed claim language, Spin Master moved for summary judgment, and it became clear that resolution of Spin Master's summary judgment motion required construction of additional claim language relating to the “signal” and “control system” terms. In particular, the Court determined that “a signal, ” “said signal, ” and “the bounced signal, ” as used in claim 1, referred to a single signal and not multiple signals. [187], p. 39');">p. 39. The Court acknowledged that this construction ran contrary to the general rule that “a” means “one or more” but found that the claim language, the specification, and the proffered expert testimony all supported the construction. Id. at pp. 35-39. With respect to the control system, the Court determined that claim 1 disclosed a clear-cut, two-step decision tree, where step one asks whether the bounced signal was received, and if the answer is “yes, ” then the first speed is initiated, and if the answer is “no, ” then the second speed is initiated. Id. at pp. 44-45.

         Applying these constructions, the Court granted summary judgment to Spin Master on Rehco's infringement claim.[1]See Id. The Court also granted summary judgment to Spin Master on Rehco's claim for breach of the helicopter agreement and on Rehco's claim for breach of the airplane agreement as to certain products (namely, the Osprey and Dominator products), but denied ...


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