Peerless Indus., Inc. v. Crimson AV, LLC, No. 11 C 1768, Slip Op. (N.D. Ill. Nov. 27, 2018) (Lefkow, J.).

After a patent infringement jury trial in June 2016, and a stipulation of judgment and damages in the amount of $40,000, the parties agreed to a stay of execution until Judge Lefkow ruled on all post-trial motions. The Court denied defendant Crimson’s Fed. R. Civ. P. 50(a) renewed motion for judgment as a matter of law as to its inequitable conduct defense in this patent dispute regarding mounting brackets for flat-screen televisions.

As an initial matter, Rule 50 did not apply in this instance because Rule 50 applied where no reasonable jury could come to a conclusion. Because the parties had agreed that inequitable conduct was an issue for the judge, not the jury, Rule 50 was inapplicable. Fed. R. Civ. P. 52 governs issued tried to a judge. Because the Court had not yet ruled on the inequitable conduct claim, a Rule 52 motion was also inappropriate.

The Court then issued its findings of fact and conclusions of law regarding the case and inequitable conduct. Of particular note, the Court held as follows:

  • Crimson’s materiality arguments failed because it either did not present evidence or otherwise did not sufficiently support its claims that the allegedly withheld prior art read on the claims.
  • While the Court held, pursuant to Rule 50(b), that no reasonable jury could have invalidated the patent in suit for failure to disclose its best mode, the Patent Office’s best mode standard was lower than the district court’s. But Crimson failed to meet even the lower standard.
  • Crimson did not show affirmative egregious misconduct in withholding the alleged prior art, which would be required absent a showing of materiality, because it did not allege anything “along the lines of the bribery, hush money, or manufactured evidence contemplated in the exception.”
  • Finally, Crimson did not offer sufficient evidence of intent to deceive the Patent Office. The Court could not infer intent from materiality – which it found was not proven. The Court also refused to infer intent based upon litigation misconduct. The case Crimson cited for that proposition actually issued an adverse finding on intent as a discovery sanction, not as a general sanction for litigation misconduct. Additionally, the parties chose to engage in “rancor[ous]” discovery and plaintiff Peerless had already been sanctioned, where appropriate, for discovery abuses and not sanctioned in other discovery disputes. Those issue having already been addressed, further sanctions for those actions were not appropriate.

Having held that there was no inequitable conduct, the Court ordered that final judgment be entered.