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Kimberly-Clark Worldwide, Inc v. First Quality Baby Products

April 30, 2013

KIMBERLY-CLARK WORLDWIDE, INC., PLAINTIFF
v.
FIRST QUALITY BABY PRODUCTS, LLC, FIRST QUALITY PRODUCTS, INC., FIRST QUALITY RETAIL SERVICES, LLC, FIRST QUALITY HYGIENIC, INC., DEFENDANTS AND COUNTERCLAIM PLAINTIFFS
v.
KIMBERLY-CLARK CORPORATION, KIMBERLY-CLARK WORLDWIDE, INC., KIMBERLY-CLARK GLOBAL SALES, LLC, COUNTERCLAIM DEFENDANTS



The opinion of the court was delivered by: William W. Caldwell United States District Judge

MEMORANDUM

I. Introduction

Presently before the court is a motion for partial summary judgment (Doc. 671), filed by defendants First Quality Baby Products, LLC, First Quality Products, Inc., First Quality Retail Services, LLC, and First Quality Hygienic, Inc. (collectively "FQ"). FQ seeks summary judgment that Plaintiff Kimberly-Clark Worldwide, Inc. ("KC") failed to comply with the patent marking statute, and that a portion of the patent infringement damages sought by KC are barred as a result. KC has filed a brief in opposition to this motion (Doc. 703), and FQ has filed a reply (Doc. 742), so the motion is now ripe for disposition. For the reasons that follow, we will grant the motion in part and deny it in part.

II. Background

In February 2009, FQ filed a complaint in this court for a declaratory judgment, but we dismissed FQ's complaint for lack of subject matter jurisdiction. Prior to our dismissal, however, KC filed this patent infringement action in the U.S. District Court for the Northern District of Texas, and this action was then transferred from Texas to this court. Among other claims in this action, KC seeks damages for infringement of the Kellenberger Patent, the Melius Patent, the Rajala '922 family of patents, and the Rajala '887 Patent. In the pending motion, FQ seeks summary judgment that KC did not comply with the patent marking statute for these patents, and consequently, that KC cannot claim pre-complaint damages for infringement of these patents.

III. Legal Standard

Rule 56(a) provides that summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). We will examine the motion under the well-established standard. See, e.g., Meditz v. City of Newark, 658 F.3d 364, 369 (3d. Cir. 2011). "Once the moving party points to evidence demonstrating no issue of material fact exists, the non-moving party has the duty to set forth specific facts showing that a genuine issue of material fact exists and that a reasonable factfinder could rule in its favor." Id. (quoting Azur v. Chase Bank, USA, Nat'l Ass'n, 601 F.3d 212, 216 (3d Cir. 2010)). The court must credit the non-movant's evidence and draw "all justifiable inferences" in its favor. Id.

The pending summary judgment motion challenges KC's compliance with the patent marking statute, 35 U.S.C. § 287(a). Under this statute, damages for patent infringement are limited to infringement that occurred after the infringer received notice of the infringement. The patentee may either provide the infringer with actual notice of infringement, or provide constructive notice by marking the number of the patent on "substantially all of its patented products[,]" in a "substantially consistent and continuous" manner. American Medical Sys. v. Medical Eng'g Corp., 6 F.3d 1523, 1537-38 (Fed. Cir. 1993). Compliance with the marking statute is a question of fact, and the patentee bears the burden of proving compliance. Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996).

IV. Discussion

As noted above, a patentee can recover damages for patent infringement either from the time when it gave the infringer actual notice of infringement, or from the time when it began consistently marking substantially all products that practice the patent. In this case, it is undisputed that no actual notice occurred until KC's pleadings in this litigation (the original complaint and the amended complaint) raised claims of infringement. In order to determine whether KC may claim pre-complaint damages, in the absence of actual notice, we must examine constructive notice by marking.

FQ argues that KC cannot show compliance with the patent marking statute because it permitted other companies to practice the patents at issue and cannot show that the other companies' products were marked with the numbers of the patents they practiced. Given these circumstances, FQ argues that KC cannot show substantially consistent and continuous marking. When someone other than the patentee practices the patent at issue and fails to mark its products, then "the court may consider whether the patentee made reasonable efforts to ensure compliance with the marking requirements[,]" under an approach known as a "'rule of reason' approach[.]" Maxwell, 86 F.3d at 1111-12. In the subsections that follow, we will separately discuss each patent and examine whether a reasonable fact-finder could find compliance with the patent marking statute for that patent.

A. Kellenberger Patent

KC seeks damages for infringement of the Kellenberger Patent from March 12, 2003 until the patent expired on September 15, 2009. KC filed its complaint accusing FQ of infringing the Kellenberger Patent on March 12, 2009. Therefore, we must examine marking between March 12, 2003 and March 11, 2009.

FQ suggests that the following companies may have practiced the Kellenberger Patent during this time frame: Procter & Gamble ("P&G"), McNeil-PPC, Inc. ("McNeil"), and Paul Hartmann AG ("Hartmann").*fn1 Neither KC nor FQ has provided evidence as to whether Hartmann or McNeil practiced the Kellenberger Patent, or if so, whether their products that practiced the patent bore the patent number. However, there is some evidence of record indicating that P&G practiced the Kellenberger Patent without marking its products with the patent number. Specifically, Stephen Goldman, FQ's expert, tested 14 packages of P&G diapers,*fn2 dated from July 21, 2007 to ...


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