Peerless Industries, Inc. v. Crimson AV, LLC

UNITEDSTATES DISTRICT COURT

FORTHE NORTHERNDISTRICT OFILLINOIS

EASTERNDIVISION

PEERLESS INDUSTRIES, INC.,

Plaintiff, CaseNo.1:11-cv-1768

vs. HonorableJoanH. Lefkow

CRIMSONAV, LLC,andVLADIMIR MagistrateJudgeSusan Cox

GLEYZER,

Defendants.

DEFENDANT’S RENEWEDRULE 50MOTIONFORJUDGMENT

AS AMATTEROFLAW

TABLE OFCONTENTS

I. BACKGROUND................................................................................................................1

II. STANDARD FORJUDGMENT UNDER FRCP50......................................................2

III. ARGUMENT......................................................................................................................2

A. Materiality..............................................................................................................4

1. But-For Materiality: The Broadest Reasonable Construction of the

Claims..........................................................................................................5

2. But-For Materiality-Plaintiff’s Omissions tothePTO...........................5

a. SanusVMPL2 Brackets...............................................................5,6

b. AL-101Brackets..............................................................................7

c. Peerless Gennady/ECN6102Brackets............................................7

d. Peerless DFPF-220/320 Brackets....................................................8

3. But-For Materiality: Plaintiff’s Misrepresentations tothePTO..........9

a. MisrepresentationtoPTOofFunctionofBridge Plate..................9

b. Misrepresentation to PTO that Gennady Brackets depicted in Prior

Art HadNoRamps bridgePlateorSafetyScrew..........................10

c. Misrepresentationtothe PTOoftheBest Mode...........................11

4. Egregious MisconductBeforethe PTO DuringProsecution of ’850..12

B. Knowledgeand Intent..........................................................................................15

1. Intent to Deceive Inferred from Withheld References and

Misrepresentations in Prosecution of ’850Patent................................16

2. Egregious Litigation MisconductSupports Inferenceto Deceive.........24

IV. CONCLUSION................................................................................................................39

AUTHORITIES

Advanced Magnetic Closures, Inc. v. Rome Fastener Corp.,

607 F.3d 817, 829 (Fed. Cir. 2010)...........................................................................................3

Brasseler, U.S.A.I.,L.P. v.Stryker Sales Corp.,

267F.3d1370,1383(Fed.Cir.2001)............................................................................................23

DS Smith Plastics Ltd. v. Plascon Packaging, Inc.,

No. 15 C 5760, 2016 U.S. Dist. LEXIS 1167, at *8 (N.D. Ill. Jan. 6, 2016) ...........................3

ElkCorp. of Dallas v.GAFBldg. Materials Corp.,

168F.3d28,32(Fed.Cir.1999)....................................................................................................15

EnergyHeating,LLC vHeat On-the-Fly,LLC,

2016-1559(Fed.Cir.May4,2018).........................................................................................13,18

InreSulfuricAcidLitigation,

231F.R.D.351,363(N.D. Ill.2005).............................................................................................30

Intellect Wireless, Inc.v. Sharp Corp.,

45F.Supp.3d839,851(N.D. Ill.2014).......................................................................................23

LumenView Tech,LLC v.Findthebest.com,Inc.,

811.F.3d471,483(Fed. Cir.2016)........................................................................................23-24

Ohio Willow WoodCo.v.Alps South,LLC.,

735F.3d1333,1351(Fed.Cir.2013)..........................................................................12,13,15,24

Orenshteynv.CitrixSystems, Inc.,

341F.Appx.621(Fed. Cir.2004).................................................................................................23

OutsidetheBoxInnovations, LLC v.Travel Caddy,Inc.,

695D.3d1285,1294(Fed.Cir.2012)..................................................................................... 12,13

Phillips Petroleum Co. v. U.S. Steel Corp.,

673 F. Supp. 1278, 1336 (D. Del. 1987),

aff’d, 865 F.2d 1247, 9 U.S.P.Q.2D (BNA) 1461 (Fed. Cir. 1989)..........................................2

Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co.,

324 U.S. 806, 818 (1945)..........................................................................................................2

Reeves v.SandersonPlumbingProds.,

530U.S.133,149(2000).................................................................................................................2

RegeneronPharm., Inc. v.Merus N.V.,

864F.3d1343,1350(Fed.Cir.2017)....................................................................................3,4,24

Rohm &Haas Co.v.Crystal Chem.Co.,

722F.2d1556,1571(Fed.Cir.1983)............................................................................................13

Tart v.Ill.Power Co.,

366F.3d461,464(7thCir.2004)...................................................................................................2

Therasense, Inc. v. Becton, Dickinson & Co.,

649 F.3d 1276, 1285 (Fed. Cir. 2011)......................................................................3, 4, 13, 24

OTHER

37 CFR 1.56...............................................................................................................................2

18U.S.C.§1001............................................................................................................................21

UNITEDSTATES DISTRICTCOURTFOR THENORTHERNDISTRICTOF ILLINOIS

EASTERNDIVISION

PEERLESS INDUSTRIES, INC.,

Plaintiff,

CaseNo.1:11-cv-1768

v.

HonorableJoanH. Lefkow

CRIMSONAV, LLC,

Defendant.

DEFENDANT’S RENEWEDRULE 50MOTIONFORJUDGMENT

AS AMATTEROFLAW

Defendant, CRIMSON AV, LLC (“Crimson”), by and through undersigned counsel,

hereby moves this Honorable Court pursuant to FED.R.CIV.P. 50 for a judgment as a matter

of law on a finding of Inequitable Conduct (“IEC”) against Peerless in prosecuting U.S.

Patent 7,823,850 (“’850 Patent”,or“’850”). In support of its motion, Crimson states:

I. BACKGROUND

The ’850 Patent discloses a mounting bracket that affixes to the back of flat panel

televisions. The bracket allegedlyprovides a guiding surface claimed to indicate when a bracket

is not correctly aligned, i.e., “misaligned,” with a wall mount from which the bracket is to be

hung. (Trial Exh.D-1/90,attached as ExhibitA,p.2.)

A jury trial was held in this case from June 13 through 24, 2016. During trial, Crimson

presented evidence in support of its position that the ’850 Patent was invalid and also

unenforceable due to Plaintiff’s inequitable conduct. During trial, Crimson filed a Rule 50

Motion on Plaintiff’s inequitable conduct. (Dkt. #589.) At the end of trial, the jury found the

’850 Patent invalid, and the Court did not rule onCrimson’s Rule 50 motion. (Trial Tr. pp. 1522-

23.) On March 31, 2017, the Court granted in part Plaintiff’s Rule 50 Motion for Judgment as a

Matter of Law, holding that the evidence did not support the jury’s verdict finding the ’850

Patent invalid for obviousness and best-mode. (Dkt. #672, pp. 9-16.) The parties agreed to

$40,000 in damages and entered a stipulation of final judgment. (Dkt. #749.) Crimson now

renews its Rule 50 motion seeking a judgment that Peerless’ ’850 Patent is unenforceable due to

Plaintiff’s inequitableconduct.

II.STANDARD FORJUDGMENT UNDER FRCP50

A judgment as a matter of law should be entered against the non-movant when a party

has been fully heard on an issue, and there is no legally sufficient evidentiary basis for a

reasonable fact finder to find for the non-moving party on that issue. Reeves v. Sanderson

Plumbing Prods., 530 U.S. 133, 149 (2000). “Once the jury has spoken, the court is obliged to

construe the facts in favor of the party who prevailed under the verdict.” Tart v. Ill. Power Co.,

366 F.3d 461, 464 (7th Cir. 2004). “[T]he standard for grantingsummaryjudgment ‘mirrors’ the

standard for judgment as a matter of law, such that ‘the inquiry under each is the same.” Reeves,

530 U.S. at 150. “It therefore follows that, in entertaining a motion for judgment as a matter of

law,thecourt shouldreviewall oftheevidencein therecord.”Id.

III. ARGUMENT

Presenting a patent application before the United States Patent and Trademark Office

(“PTO”) requires the applicant to exercise the “highest duty of candor.” Phillips Petroleum

Co. v. U.S. Steel Corp., 673 F. Supp. 1278, 1336 (D. Del. 1987), aff’d, 865 F.2d 1247, 9

U.S.P.Q.2D (BNA) 1461 (Fed. Cir. 1989). This duty of candor is “an uncompromising duty

to report to [the PTO] all facts concerning possible fraud or inequitableness underlying the

applications in issue.” Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery

Co., 324 U.S. 806, 818 (1945). See also 37 CFR 1.56. This duty extends to “each individual

associated with the filing and prosecution of a patent application” to disclose to the PTO all

“information known to that individual to be material to patentability.” DS Smith Plastics Ltd. v.

Plascon Packaging, Inc., No. 15 C 5760, 2016 U.S. Dist. LEXIS 1167, at *8 (N.D. Ill. Jan. 6,

2016)(citing Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817, 829 (Fed.

Cir. 2010).).

To ensure compliance with this duty, the Supreme Court created the equitable

defense of inequitable conduct. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276,

1285 (Fed. Cir. 2011). A patentee has committed inequitable conduct when it: (1)

misrepresented or omitted information material to patentability; and (2) did so with specific

intent to deceive the Patent Office. Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1350

(Fed. Cir. 2017). Once inequitable conduct is established as to a single claim, the entire patent is

unenforceable. Id.

Peerless committed inequitable conduct by deliberately withholding the following four

prior art references (hereinafter the “Withheld References”) from the PTOduringthe prosecution

ofthe’850Patent:

(1) Sanus’s VMPL2bracket;

(2) AL-101bracket;

(3) Peerless’s Gennady/ECN6102Brackets;1 and

(4) Peerless’s DFPF-220/320Brackets.2

The evidence shows that the Withheld References contained the three elements of the

’850 Patent claims (i.e. the back, side walls configured with ramps, and a safetyretainer, such as

a bridge plate, or an equivalent bar or tab), either singly or in combination. Moreover, the

Withheld References each had the three critical elements arranged in the same way as recited in

1FormerPeerlessengineerGennadyPlavniktestifiedthatin2004-priortoLam’sconceptionofthe’850

bracket on January 5, 2005, - he designed a universal bracket that was known internally at Peerless as

ENC#6102,orthe“GennadyBracket.”(Dkt.#602,p.8;TrialTr.906-908.)

2 The D-FPF-320 was a distributor model. (Dkt. #302, p. 5). The RTFPF-220 was the retail version, and

wasessentiallyidenticaltotheD-FPF-320,butsmaller.(Dkt.#302,p.5).

the ’850 Patent claims. (Trial Exh. D-43/158, attached as Exhibit B; Trial Tr. 928.) The

evidence shows that Peerless had knowledge of the four Withheld References prior to filing the

provisional applicationforthe’850Patent,but failedtodisclosethereferences tothePTO.

In addition, Peerless committed inequitable conduct bydeliberatelymakingthe following

misrepresentations tothe PTOduringtheprosecutionofthe’850Patent:

(1) Misrepresenting to the PTO that the Gennady Brackets depicted in prior art

Figures 1 and 2 of the patent application as having no ramps, bridge plate, or

safetyscrew;

(2) Misrepresenting in the specification and to the PTO the function and purpose of

thebridgeplateinthespecification;

(3) Misrepresenting the that the best mode was a bridge plate, byomitting disclosure

ofthesafetyscrewandbox foldretainerfrom the specification; and

(4) FilingfalseinventorDeclarations tothePTO.

The ’850 Patent would not have issued but for the misrepresentations of the material

information set out above. Likewise, the only reasonable inference that can be drawn from

Plaintiff making the above misrepresentations to the PTO is intent to deceive it in order to obtain

the’850Patent.

A. Materiality

Except in cases of “egregious misconduct,” the accused infringer must show “but-for

materiality,” meaning that “the PTO would not have allowed a claim had it been aware of the

undisclosed prior art.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291-92

(Fed. Cir. 2011). When determining materiality, the Court (1) gives the claims their broadest

reasonable construction; and (2) then determines whether, based on the broadest reasonable

construction, a reasonable patent examiner would have allowed the claims had he known of the

undisclosed prior art. Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1351 (Fed. Cir.

2017)(“Determining but-for materialityrequires that the court place itself in the shoes of a patent

examiner and determine whether, had the reference(s) been before the examiner at the time, the

claims of the patent would have still issued.”) In determining the materiality of a reference, the

Court applies apreponderanceoftheevidencestandard.Id.at 1350.

1. But-For Materiality:TheBroadestReasonableConstruction of theClaims

Here, the claim recites a “guiding surface including a longitudinal surface directly

joining” “the side portions to each other” (claim 1) or “the pair of first ramped surfaces to each

other” (claim 9). (Exhibit A, pp. 6-7.) The broadest reasonable construction of main claim 1 is

that it defines a mounting bracket having a back (to secure it to a television screen) with two

spaced-apart side walls, each of which is configured with a ramped surface, and which bracket

includes a “guiding” straight surface “connecting” the two side walls together. (Exhibit A, pp.

6-7.) Main claim 9 recites the same structure, in which the straight guiding surface connects the

first rampedsurfaces ofthesidewalls together. (ExhibitA,p. 7.)

On claim construction, the Court held that the phrase “longitudinal surface directly

joining” means “a straight surface connecting the two sides or ramps together that is not limited

to a single, unbroken surface.” (Dkt. #330, p. 14.) The Court also ruled that a 2-part box fold

satisfiedthe“straight surface”claim languageconstruction.(Dkt.#330,pp.14-16.)

Further, claim 11 recites the mounting bracket of claim 9 with a “second ramped surface

configured to contact one of the one or more retainingportions” duringmounting. (Exhibit A, p.

7.) Though this language is excessively broad, claim 11 extends to any configuration of lower

ramps, regardless of whether those lower ramps are joined together by a longitudinal retaining

surface that extends between the lower ramps. Thus, the broadest reasonable construction of the

claims does not requirethat thestraight surfacebeactuallyjoinedtobothofthelowerramps.

2. But-For Materiality-Plaintiff’s Omissions tothePTO

a. SanusVMPL2 Brackets

The jury found Sanus VMPL2 bracket to be material prior art. (Trial Tr. 1522-23). Trial

testimonyand exhibits showed that the VMPL2 mount includes brackets, each havinga back and

side walls configured with both upper and lower ramps. (Trial Exhs. D-67/247, attached as

Exhibit C; D-48/182, attached as Exhibit D; D-70/252, attached as Exhibit E; Trial Tr. 995-

998.) The VMPL2 bracket had the lower ramps that Lam asserted in his Invention Disclosure

was the only inventive aspect of the ’850 Patent. (Id.; D-83/310, attached as Exhibit F, Trial Tr.

501-502; Dkt. #602, p. 6.) The VMPL2 bracket also had a straight longitudinal bar

“connecting,”thesidewalls ofthebracket withinthemeaningofthis Court’s construction.

The VMPL2 longitudinal bar meets the Court’s definition of a “longitudinal surface,” in

that it is “a straight surface connecting the two sides or ramps together.” When in place, the

VMPL2 longitudinal bar bridged the space between the bracket side walls adjacent to its lower

ramps, thereby “connecting” them. Thus, under the broadest reasonable construction of the

claims, the VMPL2 individually covered all three elements of the combination ’850 Patent

combination,arrangedin thesameway.

Oneoftheinventors, Lam, was familiar withthe VMPL2bracket in2004. (Trial Tr.993,

998-1001, 1230, 1235-1237; Exhibit E). In fact, the VMPL2 was mounted on the wall in his

work space at Peerless where the design team studied it. (Trial Tr. 1235-1237). The Examiner

did not have the VMPL2 to consider in combination with the other references known to the PTO

during prosecution of the ’850 Patent. Placing itself in the shoes of a patent examiner applying

the broadest reasonable construction of claims 1 and 9, the Court must find a reasonable patent

examiner would not have allowed the ’850 Patent claims had he or she known of the VMPL2

WithheldReference. Therefore,theVMPL2bracket is but-formaterial.

b. AL-101Brackets

The evidence at trial showed the AL-101 mount was a custom manufactured mount that

Peerless sold to a company called Activelight in 2004. (Trial Tr. 823-825, 858-859, 906-907.)

TheAL-101brackets hadthelower ramps Lam statedwere theonlyinventivefeature ofthe’850

bracket, two side walls, and a security screw system. (Trial Tr. 860-863, 866-867; Trial Exh. D-

303, attached as Exhibit G.) The AL-101 brackets included out-turned safety screw retaining

tabs that extended outward from the lower ramps. (Exhibit G, p. 5-6; Trial Tr. 860, 863.) The

out-turned safetyscrew retaining tabs of the AL-101 fall within the language of claims 9 and 11;

claims 9 and 11 do not contain language that limits the configuration of the lower ramps to being

connectedto eachotherbyalongitudinal surface. (ExhibitA.)

Applying the broadest reasonable construction of the claims, the out-turned safety screw

retaining tabs are equivalent to in-turned safety screw retainer tabs. In-turned tabs form a box

fold,whichtheCourt heldwereequivalent to the’850Patent bridgeplate. It wouldbeobvious to

a person skilled in the art that the outward-folding retaining tabs on the AL-101 could be folded

inward to form a box fold to hold the safetyscrew. Peerless did not disclose to the PTO the AL-

101 brackets or the box-fold embodiment in ’850 Patent. Had Peerless disclosed the AL-101, the

patent examiner would not have issued the patent as written, nor issue a claim as broad as claim

11. Therefore, the Court must find that, had the Examiner known of the AL-101 Withheld

Reference, he or she would have rejected the claims over the combination of the prior art box

foldandreferences ofrecord,ortheAL-101. AL-101is thus but-formaterial.

c. Peerless Gennady/ECN6102Brackets

Peerless omitted disclosure of its own ECN 6102 Bracket, as that would have prevented

the issuance of ’850 Patent. Gennady Plavnik worked on the development of the bracket

depicted in Figure 3 of ’850 Patent. (Dkt. #602, p. 2.) Plavnik testified at trial that by the time

William Lam (i.e. the inventor of the ‘850 Patent) started working at Peerless, by late 2003, the

invention claimed by the ‘850 Patent was already developed. (Trial Tr. 903-908.) The ECN

6102 Bracket is a bracket Plavnik developed in the summer of 2004 while working at Peerless as

a manager of a bracket design project within its Design Group. (Dkt #602, p. 2; Exh. D-89/322,

attached as Exhibit H.) The Gennady/ECN 6102 had upper and lower ramps and a full width

bridge plate as shown in Figures 3 through 5 of ’850 Patent. The Gennady/ECN 6102 Bracket is

but-for material, because it has the three elements arranged in the same way as in the ’850

claims. Had the PTO Examiner been told about the Gennady/ECN 6102 Bracket by Brown, the

’850 claims would not have issued, as the Gennady/ECN 6102 Bracket has the bridge plate

missing from the Examiner’s combination. This is significant, because the incorporation of the

Gennady/ECN 6102 Bracket bridge plate into the claims is the only feature of ’850 that the

Examiner considered was inventive. (Trial Tr. 958-959.) Had the Examiner known about a prior

design that made use of an identical bridge plate that connected the two side walls of the mount,

he or she would not have allowed the ’850 Patent to issue. Therefore, the Peerless ECN 6102

WithheldReferenceis but-formaterial.

d. Peerless DFPF-220/320 Brackets

The Peerless models DFPF-220/320 brackets were identical to the claimed ’850 bracket,

as they contained the Gennady/ECN 6102 Bracket’s bridge plate to connect two lower ramps of

either side wall. (Dkt #602, pp. 4-5; Trial Exh. D-94/327, attached as Exhibit I.) Peerless

distributed that DFPF-320 starting in early October 2004. (Dkt #602, p. 3, 5, 20-25; Exhibit I.)

The Examiner would not have issued the ’850 Patent had he been made aware of Withheld

Reference DFPF-220/320 brackets, because they incorporated all of the elements of the ’850

claims arranged in the same way. The Gennady/ECN 6102 and the D-FPF-220/320 bracket

designwerethereforebut-formaterial.

3. But-For Materiality: Plaintiff’s Misrepresentations tothePTO

a. MisrepresentationtoPTOofFunctionofBridge Plate

Marshall Brown, the patent attorney who prosecuted the ’850 Patent, misrepresented the

’850 Patent bracket’s operational purpose to use the bridge plate as a “guiding surface” to

indicate “misalignment” during slide-mounting televisions. That “guiding surface” language is

present in all the ’850 claims. (Trial Tr. 961.)3 Claiming the bridge plate as a “guiding surface,”

despite the fact that it does not actually function to guide anything into place is a

misrepresentation as to the nature of the claimed invention. (Trial Tr. 518-519, 1011-1012.)

Adding the bridge plate to the claims of ‘850 was but-for material to the issuance of the patent,

as the Examiner repeatedly refused to issue the patent until after the Peerless incorporated the

bridge plate into Claim 1 as a “guiding surface.” (Trial Tr. pp. 954-959, 961-962; Exhibit B, p.

15-19; 24-31, 38-42; 46-214.) Indeed, the Examiner said that he would allow claims only after

the addition of the bridge plate of claim 8 to the broad claims. (Exhibit B pp. 39-42.) In

response, Brown deliberately incorporated the “guiding surface” language into Claim 1 to

overcome the Bremmon reference. (Trial Tr. 954-959, 961-962; Exhibit B, pp. 15-19, 24-31, 39-

42.)

However, Lam testified at trial that it is incorrect to refer to the bridge plate as a “guiding

surface” because it did not “guide anything” while mounting a television. (Trial Tr. 518-519,

1011-1012.) Lam also testified that the primary function of the bridge plate was to hold the

safety screw, not to act as a guiding surface. (Trial Tr. 519, 1011-1012, 1015-1017.) Brown’s

3 That language was incorporated directly in main claims 1 and 9 and indirectly in the remainder of the

claims,astheyweredependentfromthemainclaims.(TrialTr.961-964;ExhibitA,pp.14-15.)

amendment to the claims were but-for material, as the Examiner refused to issue the patent until

after Brown incorporated the bridge plate into the claims as a “guiding surface.” (Trial Tr. 961-

964.)

Describing the bridge plate to be a “guiding surface,” despite the fact that it does not

actually function to guide anything into place, is a false and a material misrepresentation as to

the nature of the claimed invention. Its purpose was to misdirect the Examiner’s search toward

sliding and guiding surfaces rather than the real function, safety screw retainers, of which there

were numerous embodiments in the prior art, known to Peerless and withheld from the

Examiner.

b. Misrepresentation to PTO that Gennady Brackets depicted in Prior Art Had

No Ramps bridge Plate or Safety Screw

Brown misrepresented the status of the prior art to the PTO by representing that Figures 1

and 2 of the ’850 Patent application contained an accurate depiction of the Prior Art. Figures |

and 2 of the ’850 Patent represent to the PTO that upper and lower ramps, bridge plates, and

safety screws did not exist in the prior art, as it shows only:

12 0 + l2

is

10

14

» 22

16

FIG. 1 FIG. 2

(Exhibit A, p. 2.)

By including these figures in the’850 Patent applications, Brown misrepresented to the

10

PTO that Figures 1 and 2 were representative prior art as to which the invention was an

improvement at that time. (Trial Tr. 918-922, Exhibit B, pp. 183, 195; Trial Exh. D-233/492,

attached as Exhibit J, pp. 7, 19.) However, Figures 1 and 2 are a misrepresentation of the then-

existing prior art, as the Gennady Bracket, D-FPF-220/320, AL-101, and VMPL2 each clearly

contained upper and lower ramps to guide the retaining portion into the proper position during

the mounting process. And the Gennady Bracket and D-FPF-220/320 contained bridge plates

and safetyscrews. In turn, Lam’s Invention Disclosure falsely represented the status of the prior

art as Lam included the same Figures 1 and 2 in his invention disclosure, and omitted all of the

prior art references that embodied his design. (Trial Tr. 990-992; Exhibit F, pp. 1-7.) Had

Brown and Lam beenhonest about the elements ofthepriorart,the ’850Patent never couldhave

issued.

c. Misrepresentationtothe PTOoftheBest Mode

Peerless failed to disclose to the PTO the best mode for the ’850 Patent and the fact that

the best mode was known in the art. At trial, Lam and Gleyzer testified that the best mode of the

inventionclaimedbythe ’850Patent was tousea box foldtoretainthesafetyscrewratherthan a

bridge plate. (Trial Tr. 1005-1010, 1013-1014, 1260.) However, the specification of the ’850

Patent disclosed only welded bridge plates, or a longitudinal surface that could be “fastened in

other conventionally-known manners” (emphasis added), but does not explicitly state that the

box fold (not a mode of fastening, but rather a type of construction) was the best mode for

practicing the invention. (Exhibit A, p. 4.) Brown’s omission of the box fold as known in the

art was egregious, because in doing so Brown materially misrepresented the best mode of

practicing the ‘850 Patent to the patent examiner to secure the issuance of the ‘850 Patent over

thepriorart.

Peerless also misrepresented the nature of the ‘850 Patent by omitting the safety screw

completely from the ’850 specification. Yet, Peerless disclosed it in the ’002 Patent application

filed about 6-months before the ’850 non-provisional application was filed in September 2005.

(Trial Tr. 919-921; Trial Exh. D-45/160 attached as Exhibit K, p. 2.) Thus, the failure to correct

the disclosure at the time of filing ’850 Patent in 2005 shows the omission was deliberate.

Rather, it appears that Peerless omitted the safety screw from the specification to support

Peerless’s misrepresentations that the bridge plate served a sliding or “guiding” function during

the mounting process. Had the safety screw been disclosed, the Examiner would have

recognized that the safety screw interferes with sliding/guiding, and would have directed his

prior art search toward safety screw retainers. The Examiner would have considered the tabs of

the AL-101 brackets and the bar of the VMPL2 brackets to be equivalents to the bridge plate, as

safety screw retention was its real function, as Lam so testified at trial. Omitting the safety

screw was deliberate misdirection on the part of Peerless of material information from which we

caninferdeceptiveintent.

4. Egregious MisconductBeforethe PTO DuringProsecution of ’850

Peerless, through Lam and Brown, also committed several affirmative acts of egregious

misconduct before the PTO while prosecuting the ‘850 Patent. Misrepresentations of counsel in

PTO proceedings are “tantamount to an unmistakably false affidavit,” and the lack of reasonable

explanation for the several misrepresentations constitute a “collective weight” of evidence that

“would support a finding of intent that is the single most reasonable inference.” Ohio Willow

Wood Co. v. Alps South, LLC., 735 F.3d 1333, 1351 (Fed. Cir. 2013); Outside the Box

Innovations, LLC v. Travel Caddy, Inc., 695 D.3d 1285, 1294 (Fed.Cir. 2012) (holding the filing

of a false declaration [as the inventors did here] to be equivalent to an “unmistakably false

affidavit.”). Indeed, for affirmative acts of egregious misconduct, such as filing an unmistakably

false affidavit, materiality is presumed. See Ohio Willow Wood Co., 735 F.3d at 1345;);

Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1292 (Fed. Cir. 2011)(citing Rohm

& Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1571 (Fed. Cir. 1983)(stating “there is no

room to argue that submission of false affidavits is not material.”).); Outside the Box

Innovations, LLC, 695 F.3d at 1294 (holding the filing of a false declaration to be equivalent to

an “unmistakably false affidavit.”); Energy Heating, LLC v Heat On-the-Fly, LLC, 2016-1559

(Fed.Cir.May4, 2018).

Here, the inventor of the ’850 Patent, William Lam, and the attorney who prosecuted the

’850 Patent on behalf of Peerless, Marshall Brown, committed egregious misconduct before the

PTO by submitting a Declaration at the time of filing that contained unmistakably false

statements, as to: the inventorship of the ’850 Patent; the existence of prior public knowledge,

readiness for patenting (i.e. made misrepresentations as to knowledge of prior sales of the

invention); the absence of no prior conception by another; the state of prior art; and the best

modeoftheinvention.

The Declaration submitted by the inventors, William Lam, Garry Monaco, and Dugan

O’Keene(“the Inventors”)representedtothePTOthat theinventors didnot knoworbelieve:

‘that the same invention was ever known or used by others in the

[U.S.], or described in any printed publication in any country,’

before they invented it; and 2) “that the same invention was

patented or described in any printed publication in any country, or

in public use or on sale in the [US] for more than one year prior to

thefilingdate”ofthe application.

(ExhibitB,p.204.) As shownat trial,Peerless madeand soldbrackets containingsome or all of

the features claimed by the ’850 Patent by selling mounting solutions that utilized the Gennady

Bracket, including models D-FPF-320, RTFPF-220, and the AL-101 between May and October

2004. (Trial Tr. 449, 508, 824-825, 995-1001, 1005.) It is undisputed that Lam had knowledge

of the Gennady Bracket, D-FPF-220/320, and AL-101. (Trial Tr. 503, 508, 894, 898-899, 990-

991, 993, 995-996, 997-1001, 1230, 1235-1237.) Lam was also aware of the VMPL2 as earlyas

2004, which had identical ramps to the ramps claimed by the ’850 Patent. (Trial Tr. 898-899,

993, 995-996, 997-1001, 1230, 1235-1237.) As each of the aforementioned brackets were on

sale before October 14, 2004 (i.e. more than one year prior to the date provisional application

was filed on October 14, 2005), the inventors submitted an undeniably false declaration to the

PTO to secure the issuance of the ’850 Patent by swearing that they had no knowledge as to

whether the same invention was in use, or disclosed by others in any printed publication, or in

public use/on sale in the United States for more than one year prior to the filing date of the

application.(ExhibitB,p.180.)

The inventors also made misrepresentations to the PTO as to the true inventors of the

’850 application in the Declaration they filed with the PTO. As part of the Declaration, the

inventors swore that they were the original, first, and joint inventors of the invention claimed in

the application. (Exhibit B, p. 204.) However, trial testimony shows that Plavnik was the

inventor of the bracket claimed by the ’850 Patent, as Plavnik developed the Gennady Bracket.

The Gennady Bracket disclosed every element of the’850 claims, from Lam’s allegedly

inventive ramps, to the bridge plate that the Examiner found to be the sole inventive feature of

the ’850 Patent. Further, Lam was aware of the GennadyBracket, as he testified duringtrial that

his design was intended as an improvement upon the Gennady Bracket. (Trial Tr. 495.) Despite

this, the Declaration filed with the PTO only identified William Lam, Dugan O’Keene, and

Garry Monaco as the inventors, and not Plavnik. (Exhibit B, pp. 204-207.) This

misrepresentation was never corrected with the PTO by Brown despite multiple opportunities,

andas such, constitutesanotherexampleofanundeniablyfalse representationthat Peerless made

tothePTOinprosecutingthe’850Patent.

B. Knowledgeand Intent

Direct evidenceofintent todeceiveis rarelyavailable,but thecourt mayinferintent from

the surrounding circumstances. Elk Corp. of Dallas v. GAF Bldg. Materials Corp., 168 F.3d 28,

32 (Fed. Cir. 1999) (intent need not, and rarely can, be proven by direct evidence); Ohio Willow

Wood Co. v. Alps South, LLC, 753 F.3d 1333, 1349, 1351 (Fed. Cir. 2018) (the collective weight

of misrepresentations on materiality can support a finding of deceptive intent that is the single

most reasonableinferencetobedrawn from that evidence.)

The file wrapper for the ’850 Patent shows that Peerless did not disclose any of the

WithheldReferences tothePTOduringthe prosecution,despitethe fact that theinventors named

in the ’850 Patent submitted an executed declaration with their patent application, in which they

acknowledged their duty to disclose material prior art to the PTO. (Trial Tr. 925; Exhibit B, pp.

19-20, 151-155, 157-159, 170-172, 205.) Further, the undisputed evidence at trial shows that

each of the Withheld References were within the knowledge of Peerless during the entire time

the ’850 application was prosecuted, and that Peerless knew that these Withheld References were

potentially barring because they existed more than one year prior to the filing of its provisional

application in October 2005. Peerless did not disclose the Withheld References to the PTO,

because had it done so, the ’850 Patent would not have issued. It is not credible that Brown

would NOT understand that; as a result it is clear the Peerless prior art was withheld to gain the

patent. Three of the four Withheld References were Peerless’ own products, not those of a third

party. The other was a bracket manufactured by a competitor, Sanus, which Peerless had in

possession for its designers and Lam to study. Although Peerless had ample opportunity to

explainthesediscrepancyduringtrial,it didnot.

1. Intent to Deceive Inferred from Withheld References and Misrepresentations in

Prosecution of ’850Patent

The VMPL2 bracket individually had all three elements of the combination ’850 Patent,

arranged in the same way. It had the lower ramps that Lam asserted in his Invention Disclosure

to be the only inventive aspect of the ’850 Patent. (Exhibit E; Exhibit F, p. 3-7; Trial Tr. 501;

Dkt. #602, p. 6.) Trial testimony shows Peerless had knowledge of the VMPL2 Withheld

Reference prior to the prosecution of the ’850 Patent. At trial Lam testified he was familiar with

the VMPL2 bracket in 2004. (Trial Tr. 998-1001.) It was mounted on the wall of his work space

at Peerless. Vladimir Gleyzer, the former head of product design at Peerless, testified that in

2004, the designers at Peerless, including Lam, studied a physical sample of a commercially

available VMPL2. (Trial Tr. 993, 1230, 1235-37.) In addition, Plavnik recognized the Sanus

VMPL2 depicted from his work experience at Peerless, because one was mounted on a wall in

the Design Department no later than mid-summer 2004. (Dkt. #602, p. 6.) Lam violated his

uncompromising dutyof disclosure bynot bringing it to the attention of the PTO. In light of the

above knowledge, the only inference that can be drawn from Plaintiff’s withholding the VMPL2

referencefrom thePTOis deceptiveintent.

Likewise, in May of 2004, Plaintiff sold its AL-101 brackets, which also had the lower

ramps that Lam stated were the only inventive feature of the ’850 bracket. (Trial Tr. 908, 911;

824-25, Exhibit F.) The AL-101 was manufactured by Peerless and shows Peerless had

knowledge of the ramps more than 1 year prior to its application for the ’850 Patent. Peerless

did not disclose the box fold embodiment in ’850. Had the Examiner known the key but-for

featurewas known inthe art,hewould have rejectedthe claims overthe combinationoftheprior

art box fold and references of record, or the VMPL2, had he been told about it by Peerless.

Therefore, the information withheld from the PTO was material, and the only inference that can

drawn from the failure to disclose the same is intent to deceive to PTO.

In addition, it is critically significant that Lam was fully familiar with the 2004 Gennady

Bracket that he depicted in Figures 1 and 2 of ’850 Patent. (Trial Tr. 1005; Dkt. #602, pp. 2-3;

Exhibit F; Exhibit H.) The Figures 1 and 2 Gennady Bracket had a full width bridge plate

identical to the bridge plate shown and claimed in the ’850 Patent. (Trial Tr. 503, 508, 894, 901-

902, 990-991.) After all, the Gennady Bracket is where Lam got the bridge plate from. Former

Peerless engineer Gennady Plavnik testified that in 2004, prior to Lam’s conception of the ’850

bracket on January 5, 2005, he designed a universal bracket that was known internally at Peerless

as ENC #6102, or the “Gennady Bracket.” (Trial Tr. 906-908; Dkt. #602, p. 8.) Lam testified

that he had knowledge of the Gennady Bracket at the time that he developed the ’850 bracket,

and designed his bracket to have lower ramps in an effort to “fix” the features of the Gennady

Bracket.* (Trial Tr. 503, 508, 894, 990-991.) Lam claimed that he sought to improve the

Gennady Bracket by incorporating lower ramps below the bridge plate. (Trial Tr. 503, 508, 894,

990-991.)

The Gennady Bracket, misrepresented in ’850 Figures 1 and 2, was actually configured

as shown in Peerless drawing P0314546, dated 10/1/2004, drawn by Lam (Exhibit H, p. 2):

a en _ a) oo

In his declaration, Plavnik testified that the Gennady bracket included a mounting contact

Lam’s representation to this Court was false, as Peerless’ drawing of the Gennady Bracket, P0314546,

reveals that it contained lower ramps connected by a bridge plate, as well as upper ramps. (Dkt #602, p. 2;

Exhibit H, pp. 1-8).

17

portion, two side portions that defined a receiving region (as in the ’850 bracket), upper and

lower ramped surfaces (seen configured in the side walls), and a bridge plate for a safety screw,

that extended longitudinally to join the two side walls together. (Dkt. #602, p. 2.) The Figures |

and 2 Gennady Bracket bridge plate was identical to the longitudinal surface identified as

component 120 in the *850 Patent (Tr. Trans. pp. 900, 901-902), since it was the source of

surface 120.

By no later than October 7, 2004, the Gennady bracket was ready for patenting, and

therefor “on sale” as a matter of law. Energy Heating, LLC v Heat On-the-Fly, LLC, 2016-1559

(Fed. Cir. May 4, 2018). A prototype of the Gennady bracket was shipped to TechData

Company of Florida on August 31, 2004. (Dkt. #602, p. 8). A number of the Gennady Brackets

were sold to Wal-Mart in September of 2004, and three or four of the Gennady Brackets were

displayed at the CEDIA Trade Show in September of 2004. (Dkt. #602, p. 8.) Lam released the

Gennady Bracket for production on October 5, 2004. (Dkt. #602, p. 3.) Peerless also

manufactured and sold iterations of the Gennady Bracket in its own mount models D-FPF-

220/320. The brackets for the D-FPF-220/320 mounts were configured as shown in the Peerless

Installation and Assembly Instructions for this model of its mounts, P0315646-651, dated

October 7, 2004, shown side-by-side with Lam’s October 1, 2004 drawing of the Gennady

bracket:

08 |||

lid

(Dkt. #602, pp. 4, 5; Exhibit H, pp. 3, 6). The mounting bracket of the D-FPF-220/320 hooked

18

onto the wall plate as shown in Peerless’ October 7 2004 Instructions:

1 Po.

ea

| Sat | sa il

PCE

. 4 . TR

ym] We

XE Oy .

(Exhibit I, p. 6). The enlarged view shows the bridge plate functioned to retain a safety screw

“DD,” more than a year prior to filing the’850 provisional application, Provisional Application

No. 60/727,105 (hereinafter “PR’ 105”). (Exhibit A, p. 1; Exhibit J, p. 1.)

Further, all three Peerless inventors unquestionably knew of the best mode box-fold

retainer design, as they made drawings of it in March 2005, more than six months prior to filing

the Provisional Application, PR’ 105, and over 18 months prior to filing the Regular Application

RA’343. (Trial Tr. 1461; Dkt. #602; D-Ex. 345/615, attached as Exhibit L.) They knew the box

fold design was superior to the welded bridge plate because Plaintiff had abandoned the bridge

plate by December 2004. They had several opportunities to correct the omission, but did not.

This pattern of knowing concealment demonstrates that Peerless acted with intent to deceive.

Trial evidence showed Figures 1 and 2 of ’850 omitted critical details which misled the

PTO Examiner. (Trial Tr. 961-962, 973, 976-980.) Plaintiff's attorney, Brown drafted and

presented Prior Art Figures 1 and 2 and their description to the Examiner, misrepresenting them

as exemplary prior art to show the differences between that prior art and the alleged Lam

invention of ’850. Lam executed a Declaration under Oath that the disclosure in the application

was complete, true and correct. It was not.

19

Lam admitted that Figures 1 and 2 of ’850 depicted the 2004 GennadyBracket, (Trial Tr.

508-509, 1005), yet it was incorrectly shown in ’850 without a lower ramp. This omission was a

material misrepresentation. Trial testimony showed that the 2004 Gennady Bracket contained a

lower ramp. (Trial Tr. 503, 508, 894, 901-02; Dkt. #602.) The deliberate omission of a lower

ramp in Figures 1 and 2 was intended to support Lam’s claim that his inventive concept was the

addition of a lower ramp to guide the bracket while mounting. Yet, Lam had personal

knowledge that the AL-101, the VMPL2, the ECN 6102 and the 2004 Gennady Bracket all had

lowerramps.

Further, the ’850 Gennady Bracket Figures 1 and 2 omitted its bridge plate and safety

screw. Lam acknowledged that he obtained the bridge plate from the Gennady Bracket design.

(Trial Tr. 1004-05.) Had the bridge plate and safetyscrew been disclosed in Figures 1 and 2, the

claims of ’850 never would have issued. It is clear from the Examiner’s expressly-stated

“Reasons for Allowance” that he would have rejected the ’850 claims in view of Bremmon or

VMPL2, had Brown and Lam had correctly represented the Gennady Bracket in Figures 1 and 2

of the ‘850 Application, and informed the patent examiner as to the state of the other prior art.

(Exhibit B, pp. 15-19.) But the Examiner was deliberately kept in the dark about the true

features oftheGennadyBracket byBrown andPeerless, inorderto gainallowanceofthe claims.

It is obvious that Brown knew that had Figures 1 and 2 been properly depicted to

correctly show the Prior Art Gennady Bracket features, no patent could be granted on the

brackets. The fact that Brown deliberately mischaracterized the prior art with the self-evidently

sole intent to obtain a patent is clear evidence of intent to deceive. It is self-evident that Figures

1 and 2 were created with no purpose other than to mislead the PTO as to the nature of the prior

art inordertoobtainapatent.

Finally,thePatent Act requires that thepatent applicationbefiledinthenameofthetrue

inventors. 35USC 115states:

Inventor’soath or declaration.

(a) NAMING THE INVENTOR; INVENTOR’S OATH OR DECLARATION.—

An application for patent that is filed under section 111(a) . . . shall include, or be

amended to include, the name of the inventor for any invention claimed in the

application. Except as otherwise provided in this section, each individual who is

the inventor or a joint inventor of a claimed invention in an application for patent

shall executeanoathordeclarationinconnection withtheapplication.

A false oath is a violation of 18 U.S.C. § 1001. All three inventors signed a Declaration under

Oath on October 14, 2005. (Exhibit A; Exhibit B, pp. 204 – 207.) Lam declared under oath that

he was an original and first inventor of the lower ramp and the bridge plate, in spite of the fact

that neither was true. He knew in 2004 that numerous prior art brackets had lower and upper

ramps: his own D’595 bracket design; the VMPL2; the AL101; the DFPF-220/320 and the 6102

Bracket shipped to TechData; and the Gennady/Figs 1/2 brackets. Lam also knew the 2004

Gennady Bracket had a full width bridge plate. Lam showed the Jury that he signed a false oath

when he acknowledged at Trial that he obtained the bridge plate element of his ’850 design from

thepriorart GennadyBracket.(Trial Tr.508-09, 1005.) Henevertoldthat tothePTO.

Further, Lam specifically stated under Oath in the Declaration that the specification “sets

forththebest mode contemplatedbymeof carryingout theinvention.” That was false. The best

mode of carryingout the invention was the box fold. However, the ’850 patent does not disclose

it. Clearly, the inventors had knowledge that the description in ’850 was in error and the

drawings were incomplete, but even though they had ample opportunity, neither they nor Brown

didanythingtocorrect the‘850application,as was theiruncompromising, continuingduty.

Plaintiff’s attorney Brown, before filing the patent application, was charged by statute

with the duty to conduct a “reasonable and competent inquiry.” He did not discharge his duty.

The bracket is simple. It has only 3 elements: a back, side walls, and a bridge plate. Brown’s

duty was to ask each inventor what his contribution to the bracket was. Had Brown asked that

simple, basic question, he would have learned that the bridge plate came, not from anyone of the

three, but rather from the prior work of Gennady Plavnik. But, Plavnik is not a named inventor,

even though the bridge plate is the critical, but-for element of the combination that made the

bracket patentable. The reason is simple: Plavnik’s work was a prior art bar that Brown did not

want toacknowledge,so Plavnikwas cut out oftheinventorshipequation.5

Brown also knew from Lam’s Invention Disclosure, that Lam’s sole inventive

contribution was the lower ramp, not the bridge plate. (Exhibit F; Trial Tr. 501.) Further, Brown

knew from having filed the D’595 application more than a year earlier on September 21, 2004

and the D’537 application more than two-years prior on August 8, 2003,6 that other brackets

besides the ‘850 Patent used lower ramps. (Trial Tr. 969-72; Trial Exh. D-216/475, attached as

ExhibitM; D-217/476,attachedas ExhibitN.) Thus, Brown kneworshouldhaveknownthat if

the lower ramp was Lam’s only contribution, he was not an inventor because lower ramps were

old in the art. Nothing else being different, it is not an inventive contribution to add a prior art

lower ramp to well-known bracket designs. Brown had to know about the VMPL2, the AL-101,

the ECN 6102, the Gennady Bracket (as it wound up in Figures 1 and 2, albeit misrepresented)

andtheD-FPF-220/320 brackets.

Equally significant, upon the Examiner indicating that by adding the bridge plate the

combination, the claims would be allowable, Brown immediately should have gone back to the

inventors to determine which one of them was responsible for that critical, but-for element. Had

he done so, and had Lam been as candid as he was in discovery deposition and at Trial, Brown

5 Brown could have filed during this litigation for correction of inventorship to add Plavnik, but did not

doso.

6BothD’537andD’595arepublicdocuments.

would have learned that Lam took the bridge plate from the 2004 Gennady Bracket, and that it

was a statutory bar, necessitating abandonment of the ’850 application. He clearly did neither.

That studied refusal to timely investigate and take action is indicative of an intent to deceive.

Brasseler, U.S.A.I.,L.P. v.Stryker Sales Corp.,267F.3d1370,1383(Fed. Cir.2001).

No party is ever “reasonably justified” in making false statements to the Patent Office or

to the court. Intellect Wireless, Inc. v. Sharp Corp., 45 F. Supp. 3d 839, 851 (N.D. Ill. 2014).

The collective weight of evidence in this case shows that Plaintiff acted with specific intent to

deceive the PTO, as Plaintiff was only able to obtain the ‘850 Patent by making material false

representations about the purposeofthebridgeplateandwithholdingmaterial,baringprior art.

These are exemplary of Peerless’ PTO misconduct, and demonstrate that the only

reasonable inference is that of deceptive intent, as Peerless engaged in a pattern of lack of candor

before the PTO, making factual representations that were contrary to the true information

Peerless clearlyknewit couldnot disclose,becausethennopatent wouldissue.

Further, Peerless failed to engage in adequate pre-suit investigation before bringing its

patent infringement claim against Crimson. Inadequate pre-suit investigation, or pre-suit due

diligence under FRCP Rule 11, followed by filing of a baseless suit, supports deceptive intent as

being the most reasonable inference. Here, there is absolutely no evidence of any investigation

by Peerless of correct inventorship, prior art known to the inventors, or prior art products

available to the trade, most significantly those ready for patenting, on sale or sold by Peerless.7

See Orenshteyn v. Citrix Systems, Inc., 341 F. Appx. 621 (Fed. Cir. 2004); Lumen View Tech,

LLC v. Findthebest.com, Inc., 811. F. 3d 471, 483 (Fed. Cir. 2016) (a key factor would be a pre-

7ItissignificanttonotethatPeerlessisaNon-PracticingEntity,havingnot madebracketscomingwithin

the scope of P’850 since early 2006, even before filing RA’343 which matured into P’850. Peerless

changed its mountingdesign, shownbut not claimed in ’850,to one in whichthetilt mechanismwas part

ofthebracket,copyingaSanusmountdesign.

suit validity analysis). Accordingly, the obvious failure, and indeed refusal, to do due diligence

leads toaninescapableinferenceofintent todeceivethePTO.

2. Egregious Litigation MisconductSupportsInferenceto Deceive

Post Therasense, the Federal Circuit recognized that instances of litigation misconduct

also support an inference by the Court that the patentee acted with intent to deceive the PTO.

Regeneron Pharms., Inc. v. Merus N.V., 864 F. 3d 1343 (Fed. Cir. 2017). In Regeneron, the

court sanctioned the patentee, and pointed to nine instances of litigation misconduct, drawing an

adverse inference as to specific intent to deceive the PTO. Id. at 1356. The collective weight of

misrepresentations on materiality can support a finding of deceptive intent that is the single most

reasonable inference to be drawn from that evidence. Ohio Willow Wood Co. v. Alps South, LLC,

735 F.3d 1333, 1351 (Fed. Cir. 2013). Particularly relevant here are the Regeneron instance of

failure to produce conception and reduction to practice documents, failure to include a key

document from an inventor in its document production, misrepresented to the Court that its

production was complete, and, after being ordered to confirm whether it had complied with an

order compelling production, falsely representing to the Court that it had complied. As in

Regeneron, Plaintiff’s litigation misconduct in this case was designed to obfuscate its

prosecution omissions and misrepresentations. Discovery compliance would have resulted in

Peerless producingtoCrimson theveryevidenceit hidfrom thePTO.

The incontrovertible evidence in this case shows Plaintiff repeatedly defrauded the PTO

in prosecuting the ’850 Patent application, and then actively worked to suppress evidence of that

fraud from the very beginning of this litigation in violation of the initial disclosures required by

the Local Patent Rules. Plaintiff knew it could not produce to Crimson documents and

information it withheld from the PTO in prosecution of the ’850 Patent, and had no intention of

doing so. Plaintiff brought this suit to distract and delay Crimson’s entry into the market, and

conducteddiscoverytothat end.

As an initial matter, Plaintiff failed to produce the Invention Disclosure within 14 days as

required by LPR 2.1. After numerous motions to compel production, it ultimately produced

some of these documents at the deposition of Marshall Brown on November 14, 2013, 3½ years

late, and onlyafter the Court limited Crimson’s statutoryinvaliditydefenses renderingPlaintiff’s

late production of LPR 2.1(a) documents essentially meaningless. Timely disclosure of the

Withheld Gennady/ECN 6102 Brackets and Withheld DFPF-320/220 Brackets along with 2004

sales and public disclosure documents would have short-circuited Plaintiff’s patent case and its

litigation strategy to harass, delay, distract and ultimately bar Crimson’s entry into the Audio-

Visual Mount market.

Had Peerless complied with LPR 2.1(a), it would have produced documents in 2011

showing Peerless failed to disclose to the PTO that GennadyPlavnik was the true inventor of the

mounting bracket claimed by the ’850 Patent application and that it was ready for sale no later

thanOctober7,2004, whichwouldhavebarredtheissuanceofthe’850Patent.

To further deny meaningful discovery to Crimson, Plaintiff did not “separately identify

byproduction number which documents correspond to each [numbered] category” as required by

LPR 2.1. Further, a history of the discovery in this case, provided below, shows Plaintiff

engaged in a game of hide-and-seek during discovery that effectively delayed Crimson’s ability

to discover the evidence that Plaintiff had defrauded the PTO to obtain the ’850 Patent.

Certainly, in light of the totality of Plaintiff’s discovery misconduct in this case, the only

inference that can be drawn from the aforementioned instances of Plaintiff’s egregious litigation

misconduct is oneofintent todeceive.

Not only did Plaintiff fail to comply with this Court’s LPRs, it falsely represented to

Crimson and to this Court that it produced documents responsive to LPR 2.1(a)(1) and (2) in

production numbers P0004276, P0004280-4354, P0004668-05215, P0005318-5623, P0005658-

5759, P0005760-5895, and P0003087-P0008978. (See Peerless’ Rule 26.1(a) Initial Disclosures,

attached as ExhibitO,p.5.)

Under LPR 2.1(a), within 14 days of Crimson’s Answer, Plaintiff was required to

produce or make the following available for inspection and copying along with its Initial

Disclosures:

(1) all documents concerning any disclosure, sale or transfer, or

offer to sell or transfer, of any item embodying, practicing or

resulting from the practice of the claimed invention prior to the

dateofapplicationforthepatent insuit.…;

(2) all documents concerning the conception, reduction to practice,

design, and development of each claimed invention, which

were created on or before the date of the application for the

patent insuit …;

Peerless didnot doso.

Plaintiff delayed the depositions of inventors William Lam and Dugan O’Keene until

mid-December 2012, after the deadline for the Final Invalidity Contentions in January 2012. On

December 12, 2012 and December 13, 2012, during Crimson’s respective depositions of

O’Keene and Lam, Crimson began to get evidence confirming its suspicion that Plaintiff was

hiding information. During those depositions Crimson learned there may have been an

undisclosed inventor of the ’850 Patent: “Genady,” whose last name O’Keene and Lam

professed they did not recall. At his deposition, William Lam testified that he “copied” the

functional bridge plate and safety screw features of the ’850 Patent bracket Figure 3 from

“Genady.” O’Keene drew into Figure 1 of ’850 Patent the safety screw and its retaining bridge

plate that Lam admitted he had copied. Subsequent investigation led Crimson to believe that

reference to “Genady” was in fact Dr. Gennady Plavnik, who headed Plaintiff’s New Products

Development Group at the time Lam and O’Keene were working on adapter brackets under Dr.

Plavnik’s direction. However, Crimson did not locate any drawings made byDr. Plavnik during

his tenure at Peerless, from January 1, 2004 through February 2005. When it became clear

Plaintiff was withholding key evidence from discovery, Crimson independently identified and

located Dr. Plavnik. Crimson ultimately secured evidence and a written Declaration from him as

to his inventorship of the ’850 bracket and Plaintiff’s prior work in 2004 on brackets having all

the features of ‘850 claims that were clearlyreadyfor sale, and/or sold byOctober 7, 2004. (Dkt.

#602.)

On January 29, 2013, Crimson issued its Third Request for Production of Document and

Inspection of Tangible Things. Crimson requested production of the prototypes of the ’850

Patent bracket, and its predecessor designs, sample brackets that appeared to be prototypes or

“any item embodying, practicing or resulting from the practice of the claimed invention” or

related to the development of the claimed invention. In addition, Crimson sought, pursuant to

LPR 2.1(a), all documents concerning the conception, reduction to practice, design and

development and the actual brackets shown or prototypes thereof. In addition, Crimson

requested documents relatingto the concealment byPlaintiff of the best mode of the invention as

identified by the inventors in their depositions on December 12 and 13, 2012. This best mode

embodiment was not disclosed in ’850 Patent, but was disclosed in the related, co-pending

applications that resulted in the ’002 Patent application, which disclosure in ’002 Patent was

identified by the inventors as the disclosure missing from ’850 Patent. The inventors also

testifiedthat theydidnot tell Plaintiff’s counsel tonot discloseit in’850Patent.

On February 6, 2013, Crimson issued a Rule 30(b)(6) deposition notice seeking to take

the deposition of Marshall Brown on March 13, 2013, and seeking production of certain

documents related to the patent prosecution of the ’850 Patent and documents related to

Plaintiff’s due diligence in filing the patents as well as due diligence related to the Complaints in

this lawsuit. Mr. Brown was the Foley & Lardner attorney involved in the prosecution of the

’850 application, Though Mr. Brown was not trial counsel in this matter, Plaintiff, continuingits

litigation strategy of delaying and then refusing to provide required and relevant information,

objected to every request stating the requested prosecution documents were protected by

attorney-client privilege andworkproduct immunity.

On February 26, 2013, less than two months before the close of discovery, Plaintiff

produced, in an un-organized document dump, more than 221,000 pages of new documents.

Even aside from the dubious timing of Plaintiff’s document “dump,” Plaintiff’s production did

not comply with its obligations under the Fed. R. Civ. P. 34. Amazingly, Plaintiff’s document

dump still did not contain the requested documents concerning the conception, reduction to

practice,design,development,saleortransferoftheclaimedinvention.

On February 28, 2013, Plaintiff filed a Cross-Motion for Summary Judgment on patent

validity. (Dkt #170.) In its Response, on April 5, 2013, Crimson submitted a declaration

prepared by Dr. Plavnik. (Dkt #192-1.) On April 11, 2013, Plaintiff’s counsel stated in open

court, that to Replyto Crimson’s Response, it needed to take the deposition of Dr. Plavnik. That

veryday, Plaintiff issued two subpoenas for Dr. Plavnik’s deposition, a subpoena to testify and a

separatesubpoena forproductionofdocuments inhis possession.

On April 10, 2013, after months of trying to arrange the deposition of Marshall Brown,

Crimson filed a motion to compel his deposition as well as production of related prosecution

documents. (Dkt #198.) Peerless refused to produce prosecution documents, arguing they were

privileged, and that Crimson should be estopped from discovering them because Crimson had

alreadyfiledits motionforsummaryjudgment. (Dkt #210,pp.1-5).

Further on April 17, 2013, after months of delaying the deposition of Plaintiff’s 30(b)(6)

designee, the Court compelled the deposition of Nicholas Belcore.8 At his deposition, and five

days before the discovery deadline, Plaintiff produced a binder of additional documents without

any bates numbers. The first page in the binder asserted without corroboration that the ’850

Patent invention was first conceived on January 5, 2005, and was constructively reduced to

practice on January 25, 2005. However, Plaintiff produced no documentation supporting those

assertions.

Plaintiff’s gamesmanship continued on April 19, 2013, when three days before the end of

discovery,Plaintiff abruptlywithdrewits subpoenaof Dr.Plavnik, as well as its subpoena for the

production of documents. Later that day, given Plaintiff’s continued refusal (for over two years)

to provide the most basic information on the origination of the ’850 Patent, with the looming

discovery deadline, Crimson filed a motion to compel production of documents still not

produced on the origination of the ’850 Patent (Dkt #213) and a motion to compel Dr. Plavnik’s

deposition (Dkt #214). In its response, Plaintiff did not deny that it failed to comply with LPR

2.1(a). Instead, Plaintiff argued Crimson was estopped from seeking such documents because

Crimson hadalreadyfiledamotionforsummaryjudgment.(Dkt #225,pp.1-3.)

On April 19, 2013, Crimson also filed a motion for sanctions seeking redress for

Plaintiff’s dumping over 210,000 unorganized pages of documents onto Crimson less than two

8 Crimson previously moved to compel Plaintiff’s deposition pursuant to their 30(b)(6) deposition notice

served January 31, 2012. (Dkt #154). The Court granted that motion. (Dkt #157.) Crimson initially set

the deposition of Peerless’ 30(b)(6) designee, Belcore, for February 21, 2012. After a number of

objectionsbyPeerless,thePeerlesswasfinallycompelledtoproduceBelcoreforadeposition.

months before the close of discovery. (Dkt #212, pp. 10-12.) Crimson also sought sanctions

because Peerless did not answer key interrogatories relevant to Plaintiff’s Rule 30(b)(6) witness

until two days after the witness, Nicholas Belcore, was deposed, despite the fact that those

interrogatories were directly relevant to Belcore’s testimony. In its response, Plaintiff did not

deny that it dumped over 210,000 pages of documents on Crimson in the final two months of

discovery,merelyallegingit was not improper.9 (Dkt #224,pp.4-6.) Further,Crimson brought a

supplemental motion for sanctions on April 22, 2013, after Plaintiff dumped another 30,000

pages of documents on Crimson on the day that discovery closed, April 22, 2013. (Dkt #215, p.

3). Similarly, Peerless did not deny engaging in this conduct, but instead denied that its conduct

was a “document dump,” denied that its conduct was improper, and argued that the delayed

production of these documents was, somehow, Crimson’s fault. (Dkt #226, pp. 1-3.) The

magistrate judge, Susan Cox, ruled in Crimson’s favor on the other issues raised in Crimson’s

motions for sanctions, but did not address Peerless’s conduct in engaging in document dumps.

(Dkt #235.)

On May 8, 2013, the Court denied without prejudice Crimson’s motions to compel the

production of documents from Marshall Brown and to compel production of documents on the

origination of the ’850 Patent. The Court reasoned that the information would not be needed if

the Court were to grant Crimson’s motion for summary judgment on invalidity of the ’850

Patent. The Court granted Crimson’s motion to compel the deposition of GennadyPlavnik. (Dkt

#234.)

On May 31, 2013, Crimson was finally allowed to depose Gennady Plavnik.

9InreSulfuricAcidLitigation,231F.R.D.351,363(N.D.Ill.2005)(“Norandaisnotatlibertyunderthe

federal rules to dump massive amounts of documents, which they concede have ‘no logical order to

them,’ on their adversaries and demand that they try to find what they are looking for.”). Ultimately the

totaldumpedonCrimsonwas315,779documents.

Importantly, Plavnik testified the drawings Plaintiff produced, dated March 3, 2005 through mid-

April 2005, were not the first drawings of the claimed invention; that, in fact, the origination of

the designs of those drawings dated back to the summer of 2004, when he created them, and

would be found in several “ECN” files in the Peerless’ SolidWorks database. Crimson had

sought those drawings during discovery. However, Plaintiff failed to produce them, despite

repeatedrequests.

During and after the Plavnik deposition, Crimson requested Peerless produce the specific

documents Dr. Plavnik referenced at his deposition, including the Withheld Gennady/ECN 6102

drawings and the Withheld RFPF-320/220 information. Though knowing Crimson had just

learned of these references and other conception and design documents, Peerless again refused to

produce them, arguing this time the requests “were made after the April 22, 2013 close of

discovery and were untimely.” (Dkt. #297-9, p. 2.) After a hearing on Crimson’s motion to

compel (Dkt. #297) production of those documents, on July23, 2013, the Court ordered Peerless

to produce “any and all documents relating to the origination of the invention” and further

admonishedPlaintiff,stating:

If there are drawings or documents that reflect, as [Dr. Plavnik]

testified, an origination date that occurred before March 3 of 2005

and you are not producing those, then you will be barred as a

discovery sanction from saying at trial, unless you can show me

that the documents were either destroyed, which happens, or for

some reason can’t be produced, which happens. But you’re going

to have to say something at that point under verification because I

don’t understand how Mr. Plavnik can testifythat there is all kinds

of stuff that goes back to January, I guess, of the prior year, and

there is nothing that’s been produced. So I’m warning you.

(HearingTr.from July23,2013,10).10

10 Subsequent to the July 23, 2013 hearing, it was discovered that Peerless was withholding documents

showing that it had invented the ‘850 Patent on October 7, 2004. (Exhibit G, p. 1; Exhibit H, p. 1.

ExhibitI.)

On September 30, 2013, the Court denied Crimson’s Motion for Summary Judgment on

Non-Infringement, and granted Plaintiff’s Motion for Summary Judgment of Infringement. (Dkt

#329.) Those rulings triggered the next round of discovery motions seeking documents from

Plaintiff on the origination date of the ’850 Patent. On October 2, 2013, the Court reinstated

Crimson’s motion for partial summary judgment of invalidity (Dkt #193.) but barred Crimson

from maintaining invalidity defenses that it failed to timely disclose – those being the statutory

“on-salebardoctrine”andPlaintiff’s failuretonameinventor.(Dkt #331.)

On October 11, 2013, Crimson filed a renewed motion to compel seeking the documents

Plaintiff was required to produce pursuant to LPR 2.1(a), along with origination documents

Plaintiff still not produced, and to compel the deposition of Mr. Brown. (Dkt #333, 1-4.) Plaintiff

responded by blatantly misrepresenting the contents of its initial document production to this

Court, as it argued that it produced these documents in compliance with Rule 2.1(a) and

identified these documents in its Initial Disclosures. If so, they were deceptive and intentionally

misleading,as theywere datedMarch2005,not whenactuallymade in2004.

Further, Plaintiff’s response made numerous misrepresentations to this Court, as

identified in Crimson’s reply, as Plaintiff’s document production still didnot contain anysales or

Plavnikdocuments from 2004or2005.(Dkt #354, pp.4-7.)

On October 24, 2013, the magistrate judge, Susan Cox, noted Plaintiff’s

misrepresentations onthis issue,stating:

As we previously noted, Crimson quite unusually filed a motion

for summary judgment prior to the close of discovery. But we also

emphasized that discovery was never stayed, so there was, in fact,

no reason for plaintiff to have refused production of documents.

Plaintiffnow,oddly,claims that it producedeverything.

(Dkt #359, p. 3.) Judge Cox then ordered Plaintiff to produce all requested documents, to

identify where certain documents are located, to state under verification if a document does not

exist, and, most significant, to state under verification, that it has produced everything. (Dkt

#359, pp. 3-4). The Court also noted that Plaintiff changed its position as to why the deposition

of Brown should not be compelled, and ruled that Crimson was entitled to depose Brown. (Dkt

#359, p. 4.) Ultimately, the Court granted Crimson’s motion, and ordered Plaintiff to produce the

documents on or before November 1, 2013, and to depose Brown on or before November 15,

2013.(Dkt #359,p.4.)

Despite Judge Cox’s unequivocal ruling in Crimson’s favor, Plaintiff failed to comply

with Judge Cox’s order. Instead, Plaintiff produced 283 pages of documents and the verification

of John Potts on November 4, 2013 that it had produced “everything.” That was not the case

however as the November 4 production indicated Plaintiff had additional responsive documents

on the origination of the ’850 Patent. Further, in his verification, John Potts inexplicably

testified that in 2011 and 2012 Peerless had conducted a “comprehensive search for documents

potentially relevant to this action,” and had identified the information for products that practiced

the patent-in-suit, but did not produce those documents until February 26, 2013. (Dkt #370-8, p.

2.) Plaintiff gave no reason for the delaybetween the time that it had located those documents in

the system and the time that it had allegedly produced all the documents that it had in its

possession, nor did it provide any justification for the withholding the documents until February

26, 2013, and then purportedlyincluding them in a 221,000 page dump on Crimson seven weeks

beforediscoveryended.

Most importantly regarding the Withheld References ECN 6102 and DFPF320/220, in

Peerless’ November 4, 2013 production, it for the very first time produced a document,

P0314546, showing the ECN 6102 bracket was ready for patenting by October 1, 2004, i.e., that

is singly covered all three elements of the combination ’850 Patent, and moreover it was an on

sale bar. The duplicity of Plaintiff lay in its having produced to Crimson before the end of

discovery, document P007948, which showed the same bracket but on a drawing dated March 3,

2005, misleading Crimson that the drawing was post-conception and not a bar. (See Document

P007948,filedunderseal as ExhibitP.)11

Peerless’November4,2013productionalso includeddocuments: P0314589,showingthe

bracket shipment to TechData on August 31, 2004; P0315646 – 651, the Installation and

Assembly instructions for the Withheld D-FPF-320 Reference mounts dated October 7, 2004,

showing the brackets were ready for patenting more than a year prior to filing ’850 Patent. All

these belatedly-produced documents were outside the statutory bar grace period and critically

more relevant than the earlier-produced documents. Had these documents been timely produced

in 2011 instead of after motion to compel and orders of Court to produce in late 2013 (after the

deadline for Crimson’s Final Contentions), Crimson would have directed its discovery

productively, instead of wandering around in a fog of misdirection. That is a prime example of

Plaintiff’s misconduct during litigation, as to which the only reasonable inference is deceptive

intent.

Crimson filed a third motion to compel, to contest the insufficiency of Plaintiff’s

production, which this Court granted. (Dkt #370.) During the hearing on Crimson’s motion to

compel, Plaintiff again attempted to limit the scope of discovery and Plaintiff’s counsel made

several representations in open court that Plaintiff had already produced all documents

responsive to Crimson’s requests – that Plaintiff had no more documents and that its Verification

supported that position. (Dkt. #381-4, Hearing Tr. from December 3, 2103 4:5-6; 5:8-10; 6:20-

11 The October 1, 2004 date for the drawings is consistent with Dr. Plavnik’s insistence that the P007948

drawinghadanoriginaldateearlierthanMarch2005.ThedocumentsshowthatPlavnikwascorrect.

21; 8:7-9.) However,the Court noted, “[i]t seemedprettyclear from this motion(Dkt.#370)that

thereare–that therehavebeendocuments withheld.”(Dkt.#381-4,HearingTr.,15:16-17.)

On December 3, 2013, Judge Cox ordered Plaintiff, again, “to produce documents

itemized in Crimson’s motion, including all 6102 documents, prototypes, and all documents

previously ordered to be produced.” (Dkt #377.) Despite repeated representations that it had

produced everything, on December 13, 2013, Plaintiff produced yet another 2,246 pages of

documents and finally made a bracket available for inspection at its counsel’s office even though

Peerless had verified that no brackets existed.12 On December 18, 2013, Plaintiff inexplicably,

andwithout notice,producedanother840 pages ofdocuments.

Further, it is apparent that Peerless did not actually produce all of the documents that it

had in its possession relevant to the ’850 Patent. Each of the verifications provided by Peerless

were factually inadequate. In the case of the Potts’ declaration, his verification was clearly false,

as Peerless continued to produce additional discovery that contradicted Peerless’ claims that it

hadfullycompliedwithCrimson’sdiscoveryrequests.(Dkt #381,pp.2-3.)

In light of these deficiencies, Crimson’s counsel wrote to Peerless’ counsel on December

31, 2013, to ask Peerless to verify the completeness of Peerless’ discovery, to conduct a request-

by-request verification, and to correct several errors in Peerless’ document production. (Dkt.

#381-6, pp. 1-3.) Peerless’ counsel ignored Crimson’s request for verification of completeness,

but, in obvious misdirection, did respond by specifically contesting each of the other identified

12 Crimson inspected the bracket, but Peerless refused to identify the bracket, despite repeated requests

made by Crimson. Peerless’ counsel represented to Crimson’s counsel, in open Court on March 4, 2014

on Crimson’s motion to extend time to file its invalidity motion for summary judgment, that Peerless

would respond to Crimson’s questions about the bracket. It did not do so. Crimson again wrote to

Peerless on March 10, 2014 asking Peerless to identify, among other things, the bracket model and when

itwasmanufactured. Peerlessdidnotrespond.

deficiencies from Crimson’s letter.(Dkt.#386-1,pp.1-3.)13

As set forth in Crimson’s renewed motion for sanctions, filed on January 15, 2014,

Plaintiff never provided Crimson with verification that its document production was complete,

and never even verified that it properly preserved the evidence relevant to this case, even after

Crimson explicitly demanded such a verification in writing. (Dkt #381; Dkt. #381-6, pp. 1-3;

Dkt.#386-1,pp.1-3).

Further, a verification provided by Berkley on January admits that the information

Crimson soughtwas removed from Peerless’ computersystem,as Berkleytestified:

The results of clicking on “Documentation” for ECN 6102 are

shown in P0314804. Clicking on each of the hyperlinks shown in

P0314804 results in an error, an example of which is shown on the

bottom of P0314804. The underlying files appear to have been

moved or deleted from the hyperlinked location. (Emphasis

added)

(Dkt.#381-5,p.3.)

As noted on the face of the document referenced by Berkley’s verification, the document

produced in P0314804, critical documents were deleted. Peerless’ response to Crimson’s fifth

motion to compel later contended that these documents were not deleted, and that it produced

these allegedly deleted documents on January 16, 2014. (Dkt. #386.) So either Berkley lied that

they were deleted, or Peerless lied that they were not. However, beyond Peerless’ unsupported

statements, Peerless produced no evidence by way of verification or otherwise that the

documents numbered P0315646 to P0315682 are actually the documents that were deleted from

Peerless’ system. There was then, and still is now, no way for this Court or Crimson to verify

Peerless’claim.

13 Crimson details the full extent of Peerless’s bad faith discovery conduct in its Renewed Motion for

Sanctions for Plaintiff’s Failure to Comply with This Court’s Discovery Orders. (Dkt. #381.) As the

arguments set forth in Crimson’s motion are still applicable to the present case, Crimson fully

incorporatesitsmotionforsanctionsasthoughfullysetforththerein.(Dkt.#381.)

On January 16, 2014, after yet another verification falsely claimed that Peerless had no

more documents to produce, Peerless at last produced some 2004 Plavnik documents, however

limited. Peerless produced pre-bar “instruction sheets relating to Peerless model DFPF-320

brackets.” These documents should have been produced in 2011 as part of Peerless’ initial

disclosures and productions under LPR 2.1. These documents establish, without doubt that a

reasonable Examiner would have found the ’850 Patent invalid as a matter of law pursuant to

§102(b).

The belatedly-produced Installation and Assembly instruction sheets (P0315646-651)

clearly showed the Peerless model DFPF-320 brackets; that they were ready for sale, being

“Approved” by Peerless’ Mark Berens prior to the statutory bar date; that the sheets carried a

“Patent Pending,” notice; and that they were drawn by “WPL,” that is, William Phong Lam, the

principal inventor. Peerless did not produce to Crimson any documents from 2004 from Berens

or Lam, or about any patent application that may have been pending at the time (in October

2004), so the patent pending notice was false, or was reference to the ’850 application then in

process ofbeingwritten, but not fileduntil overayearlater.

The production of the DFPF-320 Installation and Assembly instruction documents

indicates at the very least that Lam and Berens should have had LPR 2.1 discovery-responsive

information on their respective hard drives. Yet, none were produced. Peerless engaged an e-

discovery consultant, which should have run proper searches across all of Peerless’ databases,

not just the ECN database. Responsive documents existed in other databases (where Peerless

found some of them), and likelythe hard drives of Lam, Plavnik, Berens, and others who worked

in the Peerless Design Group in 2004. However, Peerless did not produce anything from those

hard drives from the 2004 period. Peerless decided to conduct a belated search only in mid-

January 2014, and it refused to verify that it conducted a proper search and that its production

was complete. Peerless ignored the Court’s orders and admonishments. Peerless’ hide-and-seek

approach to discovery is clear intent to deceive. It prejudiced Crimson because this case would

have been resolved earlier had Peerless produced all responsive documents in 2011 under the

LPRs, whichit was obligatedtodo.

Peerless has still failed to produce huge swaths of evidence relevant to Crimson’s

inequitable conduct defense. Peerless never produced the entirety of the work e-files of Plavnik,

or Lam’s work e-files on the ECN 6102 project, including SolidWorks drawings files. Despite

Plavnik’s testimony that the Gennady Bracket was on display at the CEDIA show in September

of 2004, Peerless produced no list ofPeerless’ employees that attended the show, did not identify

what brackets were displayed at the show, and did not produce the promotional materials handed

out by Peerless. Further, Crimson was only able to obtain some of the information pertaining to

Plavnik because it obtained these documents from Plavnik, who was hesitant to cooperate with

Crimson. Peerless also failed to produce any information related to the AL-101 sales to

ActiveLight in May 2004, the shipment of ECN 6102 Brackets to TechData in August of 2004,

or the sales and shipment information of the DFPF-320 and RTFPF-220 from October through

December of 2004. Likewise, Plaintiff produced only fragmentary evidence of the sales of

brackets that occurred in 2005. This is the evidence Peerless was required to produce at the start

of this litigation under LPR 2.1(a), but did not. Peerless deliberately refused to comply with the

LPRs, andhas neverproducedthesedocuments.

Additionally, Peerless engaged in egregious over-litigation and re-litigation to bury

Crimson in paperwork, e.g. bringing motions that the TRK50B bracket was not prior art on at

least 4 separate occasions, including twice after the Court ruled that it was. Peerless counsel

raisedthat contentionthe 4th timeat theJuryInstructionphase.

Peerless made a mockery of the Federal Rules and the LPRs pertaining to discovery, by

deliberately withholding material document production and opposing deposition discovery until

after close of discovery, then falsely claimed it would be unfairly prejudiced if Crimson was

permitted to rely on Peerless’ belatedly produced documents. That claim is absurd, as the

evidence Peerless (successfully) sought to exclude were Peerless’ own documents relating to

work done by its employees in 2004, of which it was fully aware, and that it should have

produced under the LPRs and Crimson’s Requests, as repeatedly ordered by the Court. The

numerous instances of Plaintiff’s litigation misconduct set out above demonstrates an inference

ofintent todeceive.

IV.CONCLUSION

The conclusion is inescapable. Peerless carried its intent to deceive the PTO into this

Court by engaging in litigation misconduct: deliberate selection of evidence to only post-2004

documents; hiding critically relevant evidence; delay through meritless objection and outright

disregard of requests and court orders; and specious claims of prejudice by Crimson’s defenses.

The collective weight of this litigation misconduct is conclusive that the single most reasonable

inferencetobedrawnis that Peerless had, andcontinues tohave,anintent todeceive.

The collective weight of the evidence amply supports the Court’s finding of deceptive

intent that is the single most reasonable inference that can be drawn from that evidence. In view

of the materiality of the withheld references, the Court is respectively urged to grant Crimson’s

motion and declare the ‘850 Patent to be unenforceable as a matter of law based on Peerless’

InequitableConduct.

Dated: May23,2018

Respectfullysubmitted,

CRIMSONAV, LLC and

VLADIMIR GLEYZER

By: /s/ PeterR.Ryndak

JosephR.Marconi (#1760173)

VictorJ.Pioli (#6256527)

PeterR.Ryndak (#6238006)

JOHNSON&BELL, LTD.

33W.MonroeStreet,Suite2700

(312)372-0770

#5200111

CERTIFICATE OFSERVICE

I hereby certify that on May 23, 2018 I have electronically filed the foregoing with the

Clerk of the Court using the CM/ECF system which sent notification of such filing to all parties

ofrecord.

/s/ PeterR.Ryndak