Liberty Pumps v. Little Giant
Liberty Pumps (“LP”) (represented by another law firm) sued Little Giant (“LG”) for patent infringement in federal court in New York. LP also filed a motion for a preliminary injunction seeking to preliminarily enjoin LG from making and selling allegedly infringing basins and covers, during the pendency of the infringement action. Still represented by the other law firm. LP’s preliminary injunction motion was denied. LP perceived its defeat as a bad one. LG was emboldened enough to accuse LP of committing fraud on the Patent Office (in obtaining its patent for allegedly failing to disclose known prior art to the Examiner) and counterclaiming to recover its attorneys fees and a declaration of the unenforceability of the patent.
Our firm was hired at this point to take over the case. We filed a request in the USPTO to reexamine LP’s own patent in view of the reference relied on by LG in its attempt to invalidate the LP patent in the trial court. Following the granting of the request, we then sought to stay the trial court proceedings pending the outcome of the reexamination proceedings, which the trial court granted following briefing and oral argument, thereby saving LP from the expense of ongoing litigation while its patent was being reexamined.
During the reexamination, LP received a favorable ruling by the USPTO that some of its claims were likely to survive reexamination in light of prior art relied on by LG. We used this ruling as an opportunity to bring LG to the settlement table. After much coaxing LG agreed to negotiate in the form of non-binding mediation. Following the selection of a mediator located in Chicago, the parties participated in a one-day mediation. Prior thereto, the parties submitted detailed position papers on liability and damages. As a result of the mediation LG agreed to pay LP a significant sum for past damages and agreed to stop manufacturing the infringing basin and cover. The win was significant for LP in that it allowed it to enter buying groups that it had been previously locked out off, by virtue of LG’s presence in the group selling basins and covers. LP was now able to sell its patented basins and covers to members within the group, as well as cross sell its other products into the buying group.