In The United States Court of Appeals · 4. The names of all law firms and the partners and...

81
2017-1175, -1760, -1811 THE LEX GROUP DC 1825 K Street, N.W. Suite 103 Washington, D.C. 20006 (202) 955-0001 (800) 856-4419 Fax: (202) 955-0022 www.thelexgroup.com In The United States Court of Appeals For The Federal Circuit TINNUS ENTERPRISES, LLC, ZURU LTD., Plaintiffs Appellees, v. TELEBRANDS CORPORATION, BED BATH & BEYOND, INC., FRY’S ELECTRONICS, INC., KOHL’S DEPARTMENT STORES, INC., THE KROGER COMPANY, SEARS HOLDING CORPORATION, TOYS ‘R’ US-DELAWARE, INC., WALGREENS BOOTS ALLIANCE, INC., Defendants Appellants. APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS IN NOS. 6:16-CV-00033-RWS-JDL AND 6:16-CV-00034-RWS-JDL, JUDGE ROBERT SCHROEDER III. CORRECTED BRIEF OF APPELLEES Thomas M. Dunlap Jeffrey D. Ahdoot David Ludwig DUNLAP BENNETT & LUDWIG PLLC Robert D. Spendlove 1717 Pennsylvania Avenue, NW, Suite 1025 Eric L. Olavson Washington, DC 20006 DUNLAP BENNETT & LUDWIG PLLC (202) 316-8558 211 Church Street, SE Leesburg, Virginia 20175 (703) 777-7319 Counsel for Appellees Counsel for Appellees Brian M. Koide Cortland C. Putbrese DUNLAP BENNETT & LUDWIG PLLC DUNLAP BENNETT & LUDWIG PLLC 8300 Boone Boulevard, Suite 550 2307 East Broad Street, Suite 301 Vienna, Virginia 22182 Richmond, Virginia 23223 (703) 777-7319 (804) 977-2688 Counsel for Appellees Counsel for Appellees Dated: August 10, 2017 Case: 17-1175 Document: 73 Page: 1 Filed: 08/10/2017

Transcript of In The United States Court of Appeals · 4. The names of all law firms and the partners and...

Page 1: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

2017-1175, -1760, -1811

THE LEX GROUPDC 1825 K Street, N.W. Suite 103 Washington, D.C. 20006

(202) 955-0001 (800) 856-4419 Fax: (202) 955-0022 www.thelexgroup.com

In The

United States Court of Appeals For The Federal Circuit

TINNUS ENTERPRISES, LLC, ZURU LTD.,

Plaintiffs – Appellees,

v.

TELEBRANDS CORPORATION, BED BATH & BEYOND, INC.,

FRY’S ELECTRONICS, INC., KOHL’S DEPARTMENT

STORES, INC., THE KROGER COMPANY, SEARS HOLDING

CORPORATION, TOYS ‘R’ US-DELAWARE, INC.,

WALGREENS BOOTS ALLIANCE, INC.,

Defendants – Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF TEXAS IN NOS. 6:16-CV-00033-RWS-JDL

AND 6:16-CV-00034-RWS-JDL, JUDGE ROBERT SCHROEDER III.

CORRECTED BRIEF OF APPELLEES

Thomas M. Dunlap Jeffrey D. Ahdoot

David Ludwig DUNLAP BENNETT & LUDWIG PLLC

Robert D. Spendlove 1717 Pennsylvania Avenue, NW, Suite 1025

Eric L. Olavson Washington, DC 20006

DUNLAP BENNETT & LUDWIG PLLC (202) 316-8558

211 Church Street, SE

Leesburg, Virginia 20175

(703) 777-7319

Counsel for Appellees Counsel for Appellees

Brian M. Koide Cortland C. Putbrese

DUNLAP BENNETT & LUDWIG PLLC DUNLAP BENNETT & LUDWIG PLLC

8300 Boone Boulevard, Suite 550 2307 East Broad Street, Suite 301

Vienna, Virginia 22182 Richmond, Virginia 23223

(703) 777-7319 (804) 977-2688

Counsel for Appellees Counsel for Appellees Dated: August 10, 2017

Case: 17-1175 Document: 73 Page: 1 Filed: 08/10/2017

Page 2: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

i

CERTIFICATE OF INTEREST

Counsel for Tinnus Enterprises, LLC certifies that

1. The full name of the party represented is: TINNUS ENTERPRISES,

LLC.

2. The names of the real parties in interest represented are: TINNUS

ENTERPRISES, LLC.

3. All parent corporations and any publicly held companies that own 10

percent or more of the stock in the party represented are: NONE.

4. The names of all law firms and the partners and associates that have

appeared for the party in the lower tribunal or are expected to appear for the party

in this Court and who are not already listed on the docket for the current case are:

• FINDLAY CRAFT: Eric Findlay and Debby Gunter

• DUNLAP, BENNETT & LUDWIG: Thomas Croft, Kevin Streit,

Noah Fontanez, W. Calvin Smith, and Ellis Bennett.

• FERGUSON, BRASWELL, FRASER, KUBASTA: Kelly Kubasta

and Dana Campbell

Dated: August 10, 2017 /s/ Thomas M. Dunlap

Thomas M. Dunlap

DUNLAP BENNETT & LUDWIG PLLC

211 Church Street SE

Leesburg, VA 20175

Telephone: (703) 777-7319

Facsimile: (703) 777-3656

Case: 17-1175 Document: 73 Page: 2 Filed: 08/10/2017

Page 3: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

ii

CERTIFICATE OF INTEREST

Counsel for ZURU LTD. certifies that

1. The full name of the party represented is: ZURU LTD.

2. The names of the real parties in interest represented are: ZURU LTD.

3. All parent corporations and any publicly held companies that own 10

percent or more of the stock in the party represented are: NONE.

4. The names of all law firms and the partners and associates that have

appeared for the party in the lower tribunal or are expected to appear for the party

in this Court and who are not already listed on the docket for the current case are:

• FINDLAY CRAFT: Eric Findlay and Debby Gunter

• DUNLAP, BENNETT & LUDWIG: Thomas Croft, Kevin Streit,

Noah Fontanez, W. Calvin Smith, and Ellis Bennett.

Dated: August 10, 2017 /s/ Thomas M. Dunlap

Thomas M. Dunlap

DUNLAP BENNETT & LUDWIG PLLC

211 Church Street SE

Leesburg, VA 20175

Telephone: (703) 777-7319

Facsimile: (703) 777-3656

Case: 17-1175 Document: 73 Page: 3 Filed: 08/10/2017

Page 4: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

iii

TABLE OF CONTENTS

Page

CERTIFICATES OF INTEREST ............................................................................... i

TABLE OF CONTENTS ......................................................................................... iii

TABLE OF AUTHORITIES .................................................................................... vi

GLOSSARY OF ABBREVIATIONS ...................................................................... ix

STATEMENT OF RELATED CASES ..................................................................... x

STATEMENT OF THE ISSUES............................................................................... 1

STATEMENT OF THE CASE .................................................................................. 2

I. Commercialization and Enforcement of the Invention ......................... 2

A. Josh Malone Invents Bunch O Balloons ..................................... 2

B. Telebrands Copies Bunch O Balloons ........................................ 3

C. The District Court Preliminarily Enjoins Balloon

Bonanza ....................................................................................... 5

D. Telebrands Copies Bunch O Balloons Again ............................. 6

E. Tinnus Files a New Lawsuit, Moves to Preliminary

Enjoin Battle Balloons, and Presents Evidence of

Irreparable Harm ......................................................................... 7

F. Tinnus’ Evidence Supporting Infringement ............................. 11

G. Tinnus Presents Evidence in Support of Validity ..................... 13

H. The District Court Enters a Second Preliminary

Injunction Against Telebrands .................................................. 19

Case: 17-1175 Document: 73 Page: 4 Filed: 08/10/2017

Page 5: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

iv

II. The Patents-in-Suit .............................................................................. 21

SUMMARY OF THE ARGUMENT ...................................................................... 23

I. The District Court Did Not Err in Finding a Likelihood of

Success on the Merits .......................................................................... 23

II. The District Court Did Not Err in Finding Irreparable Harm ............. 25

ARGUMENT ........................................................................................................... 27

I. Legal Standard ..................................................................................... 27

II. The District Court Correctly Found a Likelihood of Success on

the Merits for the ’282 Patent .............................................................. 28

A. The District Court’s Finding of Likelihood of

Infringement of the ’282 Patent is Unchallenged ..................... 28

B. The District Court Did Not Err in Finding No Substantial

Question of Validity for the ’282 Patent ................................... 29

1. The district court correctly found that Telebrands

failed to raise a substantial question as to

obviousness for the ’282 Patent ...................................... 29

a. The district court did not misinterpret

“fluid” ................................................................... 31

b. The district court did not misapply the

Sufficiently Limited limitation ............................. 33

c. The district court did not err in finding no

inherency .............................................................. 37

2. The District Court Did Not Err in Considering the

Objective Indicia Including Copying ............................. 40

3. This Court Can Consider Other Objective Indicia

that was Before the District Court .................................. 42

Case: 17-1175 Document: 73 Page: 5 Filed: 08/10/2017

Page 6: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

v

III. The District Court Correctly Found a Likelihood of Success on

the Merits for the ’749 Patent .............................................................. 45

A. The District Court Did Not Err in Finding a Likelihood

of Infringement for the ’749 Patent .......................................... 46

1. The district court did not misconstrue “common

face” ................................................................................ 47

2. The district court did not err in finding that Battle

Balloons likely infringes ................................................. 54

3. The district court consistently applied “second

end” ................................................................................. 56

B. The District Court Did Not Err in Finding No Substantial

Question of Validity for the ’749 Patent ................................... 60

IV. The District Court Did Not Err in Finding Irreparable Harm ............. 61

CONCLUSION ........................................................................................................ 65

CERTIFICATE OF FILING AND SERVICE

CERTIFICATE OF COMPLIANCE

Case: 17-1175 Document: 73 Page: 6 Filed: 08/10/2017

Page 7: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

vi

TABLE OF AUTHORITIES

PAGE(S)

CASES

Abbott Labs. v. Andrx Pharms., Inc.,

452 F.3d 1331 (Fed. Cir. 2006) ..................................................................... 28

Aria Diagnostics, Inc. v. Sequenom, Inc.,

726 F.3d 1296 (Fed. Cir. 2013) ..................................................................... 27

AstraZeneca LP v. Apotex, Inc.,

633 F.3d 1042 (Fed. Cir. 2010) ......................................................... 23, 27, 29

Bettcher Indus., Inc. v. Bunzl USA, Inc.,

661 F.3d 629 (Fed. Cir. 2011) ....................................................................... 37

Brown Williamson Tobacco v. Philip Morris,

229 F.3d 1120 (Fed. Cir. 2000) ..................................................................... 43

Elbex Video, Ltd. v. Sensormatic Electronics Corp.,

508 F.3d 1366 (Fed. Cir. 2007) ..................................................................... 49

Glaxo Grp. Ltd. v. Torpharm, Inc.,

153 F.3d 1366 (Fed. Cir. 1998) ............................................................... 42, 45

Leo Pharm. Prods. v. Rea,

726 F.3d 1346 (Fed. Cir. 2013) ..................................................................... 45

Oakley, Inc. v. Sunglass Hut Int’l,

316 F.3d 1331 (Fed. Cir. 2003) ..................................................................... 27

Par Pharm., Inc. v. TWi Pharms., Inc.,

773 F.3d 1186 (Fed. Cir. 2014) ..................................................................... 27

Polymer Techs., Inc. v. Bridwell,

103 F.3d 970 (Fed. Cir. 1996) ....................................................................... 28

Case: 17-1175 Document: 73 Page: 7 Filed: 08/10/2017

Page 8: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

vii

PowerOasis, Inc. v. T-Mobile USA, Inc.,

522 F.3d 1299 (Fed. Cir. 2008) ..................................................................... 29

Procter & Gamble Co. v. Kraft Foods Glob., Inc.,

549 F.3d 842 (Fed. Cir. 2008) ................................................................. 27, 28

Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc.,

75 F.3d 1568 (Fed. Cir. 1996) ....................................................................... 40

Research Corp. Technologies v. Microsoft Corp.,

627 F.3d 859 (Fed. Cir. 2010) ....................................................................... 29

Sepulvado v. Jindal,

729 F.3d 413 (5th Cir. 2013) ......................................................................... 28

Tinnus Enters., LLC v. Telebrands Crop.,

2016 WL 7230903 (E.D. Tex. Dec. 13, 2016) .............................................. 13

TIP Systems, LLC v. Phillips & Brooks/Gladwin, Inc.,

529 F.3d 1364 (Fed. Cir. 2008) ..................................................................... 35

Tinnus Enters., LLC v. Telebrands Corp.,

846 F.3d 1190 (Fed. Cir. 2017) ..............................................................passim

Trebro Mfg., Inc. v. Firefly Equip., LLC,

748 F.3d 1159 (Fed. Cir. 2014) ..................................................................... 27

WBIP, LLC v. Kohler Co.,

829 F.3d 1317 (Fed. Cir. 2016) ..................................................................... 41

Winter v. Natural Res. Def. Council, Inc.,

555 U.S. 7 (2009) ........................................................................................... 63

STATUTES

35 U.S.C. § 103 .............................................................................................. 5, 24, 51

35 U.S.C. § 112 .......................................................................................................... 6

Case: 17-1175 Document: 73 Page: 8 Filed: 08/10/2017

Page 9: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

viii

35 U.S.C. § 112(b) ..................................................................................................... 5

35 U.S.C. § 282 ........................................................................................................ 29

OTHER AUTHORITIES

“A father-of-eight from Texas has come up with an invention that could

transform the way hot summer days are spent. . . .” (ABC News)

(http://abcnews.go.com/Lifestyle/father-creates-genius-water-

ballooninvention/story?id=24698486) ..................................................................... 15

http://gizmodo.com/this-simple-contraption-lets-you-make-100-water-

balloon-1608997035 .................................................................................................. 4

“[A] Texas dad has invented a contraption that could alter the course of

summer: Bunch O Balloons, a gadget that allows anyone with a hose to fill

dozens of water balloons at the same time.” (People)

(http://www.people.com/article/waterballoon- kickstarter)..................................... 15

“Hero Builds a Genius Machine That Can Fill 100 Water Balloons in a

Minute.” (Time) (http://time.com/3029563/hero-builds-a-genius-machine-

that-can-fill-100-water-balloons-in-a-minute) ......................................................... 15

“Just as gunpowder and the atomic bomb revolutionized human warfare as

we know it, this clever invention by Josh Malone, a Texas-based father of

eight, will change summer water balloon warfare forever.” (Bored Panda)

(http://www.boredpanda.com/water-balloon-bunch-o-balloons-josh-malone) ....... 15

“This genius dad figured out how to fill 100 water balloons in one minute. .

Forget Potato salad, because there’s now a Kickstarter for a cause that

actually demands attention: water balloon fights.” (Buzzfeed)

(https://www.buzzfeed.com/rachelzarrell/balloonbonanza?utm_term=.qyj56

YbP1#.wk2BE9Ze5) ................................................................................................ 15

Case: 17-1175 Document: 73 Page: 9 Filed: 08/10/2017

Page 10: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

ix

GLOSSARY OF ABBREVIATIONS

Abbreviation Description

Blue Brief Opening Brief of Defendants-Appellants

Board Patent Trial and Appeal Board

Boise U.S. Pat. Application Pub. No. US 2008/0121309

(Appx1848-1896)

Cooper U.S. Pat. No. 5,826,803 (Appx2258-2264)

Donaldson U.S. Pat. No. 5,014,757 (Appx2596-2605)

Lee U.S. Pat. Application Pub. No. US 2005/0004430

(Appx2274-2284)

Patents-in-Suit ’282 Patent and ’749 Patent

Retailer Action Tinnus Enterprises Inc. v. Wal-Mart, Inc. d/b/a Wal-

Mart, No. 6:16-cv-00034 (E.D. Tex. filed Jan. 26, 2016)

Retailers Bed Bath & Beyond Inc, Fry’s Electronics, Kohl’s

Department Stores Inc, Sears Holding Corporation, The

Kroger Company, Toys “R” Us-Delaware, Inc., and

Walgreens Boots Alliance, Inc., collectively

R&R Report and Recommendation of United States Magistrate

Judge (Appx1-29)

Saggio U.S. Patent Application Pub. No. US 2013/0118640

(Appx2266-2272)

Telebrands Telebrands Corporation and the Retailers

Tinnus Tinnus Enterprises, LLC and ZURU Ltd., collectively

Tinnus I Tinnus Enters., LLC v. Telebrands Corp.,

No. 6:15-cv-00551-RC-JDL (E.D. Tex. filed Dec. 16,

2015)

Case: 17-1175 Document: 73 Page: 10 Filed: 08/10/2017

Page 11: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

x

Tinnus I Appeal Tinnus Enters., LLC v. Telebrands Corp., 846 F.3d 1190

(Fed. Cir. 2017)

Tinnus II Tinnus Enters., LLC v. Telebrands Corp., No. 6:16-cv-

00033-RWS-JDL (E.D. Tex. filed Jan. 26, 2016)

Tinnus III Tinnus Enterprises, LLC v. Telebrands Corp., No. 6:17-

cv-00170-RWS-JDL (E.D. Tex. filed Mar. 20, 2017)

USPTO United States Patent & Trademark Office

Wal-Mart Wal-Mart, Inc. d/b/a Wal-Mart

Weir U.S. Pat. No. 6,478,651 (Appx2652-2653)

ZURU ZURU Ltd.

’066 Patent U.S. Patent No. 9,051,066

’282 Patent U.S. Patent No. 9,315,282

’749 Patent U.S. Patent No. 9,242,749

Case: 17-1175 Document: 73 Page: 11 Filed: 08/10/2017

Page 12: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

xi

STATEMENT OF RELATED CASES

No other appeal in or from these district court actions was previously before

this or any other court.

The following federal court cases may be directly affected by the Court’s

decision in this appeal:

1. In Tinnus Enterprises, LLC v. Telebrands Corp., No. 6:15-cv-

00551-RC-JDL (E.D. Tex. filed Dec. 16, 2015) (“Tinnus I”),

Appellees Tinnus Enterprises, LLC and ZURU Ltd. (collectively,

“Tinnus”), accuse Telebrands Corporation and other defendants of

infringing U.S. Patent No. 9,051,066 (“the ’066 Patent”), which is the

parent patent to the two patents at issue here: U.S. Patent Nos.

9,242,749 (“the ’749 Patent”) and 9,315,282 (“the ’282 Patent”)

(collectively, “the Patents-in-Suit”).1 The district court preliminarily

enjoined Telebrands based on its infringement of the ’066 Patent.

Telebrands appealed that decision and this Court affirmed. Tinnus

Enters., LLC v. Telebrands Corp., 846 F.3d 1190 (Fed. Cir. 2017)

(“Tinnus I Appeal”). Tinnus I is currently stayed pending the outcome

of Tinnus’s appeal of the Patent Trial and Appeal Board’s (“Board”)

1 This Brief refers to “Telebrands” collectively as Telebrands Corporation and the

Retailers (defined below).

Case: 17-1175 Document: 73 Page: 12 Filed: 08/10/2017

Page 13: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

xii

final written decision finding the ’066 patent unpatentable as

indefinite (see below).

2. In Tinnus Enterprises, LLC v. Telebrands Corp., No. 17-1726

(Fed. Cir.), Tinnus is appealing the Board’s final written decision

finding that the term “substantially filled” in the ’066 Patent is

indefinite under 35 U.S.C. § 112(b).

3. In Tinnus Enterprises, LLC v. Telebrands Corp., No. 6:17-cv-

00170-RWS-JDL (E.D. Tex. filed Mar. 20, 2017) (“Tinnus III”),

ZURU has accused Telebrands, Bulbhead.com, and Bed Bath and

Beyond, Inc. of infringing the Patents-in-Suit and U.S. Patent Nos.

9,527,612 and 9,533,779. Tinnus has accused Telebrands’ third

iteration of its multiple balloon filling product, Easy Einstein

Balloons. The district court granted Tinnus’ motion for a preliminary

injunction against defendants and a preliminary injunction order has

issued. Defendants are appealing that order and this Court has

deemed that appeal to be a companion case to this appeal.

Case: 17-1175 Document: 73 Page: 13 Filed: 08/10/2017

Page 14: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

1

STATEMENT OF THE ISSUES

1. Whether the district court properly found likelihood of success on the

merits where:

a. with respect to the ’282 Patent, Telebrands (i) does not

challenge the district court’s likelihood of infringement finding

on appeal and (ii) has failed to show that the district court

abused its discretion in finding no substantial question of

validity based on obviousness or

b. alternatively, with respect to the ’749 patent, Telebrands has

failed to show that the district court abused its discretion in

finding (i) likely infringement and (ii) no substantial question of

validity based on obviousness.

2. Whether the district court abused its discretion in finding a likelihood

that Tinnus would suffer irreparable harm in the absence of an injunction.

Case: 17-1175 Document: 73 Page: 14 Filed: 08/10/2017

Page 15: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

2

STATEMENT OF THE CASE

I. Commercialization and Enforcement of the Invention

This Court is already acquainted with some of the basic facts having already

rendered its opinion in the Tinnus I Appeal. See 846 F.3d 1194-1202.

A. Josh Malone Invents Bunch O Balloons

As the Court may recall, in early 2014, Josh Malone—the inventor of the

Patents-in-Suit—finalized his designs for a revolutionary new toy product (a

product that is now commercially offered as “Bunch O Balloons”), which would

allow someone to fill as many as 100 water balloons in approximately 60 seconds.

Appx1326, ¶2. The device contains a hose attachment and the other end is fitted

with 35 or 37 balloons. Appx1327, ¶3. When the hose is turned on, the balloons

automatically fill and then seal themselves upon their release from the hose

attachment. Id.

Immediately after developing his first successful Bunch O Balloons

prototype, Appx1326, ¶2, Mr. Malone, through his company, Tinnus Enterprises,

LLC, filed a patent application for his invention on February 7, 2014. Appx1327,

¶4. In March 2014, Mr. Malone began taking steps to have his Bunch O Balloons

product manufactured. Appx1327, ¶5.

To help raise the necessary funds to manufacture and market his invention,

Mr. Malone launched a Kickstarter.com internet campaign on July 22, 2014.

Case: 17-1175 Document: 73 Page: 15 Filed: 08/10/2017

Page 16: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

3

Appx1327, ¶6. Mr. Malone’s invention was an instant hit. Funding via Kickstarter

reached nearly $1 million, and his Kickstarter video featuring the Bunch O

Balloons product has had approximately 2.9 million views. Appx1327, ¶¶7-8.

Within days, various national media outlets, including, among others, Sports

Illustrated, Time, People, Good Morning America and the Today Show, all covered

and reported on Mr. Malone’s novel Bunch O Balloons invention. Appx1327-

1328, ¶¶9-10. Bunch O Balloons went viral on the web. Id., ¶10.

In August 2014, Mr. Malone and ZURU Ltd. (“ZURU”), a small family-

owned toy company founded in New Zealand, partnered to manufacture, market,

and sell the Bunch O Balloons product. Appx1328, ¶¶14-15. Tinnus licensed to

ZURU any present or future patent rights owned by Tinnus relating to the Bunch O

Balloons product. Id. at ¶15; see also Appx1334, ¶3.

B. Telebrands Copies Bunch O Balloons

After learning about the Bunch O Balloons product through Kickstarter,

Telebrands decided to copy and sell a virtually-identical replica of Tinnus’s Bunch

O Balloons product, which Telebrands called “Balloon Bonanza.” There is no real

dispute that Telebrands copied Bunch O Balloons. Telebrands only disputes

whether copying should be considered; it does not dispute the fact that copying did

occur. See Blue Brief at 39-40 (alleging that district court’s “reliance” on copying

was error but not disputing that copying did occur).

Case: 17-1175 Document: 73 Page: 16 Filed: 08/10/2017

Page 17: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

4

Documents produced by Telebrands confirm that Telebrands copied

Tinnus’s Bunch O Balloons product. Appx196-204; see also Appx1328-1329,

¶¶15-17; Appx1334, ¶¶4-5. For example, on the same day that Mr. Malone

launched his Kickstarter.com campaign for Bunch O Balloons (July 22, 2014), an

employee in Telebrands’s new product division emailed Telebrands’s executives

about Mr. Malone’s product and the Kickstarter.com campaign. Appx203.

Shortly thereafter, Telebrands retained a contractor to systematically and

deliberately copy Mr. Malone’s Bunch O Balloons product. Email communications

between Telebrands and this contractor indisputably confirm that Mr. Malone’s

Bunch O Balloons product was deliberately copied. See Appx196-204. The district

court relied on these emails in its analysis: “Plaintiffs [sic] have submitted

Telebrands’ emails that discuss the development of Telebrands’ balloon products,

and state, for example: ‘[t]his is only the first proto[type] so assume this will have

37 filler rods and balloons (or more or less) like theirs and work exactly like the

original ‘Bunch of Balloons.’” Appx23 (quoting Appx200) (emphasis in original).

As noted above, the Bunch O Balloons device is fitted with 35 or 37 balloons.

Appx1327, ¶3. The district court only referenced one of numerous emails that

unquestionably demonstrate copying. These emails unambiguously reference and

compare the product Telebrands was developing (i.e., copying) and the Bunch O

Balloons product. See, e.g., Appx196-204.

Case: 17-1175 Document: 73 Page: 17 Filed: 08/10/2017

Page 18: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

5

In December 2014, Telebrands began marketing and offering for sale its

Balloon Bonanza product, Appx1328, ¶16, which was well-after Mr. Malone had

already filed a patent application (February 7, 2014), begun manufacturing Bunch

O Balloons (March 2014), gone public with his invention (July 22, 2014), and

marketed and sold his product. Appx1326, ¶2, Appx1327, ¶¶5-6, Appx1328, ¶13.

C. The District Court Preliminarily Enjoins Balloon Bonanza

On June 9, 2015, the United States Patent and Trademark Office (“USPTO”)

issued the ’066 Patent. Appx1700-1711. Tinnus filed suit against Telebrands that

same day. Appx1277. Tinnus quickly moved for a preliminary injunction against

Telebrands’ Balloon Bonanza product, which the district court granted. Appx1303-

1499, Appx1299-1302. Telebrands appealed that decision and this Court affirmed.

See Tinnus Enters., LLC v. Telebrands Corp., 846 F.3d 1190 (Fed. Cir. 2017)

(“Tinnus I Appeal”). This Court found, among other things, that the district court

did not err in finding that Telebrands failed to raise a substantial question of

invalidity under either 35 U.S.C. § 103 or 35 U.S.C. § 112(b), and that Tinnus

demonstrated a likelihood of irreparable harm.

With respect to § 103, this Court affirmed the district court’s conclusion that

Telebrands’ obviousness argument (for the Cooper, Saggio, and Lee references)

failed to raise a substantial question of validity, finding that “under a plain error

review, we cannot say that the district court committed a clear or obvious error

Case: 17-1175 Document: 73 Page: 18 Filed: 08/10/2017

Page 19: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

6

when it found insufficient motivation to combine these disparate references.” Id.

at 1207. With respect to § 112, this Court affirmed the district court’s finding that

Telebrands failed to meet their burden in showing that the term “substantially

filled” found in claim 1 was indefinite. Id. at 1197-98.

D. Telebrands Copies Bunch O Balloons Again

With the district court’s injunction preventing it from selling Balloon

Bonanza, Telebrands began selling in December 2015 a “new” multiple balloon

filling product under various names, including Balloon Bonanza HD, Battle

Balloons, Balloon Bonanza HD Color Burst, Battle Balloons Color Combat, and

Battle Balloons Color Burst (collectively, “Battle Balloons”). Appx209, ¶5,

Appx137, ¶40. Battle Balloons was a modification of the first-generation product

(Balloon Bonanza) in only one respect—the housing on Battle Balloons was

modified from having a flat planar shape to a conical shape. Appx214-216.

Photographs of both products are reproduced below:

Balloon Bonanza Battle Balloons

Case: 17-1175 Document: 73 Page: 19 Filed: 08/10/2017

Page 20: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

7

E. Tinnus Files a New Lawsuit, Moves to Preliminary Enjoin Battle

Balloons, and Presents Evidence of Irreparable Harm

On January 26, 2016, the ’749 Patent issued. That same day, Tinnus filed a

lawsuit claiming that Telebrands’ new Battle Balloons product infringes the ’749

Patent in the matter below. Appx112; Tinnus Enters, LLC v. Telebrands Corp.,

6:16-cv-00033-RWS-JDL (E.D. Tex. filed Jan. 26, 2016) (“Tinnus II”). On the

same day, Tinnus Enterprises, LLC individually filed a separate lawsuit against

Wal-Mart, Inc. claiming infringement of the ’749 Patent. Tinnus Enterprises Inc.

v. Wal-Mart, Inc. d/b/a Wal-Mart, No. 6:16-cv-00034 (E.D. Tex. filed Jan. 26,

2016) (“the Retailer Action”). On April 19, 2016, the ’282 Patent issued and

Tinnus amended its complaint to include the newly issued ’282 Patent. Appx89-

111, Appx132. Tinnus Enterprises, LLC separately amended its complaint to

include the ’282 Patent and to add the additional retailer defendants Bed Bath &

Beyond Inc, Fry’s Electronics, Kohl’s Department Stores Inc, Sears Holding

Corporation, The Kroger Company, Toys “R” Us-Delaware, Inc., and Walgreens

Boots Alliance, Inc.2 (collectively “the Retailers”).3

2 Wal-Mart has since been dismissed from the district court action.

3 On June 16, 2016, the district consolidated Tinnus II (6:16-cv-00033) with the

Retailer Action (6:16-cv-00034) for pre-trial purposes. Appx12776-12777. ZURU

Ltd. was added to the Retailer Action as an involuntary plaintiff. Appx12785.

Case: 17-1175 Document: 73 Page: 20 Filed: 08/10/2017

Page 21: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

8

Two weeks after the ’282 Patent issued, on May 3, 2016, Tinnus filed a

second motion for preliminary injunction, this time seeking an injunction covering

Telebrands’ Battle Balloons product. Tinnus supported its motion with substantial

evidence, including numerous expert reports, fact witness declarations, and fact

witness testimony.

Specifically, Tinnus presented extensive evidence and argument which

demonstrated that they had suffered irreparable harm as a result of Telebrands’

actions.4 Tinnus’ evidence included two consumer confusion surveys that showed a

likelihood of consumer confusion between ZURU’s and Telebrands’ competing

balloon filling products. Appx1161-1269. The second survey also showed that

consumers had likely confused whether Tinnus’ or Telebrands’ multiple balloon

filling products were the original, first-to-market product. Appx1234-1235; see

also generally Appx1227-1269. Tinnus also presented declarations and testimony

by a branding expert (Ms. Rhonda Harper) and an expert economist (Dr. Ray

Perryman), who each opined that Telebrands had severely harmed Tinnus and that

further harm was likely without an injunction.5

4 See Appx4361-4370, Appx4372-4373, Appx4377-4389, Appx4402-4403,

Appx4456-4458, Appx4473-4479, Appx5557, Appx5560, Appx5606-5620.

5 Appx884-1119, Appx2842-2938, Appx1121-1160, Appx4377-4388 at 25:4-

36:11, Appx4472-4476 at 38:5-41:7.

Case: 17-1175 Document: 73 Page: 21 Filed: 08/10/2017

Page 22: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

9

In summary, Tinnus’ evidence showed that they were suffering harm in the

form of:

• Direct competition in a two-player market (Appx907-908, ¶51, Appx914-

915, ¶64, Appx1272-1275, ¶¶4, 8, 13-14, 16-18, Appx1132-1133, ¶51,

Appx4403 at 51:4-12);

• Consumer confusion (Appx1120-1269 (two consumer confusion surveys

conducted by Ms. Harper), Appx2868-2870, ¶¶56-57, Appx2902,

Appx2913, App2923, Appx2926-2936, Appx4368-4370 at 16:20-18:3,

Appx4474-4476 at 39:18-41:7);

• Harm to ZURU’s relationships and loss of goodwill with its retailer

customers (Appx2837-2841, Appx4366-4368 at 14:8-16:18);

• Likely continued price erosion (Appx908-909, ¶¶52-53, Appx2858-2867,

¶¶32-53, Appx4361-4366 at 9:13-14:7, Appx4378-4381 at 26:6-29:18);

• Harm to reputation and loss of goodwill with consumers (Appx916-17,

¶¶67-70, Appx1125-1129, Appx1134-1136, ¶¶52-60, Appx1140,

Appx4368-4370 at 16:20-18:3, Appx4385-4388 at 33:3-36:11);

• Loss of market position (Appx2855-2856, ¶25) and loss of business

opportunities (id.; see also Appx2837-2841, Appx4366-4368 at 14:8-

16:18);

Case: 17-1175 Document: 73 Page: 22 Filed: 08/10/2017

Page 23: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

10

• Loss of mindshare (id.; Appx912-916, ¶¶59-66, Appx2871-2873, ¶¶60-67,

Appx1124-1132, ¶¶23-51, Appx1140, Appx1226-1235, Appx4381-4385 at

29:16-33:7, Appx4475-4476 at 40:8-41:7).

For example, ZURU received numerous reviews and emails from customers

that complained how the colored balloons stained their skin and clothes.6 Some of

these complaints were posted on ZURU’s own Amazon.com webpage, harming

ZURU’s online star-rating and reputation. See, e.g., Appx2913. Considering that

ZURU had never sold colored-water multiple balloon filling products, Appx4369

at 17:1-3, and it being undisputed that ZURU and Telebrands were at least the two

main competitors in the mass-water-balloon market, Appx5560 at 12:20-23, the

district court found that Telebrands’ Battle Balloons product was the likely culprit

behind these complaints. Appx26, Appx40. The district court therefore found that

Telebrands had confused consumers and caused loss of goodwill. See id.

As another example of the type of harm Tinnus had suffered, the Magistrate

Judge found that Telebrands’ direct competition with ZURU Ltd. had harmed

ZURU Ltd.’s relationship with an important retail customer—Walmart. Appx26.

Relying on evidence offered by ZURU Ltd. (Appx4367-4368 at 15:2-16:18,

Appx2837-2841), the Magistrate Judge found that “Wal-Mart has indisputably put

all retail relationships with ZURU on hold for 2017,” and that but-for Telebrands,

6 See, e.g., Appx4368-4370 at 16:20-18:3, Appx2868-2870, ¶¶56-57, Appx2902,

Appx2913, App2923, Appx2926-2936.

Case: 17-1175 Document: 73 Page: 23 Filed: 08/10/2017

Page 24: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

11

that relationship never would have been harmed. Appx26. The Magistrate Judge

further found that “the harm here is that ZURU was deprived of the ability to come

to the market with its monopoly right, and deprived of the opportunity to build new

and gainful relationships with retailers absent Telebrands’ presence in the market.”

Appx26. The District Judge agreed with these findings, stating that “the Magistrate

Judge properly concluded that [Tinnus’] relationships with their retailers were

affected by Telebrands because [Tinnus] would not be in court against their

retailers if not for Telebrands’s actions.” Appx41.

F. Tinnus’ Evidence Supporting Infringement

Tinnus also presented substantial evidence and argument in support of

infringement.7 In particular, Tinnus submitted an expert declaration of Dr. Barry

M. Kudrowitz, in which he opined that Battle Balloons infringed the asserted

claims of the ’282 and ’749 Patents. Appx213-239, Appx3000-3010. Further, at the

preliminary injunction hearing, Dr. Kudrowitz testified regarding infringement.

Appx4458-4463. To show that each claim limitation was met, Dr. Kudrowitz also

submitted a claim chart with images of the Battle Balloons products from the

Battle Balloons website, actual photographs of the products, images from the

product instruction manual, and other screenshots of the website and related

7 Appx213-239, Appx3000-3010, Appx4458-4463, Appx2809-2810, Appx5098,

Appx5102-5104, Appx5589-5596.

Case: 17-1175 Document: 73 Page: 24 Filed: 08/10/2017

Page 25: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

12

product videos. Appx213-239, Appx3000-3010. Tinnus also submitted the actual

Battle Balloons products as evidence of infringement. Appx8, Appx185.

As noted by the district court, Telebrands raised no objections to the

Magistrate Judge’s finding that Battle Balloons likely infringes the ’282 Patent.

Appx32. Similarly, on appeal, Telebrands does not challenge the district court’s

finding that Battle Balloons likely infringes the ’282 Patent. Instead, Telebrands

limits its infringement defenses to the ’749 patent on appeal. Blue Brief at 40-58.

Specifically, Telebrands claims that the “second end” and “common face”

limitations of the ’749 Patent are not present in its Battle Balloons product. Id.

As noted by the district court, those terms were construed in the Tinnus I

litigation. Appx11-14. In Tinnus I, the district court construed the term “second

end” to mean “an outer limit of the housing distinct from the first end,” and the

term “common face” was construed to mean “a shared outer surface of the housing

through which a plurality of holes extend.” Appx12-13.

In the Report and Recommendation of United States Magistrate Judge

(“R&R”), the Magistrate Judge adopted the district court’s prior constructions, but

clarified that the meaning of the “outer limit” term in the construction of “second

end” was synonymous with “outer surface.” Appx14. The Magistrate Judge

Case: 17-1175 Document: 73 Page: 25 Filed: 08/10/2017

Page 26: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

13

clarified his prior construction of the term because the parties’ experts disputed the

meaning of the district court’s construction.8 Id.

After carefully reviewing all the evidence and applying those claim

constructions, the district court found that the Battle Balloons product infringed

both the “second end” and “common face” limitations of the ’749 patent. Appx14,

Appx32-34.

G. Tinnus Presents Evidence in Support of Validity

Tinnus also presented extensive evidence to rebut Telebrands’ invalidity

defense of obviousness. To show non-obviousness, Tinnus submitted a declaration

by Dr. Kudrowtiz, who opined that Telebrands had not identified prior art which

showed each and every claim limitation of the patented invention.9 Appx2960-

2979, ¶¶50-97. Tinnus also submitted evidence of objective indicia that included:

8 After the injunction issued against Battle Balloons, due to Telebrands’

“continuously modifying interpretations of the Court’s construction,” the district

court again explained the meaning of “second end” to Telebrands. Tinnus II, 2016

WL 7230903, at *7 (E.D. Tex. Dec. 13, 2016). The district court explained that

“the language of the patent is clear in that it requires both a ‘first end’ and a

‘second end’ and they must be distinct. The Court has stated this from the outset.

The outer limit is simply synonymous with an ‘end’ of the housing as a person of

ordinary skill in the art would understand the plain and ordinary meaning of that

word. The ‘second end’ must be an end of the housing. There is no support in the

intrinsic record that ‘second end’ must be ‘one of at least two lengthwise limits.’”

Id.

9 Dr. Kudrowitz offered analysis as to Telebrands’ indefiniteness and written

description challenges as well. Appx2956-2960.

Case: 17-1175 Document: 73 Page: 26 Filed: 08/10/2017

Page 27: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

14

(1) copying by Telebrands (Appx196-204; see also Appx1328-1329,

¶¶15-17, Appx1334, ¶¶4-5);

(2) commercial success for Tinnus, ZURU, and Telebrands (Appx1327-

1328, ¶¶6-10, Appx2848-2857, ¶¶13-27, Appx3034-3035, Appx4388-

4389 at 36:22-37:20.)

(3) praise by others (Appx2981-2983, Appx2875-2891, Appx3195-3416,

Appx4465-4466 at 30:21-32:12);

(4) long-felt need (Appx2983, Appx2857, ¶27, Appx3164 at [0003-

0004]);

(5) failure by others (Appx2983-2984);

(6) decades-long time lapses between the prior art and the filing date of

the invention (Appx2983); and

(7) thirty-five licensing requests from major toy companies such as

Hasbro (Appx2852-2853, ¶20).

As discussed, when Mr. Malone launched his July 2014 Kickstarter

campaign, the product went viral online and went on to raise almost $1 million in

funding, an extremely rare occurrence. Appx2848-2850, ¶¶13-15, Appx1327-1328,

¶¶6-10. Notable publications such as Time Magazine praised the invention,

recognizing a long-felt need for a product that could rapidly fill and self-tie water

Case: 17-1175 Document: 73 Page: 27 Filed: 08/10/2017

Page 28: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

15

balloons.10 Appx2982, Appx2889. Here is just a small sampling of articles praising

Bunch O Balloons:

• “Hero Builds a Genius Machine That Can Fill 100 Water Balloons in a

Minute.” (Time) (http://time.com/3029563/hero-builds-a-genius-machine-

that-can-fill-100-water-balloons-in-a-minute) (Appx2889).

• “[A] Texas dad has invented a contraption that could alter the course of

summer: Bunch O Balloons, a gadget that allows anyone with a hose to fill

dozens of water balloons at the same time.” (People)

(http://www.people.com/article/waterballoon- kickstarter) (Appx2886).

• “A father-of-eight from Texas has come up with an invention that could

transform the way hot summer days are spent. . . .” (ABC News)

(http://abcnews.go.com/Lifestyle/father-creates-genius-water-

ballooninvention/story?id=24698486) (Appx3036).

• “This genius dad figured out how to fill 100 water balloons in one minute. . . .

Forget Potato salad, because there’s now a Kickstarter for a cause that

actually demands attention: water balloon fights.” (Buzzfeed)

(https://www.buzzfeed.com/rachelzarrell/balloonbonanza?utm_term=.qyj56

YbP1#.wk2BE9Ze5) (Appx2877).

• “Just as gunpowder and the atomic bomb revolutionized human warfare as

we know it, this clever invention by Josh Malone, a Texas-based father of

eight, will change summer water balloon warfare forever.” (Bored Panda)

(http://www.boredpanda.com/water-balloon-bunch-o-balloons-josh-malone)

(Appx2876).

After the Kickstarter campaign ended, approximately 35 companies,

including major game and toy manufacturers such as Hasbro (one of the largest toy

companies in the world), approached Mr. Malone about licensing the patent.

Appx2852-2853, ¶20. After consideration, Mr. Malone chose to place his 10 Indeed, Tinnus’ own expert was aware of Bunch O Balloons and its Kickstarter

campaign for over a year before he was even contacted by counsel for Plaintiffs to

act as an expert in this case. Appx3034, ¶101.

Case: 17-1175 Document: 73 Page: 28 Filed: 08/10/2017

Page 29: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

16

intellectual property with ZURU by way of an exclusive licensing agreement.

Appx2853, ¶20.

The press and popularity of Bunch O Balloons was so widespread that it

quickly caught the attention of Telebrands. See Appx203. As noted by the district

court, on the same day that the Kickstarter campaign launched, “one of

[Telebrands’ product development] employees sent a link of an article praising

Plaintiffs’ Bunch O Balloons product to Telebrands’s CEO.” Appx38, Appx203.

Impressed with Bunch O Balloons (as was everyone else), Telebrands soon

thereafter copied Mr. Malone’s Bunch O Balloons product. See Appx196-204.

Both ZURU and Telebrands independently went on to achieve success with

their respective multiple balloon filling products.11 Appx2851-2857, ¶¶18-27.

Bunch O Balloons is ZURU’s best-selling product ever both worldwide and in the

United States. Appx2851, ¶18. ZURU’s overall company revenue skyrocketed due

to the success of Bunch O Balloons. Id. Indeed, sales for Bunch O Balloons are on

track to eclipse one of the best-selling water toys of all-time. Appx2853, ¶21.

Additionally, Telebrands’ Chief Operating Officer and Executive Vice President

Bala Iyer similarly testified that Telebrands’ Battle Balloons product was

successful. Appx2856, ¶26, Appx3420 at 33:7-15.

11 Tinnus’ expert, Dr. Kudrowitz, opined that Tinnus’ Bunch O Balloons product is

coextensive with claim 1 of the ’749 patent and claims 1-3 of the ’282 patent.

Appx3035, ¶103.

Case: 17-1175 Document: 73 Page: 29 Filed: 08/10/2017

Page 30: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

17

Bunch O Balloons has also won numerous industry accolades. Appx2850-

2851. For example, in January 2016, Bunch O balloons won the 2016 Toy Award

for the “SchoolKids” category at Spielwarenmesse, a global toy fair hosted in

Nuremberg, Germany. Appx2850-2851, ¶16. The Spielwarenmesse is the world’s

leading fair for the toy industry with over 2,800 exhibitors from 60+ nations and

more than 70,000 trade visitors from 120 nations. Id. The toys are judged based on

their enjoyment, originality, safety, workmanship and quality, understandability

and potential for trade success. Id. The jury was sufficiently impressed with Bunch

O Balloons to declare it a superb product. Id.

Bunch O Balloons was also awarded the overall “Toy of the Year”

distinction in addition to winning the Outdoor category, at the 2015 Australian Toy

Association Product of the Year Awards in Melbourne. Appx2851, ¶17. In just

three months, the product was the best-selling summer toy in Australia. Id.

In addition to presenting evidence of praise by others and a long-felt need,

Tinnus also presented evidence of failure by others. Appx2983-2984. For example,

Dr. Kudrowitz noted that the prior art Donaldson reference would not operate as

described to automatically and detach and seal an air-filled balloon—and that

Donaldson would not work with a non-compressible fluid like water. Appx2983-

2984, ¶110. As another example, Dr. Kudrowitz noted that the Saggio prior art

application represented a failed attempt to solve the water balloon problem, as that

Case: 17-1175 Document: 73 Page: 30 Filed: 08/10/2017

Page 31: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

18

application was rejected for non-enablement.12 Appx2984, ¶111. Indeed, Dr.

Kudrowitz testified that “[f]rom my own experience in the toy industry, I am aware

that the problem of filling multiple balloons simultaneously and automatically

sealing them has been a daunting one.” Appx2983, ¶109.

Tinnus also presented evidence with respect to the chronology of the prior

art. Appx2984, ¶112. Specifically, Dr. Kudrowitz observed “[t]hat the various prior

art references Telebrands has cited are spread over several decades is, to me, also

telling: Donaldson dates to 1990; Cooper, to 1997; Weir, to 1999; Lee, to 2004;

Saggio, to 2012; and Air Force 4 Inflator, to 2013.” Id. Dr. Kudrowitz opined that

this “evidences the failure of others to solve the problems solved by the invention

described and claimed in the ’749 and ’282 Patents and embodied in Tinnus’

Bunch O Balloons product.” Id.

Further, Dr. Kudrowitz testified at the hearing as to why he believed the

patents to be non-obvious, including that Telebrands had failed to show each and

every claim limitation in the prior art. Appx4464-4466 at 29:15-31:12. Also at the

hearing, Dr. Perryman testified that Bunch O Balloons was a successful product.

12 The 2012 Saggio application disclosed in the specification that “[t]he time and

energy required to tie multiple water balloons is often significant and often

interferes with producing a large number of filled water balloons. Thus, there is a

need for a water balloon that does not require tying and a system/method of

providing a plurality of water balloons relatively quickly.” Appx3164 at [0003-

0004] (emphasis added).

Case: 17-1175 Document: 73 Page: 31 Filed: 08/10/2017

Page 32: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

19

Appx4388 at 36:18- 37:20. In short, Tinnus presented substantial evidence

regarding the objective indicia of non-obviousness.

H. The District Court Enters a Second Preliminary Injunction

Against Telebrands

On July 12, 2016, the Magistrate Judge issued the R&R, recommending that

Tinnus’ motion for a preliminary injunction be granted. Appx1-29. Telebrands

objected to the R&R and requested oral argument, which the district court granted,

allowing Telebrands a second opportunity to present all of its arguments.

Appx4657, Appx4949. After considering the parties’ substantial briefing, the

testimony of witnesses (both live at the hearing and by declaration), and lengthy

oral argument by the parties’ counsel in two hearings, the district court granted

ZURU’s motion for preliminary injunction on September 29, 2016. Appx30-42.

In that opinion, which also incorporated the 29-page R&R, Appx1-29, the

District Judge found that the ’282 and ’749 Patents were likely infringed. Appx32-

34. The District Judge also concluded that there was no substantial question as to

the validity of the ’066 patent. Appx35-40. In addition, the District Judge found

that Telebrands’ actions had caused irreparable harm to Tinnus. Appx40-41.

Subsequently, on October 31, 2016, the district court issued an order

enjoining Telebrands “from making, using, importing, marketing, advertising,

offering to sell, or selling in the United States the Battle Balloons product or any

Case: 17-1175 Document: 73 Page: 32 Filed: 08/10/2017

Page 33: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

20

colorable imitation of the same that infringes the ’749 and/or the ’282 Patent.”

Appx46.

After the district court granted Tinnus’ motion for a preliminary injunction,

Telebrands filed two additional motions: a motion for the court to reconsider the

preliminary injunction and a motion to stay the preliminary injunction. The district

court denied both motions. Appx6854-6868. In its opinion, the district court stated

that “[w]hile Telebrands utilized ten pages of its brief to reargue its positions to the

Court and explain why it disagrees with the Court’s decision, Telebrands has not

identified any finding which amounted to an abuse of the Court’s discretion.” Id. at

7.

For example, in its motion for a stay, Telebrands re-urged the same non-

infringement arguments with respect to “second end.” Id. at 7-8. The district court

stated that “[a]s the Court has repeatedly explained, there is no support for such a

limiting construction [as a ‘linear limit’ for ‘second end’], and therefore

Telebrands does not have a viable non-infringement argument by arguing that the

‘second end’ is limited to a linear end of the housing.” Id. at 8. For “common

face,” the district court stated that “[t]he Court has continued to understand and

assess the moving interpretations of Telebrands’s proposal for the term ‘common

face’ . . . Telebrands’s argument again presents a disagreement with the Court but

does not clearly showcase an abuse of discretion.” Id. at 9.

Case: 17-1175 Document: 73 Page: 33 Filed: 08/10/2017

Page 34: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

21

Telebrands now appeals the issuance of the district court’s preliminary

injunction orders and its denial of Telebrands’ motion for reconsideration.

II. The Patents-in-Suit

The ’282 and ‘749 Patents are both directed to a system and method for

simultaneously filing multiple containers with fluid. Appx108, col. 1:22-24;

Appx97, col. 1:20-22. One application of the ’066 Patent is the mass-filling of

water balloons, as shown in the embodiment depicted in Figure 1:

Appx103; Appx91.

The ’749 Patent issued from a continuation of the application that issued as

the ’066 Patent. Appx89. The ‘282 Patent issued from a continuation of the

application that issued as the ‘749 Patent. Appx100. The ’749 and ’282 Patents

Case: 17-1175 Document: 73 Page: 34 Filed: 08/10/2017

Page 35: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

22

share a common specification with the ’066 Patent, which was asserted in Tinnus I

and discussed by this Court in the Tinnus I Appeal.

As this Court noted in the context of the ’066 Patent, the specification refers

to a plurality of containers 18—balloons in the embodiment above—being

clamped to the tubes 16 using elastic valves 20. Tinnus I Appeal, 846 F.3d at

1196. The Court noted that the specification “refers to the force applied by the

elastic valves to keep the containers attached to the tubes as the ‘connecting

force.’” Id.

The Court went on to hold that the specification “teaches three ways to

overcome the connecting force such that the containers detach from the tubes…

(1) pulling the containers away from the tubes[]; (2) shaking the device to

overcome the connecting force holding the containers to the tubes[]; and

(3) allowing the containers to fall off due to gravity[].” Id.

Case: 17-1175 Document: 73 Page: 35 Filed: 08/10/2017

Page 36: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

23

SUMMARY OF THE ARGUMENT

Telebrands fails to meet the high standard required to show the district court

abused its discretion in granting the preliminary injunctions. Contrary to

Telebrands’ scattershot approach, the district court carefully considered the

likelihood of success on the merits and correctly found independently and

separately that both the ’282 and ’749 Patents were likely valid and infringed. The

district court also carefully considered the irreparable harm factors and found that

Telebrands’ Battle Balloons product continues to irreparably harm Tinnus.

Telebrands’ attempts to circumvent these findings by wrongly arguing that the

district court improperly ignored or rejected its positions. But that is simply not

true. None of Telebrands’ convoluted mischaracterizations of the record below

transform the district court’s decision into an abuse of discretion.

I. The District Court Did Not Err in Finding a Likelihood of Success on

the Merits

All that is required to show a likelihood of success on the merits is “that [the

patentee] will likely prove infringement of one or more claims of the Patents-in-

Suit, and that at least one of those same allegedly infringed claims will also likely

withstand the validity challenges presented by the accused infringer.” AstraZeneca

LP v. Apotex, Inc., 633 F.3d 1042, 1050 (Fed. Cir. 2010). Here, the Court’s task is

simplified because it need only find likelihood of success with respect to at least

the ’282 Patent or the’749 Patent. With respect to the ’282 Patent, Telebrands

Case: 17-1175 Document: 73 Page: 36 Filed: 08/10/2017

Page 37: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

24

concedes infringement by not challenging the district court’s infringement

findings. Accordingly, Telebrands cannot demonstrate any abuse of discretion for

the likelihood of infringement of the ’282 Patent. This only leaves validity of the

’282 Patent. To the extent this Court finds that the district court did not clearly err

in finding no substantial question of validity for the ’282 Patent, the Court does not

need to consider Telebrands’ arguments with respect to the ’749 Patent.

Likelihood of success would be established solely on the ’282 Patent alone.

With respect to validity in the broader context, the district court properly

found no substantial question of validity for the ’282 and ’749 Patents. As this

Court found in the Tinnus I Appeal, the district court did not plainly err in rejecting

the combination of Cooper, Saggio, and Lee under 35 U.S.C. § 103. 846 F.3d at

1207. Telebrands has not shown that the district court below clearly erred in

rejecting those same references for the Patents-in-Suit here. Moreover, the district

court did not abuse its discretion by rejecting the newly asserted Weir and

Donaldson references as neither of them teach detachment by partially filling,

shaking, or both as required by the claims. Appx15, adopted Appx36. The district

court also properly found that Telebrands failed to adequately show that any of the

asserted references inherently teach these limitations. Appx36-37.

To the extent the Court reaches the question of infringement for the ’749

Patent, Telebrands fails to show that the district court clearly erred in finding the

Case: 17-1175 Document: 73 Page: 37 Filed: 08/10/2017

Page 38: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

25

’749 Patent likely infringed. Telebrands’ primary infringement argument is that

the district court misconstrued the terms “common face” and “second end” because

the constructions did not include planarity or linear limitations, respectively. But

Telebrands’ arguments are based on mischaracterizations of the prosecution history

and artificial inconsistencies regarding the district court’s application of these

terms with the prior art. As is shown below, the district court has been forced to

continuously explain its constructions of “common face” and “second end” to stay

ahead of Telebrands’ ever-changing interpretations of those explanations. And, as

the district court has recognized over and over again, Telebrands has created these

inconsistencies by incorrectly interpreting the court’s reasoning. The district

court’s refusal to import Telebrands’ unsupported planarity and linear limitations

fails to demonstrate an abuse of discretion.

II. The District Court Did Not Err in Finding Irreparable Harm

Telebrands also fails to show that the district court clearly erred in finding

irreparable harm. Telebrands complains of “scant” evidence but ignores that the

district court based its decision on the “ample evidence” showing harm, including

the fact that Tinnus and Telebands are direct competitors, evidence showing the

likelihood of continuing price erosion, and evidence of customer confusion. The

district court properly weighed the evidence and found irreparable harm.

Case: 17-1175 Document: 73 Page: 38 Filed: 08/10/2017

Page 39: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

26

Accordingly, Tinnus requests that the Court affirm the district court’s

preliminary injunctions against Telebrands.

Case: 17-1175 Document: 73 Page: 39 Filed: 08/10/2017

Page 40: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

27

ARGUMENT

I. Legal Standard

“A decision to grant or deny a preliminary injunction is within the sound

discretion of the district court, based upon its assessment of four factors: (1) the

likelihood of the patentee’s success on the merits; (2) irreparable harm if the

injunction is not granted; (3) the balance of hardships between the parties; and

(4) the public interest.” Procter & Gamble Co. v. Kraft Foods Glob., Inc., 549

F.3d 842, 847 (Fed. Cir. 2008) (quoting Oakley, Inc. v. Sunglass Hut Int’l, 316

F.3d 1331, 1338-39 (Fed. Cir. 2003)). All that is required to show a likelihood of

success on the merits is “that [the patentee] will likely prove infringement of one

or more claims of the Patents-in-Suit, and that at least one of those same allegedly

infringed claims will also likely withstand the validity challenges presented by the

accused infringer.” AstraZeneca, 633 F.3d at 1050. An accused infringer must

demonstrate a substantial question of validity or infringement to overcome a

showing of likelihood of success on the merits. Trebro Mfg., Inc. v. Firefly Equip.,

LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014) (citing Aria Diagnostics, Inc. v.

Sequenom, Inc., 726 F.3d 1296, 1304 (Fed. Cir. 2013)).

Under both Fifth Circuit and Federal Circuit law, a district court’s decision

to grant a preliminary injunction can only be overturned upon a showing that court

Case: 17-1175 Document: 73 Page: 40 Filed: 08/10/2017

Page 41: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

28

abused its discretion.13 See Sepulvado v. Jindal, 729 F.3d 413, 417 (5th Cir. 2013);

see also Procter & Gamble, 549 F.3d at 845. Establishing an abuse of discretion

in the preliminary injunction context requires a “showing that the court made a

clear error of judgment in weighing relevant factors or exercised its discretion

based upon an error of law or clearly erroneous factual findings.” Abbott Labs. v.

Andrx Pharms., Inc., 452 F.3d 1331, 1335 (Fed. Cir. 2006) (quoting Polymer

Techs., Inc. v. Bridwell, 103 F.3d 970, 973 (Fed. Cir. 1996)).

II. The District Court Correctly Found a Likelihood of Success on the

Merits for the ’282 Patent

A. The District Court’s Finding of Likelihood of Infringement of the

’282 Patent is Unchallenged

Telebrands does not challenge the district court’s finding that claim 1 of the

’282 Patent is likely infringed. Blue Brief at 40-58 (limiting non-infringement

arguments on appeal to the ’749 Patent). Thus, all that is required to affirm the

preliminary injunction below is determining that the district court did not err in

finding the ’282 Patent likely valid. See AstraZeneca, 633 F.3d at 1050 (finding

that for preliminary injunction likelihood of success analysis patentee is only

required to prove that one claim of one patent is likely valid and infringed).

13 In the Tinnus I Appeal, this Court properly applied the plain error standard with

respect to obviousness and indefiniteness because Telebrands did not object to the

Magistrate Judge’s determinations on these issues. 846 F.3d 1203, 1205-07.

Case: 17-1175 Document: 73 Page: 41 Filed: 08/10/2017

Page 42: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

29

B. The District Court Did Not Err in Finding No Substantial

Question of Validity for the ’282 Patent

“A patent shall be presumed valid.” 35 U.S.C. § 282; see also Research

Corp. Technologies v. Microsoft Corp., 627 F.3d 859, 870 (Fed. Cir. 2010) (“A

patent is presumed valid and the party asserting invalidity has the burden of

persuasion to show the contrary by clear and convincing evidence.”). In granting

the preliminary injunction, the district court found that Telebrands failed to

overcome this presumption and raise a substantial question as to validity for the

’282 Patent. In doing so, the district court properly rejected Telebrands’

obviousness arguments as discussed below.

1. The district court correctly found that Telebrands failed to

raise a substantial question as to obviousness for the ’282

Patent

The district court found that the combination of Weir and Donaldson does

not raise a substantial question as to obviousness.14 Appx15. Claim 1 of the ’282

Patent requires, in part, an “elastic fastener being sufficiently limited to permit its

respective container to detach from its respective tube upon one or more of (1) at

14 Telebrands does not mention the fact that the majority of prior art asserted in this

case (including Donaldson) was considered by the Examiner during prosecution. It

is well-settled that an alleged infringer cannot just rehash the prosecution history of

a patent. PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1304 (Fed. Cir.

2008) (“When no prior art other than that which was considered by the USPTO

examiner is relied on by the attacker, he has the added burden of overcoming the

deference that is due to a qualified government agency presumed to have properly

done its job”).

Case: 17-1175 Document: 73 Page: 42 Filed: 08/10/2017

Page 43: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

30

least partially filling the container with fluid and (2) shaking the housing.”

Appx111, col. 6:47-51 (hereinafter “the Sufficiently Limited limitation”).

Although Telebrands claimed that these two references together teach all of the

elements of claim 1, the district court rejected them because neither Weir nor

Donaldson “teaches a method for filling a container with fluid and corresponding

detachment thereof by partially filling or shaking.” Appx15. Specifically, the

Magistrate Judge emphasized the mechanical action and release of Donaldson:

[T]he sealing disclosure in Donaldson discloses a mechanical release

that includes a firing pin and pressurized gas:

([Donaldson], Fig. 5; 4:43–52 (“The pressurized gas escapes into the

volume 48 and fills that volume. The spring 66 moves the spring pin

back into the cocked position with the gasket 70 seated against the

inner container bottom adjacent to the hole in that bottom to seal the

volume except for the orifices 46. The pressurized gas fills the volume

Case: 17-1175 Document: 73 Page: 43 Filed: 08/10/2017

Page 44: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

31

48 and moves through the orifices 46 into the balloon as indicated in

FIG. 4 by the arrows 71’. The O-ring seals the balloon against the

escape of this pressurized gas so the balloon inflates…”).) Not only is

it unclear how it would be obvious to use such a mechanism to

release a plurality of containers filled with water by partially filling

and/or shaking, it appears actually counterintuitive to such a teaching.

Instead, the mechanical action for release disclosed in Donaldson is

actually distinguishable from the present invention, as Donaldson

does not teach removing the container by partially filling or shaking.

Appx15-16 (figure in original; emphasis added). In adopting the Magistrate

Judge’s reasoning, the District Judge also rejected Telebrands’ claim that the O-

rings in Donaldson are inherently capable of performing the recited function

because the Sufficiently Limited limitation “is not necessarily present or the

natural result of combining the prior art references, as the O-rings that Telebrands

relies on are frequently designed specifically not to detach upon shaking.”

Appx37. Telebrands now wrongly claims these findings were clearly erroneous.

a. The district court did not misinterpret “fluid”

Telebrands first claims that the district court improperly distinguished

Donaldson and Weir based on a supposedly erroneous construction of “fluid.”

Blue Brief at 26-28. In support, Telebrands cites certain excerpts from the

Magistrate Judge’s R&R out of context where the word “water” was used instead

of “fluid” to conclude that the court dismissed Donaldson and Weir as irrelevant.

Id. at 27. Telebrands misunderstands the Magistrate Judge’s analysis and

overemphasizes the court’s use of the word “water.” The Magistrate Judge

Case: 17-1175 Document: 73 Page: 44 Filed: 08/10/2017

Page 45: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

32

carefully evaluated the references and found that “neither Weir nor Donaldson

teaches a method for filling a container with fluid and corresponding detachment

thereof by partially filling or shaking.” Appx15. The district court adopted the

Magistrate Judge’s reasoning on this distinction, which does not hinge on the type

of fluid that was disclosed. Appx36.

While the Magistrate Judge did discuss the fact that neither Weir nor

Donaldson discloses filling containers with water, this was not the sole, or even

primary, reason that was articulated for distinguishing these references. For

example, in distinguishing Donaldson, the Magistrate Judge found that “the

mechanical action for release disclosed in Donaldson is actually distinguishable

from the present invention, as Donaldson does not teach removing the

container by partially filling or shaking.” Appx16 (emphasis added). The court

did not make this same distinction when discussing what fluid was used.

Contrary to Telebrands’ claim that lack of water was the court’s reason for

distinguishing Donaldson, it was the “mechanical action for release” (discussed

above) that guided the Magistrate Judge’s conclusion. Nowhere in the R&R does

the Magistrate Judge suggest these references were dismissed as irrelevant.

Indeed, in denying Telebrands’ motion for reconsideration, the district court

confirmed that “the Court did not reject any references as irrelevant. Rather, the

Court considered the references and the testimony provided, and analyzed each

Case: 17-1175 Document: 73 Page: 45 Filed: 08/10/2017

Page 46: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

33

reference and combination, as well as any evidence of a motivation to combine.”

Appx6863.

Telebrands’ misreading fails to demonstrate that the district court’s

reasoning was “clearly erroneous.”

b. The district court did not misapply the Sufficiently

Limited limitation

Telebrands next argues that the district court erred in “analyzing” the

Sufficiently Limited limitation. Blue Brief at 28-39. In support, Telebrands raises

what it portrays as a series of purported errors in the district court’s analysis. But

Telebrands’ underlying complaint is the same—Telebrands contends that the

district court should have found that the O-rings in the prior art (Donaldson and

Lee), by themselves, sufficiently disclose detachment by partially filling or

shaking.

Telebrands initially claims that the district court “barely” mentioned

motivation to combine. Blue Brief at 28. According to Telebrands, this constitutes

an abuse of discretion. Id. Telebrands’ reasoning is faulty. First, the degree to

which the district court addressed Telebrands’ arguments is no basis for finding

error. Second, as admitted by Telebrands, the district court did in fact sufficiently

address motivation to combine. Regarding Donaldson, the Magistrate Judge found

that “[n]ot only is it unclear how it would be obvious to use such a mechanism to

Case: 17-1175 Document: 73 Page: 46 Filed: 08/10/2017

Page 47: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

34

release a plurality of containers filled with water by partially filling and/or shaking,

it appears actually counterintuitive to such a teaching.”15 Appx16.

Moreover, the district court did not necessarily need to reach the question of

motivation as the court found that neither Donaldson nor Weir disclosed

detachment by partially filling or shaking. Appx15. Telebrands does not explain

why the district court was required to reach the issue of motivation where neither

of the references disclosed the actual elements of the claim. No one disputes that

Donaldson discloses an O-ring. But Telebrands’ attempt to transform that simple

disclosure into substantial proof that Donaldson teaches detachment by partially

filling or shaking was properly rejected by the court.

Attempting to get around this critical deficiency, Telebrands next argues that

the district court erroneously interpreted the word “permit” in the phrase “the

restriction of the elastic fastener being sufficiently limited to permit its perspective

container to detach from its respective tube upon one or more of (1) at least

partially filling the container with fluid and (2) shaking the housing . . .” Blue Brief

at 31-33; Appx111. By arguing that the plain meaning of “permit” means “allow,”

Telebrands attempts to circumvent the actual language of the claim that

15 With respect to Lee and Saggio (for the ’749 Patent), the Magistrate Judge also

found that “Telebrands does not sufficiently describe how a person of ordinary

skill in the art would have been motivated to combine Lee with Cooper, which

relates to lawn and garden sprinklers, or Saggio, which relates to a water balloon

system.” Appx23.

Case: 17-1175 Document: 73 Page: 47 Filed: 08/10/2017

Page 48: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

35

detachment occurs upon partially filling or shaking. Instead, Telebrands’ proposed

construction unnecessarily broadens the claim to include any method of

detachment (i.e., mechanical actuation, gravity, pulling, etc.). The district court

properly rejected this argument as the plain language of the claims expressly

requires detachment upon partially filling, shaking, or both. Appx36. By defining

“permit” to allow different forces to cause detachment, the partially filling and

shaking requirements would be rendered meaningless.

Telebrands’ claim that its overly broad interpretation of “permit” is

supported by the intrinsic evidence is unfounded. The ’282 Patent’s specification

discloses “pulling” as an alternative embodiment, not a preferred embodiment. It

is a third alternative, listed only after the claimed embodiments of detaching upon

partially filling or shaking. Appx110 at 4:65-66 (“They can be removed by falling

off, by shaking them off, by pulling them off by hand, etc.”). A construction or

interpretation that excludes an embodiment is not suspect just because it excludes

an alternative embodiment. TIP Systems, LLC v. Phillips & Brooks/Gladwin, Inc.,

529 F.3d 1364, 1373 (Fed. Cir. 2008) (“[C]laims need not be construed to

encompass all disclosed embodiments when the claim language is clearly limited

to one or more embodiments.”).

Telebrands has misconstrued the Magistrate Judge’s analysis by conflating

the term “permit” in the “sufficiently limited to permit” limitation with whether

Case: 17-1175 Document: 73 Page: 48 Filed: 08/10/2017

Page 49: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

36

some other force (e.g., someone manually pulling containers from their respective

tubes) causes detachment. During claim construction, Telebrands again argued for

this open-ended interpretation of “permit,” and the court explained that “[t]he term

‘sufficiently limited,’ as used in the claim, is a limitation of the elastic fastener,”

and that “[t]he term ‘permit’ is not used to imply some other force might be used to

detach the containers, but rather it is used to define the restrictive force of the

elastic fasteners as stated in the claim.” Appx7112, adopted in full at Appx6837.

The court repeatedly stated that the term “sufficiently limited,” as used in the

claim, “is a limitation of the elastic fastener” and not about the use of “some other

force.” Id.

Telebrands argues in the alternative that even if “permit” were interpreted

under the district court’s analysis—i.e, within the actual context of the claims—

Donaldson purportedly discloses that limitation because it teaches detachment after

filling. Blue Brief at 33. But Telebrands is again interpreting the claim out of

context because under this reading of the claim, the term “upon” would be read out

of the claim entirely. The district court correctly found that the mechanical action

for release disclosed in Donaldson fails to “teach detachment upon partially filling,

shaking or both as the claims here require.” Appx36 (emphasis added). Moreover,

Telebrands does not even argue that the court clearly erred in distinguishing the

mechanical action for release in Donaldson over the present invention. Thus, the

Case: 17-1175 Document: 73 Page: 49 Filed: 08/10/2017

Page 50: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

37

district court did not clearly err in rejecting Telebrands’ improper broadening of

the term “permit.”

c. The district court did not err in finding no inherency

Recognizing the deficiencies in the prior art, Telebrands is left making

unsupported conclusions regarding inherency. This Court has been clear regarding

the high standard for asserting inherency in an obviousness context: “We have

recognized that inherency may supply a missing claim limitation in an obviousness

analysis . . . . We have, however, also explained that the use of inherency, a

doctrine originally rooted in anticipation, must be carefully circumscribed in the

context of obviousness.” Par Pharm., Inc. v. TWi Pharms., Inc., 773 F.3d 1186,

1195 (Fed. Cir. 2014) (citations omitted). Thus, inherency requires that the

claimed element necessarily be present or naturally result in the prior-art

reference. Id. “Inherency, however, may not be established by probabilities or

possibilities. The mere fact that a certain thing may result from a given set of

circumstances is not sufficient.” Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d

629, 639 (Fed. Cir. 2011). Telebrands fails to demonstrate that the district court

clearly erred in finding that Donaldson does not inherently disclose the Sufficiently

Limited limitation.

Telebrands first incorrectly claims that the district court ignored evidence

showing the inherent capabilities of the prior art O-rings. Blue Brief at 34. In

Case: 17-1175 Document: 73 Page: 50 Filed: 08/10/2017

Page 51: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

38

actuality, the district court made clear that Telebrands “has not met the high

standard required for inherency” because the limitation that “the connecting force

of the fastener be ‘sufficiently limited to permit’ the container to detach upon

partially filling, shaking or both – is not necessarily present or the natural result of

combining the prior art references, as the O-ring that Telebrands relies on are

frequently designed specifically not to detach upon shaking.” Appx37. The fact

that the district court did not agree with Telebrands’ opinions about O-rings in no

way demonstrates clear error.

Telebrands also alleges that its “unrebutted” evidence proves that the

disclosed O-rings are necessarily capable of detachment by shaking. Blue Brief at

34-35. This is demonstrably false as Tinnus’ expert expressly testified that shaking

is not inherent in the prior art. Appx3062, ¶¶59-60. Moreover, the evidence cited

to by Telebrands—consisting solely of opinion testimony of its own expert—is

lacking any underlying factual support showing that the Sufficiently Limited

Limitation must necessarily be present in the prior art. Telebrands assumes,

incorrectly, that because the district court did not cite its expert in its opinion, it

must not have considered the testimony. This is not a sufficient basis for showing

abuse of discretion.

Without any direct support in the prior art for its inherency theory,

Telebrands takes a step back and attempts to divorce the O-rings from the context

Case: 17-1175 Document: 73 Page: 51 Filed: 08/10/2017

Page 52: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

39

in which they exist in the prior art. By doing this, Telebrands can argue that so

long as some force is somehow applied, and an O-ring is somehow released, then

inherency is proven. Thus, according to Telebrands, the mechanism Donaldson

uses to detach the balloon becomes irrelevant.16 Blue Brief at 36. In addition to

there being no actual support for Telebrands’ position, its theory completely

ignores the context of the claim, which expressly requires that detachment occur

upon partially filling or shaking. Merely describing what an O-ring may or may

not be capable of is insufficient within the context of the claims, which require

more. Simply put, Donaldson does not meet the plain language of the Sufficiently

Limited Limitation because detachment occurs upon mechanical actuation, not

partially filling or shaking.

Telebrands also argues that Donaldson “unambiguously discloses an O-ring

that is capable of detaching when a tube upon which it is attached accelerates

away . . .” Blue Brief at 37. Telebrands’ play on words is another example of how

it consistently misinterprets the district court’s constructions to obtain a favorable

result. “Accelerating away” does not equate to shaking as contemplated by the

claims or the court’s construction of the term. Moreover, the district court

evaluated the alleged admissions by Tinnus’ technical expert (Blue Brief at 36

16 Telebrands’ sleight-of-hand description of the Donaldson firing mechanism is

misleading. Telebrands refers to the mechanism to fill the balloon as irrelevant.

Blue Brief at 34. But it is the same mechanism that ultimately provides the

mechanical actuation and force to detach the balloon.

Case: 17-1175 Document: 73 Page: 52 Filed: 08/10/2017

Page 53: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

40

n.10) on reconsideration and found that “even if this testimony provided the

admissions claimed by Telebrands, which it does not appear to, the purported

admissions of Plaintiffs’ technical expert do not impact the Court’s analysis.”

Appx6858.

Finally, there is nothing inherent in O-rings, particularly the O-rings in

Donaldson, that requires detachment by shaking. And one can imagine many cases

where an O-ring would be designed not to detach upon shaking. As the district

court found, it would be “counterintuitive” to have the O-rings in Donaldson

naturally result in detachment by shaking as that would defeat the purpose of

keeping the O-ring secured until the mechanical actuation of the Donaldson’s

device performs the detachment. Appx16.

Telebrands’ unsupported statements that the prior art O-rings “would have

detached upon shaking” fails to satisfy the high standard for inherency, and the

district could did not clearly err in reaching this conclusion.

2. The District Court Did Not Err in Considering the

Objective Indicia Including Copying

“It is the secondary considerations that are often most probative and

determinative of the ultimate conclusion of obviousness or nonobviousness. Pro-

Mold & Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1573 (Fed. Cir.

1996). The district court found that this evidence, in particular the direct evidence

of Telebrands’ copying, was relevant. Appx23 (citing Appx200). Telebrands does

Case: 17-1175 Document: 73 Page: 53 Filed: 08/10/2017

Page 54: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

41

not dispute that it copied Tinnus’ product, but rather downplays the importance of

copying in the obviousness context. Blue Brief at 36-37. Aside from its general

objections, Telebrands offers no real support for its suggestion that copying is

somehow less important or does not matter here.

It is well-settled that “evidence of copying tends to show nonobviousness.”

WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1336 (Fed. Cir. 2016). The fact that

copying occurred is unquestionably relevant. This is particularly true where the

copying was done by Telebrands, a direct competitor. See id. (“The fact that a

competitor copied technology suggests it would not have been obvious.”).

Telebrands’ attempt to undermine the district court’s reliance on copying by

pointing to its redesigned Battle Balloons product misses the point. The

undisputed fact is that Tinnus’ invention was copied by Telebrands, which “tends

to show nonobviousness.” Id. Simply because the district court found that

Telebrands’ redesigned product had some differences from its original product is

of no consequence.17 Copying occurred, and that should be the end of the inquiry.

17 In the Tinnus I action, after Telebrands released its redesigned Battle Balloons

product, Tinnus moved for contempt to determine whether the redesigned product

was being sold in violation of the existing injunction. (Tinnus I, Dkt. 113). Under

the heightened standard for contempt, the district court denied Tinnus’ motion

finding that the modified housings in Telebrands’ two products were more than

colorably different. (Tinnus I, Dkt. 144). Although not entirely clear, Telebrands

appears to rely on this finding to suggest that anything that occurred before its

redesign is irrelevant to any of the issues in this proceeding. It is not clear how the

district court’s finding during contempt proceedings is relevant as the court still

found that the redesigned product likely infringes.

Case: 17-1175 Document: 73 Page: 54 Filed: 08/10/2017

Page 55: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

42

Accordingly, the district court correctly relied on Tinnus’ evidence of

objective indicia to support its findings.

3. This Court Can Consider Other Objective Indicia that

Were Before the District Court

Telebrands argues on appeal that evidence of copying alone cannot be

sufficient when considering objective indicia. Blue Brief at 39-40. But during the

preliminary injunction proceedings, Tinnus presented overwhelming evidence of

other objective indicia including commercial success, praise by others, long felt

need, failure by others, and licensing. See Statement of the Case, Section I.G.,

supra. In affirming the preliminary injunction below, this Court can rely on these

other objective criteria because “[a]s a general proposition, an appellate court may

affirm a judgment of a district court on any ground the law and the record will

support so long as that ground would not expand the relief granted.” Glaxo Grp.

Ltd. v. Torpharm, Inc., 153 F.3d 1366, 1371 (Fed. Cir. 1998).

For instance, with respect to commercial success, Tinnus presented evidence

that both ZURU and Telebrands independently went on to achieve success with

their respective multiple balloon filling products. Appx2851-2857, ¶¶18-27; see

discussion at 16-17, supra. Appx3420 at 33:7-15.

Case: 17-1175 Document: 73 Page: 55 Filed: 08/10/2017

Page 56: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

43

Telebrands does not contest on appeal that the district court's finding of a

nexus was appropriate. See Blue Brief at 39-40. In any event, nexus is presumed

since Bunch O Balloons, the marketed product, is coextensive with claim 1 of the

’749 patent and claims 1-3 of the ’282 patent. Appx3035, ¶103 (Tinnus’ expert’s

opinion); Brown Williamson Tobacco v. Philip Morris, 229 F.3d 1120, 1129 (Fed.

Cir. 2000) (a nexus is presumed when the marketed product embodies the claimed

features).

Bunch O Balloons has also won numerous industry accolades. Appx2850-

2851. For example, in January 2016, Bunch O balloons won the 2016 Toy Award

for the “SchoolKids” category at Spielwarenmesse, a global toy fair hosted in

Nuremberg, Germany. Appx2850-2851, ¶16. The Spielwarenmesse is the world’s

leading fair for the toy industry with over 2,800 exhibitors from 60+ nations and

more than 70,000 trade visitors from 120 nations. Id. The toys are judged based on

their enjoyment, originality, safety, workmanship & quality, understandability and

potential for trade success. Id. The jury was sufficiently impressed with Bunch O

Balloons to declare it a superb product. Id.

Bunch O Balloons was also awarded the overall “Toy of the Year”

distinction in addition to winning the Outdoor category, at the 2015 Australian Toy

Association Product of the Year Awards in Melbourne. Appx2851, ¶17. In just

three months, the product was the best-selling summer toy in Australia. Id.

Case: 17-1175 Document: 73 Page: 56 Filed: 08/10/2017

Page 57: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

44

In addition to presenting evidence of praise by others and a long-felt need,

Tinnus also presented evidence of failure by others. Appx2983-2984. For example,

Dr. Kudrowitz noted that the prior art Donaldson reference would not operate as

described to automatically and detach and seal an air-filled balloon—and that

Donaldson would not work with a non-compressible fluid like water. Appx2983-

2984, ¶110. As another example, Dr. Kudrowitz noted that the Saggio prior art

application represented a failed attempt to solve the water balloon problem, as that

application was rejected for non-enablement.18 Appx2984, ¶111. Indeed, Dr.

Kudrowitz testified that “[f]rom my own experience in the toy industry, I am aware

that the problem of filling multiple balloons simultaneously and automatically

sealing them has been a daunting one.” Appx2983, ¶109.

Tinnus also presented evidence with respect to the chronology of the

prior art. Appx2984, ¶112. Specifically, Dr. Kudrowitz observed “[t]hat the various

prior art references Telebrands has cited are spread over several decades is, to me,

also telling: Donaldson dates to 1990; Cooper, to 1997; Weir, to 1999; Lee, to

2004;

18 The 2012 Saggio application disclosed in the specification that “[t]he time and

energy required to tie multiple water balloons is often significant and often

interferes with producing a large number of filled water balloons. Thus, there is a

need for a water balloon that does not require tying and a system/method of

providing a plurality of water balloons relatively quickly.” Appx3164 at [0003-

0004] (emphasis added).

Case: 17-1175 Document: 73 Page: 57 Filed: 08/10/2017

Page 58: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

45

Saggio, to 2012; and Air Force 4 Inflator, to 2013.” Id. Dr. Kudrowitz opined that

this “evidences the failure of others to solve the problems solved by the invention

described and claimed in the ’749 and ’282 Patents and embodied in Tinnus’

Bunch O Balloons product.” Id.; accord Leo Pharm. Prods. v. Rea, 726 F.3d 1346,

1356 (Fed. Cir. 2013) (“The elapsed time between the prior art and the [patent in

suit’s] filing date evinces that the [patent in suit’s] claimed invention was not

obvious to try.”).

Further, Dr. Kudrowitz testified at the hearing as to why he believed the

patents to be non-obvious, including that Telebrands had failed to show each and

every claim limitation in the prior art. Appx4464-4466 at 29:15-31:12. Also at the

hearing, Dr. Perryman testified that Bunch O Balloons was a successful product.

Appx4388 at 36:18- 37:20. In short, Tinnus presented substantial evidence in

support of non-obviousness and this Court can rely on that evidence on appeal.

See Glaxo, 153 F.3d at 1371.

III. The District Court Correctly Found a Likelihood of Success on the

Merits for the ’749 Patent

The district court found that Telebrands’ Battle Balloons product likely

infringes both the ’282 and ’749 Patents. Appx7-14; Appx32-33. Telebrands does

not challenge the district court’s finding of likely infringement for the ’282 Patent.

See Blue Brief at 40-58 (limiting non-infringement arguments to the ’749 Patent).

Accordingly, if the Court finds no substantial question of validity with respect to

Case: 17-1175 Document: 73 Page: 58 Filed: 08/10/2017

Page 59: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

46

the ’282 Patent, the Court need not reach the question of likelihood of success for

the ’749 Patent. In the event the Court does consider the ’749 Patent, Telebrands

has failed to demonstrate the district court clearly erred in finding the ’749 Patent

likely valid and infringed.

A. The District Court Did Not Err in Finding a Likelihood of

Infringement for the ’749 Patent

For the ’749 Patent, Telebrands’ argument centers on the district court’s

constructions of the terms “common face” and “second end” in claim 1.

Throughout the related district court litigations, Telebrands has repeatedly

attempted to import limitations into these terms: a planarity requirement for

“common face” and a linear limit for “second end.” And as the district court has

repeatedly found, Telebrands’ proposed limitations have no support in the

prosecution history, ignore the plain language of the claim, and rely on numerous

misinterpretations of the district court’s constructions.

1. The district court did not misconstrue “common face”

In Tinnus I, the district court generally adopted Tinnus’s proposed

construction and construed “common face” to mean “a shared outer surface of the

housing through which a plurality of holes extend.”19 Appx2492-2496.

Telebrands correctly notes that the Magistrate Judge expressly rejected Telebrands’

19 Although Tinnus I involves a different patent (the ’066 Patent), the terms

“common face” and “second end” appear in claim 1 of the ’749 Patent as well,

which is a continuation of the ’066 Patent and shares the same specification.

Case: 17-1175 Document: 73 Page: 59 Filed: 08/10/2017

Page 60: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

47

attempt to limit “common face” as requiring a planar surface. Blue Brief at 41.

The district court applied the same construction for the ’749 Patent in deciding the

preliminary injunction despite Telebrands’ insistence that a “common face” must

be a planar surface with no geometric transitions. Appx12-13.

Telebrands’ primary contention is that the district court’s construction of

“common face” is inconsistent with the prosecution history. This is based on

Telebrands’ mistaken belief that the patentee repeatedly distinguished the Boise

reference (Appx1853) because of the “common face” language. But the patentee

never made any such distinction, and the district court recognized that Telebrands’

argument was based on an incorrect reading of the examiner’s amendment.

During prosecution, the examiner rejected the language “a housing with an

opening at a first end and a plurality of holes at a second end” in view of Boise

reference. Appx1827. Figure 5 of Boise is representative, and is set forth below

Case: 17-1175 Document: 73 Page: 60 Filed: 08/10/2017

Page 61: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

48

(without highlighting from Telebrands):

Boise, Fig. 5 (Appx1853)

Applicant then amended the claim as follows: “a housing comprising with an

opening at a first end and a two-dimensional array a plurality of holes at a second

end . . . “Appx1900 (amendments emphasized in original). The Examiner then

amended claim 1 as follows: “a housing comprising an opening at a first end, and a

plurality of holes extending through a common face of the housing two

dimensional array of holes at a second end . . .” Appx1924. The only explanation

given by the examiner for the amendment was that “[t]he ‘common face’ language

Case: 17-1175 Document: 73 Page: 61 Filed: 08/10/2017

Page 62: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

49

of claim 1 distinguishes the present invention from Boise . . .” Appx1925.

Notably, the Examiner made no other comment regarding the previous amendment

adding “a two-dimensional array.” See Appx1925-1926.

Based only on these amendments and the examiner’s limited explanation,

Telebrands makes a number of assumptions to support its planarity limitation.

First Telebrands’ incorrectly assumes that the addition of “two-dimensional array”

was rejected only because Boise allegedly “also has holes that are arranged in a

two-dimensional array.” Blue Brief at 44. But in striking “two-dimensional array”

and adding the “common face” language, the examiner made no mention of the

“two-dimensional array” language and whether that language was the sole reason

for adding “common face.” Telebrands also incorrectly assumes that the “common

face” language was the only limitation added to the claims to overcome Boise. A

number of additional limitations were added to the claim in response to the

rejection over Boise. Appx1899-1911. This Court has cautioned against using the

file history to limit claim scope without express disclaimer. Elbex Video, Ltd. v.

Sensormatic Electronics Corp., 508 F.3d 1366, 1371 (Fed. Cir. 2007) (prosecution

history disclaimer does not apply “where the alleged disavowal is ambiguous”).

Despite these unsupported interpretations of the prosecution history, the

district court correctly ruled that “common face” has no planarity requirement.

Tinnus I, Dkt. 181 at 6-10. As the district court observed, the Examiner “did not

Case: 17-1175 Document: 73 Page: 62 Filed: 08/10/2017

Page 63: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

50

necessarily amend the claims to distinguish the present invention over the prior art

by requiring that the ‘common face’ be ‘planar’ (indeed the Examiner states no

such requirement in amending the plain language of the claim) because the

important distinction is also made that a plurality of holes extend through a

‘common’ or shared surface of the housing at a second end.” Id. at 8-9.

Telebrands’ nevertheless maintains that the district court was wrong because

“if the patentee had amended the . . . claims to say ‘shared outer surface’ instead if

‘common face,’ the examiner unquestionably would have maintained its initial

rejection of Boise.” Blue Brief at 47. Not only is it improper for Telebrands to

speculate as to what the examiner would have done, Telebrands incorrectly

assumes that the examiner did not take into account the full-scope of the claim,

including the “second end” limitation, when amending claim 1 to overcome Boise.

The district court recognized that the examiner’s amendment adding “common

face” was not made in a vacuum and explained that Telebrands’ argument “fails to

appreciate the plain language of claim 1 and the scope and context of the

Examiner’s statements” and that “Boise does not disclose a shared outer surface

with a plurality of holes at a second end.” Tinnus I, Dkt. 181 at 9 (emphasis in

original). The district court correctly recognized and rejected Telebrands’ overly-

narrow reading of the prosecution history.

Case: 17-1175 Document: 73 Page: 63 Filed: 08/10/2017

Page 64: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

51

Telebrands also claims that the ’749 Patent’s prosecution history also

supports its claim that common face includes a planarity requirement and surfaces

that are separated by geometric transitions. Blue Brief at 45-46. Specifically,

Telebrands cites the examiner’s consideration of the prior art Saggio as compared

to Furey. But once again Telebrands takes the examiner’s distinction too far. In

rejecting certain claims under 35 U.S.C. § 103, the Examiner merely stated that

Saggio “does not disclose that the tubes extend through a common face of the

housing,” and that Furey does disclose “tubes…extending from a common face of

the housing.” Appx2528-2529. The district court correctly found that the

Examiner’s consideration of these references did not require that the “common

face” be a planar surface that is geometrically bounded.

The district court’s refusal to adopt Telebrands tenuous interpretation of the

prosecution history does not constitute an abuse of discretion. As shown in the

figures reproduced below, the Patents-in-Suit and the Furey reference both show a

device in which the tubes extend in generally the same direction from the same

portion of the housing, in other words: a shared outer surface.

Case: 17-1175 Document: 73 Page: 64 Filed: 08/10/2017

Page 65: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

52

’749 Patent, Fig. 1 (Appx91) Furey, Fig. 1 (Appx2546)

In contrast, Boise and Saggio both show a device in which fluid conduits

extend in diametrically opposed directions from widely disparate portions of the

housing.

Boise,

Fig. 5

(Appx18

53)

Saggio, Fig. 7 (Appx2540)

Case: 17-1175 Document: 73 Page: 65 Filed: 08/10/2017

Page 66: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

53

The distinction is not whether the face is absolutely planar or if it has a step

that is bigger than an atom. In fact, the examiner never discussed the narrowing

conduit in Saggio and certainly did not make any distinction based on Telebrands’

supposed geometric transitions. The distinction is whether the prior art shows the

plurality of tubes extending from a shared outer surface – i.e., a common face. The

conduits of Boise and Saggio, which extend from opposite sides of a cylinder,

cannot be tubes attached to “holes extending through a common face

of the housing at a second end.”

The district court additionally noted that “the ‘planar’ requirement also

potentially excludes embodiments disclosed in the specification where the shape of

the housing is ‘conical, cylindrical, pyramidal, etc…’” (Tinnus I, Dkt. 181 at 9).

But Telebrands claims this was a mistake because conical, cylindrical, and

pyramidal shapes can have planar surfaces. Blue Brief at 48. Telebrands again

incorrectly assumes that any conical, cylindrical, or pyramidal shaped object must

have a planar face. Such a limitation has no support in the intrinsic evidence.

Simply because a certain shape may have a planar face does not mean it must have

a planar face. Telebrands is again trying to improperly read limitations into the

claim.

Moreover, Telebrands misconstrues the specification, which does not say

“cone” or “pyramid.” Rather, the specification says “conical” or “pyramidal”—

Case: 17-1175 Document: 73 Page: 66 Filed: 08/10/2017

Page 67: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

54

i.e., the housing can resemble a conical or pyramidal shape but does not have to be

a cone or pyramid per se. Appx99, col. 6:17-24. In fact, the specification

specifically sets forth that “the shapes shown and illustrated . . . are for example

purposes only. Various other shapes may be used herein . . .” Id. Accordingly, the

district court did not err and correctly relied on the specification in rejecting any

planarity requirement. (Tinnus I, Dkt. 181 at 9).

2. The district court did not err in finding that Battle Balloons

likely infringes

Telebrands next argues that under the district court’s construction of

“common face,” “Battle Balloons does not have a ‘plurality of holes’ in a

‘common face’ . . . because each step of the Battle Balloons housing is a discrete

surface with only a single hole.” Blue Brief at 48. Telebrands’ argument largely

relies on its misplaced planarity and geometric boundary limitations. Indeed,

Telebrands even admits that “geometric boundaries” are not included in the district

court’s construction of common face: “a shared outer surface.” Blue Brief at 49.

Telebrands spiral staircase analogy is misplaced because claim 1 requires “a

housing comprising … a common face.” (emphasis added). There is no housing

with respect to Telebrands’ spiral staircase, and so it is not at all analogous to the

Battle Balloons housing. Telebrands’ argument ignores the full scope and context

of the claim as applied under the district court’s construction of “common face.”

Case: 17-1175 Document: 73 Page: 67 Filed: 08/10/2017

Page 68: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

55

Telebrands attempts to create a false dichotomy that either “common face”

must be rigidly geometrically limited to a planar surface or no surface with

geometric boundaries can be a “common face” with a “plurality of holes.” Blue

Brief at 50-51. Contrary to Telebrands contention, the district court did not err in

rejecting this overly rigid interpretation. Rather, the district court correctly found

that “[t]here is nothing in the prosecution history, the specification, or the claims

that requires such a narrow ‘geometrically bounded’ interpretation of what it

means to be a ‘shared outer surface.’” Appx13; Appx34. When arguing this same

position in its motion for reconsideration, the district court again found that

“‘nothing in the construction or the prosecution history of this claim demands this

dichotomy.’” Appx6862 (quoting Appx34).20

Accordingly, Telebrands has failed to identify any abuse of discretion by the

district court in refusing to limit “common face” to be a planar surface with distinct

geometric boundaries. And, the district court correctly found that the Battle

Balloons housing has a “shared outer surface of the housing through which a

plurality of holes extend.”

20 The district court also rejected Telebrands’ claim that it failed to specifically

identify where the “common face” is located, confirming that the Court “carefully

considered” Telebrands’ arguments in light of the prosecution history and found

them unpersuasive. Appx6861-6862.

Case: 17-1175 Document: 73 Page: 68 Filed: 08/10/2017

Page 69: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

56

3. The district court consistently applied “second end”

Telebrands next argues that the district court inconsistently applied the

“second end” limitation depending on whether it was looking at prior art or the

accused Battle Balloons product. Blue Brief at 51-52. Telebrands incorrectly

interprets the district court’s construction of “second end” and its application of

that construction to the prior art.

In Tinnus I, the district court construed the term “second end” to mean “an

outer limit of the housing distinct from the first end.” (Tinnus I, Doc. No. 181, at

13). In construing the term, the district court rejected the requirement that the

“second end” be a linear limit or adjacent to a linear limit of the housing. (Id. at

12). Despite the district court’s express rejection of limit being a linear limit,

during the preliminary injunction proceedings in this case, Telebrands nevertheless

interpreted the district court’s construction of “outer limit” to be the outer linear

limit. Appx1683-1684. The district court again rejected Telebrands’ “unduly

narrow interpretation of the Court’s claim construction,” but because of an

apparent dispute between the experts as to the meaning of the construction, the

district court clarified “outer limit” to be “simply that of an ‘outer surface.’”

Appx13-14. The district court also made perfectly clear that “[t]he distinguishing

marker of the ‘second end,’ as was set forth in the Court’s claim construction, is

Case: 17-1175 Document: 73 Page: 69 Filed: 08/10/2017

Page 70: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

57

that the ‘second end’ be distinct from the ‘first end.’” Appx14 (emphasis in

original).

Telebrands then objected, as it does here, that the court’s clarification

actually broadened the term to include surfaces adjacent to a limit of a housing.

Appx4667-4668. Telebrands claims this is inconsistent with the district court’s

previous rejection that the “second end” be “adjacent to” a linear limit of the

housing. The district court disagreed, and acknowledged that Telebrands created

this perceived inconsistency to argue its linear limit construction another time:

“Telebrands claims that it is not again arguing for this limitation, but then states

that anything that is not the outer linear limit is an ‘adjacent surface.’ By labeling

everything that is not the outer linear limit an ‘adjacent surface,’ Telebrands is

again arguing that the term should be limited to only the outer linear limit . . .”

Appx33-34.

Telebrands made these same arguments during claim construction, and the

district court again rejected them, but this time the court explained that it only

clarified “outer limit” because “[Telebrands’] expert continued to advocate a

position that circumvented the Court’s construction based on the meaning of ‘limit’

. . . .” Appx7177. The district court found that:

While the Court used the term “outer limit” in its construction, it was

to resolve the parties’ initial dispute as to whether the “second end”

needed to be a linear limit. The Court only clarified the meaning of

that term using the term “surface” to resolve the dispute between

Case: 17-1175 Document: 73 Page: 70 Filed: 08/10/2017

Page 71: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

58

testifying experts at the preliminary injunction hearing. In reality, the

language of the patent is clear in that it requires both a “first end” and

a “second end” and they must be distinct. The Court has stated this

from the outset. The outer limit is simply synonymous with an “end”

of the housing as a person of ordinary skill in the art would

understand the plain and ordinary meaning of that word. The “second

end” must be an end of the housing. There is no support in the

intrinsic record that “second end” must be “one of at least two

lengthwise limits.”

Appx7178. As with “common face,” Telebrands’ strategy has been to isolate

claim terms and then apply a hyper-technical construction, ignoring the context of

these terms within the claims, prior art, and understanding of a person of ordinary

skill. The district court has recognized this flawed approach to claim construction,

which is why it repeatedly distinguished the first and second ends as being distinct.

Telebrands simply refuses to apply the claim terms in context.

Telebrands’ discussion of Boise further illustrates its flawed approach to

claim construction. Contrary to Telebrands’ claim, the district court never

identified “only Boise’s linear extremes” as the “second end.” Blue Brief at 52

(emphasis added). The district court’s discussion of Boise was not so limiting.

First, the district court’s statement on Boise was for “common face,” not “second

end.” And for “common face,” the district court found that Boise shows “an

aligned plurality of holes along the cylindrical portion of the housing, and a single

hole at either end of the housing.” Appx2494 (emphasis added). For “second end,”

the district court correctly found that “Boise does not disclose a shared outer

Case: 17-1175 Document: 73 Page: 71 Filed: 08/10/2017

Page 72: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

59

surface with a plurality of holes at a second end.” Appx2495 (emphasis in

original). Telebrands’ incomplete characterization of the district court’s discussion

of Boise in no way supports its linear limit construction.

Refusing to back down from its flawed interpretations, Telebrands argues

that the clarified construction of “outer limit” is “irreconcilable with its application

of the term to Boise.” Blue Brief at 56. But as the district court explained, “[t]he

claim must be read in its full context to appreciate the amendment made by the

Examiner in view of Boise.” Appx13. Telebrands creates another false

dichotomy—i.e. if “second end” does not mean the absolute linear limit, it must

mean the “entire surface that is not the ‘first end.’” Appx4668. This dichotomy is

unsupported by the claims, the specification, the court’s construction of the term,

or the court’s analysis. The district court carefully evaluated the prosecution

history and found that “Boise does not include a shared outer surface of the

housing through which a plurality of holes extend at ‘an outer limit of the housing

distinct from the first end.’” Appx7117-7118 (emphasis added).

The district court’s interpretation of the term “second end” has been

consistent, and the fact that the court refuses to adopt Telebrands’ strained reading

of the claims, the prosecution history, and the district court’s own explanations is

insufficient to show clear error.

Case: 17-1175 Document: 73 Page: 72 Filed: 08/10/2017

Page 73: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

60

B. The District Court Did Not Err in Finding No Substantial

Question of Validity for the ’749 Patent

Telebrands’ arguments regarding the validity of the ’749 Patent are mostly

the same as those for the ’282 Patent. The primary difference is that for the ’749

Patent, Telebrands asserted the combinations of (1) Air Force Inflator with

Donaldson and Lee, and (2) Saggio and Cooper with Donaldson or Lee. Similar to

the ’282 Patent, however, Telebrands’ arguments center on whether the district

court properly considered Donaldson and Lee. Because the arguments with respect

to Donaldson are virtually the same as that for Lee, for the same reasons discussed

for Donaldson in Section II B. supra, Telebrands fails to demonstrate that the

district court erred in finding that Donaldson or Lee raise a substantial question as

to validity for the ’749 Patent.

With respect to Lee, the district court also found that Lee relates to a

treatment for obesity and that Telebrands “does not sufficiently describe how a

person of ordinary skill in the art would have been motivated to combine Lee” with

the other references. Appx21-23. In the Tinnus I Appeal, this Court also

considered the applicability of Lee to the ’066 Patent and found that the district

court did not plainly err in finding no motivation to combine. Tinnus I Appeal, 846

Case: 17-1175 Document: 73 Page: 73 Filed: 08/10/2017

Page 74: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

61

F.3d at 1207 (“Telebrands has not demonstrated that Lee is reasonably pertinent to

the problem addressed in the ’066 patent”).21

With respect to Air Force Inflator, Telebrands does not challenge the district

court’s finding that it “does not disclose any elastic fasteners or any sealing

mechanism for the balloons” and that it fails to “teach detachment of the containers

by partially filling and/or shaking.” Appx20-21. Telebrands only generally claims

that the district court erred in rejecting this reference but does not present any real

challenge other than those already raised with respect to Donaldson and Lee.

Accordingly, no additional discussion of Air Force Inflator is necessary.

IV. The District Court Did Not Err in Finding Irreparable Harm

During the preliminary injunction proceedings, Tinnus submitted substantial

evidence of irreparable harm. See Statement of the Case, Section I.E., supra. The

district court held a hearing and heard testimony regarding, among other things,

price erosion, loss of goodwill, customer confusion, and harm to customer

relationships. Telebrands was afforded the opportunity to rebut Tinnus’ showing

and present evidence of its own. Based on a careful review of all the presented

evidence, the district concluded that Tinnus will likely suffer irreparable harm.

Appx26-27.

21 Although the Court reviewed Lee under a plain error standard, Telebrands has

not shown why the Court’s consideration of Lee should change under a clear error

standard for patents concerning the same subject matter.

Case: 17-1175 Document: 73 Page: 74 Filed: 08/10/2017

Page 75: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

62

Telebrands creates the misconception that the district court made reversible

errors in evaluating the evidence of price erosion and harm to customer

relationships. Blue Brief at 59-61. But Telebrands completely ignores the court’s

primary basis for finding irreparable harm – Telebrands and Tinnus are direct

competitors and share many of the same customers:

As the Court previously noted, the Federal Circuit has repeatedly held

that “[d]irect competition in the same market is certainly one factor

suggesting strongly the potential for irreparable harm without

enforcement of the right to exclude.” Presidio Components, Inc., v.

American Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir.

2012); Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 703 (Fed.

Cir. 2008); see also Douglas Dynamics v. Buyers Prods. Co., 717

F.3d 1336, 1345 (Fed. Circ. 2013) (“[w]here two companies are in

competition against one another, the patentee suffers the harm—often

irreparable—of being forced to compete against products that

incorporate and infringe its own patented inventions.”) On this basis

alone, Plaintiffs have shown a likelihood of irreparable harm absent

an injunction.

Appx25. Telebrands does not even challenge this significant finding. Instead,

Telebrands retreats back to misinterpreting the district court’s analysis.

First, Telebrands claims that the district court’s price erosion analysis

ignored actual data and focused primarily on outdated data from a “different” case.

Blue Brief at 59. The district court did no such thing. In fact, the court addressed

this same argument and found that “[t]he R&R did not rely on the evidence from

the earlier case to find a likelihood of price erosion in this case. Plaintiffs have

Case: 17-1175 Document: 73 Page: 75 Filed: 08/10/2017

Page 76: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

63

provided ample evidence to support the Magistrate Judge’s finding that price

erosion is likely during the pendency of this litigation.” Appx41 (emphasis added).

Telebrands seems to take issue not with the district court’s findings but with

the quality of the evidence – i.e., no proof of actual price erosion. But the law only

requires a likelihood of price erosion. See Winter v. Natural Res. Def. Council,

Inc., 555 U.S. 7, 22 (2009). And, the court found that the evidence submitted by

Tinnus shows that “it is . . . foreseeable that [Tinnus] could be required to reduce

its wholesale prices for 2017 as a result of the continued sales of Telebrands’

alleged infringing Battle Balloon products to shared retailers.” Appx25.

Telebrands does not explain why this evidence, including testimony from ZURU’s

own COO, could not be considered by the court to find a likelihood of irreparable

harm. Simply because the court found Tinnus’ evidence more compelling than

Telebrands’ does not demonstrate clear error.

Telebrands next complains that the district court mistakenly evaluated the

evidence of loss of goodwill because the court did not consider that Walmart’s

decision to put sales on hold was due to “legal issues,” not as a result of sales of

Telebrands’ products. Blue Brief at 60-61. Telebrands’ argument is misplaced

because the court did not distinguish between harm due to sales and harm due to

the litigation, but rather a combination of all the factors:

Case: 17-1175 Document: 73 Page: 76 Filed: 08/10/2017

Page 77: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

64

Of course, without the sale of Telebrands’ alleged infringing products,

ZURU would never have had to bring any litigation or enforce its

patent rights. Importantly, the harm here is that ZURU was deprived

of the ability to come to the market with its monopoly right, and

deprived of the opportunity to build new and gainful relationships

with retailers absent Telebrands’ presence in the market.

Appx25; Appx41 (“Plaintiffs’ relationships with their retailers were affected by

Telebrands because Plaintiffs would not be in court against their retailers if not for

Telebrands’s actions.”).

Finally, with respect to the Retailers, the district court separately found that

the Retailers’ “fire sale” activities would likely further irreparably harm Tinnus.

(Appx6400-6401, adopted in full at Appx6631-6634. Although Telebrands

separately appealed that decision, it does not challenge that finding here, and

therefore concedes that the district court properly found irreparable harm for the

Retailers.

Accordingly, Telebrands has failed to demonstrate any abuse of discretion

with the district court’s finding of irreparable harm.

Case: 17-1175 Document: 73 Page: 77 Filed: 08/10/2017

Page 78: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

65

CONCLUSION

Based on the foregoing, Tinnus requests that the Court affirm the district

court’s preliminary injunction orders against Telebrands.

/s/ Thomas M. Dunlap

Thomas M. Dunlap

David Ludwig

Robert D. Spendlove

Eric Olavson

Dunlap Bennett & Ludwig PLLC

211 Church Street, SE

Leesburg, Virginia 20175

(703) 777-7319 (t)

(703) 777-3656 (f)

[email protected]

[email protected]

[email protected]

[email protected]

Jeffrey D. Ahdoot

Dunlap Bennett & Ludwig PLLC

1717 Pennsylvania Ave., Suite 1025

Washington, DC 20006

(202) 316-8558 (t)

(703) 777-3656 (f)

[email protected]

Brian M. Koide

Dunlap Bennett & Ludwig PLLC

8300 Boone Blvd., Suite 550

Vienna, VA 22182

(703) 777-4319

[email protected]

Case: 17-1175 Document: 73 Page: 78 Filed: 08/10/2017

Page 79: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

66

Cortland C. Putbrese

Dunlap Bennett & Ludwig PLLC

2307 East Broad Street, Suite 301

Richmond, VA 23223

(804) 977-2688

[email protected]

Counsel for Appellees Tinnus Enterprises,

LLC and ZURU Ltd.

Case: 17-1175 Document: 73 Page: 79 Filed: 08/10/2017

Page 80: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

CERTIFICATE OF FILING AND SERVICE

I hereby certify that on this 10th day of August, 2017, I caused this Corrected

Brief of Appellees to be filed electronically with the Clerk of the Court using the

CM/ECF System, which will send notice of such filing to the following registered

CM/ECF users:

Robert T. Maldonado David M. Underhill

Elana Araj Eric J. Maurer

COOPER & DUNHAM, LLP Stacey K. Grigsby

30 Rockefeller Plaza, Floor 20 BOIES, SCHILLER & FLEXNER, LLP

New York, New York 10112 1401 New York Avenue,

(212) 278-0509 NW, 11th Floor

[email protected] Washington, DC 20005

[email protected] (212) 274-1120

[email protected]

Counsel for Appellants [email protected]

[email protected]

Counsel for Appellants

Upon acceptance by the Clerk of the Court of the electronically filed

document, the required number of copies of the Corrected Brief of Appellees will

be hand filed at the Office of the Clerk, United States Court of Appeals for the

Federal Circuit in accordance with the Federal Circuit Rules.

/s/ Thomas M. Dunlap

Counsel for Appellees

Case: 17-1175 Document: 73 Page: 80 Filed: 08/10/2017

Page 81: In The United States Court of Appeals · 4. The names of all law firms and the partners and associates that have appeared for the party in the lower tribunal or are expected to appear

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of Fed. R. App. P.

28.1(e)(2) or 32(a)(7)(B) because:

[ X ] this brief contains [13,569] words, excluding the parts of the brief

exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or

[ ] this brief uses a monospaced typeface and contains [state the number

of] lines of text, excluding the parts of the brief exempted by Fed. R. App. P.

32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because:

[ X ] this brief has been prepared in a proportionally spaced typeface using

[Microsoft Word 2016] in [14pt Times New Roman]; or

[ ] this brief has been prepared in a monospaced typeface using [state

name and version of word processing program] with [state number of

characters per inch and name of type style].

Dated: August 10, 2017 /s/ Thomas M. Dunlap

Counsel for Appellees

Case: 17-1175 Document: 73 Page: 81 Filed: 08/10/2017