Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 1 of 9 PageID #: 593

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BLUEFIELD DIVISION

HAFCO FOUNDRY AND MACHINE

COMPANY, INC.,

Plaintiff,

v. Civil Action No. 1:15-cv-16143

(Judge Faber)
GMS MINE REPAIR AND
MAINTENANCE, INC.,

Defendant.

REPLY MEMORANDUM IN FURTHER SUPPORT OF PLAINTIFFS MOTION FOR

ENHANCED DAMAGES, ATTORNEYS FEES, PERMANENT INJUNCTION AND
PREJUDGMENT AND POST-JUDGMENT INTEREST

Comes now Plaintiff, Hafco Foundry and Machine Company, Inc. (Hafco), by and

through its undersigned counsel, and submits this Reply Memorandum in Further Support of

Plaintiffs Motion for Enhanced Damages, Attorneys Fees, Permanent Injunction and

Prejudgment and Post-Judgment Interest. Plaintiff respectfully requests that the subject Motion

be granted.

I. Treble Damages.

Defendant offers only a single argument in opposition to the award of treble damages;

that being, treble damages are not an available remedy under 35 U.S.C. 289. More

specifically, Defendant speculates that the jury awarded Hafco the profits earned by Defendant

from the sales of its infringing rock dust blower pursuant to 35 U.S.C. 289. Defendants

argument is wholly flawed for two reasons. First, Hafcos Complaint in this matter specifically

1
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 2 of 9 PageID #: 594

requested damages only under 35 U.S.C. 284, not under 35 U.S.C. 289. See, Complaint at p.

5.

Second, and more importantly, the jury was explicitly instructed that Hafco was seeking

damages in the form of Hafcos lost profits, not Defendants lost profits. Specifically, the jury

was instructed that [i]n this case, Hafco seeks to recover lost profits resulting from GMS

infringement of the 684 Patent. If you conclude that Hafco has proved that it lost profits

because of GMS infringement, the lost profits you award should be the amount that Hafco

would have made on any sales that Hafco lost because of the infringement. See, Jury Charge.

(Emphasis added). In the face of those unambiguous jury instructions, it defies logic for

Defendant to say that the jury awarded Defendants profits to Hafco under 35 U.S.C. 289. It

is simply impossible for the jury to have awarded Defendants lost profits to Hafco under 35

U.S.C. 289 when the jury had no knowledge of the existence of any such statute.

Yes, the jury did award Hafco the sum of $123,650.00 in damages, which sum was the

same as Defendants gross revenues (not profits) from the sale of its infringing rock dust

blower, despite Hafcos evidence at trial that its lost profits from Defendants infringing sales

were $110,000.00. In and of itself that fact does not mean the jury awarded damages under 35

U.S.C. 289. Indeed, the Jury also was correctly instructed that Hafco is entitled to receive

damages adequate to compensate it for infringement beginning on April 20, 2015 to the present.

Frankly, it is likely the $123,650.00 was ingrained in the minds of the jurors after the

unnecessary and lengthy process demanded by defense counsel for Josh Helbig to add up all of

the sales invoices rather than just stipulate to the amount of gross revenues as requested by

Hafcos counsel.

2
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 3 of 9 PageID #: 595

In sum, Hafco only sought damages under 35 U.S.C. 284 and the jury was instructed

only with respect to that statute. Therefore, it was impossible for the jury to award Defendants

profits to Hafco pursuant to 35 U.S.C. 289 as the jury had no reason to do so. While the jury

awarded Hafco an amount equivalent to Defendants gross revenues from the sale of its

infringing rock dust blower, that fact certainly does not mean that the jury made an award

pursuant to 35 U.S.C. 289. Such a leap of logic is pure speculation. Based on all of the above,

and for the reasons set forth in Hafcos original Motion on this subject, this Court should treble

the damages awarded by the jury.

II. Attorneys Fees.

Defendant next argues against the award of attorneys fees based on its tired assertion

that the 684 Patent is functional in nature. That argument was disposed of as the result of the

Markman hearing held in this case.a hearing only held as the result of Defendants tardy

assertion of invalidity. Raising that already-ruled upon issue once again in a post-trial context

further supports the award of attorneys fees. Likewise, Defendant continues to argue about

purported substantial visual differences between the patented design and the product at issue,

despite the jurys verdict that the product at issue infringed the 684 Patent. Essentially,

Defendant is asking the Court to ignore the jurys verdict of not only infringement, but willful

infringement.

An exceptional case is simply one that stands out from others with respect to the

substantive strength of a partys litigating position (considering both the governing law and the

facts of the case) or the unreasonable manner in which the case was litigated. Octane Fitness,

LLC v. Icon Health & Fitness, Inc., 572 U.S. ___, ___ (slip op., at 7-8). Clearly, given the jurys

finding of willfulness (in less than 2 hours) on the part of Defendant, the substantive strength of

3
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 4 of 9 PageID #: 596

Hafcos litigation position unquestionably was substantial. While Defendant correctly points out

that it did not conduct any discovery, it did unnecessarily prolong the litigation and cause Hafco

to incur additional fees as the result of its untimely assertion of invalidity. Perhaps if Defendant

actually conducted some discovery it would have been in a better position to understand and

appreciate the clarity of its infringement. Thus, Defendants choice to not conduct discovery

does not necessarily militate in its favor. See, e.g., Homeland Housewares, LLC v. Sorensen

Research & Dev. Trust, Case No. 2013-1537 (Fed. Cir. 2014) (affirming the award of attorneys

fees for filing motions for reconsideration and failing to develop evidence). To the contrary, its

failure to even prosecute its untenable case while forcing Hafco to incur the significant costs of

litigation and trial support the award of attorneys fees.

Of course, the untimely assertion of invalidity was based on the specious argument that

the 684 Design Patent somehow is functional. Once again, and briefly, [i]n determining

whether a claimed design is primarily functional, the function of the article itself must not be

confused with the functionality of the design of the article. Ethicon Endo-Surgery, Inc., 796

F.3d 1312, 1328 (Fed. Cir. 2015), quoting Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1462

(Fed. Cir. 1997). (Emphasis added). Indeed, the fact that the article of manufacture serves a

function is a prerequisite of design patentability, not a defeat thereof. Hupp at 1460.

(Emphasis added). Defendant ignored this clear law in demanding a Markman hearing and

continues to ignore the law in its opposition to the award of attorneys fees. Del Mar Avionics,

Inc. v. Quinton Instrument Co., 836 F.2d 1320, 1324 (Fed. Cir. 1987) ([P]rior findings and the

claim construction based thereon are the law of the case. They are not available for

redetermination.).

4
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 5 of 9 PageID #: 597

Moreover, the overall evidence in this case demonstrated clear subjective bad faith on the

part of Defendant in infringing the 684 Patent. The evidence was that there are thousands of

rock dust blowers, yet Defendants product looks nearly identical to Hafcos design; a design

that the evidence demonstrated was completely unique to the mining industry. That fact alone

demonstrates by a preponderance of the evidence that this is an exceptional case. WBIP, LLC

v. Kohler Co., 829 F.3d 1317, 1340 (Fed. Cir. 2016) ([A]n infringer's subjective bad faith alone

may support an award of enhanced damages. (citing Halo, 136 S. Ct. at 1933)); WesternGeco

L.L.C. v. ION Geophysical Corp., 837 F.3d 1358, 1362 (Rather, Halo emphasized that

subjective willfulness alone . . . can support an award of enhanced damages.). Moreover,

awarding attorneys fees in this case will promote the deterrence of such conduct in the future,

especially given the overall financial disparity between Hafco and Defendant. Octane Fitness,

572 U.S. ___, ___ (slip op., at 8, fn 6), citing Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994); see,

also, Romag Fasteners, Inc. v. Fossil, Inc., 3:10-cv-01827-JBA (D. Conn., August 14, 2014)

(awarding fees for compensation and deterrence reasons given that the defendants accused

product was but a minute portion of its overall business).

As discussed in more detail in Hafcos original Motion with respect to its request for the

award of attorneys fees, Defendant failed to adequately respond to Hafcos discovery requests,

thereby necessitating the filing of a motion to compel. Defendant even failed to file a response

to the motion to compel and an Order was eventually entered compelling Defendant to respond

to Hafcos discovery requests. Yet, on June 14, 2017, Hafco learned that Defendant failed to

comply with that discovery Order. Specifically, on June 14, 2017, Defendant filed in this case a

Motion for Judgment as a Matter of Law in Favor of Defendant, or, in the Alternative, For a New

Trial (the Motion for Judgment as a Matter of Law). Attached to the Motion for Judgment as a

5
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 6 of 9 PageID #: 598

Matter of Law are copies of emails responsive to Hafcos discovery requests that were not

previously produced in this case.

For example, Request for Production No. 9 required Defendant to produce [a]ll

documents and things which refer or relate or constitute communications, discussions or

correspondence with or about (a) Plaintiff, or (b) this lawsuit. Request No. 10 required

Defendant to produce [a]ll documents and things which refer or relate to all sales of GMS

Blowers Request No. 13 required Defendant to produce any other documents and things

that refer or relate to the [684] Patent. In his deposition, Josh Helbig (the person who produced

the new emails) was asked Have you ever been asked since the beginning of this lawsuit to look

for e-mails that relate to the Hafco can duster? Mr. Helbig responded I think I did a search

and, you know, I dont recall exactly what we found, but anything that I had was copied in on

from Bill [Means] Despite the several discovery requests and Mr. Helbigs testimony under

oath, for the first time in this case Hafco was provided copies of the emails attached to the

Motion for Judgment as a matter of law. 1 How many more responsive emails were not

produced? This conduct certainly justifies the award of attorneys fees.

Therefore, based on all of the above, and the other matters raised in Hafcos original

Motion with respect hereto, the Court should find this matter to be an exceptional case and award

Hafco its attorneys fees.

III. Permanent Injunction.

Despite voluntarily agreeing to a preliminary injunction, Defendant now resists the

imposition of a permanent injunction.2 Defendant does so by arguing that there was no evidence

1
Candidly, a motion under Fed. R. Civ. Pro. 37 is likely appropriate.
2
This fact also merits in favor of the Court awarding Hafco its attorneys fees.

6
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 7 of 9 PageID #: 599

at trial of lost market share as the result of Defendants infringement. That assertion is not

accurate as the evidence from Messrs. Fornaci and Vicinnelly indicated that Hafcos rock dust

blower was the first (and only) can duster on the market.3 As such, there can be no doubt that

sales of the infringing product by Defendant necessarily reduced Hafcos market share. There

can be no other result.

With respect to the public interest factor, Defendant once again blurs the clear difference

between function and functionality of design. At the trial, the evidence adduced from

Messrs. Fornaci and Vicinnelly was that the Hafco rock dust blower functioned better than the

Defendants infringing product. That evidence did not violate any rulings of the Court with

respect to not discussing functionality of design in the context of attempting to invalidate the

patent, as Defendant was prohibited from doing since that issue was determined as the result of

the Markman hearing. Given Defendants admission that the public interest overwhelmingly

supports the promotion of safety within the mining industry, Defendant should be prohibited

from further manufacture and sale of its inferior and infringing product.

Furthermore, despite the jurys verdict of willful infringement, Defendant makes the

astonishing assertion that the sale of both products should continue. Why Defendant would

desire to continue to sell its infringing product and subject itself to further damages, including

the payment of treble damages and attorneys fees, is wholly unclear. Nonetheless, such actions

would result in further infringement actions being filed by Hafco against Defendant. Thus,

principles of judicial economy warrant the imposition of a permanent injunction. Moreover, if

not permanently enjoined and Defendant, in fact, does continue to sell its infringing rock dust

3
Interestingly, Defendants position is belied by the newly produced emails discussed above which refer to
another infringing can duster taking away sales of the Hafco rock dust blower.

7
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 8 of 9 PageID #: 600

blower, Hafco would face the substantial hardship of being forced to compete against its own

patented design. Metalcraft of Mayville, Inc. v. Toro Co., Case No. 2016-2433 (Fed. Cir.

February 16, 2017).

IV. Prejudgment And Post-Judgment Interest.

Finally, Defendants argument for not awarding prejudgment interest fails for the same

reason as its argument against the awarding of treble damages. Plaintiffs Complaint sought

damages under 35 U.S.C. 284 and there was no evidence of Defendants profits adduced at

trial. Rather, there was evidence of Defendants gross revenues and evidence of Hafcos lost

profits. The jury awarded Hafco $123,650.00 and, as discussed in more detail above,

Defendants assertion that those damages must be Defendants profits is pure speculation. It is

wholly proper for the Court to award prejudgment interest to Hafco.

WHEREFORE, Plaintiff respectfully requests that the subject Motion be granted.

Respectfully submitted,

By Counsel.

By: /s/ Andrew G. Fusco_______________

Andrew G. Fusco (WV Bar No. 1317)
Jeffrey A. Ray (WV Bar No. 6368)
Bowles Rice, LLP
7000 Hampton Center, Suite K
Morgantown, West Virginia 26505
(304) 285-2500

-and-

Ross M. Bagley (admitted pro hac vice)

Pryor Cashman LLP
7 Times Square
New York, New York 10036
(212) 421-4100

8
 Case 1:15-cv-16143 Document 96 Filed 06/23/17 Page 9 of 9 PageID #: 601

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BLUEFIELD DIVISION

HAFCO FOUNDRY AND MACHINE

COMPANY, INC.,

Plaintiff, CERTIFICATE OF SERVICE

v. Civil Action No. 1:15-cv-16143

(Judge Faber)
GMS MINE REPAIR AND
MAINTENANCE, INC.,

Defendant.

I hereby certify that on June 23, 2017, I electronically filed the foregoing Reply

Memorandum in Further Support of Plaintiffs Motion for Enhanced Damages, Attorneys

Fees, Permanent Injunction and Prejudgment and Post-Judgment Interest with the Clerk of

the Court using the CM/ECF system which will send notification of such filing to the following

CM/ECF participants:

William C. Means, Esq.

bmeans@gmsminerepair.com
Andrew J. Ellis, Esq.
aellis@gmsminerepair.com
Counsel for Defendant GMS Mine Repair and Maintenance, Inc.

/s/ Andrew G. Fusco_______________

Andrew G. Fusco (WV Bar No. 1317)
Jeffrey A. Ray (WV Bar No. 6368)
Bowles Rice, LLP
7000 Hampton Center, Suite K
Morgantown, West Virginia 26505
(304) 285-2500