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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF WISCONSIN

NORDOCK, INC.,

Plaintiff,
Civil Action No. 11-cv-118
v.
Magistrate Judge William E Duffin
SYSTEMS, INC.,

Defendant.
DEFENDANTS RESPONSE TO COURTS QUESTIONS REGARDING THE
RELEVANT ARTICLE OF MANUFACTURE AND ISSUES RELATING THERETO

Defendant Systems, Inc., by undersigned counsel, hereby provides its answers to the
questions asked by this Court during the Status Conference of June 20, 2017 and set out in its
Minute Order of that date. In particular, Systems, Inc., addresses the following questions posed
by the Court: (1) what the article of manufacture is in this case; (2) what factors are to be
considered in determining the article of manufacture; and (3) who has the burden of proof with
respect to the question of the article of manufacture.
To provide meaningful answers to the above-questions, and in recognition that the
current assigned Judge did not handle this matter at its beginning and did not preside over the
trial, a brief review of the relevant facts and history of this case may be helpful.

I. FACTS

1. A. The Underlying Action and Trial


Nordock and Systems, Inc. are competitors in the field of so-called dock levelers. These
are heavy-duty pieces of equipment, typically formed of welded steel plate, that are used to
provide a transition from loading docks at warehouses and the like to the interior of the trailer of
a semi-trailer truck.
This action was originally filed on January 28, 2011. Initially, Nordock claimed that
several models of dock levelers offered by Systems, which included a so-called lug lip and
hinge plate, infringed Nordocks intellectual property rights. In particular, Nordock initially

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Case 2:11-cv-00118-WED Filed 08/25/17 Page 1 of 11 Document 262
alleged that the various models of dock leveler offered by Systems having such a lug lip and
hinge plate infringed Nordock United States Design Patent No. D579,754 (the 754 Patent), a
patent which claims exclusive rights in, The ornamental design of a lip and hinge plate for a
dock leveler as shown and described. In addition, Nordock alleged in its Complaint that its lip
and hinge plate had somehow acquired secondary meaning and that Systems' dock levelers
infringed Nordock's supposed trade-dress and other non-patent rights.
In its Complaint Nordock made no claim for Systems profits under 35 U.S.C.289. Nor
did Nordock make any claim for such profits in its description of damages in its Initial
Disclosures. Indeed, Nordock made absolutely no mention of 289 until barely three weeks
before the close of fact discovery, when Nordock apparently realized, for the first time, that 289
authorizes a claim for profits. Over Systems objections (Docket No. 25) this Court allowed
Nordock to conduct otherwise untimely discovery into Systems profits (Docket No. 77) and
permitted Nordock to make a claim for Systems profits, despite having never identified such a
claim in its Complaint, initial disclosures or at any time prior to three weeks before the close of
fact discovery.
This case was tried to a jury between March 18-26, 2013. On the first day of trial,
Nordock voluntarily dismissed, with prejudice, all of its claims based on non-patent rights (i.e.,
its claims for trade-dress infringement, unfair competition, etc.) and elected to proceed solely on
the basis of its patent rights.
At trial, Systems damages expert, Mr. Richard Bero, analyzed potential damages under
two theories. First, Mr. Bero performed an analysis under a reasonable royalty theory and
concluded that a reasonable royalty would be $15 per dock leveler found to include Nordocks
lip and hinge plate ornamental design. Second, Mr. Bero sought to determine Systems profits
on the article of manufacture to which the ornamental design was applied and concluded that
such profits would be less than $15 per unit.
At trial, Systems technical expert, Mr. Adam Brookman, testified as to the relevant
technology as well as to the type and scope of protection provided by the 754 Patent.

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Case 2:11-cv-00118-WED Filed 08/25/17 Page 2 of 11 Document 262
On March 26, 2013 the jury returned a verdict of non-infringement with respect to the
Systems' mechanical dock levelers (the LMP and LMD levelers) and a verdict of
infringement with respect to the System' hydraulic dock levelers (the LHP and LHD
levelers). The jury also awarded Nordock $46,825 as a reasonable royalty for the infringement.
The Jurys award of $46,825 as compensation for the infringement was fully in line with Mr.
Beros testimony that a reasonable royalty was $15 per unit. The Jurys concurrent finding that
Systems profits were 0 is consistent with Mr. Beros testimony that Systems profits on the
infringing sales were less than $15 per unit.

II RESPONSE TO COURTS QUESTIONS

A. What The Article Of Manufacture Is In This Case


As set out in greater detail in Systems, Inc.s accompanying Motion for Summary
Judgment, the article of manufacture in this case is the lip and hinge plate structure shown in
solid lines in each of the seven figures of the 754 Patent. Figure 1 of this patent, which is
reproduced below, shows the elements making up this article of manufacture:

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Case 2:11-cv-00118-WED Filed 08/25/17 Page 3 of 11 Document 262
As illustrated, the structure consists of four different components. First, the structure
includes a generally horizontally oriented, rectangularly shaped structure known as the lip. In
the subject Systems, Inc. device, this structure is formed from heavy steel plate approximately
inch to 5/8 inches thick. Second, the structure includes a generally vertically oriented,
rectangularly shaped structure known as the hinge plate. This structure, too, is formed of
heavy steel plate approximately inches thick. As illustrated, a series of generally triangularly-
shaped hinge lugs are welded in adjacent pairs to both the hinge plate and the lip as shown.
The lugs are also formed of heavy steel plate and are approximately inches thick. Finally, a
cylindrical hinge rod extends through the hinge lugs to connect the lip to the hinge plate for
pivoting movement relative to the hinge plate. In the subject Systems, Inc. device, the hinge rod
is formed of steel and is approximately 1 inch in diameter. The hinge rod forms the axis or axle
around which the lip pivots relative to the hinge plate.
For reasons stated in detail in Systems accompanying motion for summary judgment,
there is no credible evidence on which a jury can reasonably find that the relevant article of
manufacture is other than the lip and hinge plate actually shown and described in the 754 Patent.
Because no genuine issue of material fact exists on this point, this Court can properly hold on
summary judgment, (1) that the article of manufacture is not an entire dock leveler, and (2) that
the article of manufacture is, in fact, the lip and hinge plate, along with the hinge lugs and hinge
rod, as actually illustrated in solid lines in each of the figures of the 754 Patent.

B. What Factors Are To Be Considered In Determining The Article Of


Manufacture
At present, the Federal Circuit has not yet provided detailed guidance on the question of
determining what makes up the article of manufacture under a design patent. Following the
remands from the Supreme Court in both Samsung Electronics Co. v. Apple, Inc. and the instant
matter, the Federal Circuit, in turn, remanded both actions to their respective district courts for
determination of the articles of manufacture without substantive guidance in either case as to

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how the determination is to be made.

1. Supreme Court Guidance


Although neither the Supreme Court nor the Federal Circuit has articulated a test for
determining the relevant, article of manufacture, the opinion of the Supreme Court in Samsung
Electronics Co. v. Apple, Inc., provides at least some guidance regarding how the article of
manufacture is to be determined. In particular, the Supreme Court clarified that the test used by
the Federal Circuit below, namely whether something must be separately sold in order to be an
article of manufacture, is not the proper test. As framed by the Supreme Court, The only
question we resolve today is whether, in the case of a multi-component product, the relevant
article of manufacture must always be the end product sold to the consumer or whether it can
also be a component of that product. (Emphasis supplied.) Importantly for the proceedings
here, the Supreme Court held clearly and unambiguously that the relevant article of
manufacture can be a component of another product:

The term article of manufacture, as used in 289, encompasses


both a product sold to a consumer and a component of that
product.

So understood, the term article of manufacture is broad enough


to encompass both a product sold to a consumer as well as a
component of that product. A component of a product, no less than
the product itself, is a thing made by hand or machine. That a
component may be integrated into a larger product, in other
words, does not put it outside the category of articles of
manufacture.
(Emphasis supplied.)
In deciding that question, the Supreme Court expressly rejected the separately sold test
applied by the Federal Circuit in both Samsung and this case and held clearly and unambiguously
that the relevant article of manufacture can indeed be a component of another product
regardless of whether the components are sold separately. Again, in the words of the Court:

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The Federal Circuits narrower reading of article of manufacture
cannot be squared with the text of 289. The Federal Circuit found
that components of the infringing smartphones could not be the
relevant article of manufacture because consumers could not
purchase those components separately from the smartphones...But,
for the reasons given above, the term article of manufacture is
broad enough to embrace both a product sold to a consumer and a
component of that product, whether sold separately or not. Thus,
reading article of manufacture in 289 to cover only an end
product sold to a consumer gives too narrow a meaning to the
phrase.
(Emphasis supplied.) Indeed the Court expressly referenced the instant case in rejecting the
Federal Circuits flawed analysis of the article of manufacture:

[S]ee also Nordock, Inc. v. Systems Inc., 803 F. 3d 1344, 1355 (CA
Fed. 2015) (declining to limit a 289 award to a design for a lip
and hinge plate because it was welded together with a leveler
and there was no evidence it was sold separate[ly] from the
leveler as a complete unit).
Thus, the Supreme Court has indicated that neither the welded structure of Systems products
nor the lack of evidence that the lip and hinge plate are sold separately are controlling.
The Supreme Court in Samsung v. Apple expressly declined to to set out a test for
identifying the relevant article of manufacture and instead invited the Federal Circuit to,
address any remaining issues on remand. On remand, the Federal Circuit, too, declined to
specify a test at this time and, instead, remanded the case to this Court for further action.

2. This Court May And Should Adopt The Test Proposed By The United
States As Amicus Curiae Before The Supreme Court
In the Samsung proceedings before the Supreme Court, the United States, appearing as
Amicus Curiae in support of neither party, proposed a test and framework for determining the
relevant article of manufacture for purposes of 289. (A copy of the Amicus brief filed by the
United States is attached as Exhibit B to the accompanying Declaration of Philip P. Mann.)
Although the Supreme Court declined to adopt that or any other test in the absence of adequate
briefing by the parties, the test proposed by the United States is, nevertheless, workable,

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practical and should be adopted by this Court.
Initially, the United States noted that, In determining whether the relevant article is the
entire product or a component, the factfinder...should keep in mind the scope of the plaintiff s
innovation and should identify the article in which the patented design prominently features,
without unnecessarily sweeping in aspects of the product that are unrelated to that design.
(U.S. Amicus Brief at p. 26, emphasis supplied.) Continuing, the United States further noted
that, In cases where the identity of the relevant article of manufacture is otherwise open to
reasonable dispute, the factfinder may legitimately consider which characterization would
appropriately compensate (rather than over-compensate) the patentee for the contribution of the
patented design to the value of the infringers finished product. [citing Sheldon v. Metro-
Goldwyn Pictures Corp., 309 U.S. 390, 402-408 (1940)]. (U.S. Amicus Brief at p.27, emphasis
supplied.) From this it is apparent that the goal should be to determine the structure or
component that actually makes use of the patented design and avoid both sweeping in aspects
of the product that are unrelated to that design and overcompensat[ing] the patentee for the
contribution of the patented design to the value of the infringers finished product.
After noting that the goal should be to fairly ascertain what structure actually makes use
of the patented design, the United States, in its Amicus brief, then proposed a sensible and
practical multi-part test for determining the relevant article of manufacture as follows:
First, the scope of the design claimed in the plaintiffs patent, including the drawing and
written description, provides insight into which portions of the underlying product the design is
intended to cover, and how the design relates to the product as a whole. (U.S. Amicus Brief at p.
27.)
Second, the factfinder should examine the relative prominence of the design within the
product as a whole.
Third, and relatedly, the factfinder should consider whether the design is conceptually
distinct from the product as a whole.
Fourth, the physical relationship between the patented design and the rest of the product

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may reveal that the design adheres only to a component of the product.
In setting out this test, the United States also provided helpful guidance as to how the test
should be applied.
As to the first inquiry, In some cases, the patent will indicate that the design is intended
to be applied to a component of the product. (U.S. Amicus Brief at p. 28.) This is especially
applicable here given that the patent itself is entitled, Lip And Hinge Plate For A Dock Leveler
and in all instances shows only a lip and hinge plate and never an entire dock leveler.
As to the second inquiry, namely, the relative prominence of the design within the
product as a whole, the United States stated that, If the design is a minor component of the
product, like a latch on a refrigerator, or if the product has many other components unaffected by
the design, that fact suggests that the article should be the component embodying the design.
(U.S. Amicus Brief at p. 28.) This is in contrast to those situations wherein, the design is a
significant attribute of the entire product, affecting the appearance of the product as a whole, a
fact that, if present, might suggest that the article of manufacture is the entire product. (U.S.
Amicus Brief at p. 28, emphasis supplied.)
As to the third inquiry, namely, the physical relationship between the patented design
and the rest of the product, the United States noted that, If the product contains other
components that embody conceptually distinct innovations, it may be appropriate to conclude
that a component is the relevant article. (U.S. Amicus Brief at p. 29, emphasis supplied.)
Finally, as to the fourth inquiry, namely, the physical relationship between the patented
design and the rest of the product, the United States noted that, If the design pertains to a
component that a user or seller can physically separate from the product as a whole, that fact
suggests that the design has been applied to the component alone rather than to the complete
product. (U.S. Amicus Brief at p. 29, emphasis supplied.) Significantly, and of importance here,
the United States further noted that, The same is true if the design is embodied in a component
that is manufactured separately from the rest of the product, or if the component can be sold
separately (for instance, for replacement purposes). (U.S. Amicus Brief at p. 29, emphasis

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supplied.)

C. Who Has The Burden Of Proof With Respect To The Question Of The
Article Of Manufacture
Both the Supreme Court and the Federal Circuit have apparently declined to clarify who,
exactly, has the burden of proof regarding what is the article of manufacture. In the absence of
such clarification, the ordinary rule that a plaintiff bears the initial burden of proof on all issues,
including the issue of damages, should not be disturbed. Having requested, under 35 U.S.C.
289 Systems profits from the sale of any article of manufacture to which [the patented]
design...has been applied, Nordock should be charged with the burden of establishing what that
article of manufacture is, as such is an essential part of its case in chief.
However, as Systems, Inc., has already offered, and remains fully prepared to continue
offering evidence establishing that the relevant article of manufacture is the lip and hinge plate
actually shown in the 754 Patent, Systems, Inc., without waiver of its position stated above, is
prepared to offer proof on this issue should the Court so require.

III CONCLUSION AND SUMMARY


Based on the foregoing, this Court can and should adopt the four-part inquiry articulated
by the United States in Samsung v. Apple for determining what is the relevant article of
manufacture. Although not formally adopted by the Supreme Court in Samsung v. Apple, neither
did the Court indicate that the test was in any way inappropriate. Rather, the Supreme Court
noted that, as neither Samsung nor Apple briefed the issue, We decline to lay out a test for the
first step of the 289 damages inquiry in the absence of adequate briefing by the parties. Given
that the Supreme Court further stated that, the Federal Circuit may address any remaining issues
on remand, and given further that the Federal Circuit, too, has declined to provide guidance at
this time, this Court is free to adopt the practical and workable test proposed by the United
States.
For reasons addressed in detail in Systems, Inc.s accompanying Motion for Summary
Judgment, this Court can and should find (1) that the article of manufacture is not an entire dock

MANN LAW GROUP


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Systems Response To Courts Questions - 9 Seattle, WA 98101
TELEPHONE: 206.436.0900
Case 2:11-cv-00118-WED Filed 08/25/17 Page 9 of 11 Document 262
leveler and (2) is, in fact, the lip and hinge plate structure (along with the hinge lugs and hinge
pin) actually shown in the 754 Patent. Given the clear facts in this case along with the Supreme
Courts clear holding that sold separately is not the proper test for determining the article of
manufacture, no reasonable jury can, on the undisputed relevant facts, conclude otherwise.

Dated: August 25, 2017 Respectfully submitted,

/s/ Philip P. Mann


Philip P. Mann
MANN LAW GROUP
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-0900
phil@mannlawgroup.com

Attorneys for Defendant


Systems, Inc.

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Case 2:11-cv-00118-WED Filed 08/25/17 Page 10 of 11 Document 262
CERTIFICATE OF SERVICE
I hereby certify that on the date indicated below, I electronically filed the foregoing with

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

the following:

Jeffrey S. Sokol jsokallaw@att.net

Executed on August 25, 2017.

/s/ Philip P. Mann

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