Manufacturer filed suit in home state after receiving cease-and-desist letter
By Pat Murphy
The Daily Record Newswire
BOSTON - A West Virginia manufacturer is bound and determined to put an end to a patent lawsuit filed against it on "foreign" ground in U.S. District Court in Boston.
Unfortunately for U.S. Carburetion, Inc., Judge Indira Talwani has twice rejected the defendant's formulation of limited covenants not to sue designed to force a dismissal of the declaratory judgment action brought by the Massachusetts-based plaintiff, New England Gen-Connect, LLC.
Perhaps a third and purportedly "unconditional" covenant will do the trick.
From its headquarters in Hingham, Gen-Connect manufactures kits to convert portable home generators for use with propane and natural gas. U.S. Carburetion does the same thing from its home base in Summerville, West Virginia.
Notably, U.S. Carburetion holds Patent No. 8,448,924 for an "Alternative-Fuel Inductor for Engines." The patent was filed in 2011 and has a 20-year life.
The genesis of the face-off between Gen-Connect and U.S. Carburetion stems from a cease-and-desist letter that the West Virginia manufacturer sent to Gen-Connect on Aug. 8, 2014. In the letter, U.S. Carburetion alleged that the manufacture of Gen-Connect's Honda EU2000i propane kit constituted infringement of Carburetion's '924 patent.
The letter ominously warned Carburetion would "have no choice but to proceed with more drastic measures" if Gen-Connect continued to make and sell its Honda propane kit.
Instead of caving in to the threat, Gen-Connect responded with a lawsuit. Before the calendar had flipped to September, Gen-Connect was in federal court in Boston seeking a declaratory judgment of non-infringement and invalidity of Carburetion's '924 patent.
"That took them by surprise - I know it did," says Boston patent attorney Gary E. Lambert, who represents Gen-Connect.
According to Lambert, U.S. Carburetion had made a fundamental miscalculation. He speculates that the company's decision-makers had bet that their cease-and-desist letter would have the desired effect rather than invite a lawsuit.
"Maybe they had no intention of suing us," he says. "We'll never know that, and they'll never tell us, but we called their bluff. We sued them, and things haven't turned out quite the way they expected."
Lambert says Gen-Connect gained a tactical advantage by ensuring the dispute was heard in the company's home state.
Carburetion's tactical error provides a practice pointer for non-patent attorneys who dabble in patent litigation, he adds. According to Lambert, all too often non-patent attorneys fire off cease-and-desist letters at the behest of their clients without thinking through the consequences. Lambert says he regularly cautions clients who want him to send out a letter to a competitor in another state.
"If you are going to send one, be prepared to counterclaim with a lawsuit for infringement," he adds.
If you must send a cease-and-desist letter, make sure you "dial it back" and not make it so threatening that it sends the recipient running for court, says Sean D. Detweiler, a patent attorney at Morse, Barnes-Brown & Pendleton in Waltham.
"I try to put it more in terms of that we're willing to talk about this and figure out a solution," he says.
Donald S. Holland is a patent attorney with Holland & Bonzagni in Longmeadow.
Holland agrees there's a risk in sending cease-and-desist letters that prudent lawyers will account for.
"What most patent attorneys do is, if you're going to send a letter like this, you file a claim in your own state against the recipient of the letter so that you've chosen your forum," Holland says. "Basically, you're hoping for a 'hometown' verdict."
Since getting sued, U.S. Carburetion has been trying everything possible to avoid being on the wrong end of just such a hometown verdict.
In January 2015, the defendant presented the court with a covenant not to sue in which it promised not to sue Gen-Connect over any of its products for three years.
The defendant filed a motion to dismiss, asserting that the three-year covenant not to sue extinguished the controversy between the parties. Talwani denied the motion finding that, given the limited duration of the covenant, a substantial controversy existed between the parties of "sufficient immediacy and reality to warrant issuance of a declaratory judgment."
The defendant filed a second motion to dismiss in December, proposing a seven-year covenant not to sue.
Last month, Talwani found that a covenant that didn't expire until 2021 just wasn't good enough.
"The extended covenant not to sue merely extends the period of uncertainty as to whether Gen-Connect should continue to grow and expand its current product line," Talwani wrote in her Feb. 11 order.
Detweiler believes Talwani's decision makes sense from both a legal and business standpoint.
"I would sit there as [Gen-Connect] and ask why am I going to build up a business if in 2021 I'm going to be sued for patent infringement," he says.
Carburetion was right back at it Feb. 25, filing an "Unconditional, Permanent Covenant Not to Sue" that covers all products made and sold to date by Gen-Connect and all future products from now until the end of the '924 patent.
Detweiler says he could see giving effect to a covenant covering the life of the patent.
"To me, a patent is good for the 20-year term," he says. "If you're going to do a covenant not to sue, it's typically a covenant not to sue on the patent, not for some foreseeable number of years."
The defendant is represented by Arthur A. Gardner of Atlanta. Gardner declined to comment on the case.
Published: Fri, Apr 01, 2016
