ThermaPure Litigation Report #4

Judgment Against ThermaPure

The past week has shown a flurry of activity with regard to ThermaPure litigation. On November 23, 2011, a Consent Judgment was entered between ThermaPure and Temp-Air Inc. in Minnesota. The Judgment was the result of a settlement agreement but included a number of important statements of fact, which became findings and conclusions of the court:

• Temp-Air has not directly infringed the '812 and '148 patents through making, using, selling or offering to sell any Temp-Air product or service;

• Temp-Air has not induced or contributed to and is not inducing to or contributing to the infringement of the '812 and '148 patents by another through any act of Temp-Air or sale or offer for sale of any Temp-Air product or service;

• Judgment is entered for Temp-Air and against ThermaPure on ThermaPure's claims of infringement of the '812 and '148 patents; and

• No appeal shall be taken by any party from this Consent Judgment, the right to appeal being expressly waived by all parties.

In effect, this is a full "not guilty" verdict for Temp-Air, who specifically advertised the use of heat to kill bedbugs at 120-135°F with real time remote temperature-monitoring sensors.

Further, a November 30, 2011 press release from Temp-Air states: "The settlement does not require Temp-Air to pay anything to ThermaPure or to take a license from ThermaPure."

The Temp-Air Judgment is a significant victory for the restoration industry. Even if it has no binding legal effect on other courts, the statements made in the Consent Judgment are "admissions" of ThermaPure. Click here for a copy of the Judgment.

Keeping Score

Other than the "Partial Judgment" entered in Texas nearly two years ago, the Temp-Air Judgment is the only judgment in any ThermaPure patent case of which we are aware. The other conclusions have been out-of-court settlements or defaults. No trial date has been set in the Illinois case against Dri-Eaz, Jon-Don, ServPro, et al. In April 2012, the court will conduct a hearing to examine the evidence from all the parties and make a legal interpretation of their claims. The results of the hearing may indicate a likely outcome of the case as a whole.

Litigation Blitz

Many other cases are pending and ThermaPure has recently accelerated its pace of filing lawsuits. ThermaPure filed four patent infringement lawsuits in the State of Ohio in one day, November 29, 2011. They are against C&C Clean Team Enterprises, LLC, Quick Dry, Inc., Rapid Response Restoration and Ultimate Building Maintenance.

On September 13, 2011, ThermaPure filed one Complaint in Colorado against three different entities: Disaster Restoration, Inc., Restoration Logistics, Inc. and Duraclean Master Cleaners, Inc. It also filed suit in Pennsylvania in August 2011 against Giersten Company of Illinois, Inc.

Joining Forces

Defendants in similar federal court cases in different jurisdictions have the right to file motions to have the cases consolidated for purposes of discovery. This is done by filing a motion with the Judicial Panel on Multidistrict Litigation. If the motion is granted, all the pre-trial proceedings for the cases will be handled by a single court. This allows an economy of scale and coordination that can greatly reduce litigation expenses. Filing the motion is inexpensive. Send an email to edcross@restorationdefense.org for more information.

Counterclaims

On a related note, the Temp-Air Judgment also concluded Temp-Air's counterclaims against ThermaPure for Federal False Representation, Deceptive Trade Practices, Common Law False Advertising and Tortious Interference with Prospective Business Advantage.

A tortious interference with prospective business advantage occurs where a party commits an intentional act designed to disrupt an economic relationship that has a potential future benefit.

A party filing patent infringement lawsuits against an equipment manufacturer may be liable for tortious interference with prospective economic advantage if the suit is designed to disrupt the manufacturer's relationship with its regular customers. The damages could be significant, depending on the volume of lost sales. This type of claim also has the potential to yield punitive damages. Punitive damages are awarded above and beyond the actual losses suffered by a party and are intended as punishment to deter future wrongful conduct.

Parties who file large numbers of patent infringement cases and settle for less than the cost of defense are sometimes accused of abusing the legal system. A party sued under those circumstances may have a claim for abuse of process. An abuse of process occurs with the improper use of a legal procedure for an unintended, malicious or perverse reason. It may also yield punitive damages.

Those who abuse the legal process may also be guilty of the crime of extortion. Extortion occurs where someone knowingly obtains control over the property of another by way of a threat made with the intent to deprive the other of the property. In some states, a party may be liable for extortion where the threats unlawfully restrict someone's freedom of action.

Our webinar on legal issues with the ThermaPure Patent Litigation explains the elements necessary to prove a patent infringement, the potentially-collectable damages, the types of defenses available, the concept of "prior art" and other useful information. Click here for a recording of the webinar.

Stay tuned to the RIDA web site www.restorationdefense.org for the latest news and information affecting the legal rights of the restoration industry. Call (760) 773-4002 if you have any questions.