IN RE: Cable Tie Patent Litigation

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SHURA PANE 24 ET
, | cee an EER aBEFORE THE JUDICIAL PANEL : Ce
2 MULTIDISTRICT LITIGATION | HAR 25 18.0 ISR
3 IN RE CABLE TIE PATENT ) DOCKET NO. Gada Bid SELITIGATION ) : : = Pei a
* OPINION AND ORDER | 34, |5 Ye)
BEFORE ANDREW A. CAFFREY, CHAIRMAN, ROY W. HARPER, CHARLES EE
7 R. WEINER, EDWARD S. NORTHROP, AND ROBERT H. SCHNACKE, : -
JUDGES OF THE PANEL. ~ : Co
8 PER CURIAM
9 This litigation consists of four actions, three pending
10 in the Northern District of Illinois and one pending 3 BEEN
11 in the Eastern District of Wisconsin. Each action involves oo SE
12 claims concerning one or more patents covering one-piece : |
13 plastic cable ties (self-locking devices which are molded . :
14 from nylon and designed to encircle a bundle of electrical BE
wires to group the wires together). .
15 The first Illinois action was filed in September, }
16 1976, by Bowthorpe-Hellerman, Ltd. (Bowthorpe-Hellerman),
17 a British company that manufactures cable ties and owns
18 a United States patent covering those ties (the '201 To RB Co
19 patent), against All States Plastic Manufacturing Co.,
20 Inc. (All States), a corporation engaged in the business |
21 of manufacturing and selling cable ties. The complaint
in this action alleges that All States has infringed . oo Lo
22 the '201 patent. All States has denied infringement
23 and affirmatively alleged that the '201 patent is invalid oo oo |
24 and has been misused by Bowthorpe-Hellerman. Extensive
25 |

Case MDL No. 412 Document 2 Filed 05/20/15 Page 2 of 10
discovery and other pretrial proceedings have been accom- SI
plished in this action, and the court recently set a SEE Co
discovery cutoff date of May 1; 1980. . CL
The second Illinois action was commenced in October,
1976, against All States by Panduit Corporation (Panduit),
a manufacturer of cable ties and the owner of two United ET ,
States patents concerning those ties (the '146 and '869 SE
patents). The complaint alleges that All States has y L oo
infringed the '146 and the '869 patents; All States .
has denied infringement and affirmatively alleged that
the patents are invalid and have been misused by Panduit. LL
All States has filed a counterclaim in this action oo . .
against Panduit, Bowthorpe-Hellerman, Bowthorpe Holdings, : |
Ltd. (Bowthorpe-Hellerman's parent corporation), and :
Tyton Corporation (a wholly-owned subsidiary of Bowthorpe
Holdings, Ltd. which is engaged in the manufacture, sale : :
and distribution of cable ties in the United States).
This counterclaim, which was commenced under Sections
1 and 2 of the Sherman Act and Section 3 of the Clayton : oo
Act, alleges, inter alia, as follows: (1) the counterclaim . Co
defendants have conspired and combined to monopolize | | :
certain cable tie markets by entering into illegal patent |
cross-licensing agreements and other agreements to secure
illegal patent monopolies; (2) Panduit has tied the sale | :
of its cable ties to the sale of other products in order
to coerce customers into purchasing the cable ties; (3) oo
1/7 Panduit originally alleged that All States had also
violated a third patent owned by Panduit concerning cable :
ties. Panduit abandoned these allegations in late 1979, So
however. oo

Case MDL No. 412 Document 2 Filed 05/20/15 Page	3 of 10
1 Panduit has procured one or more of the patents involved
® 5 in this litigation through fraudulent means and instituted
3 the action against All States with knowledge that the
patents were fraudulently procured or otherwise invalid;
. * and (4) Panduit has obtained numerous and overlapping oo
> patents covering the cable tie in order illegally to
6 extend and prolong Panduit's patent monopolies. Panduit's
7 motion for a separate trial and a stay of discovery on
8 the counterclaim presently is sub judice before the court
9 in the Northern District of Illinois.
10 Substantial discovery and other pretrial proceedings
have occurred in this action, and Panduit recently has
H moved the court in the Northern District of Illinois
12 to close discovery on the issues raised by the complaint
® 13 and to establish a trial date for those issues. That
14 motion presently is sub judice.
15 All parties to the first two Illinois actions agree
16 that the parties in these actions have cooperated to
17 some extent in accomplishing the discovery taken to date
18 in those actions, which are pending before different
judges. In October, 1977, All States filed a motion
19 seeking to consolidate these two actions for discovery
20 purposes. In June, 1978, the Honorable John F. Grady,
21 to whom one of these actions is assigned, ruled on this
22 motion as follows:
23 There has been no showing that it is necessary to
consolidate this case with any other case in order
24 to conduct appropriate joint discovery. That discovery
® can be and apparently is being conducted without	consolidation. Accordingly, [All States'] motion
25 to transfer this case to the Executive Committee
for reassignment for purposes of consolidated discovery
is denied.

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—4—
1 The third and final Illinois action was commenced
2 in December, 1978, by Panduit against Dennison Manufacturing (
3 Company, Inc. (Dennison), a corporation engaged in the }
4 manufacture, sale and distribution of cable ties in the
United States. Panduit alleges that Dennison has infringed )
5
the '146 and the '869 patents, the same two patents involved
6
in Panduit's Illinois action against All States. To
7 date, no discovery has taken place in this action.
8 The Wisconsin action was filed in December, 1978,
9 by Panduit against Tyton for infringement of the '146
10 and the '869 patents. Bowthorpe-Hellerman has joined
11 in this action in order to file a counterclaim, and together
with Tyton has filed a counterclaim charging Panduit
12
with infringement of the '201 patent, which is also the
13
subject of Bowthorpe-Hellerman's action against All States ®
14 in the Northern District of Illinois.2/ No discovery
15 has yet taken place in this action.
16
2/ Many of the parties in the actions before the Panel
17 have been involved in prior proceedings relating to cable
tie patents. For example, Panduit and Bowthorpe-Hellerman
18 have participated in Patent Office "interference" and/or
"public use" proceedings concerning the patents involved
in this litigation. In addition, Panduit has been involved
19 in an interference proceeding involving a fourth patent
covering cable ties (this patent is owned by the Minnesota
20 Mining and Manufacturing Company) which may pre-date
the patents at issue in the actions before the Panel.
21 Finally, in All States Plastic Mfg. Co. v. Weckesser
Co., 362 F. Supp. 94 (N.D. Ill. 1973), aff'd, 506 F.2d
465 (7th Cir. 1974), a fifth patent covering cable ties
22 and owned by All States was declared invalid. In that
action, the '201 patent and the '146 patent involved
23 in the litigation before the Panel were found to be important
contemporaneous developments evidencing the obviousness
24 of All States' cable tie patent. ®
25

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-5-
1 All States has moved the Panel, pursuant to 28 U.S.C.
® 2 §1407, to transfer the Wisconsin action to the Northern
, 3 District of Illinois and to assign all actions to Judge
4 Grady for coordinated or consolidated pretrial proceedings.’ oo
5 Transfer is opposed by Panduit, Bowthorpe-Hellerman,
6 Bowthorpe Holdings and Tyton. Dennison has submitted
a short pleading to the Panel in which Dennison states
7
that it "sees no compelling reason for consolidation
8 of discovery" at this time.
9
3/ Panduit has filed a motion to dismiss All States
10 Section 1407 motion on the grounds that All States is
not a party to the Wisconsin action and is, accordingly,
11 without standing to initiate a Section 1407 motion.
Bowthorpe-Hellerman, Bowthorpe Holdings and Tyton support
12 this motion. All States opposes this motion.
Panduit and the parties that support this motion point
® 13 out that Section 1407(c)(ii) states that proceedingsfor the transfer of an action by the Panel may be initiated
14 "by a party in an action in which transfer for coordinated
or consolidated pretrial proceedings under this section
15 may be appropriate." These parties argue that because
All States is not a party to the Wisconsin action, All
16 States does not have standing to seek transfer of theWisconsin action under Section 1407.
17 But in In re Equity Funding Company of America Securities
Litigation, 375 F. Supp. 1378, 1380 n.4 (J.P.M.L. 1974),
18 we held as follows: "A purely literal reading of Section
1407	(c) (ii) suggests that a party may only move for transfer
19 of an action in which it appears as a party. Such a
narrow reading, however, is not consistent with the purposes
20 and intent of the legislation." In any event, the lackof standing argument routinely becomes academic because
in Panel hearing orders (including the order setting
21 the present litigation for hearing) the following paragraph
appears concerning all dockets set tor the particular
22 hearing: "IT IS FURTHER ORDERED that at said hearing
the Panel may, on its own initiative, consider transfer
23 of any or all of the actions to any district or districts.”
See 28 U.S.C. §1407(c) (i).
® 24
25

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—6- )
1 We find that, although these actions involve common
2 questions of fact, transfer under Section 1407 would ®
3 not necessarily serve the convénience of the parties
4 and witnesses or promote the just and efficient conduct .
5 of the litigation. Accordingly, we deny the motion to
transfer.
6
All States acknowledges that each of the three patents
7 in this litigation is not at issue in each of the actions
8 before the Panel ;4/ nevertheless, All States argues that
9 the record before the Panel, together with the history
10 of proceedings concerning cable tie patents in which
11 some of the parties before the Panel have been involved,
12 see note 3, supra, amply demonstrate that questions concerning
13 the scope and validity of all three patents are involved ®in all three Illinois actions and in the Wisconsin action.
14 All States contends that the three patents cover the
15 same "simple" structure of a one-piece cable tie, and
16 that consideration of the validity of Panduit's two patents
17 is necessarily intertwined with a consideration of the
18 validity of Bowthorpe-Hellerman's patent. All States
19 maintains that numerous common questions of fact will
20 revolve around the issues of, inter alia, (1) who, as
between Panduit and Bowthorpe-Hellerman, is the first
21 inventor of the subject matter of the patents involved
22 in this litigation; and (2) whether there was certain
23 prior art against the three patents involved in this
24 litigation that might render those patents invalid. o
25 4/ All threepatents are at issue in the Wisconsin action;
Bowthorpe-Hellerman's Illinois action focuses on only
the '201 patent; and Panduit's two Illinois actions focus
on the 'l146 and '869 patents.

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-7
1 All States argues that transfer of the Wisconsin action
® 2 to the Northern District of Illinois and assignment of
3 this litigation to Judge Grady would allow the parties
4 to make optimal use of the substantial discovery which Co
’ 5 has already occurred in at least two of the Illinois
actions, eliminate the possibility of any duplicative
6
discovery in the future, and prevent conflicting rulings
~
concerning discovery and other pretrial matters.
8 The opponents of transfer do not seriously contest
9 All States' argument that the four actions before the
10 Panel involve common questions of fact. The .thrust
11 of opponents' argument is that the bulk of discovery
12 concerning common questions of fact has already been
accomplished in the two more advanced Illinois actions,
13
® and that, as recognized by Judge Grady, see pages 3-4,
14
supra, the parties to at least those two actions have
5
1 voluntarily cooperated in a variety of ways to avoid
16 duplication of effort and expense where appropriate in
17 the discovery process.
18 -
5/ While some of the opponents argue that the actions
19 raise "two distinct validity issues" concerning, respectively,
the '201 patent and the '146 and '869 patents, and that
no one party is common to all actions, these same opponents
20 acknowledge that there has been a great deal of joint
discovery on issues of common interest in the two more
21 advanced Illinois actions.
22 Opponents do maintain, however, that the "massive"
antitrust counterclaim filed by All States against Panduit,
23 Bowthorpe-Hellerman, Bowthorpe Holding and Tyton in oneof the Illinois actions would substantially complicate
and significantly delay pretrial proceedings in the entire
24 litigation if Section 1407 transfer were ordered. Opponents
C point out that the various counts of the counterclaim
25 raise a variety of issues involving, for the most part,
patents and market areas that are involved in none of
the other actions before the Panel.

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-8-
1 We find that movant has not met its burden of demonstrating
2 that transfer will further the purposes of Section 1407. ®
3 The two Illinois actions against All States have been
4 pending for over three years, and discovery concerning Co
5 the common factual questions in this litigation is well )
advanced. A discovery cutoff date of May 1, 1980 has
© been established in one of those two actions, and a motion
’ to establish a discovery cutoff date for the issues in
8 the complaint in the other action presently is sub judice.
9 Thus these actions (which, taken together, involve each
10 of the three patents at issue in this litigatiqn) are
11 nearing trial, and under the collateral estoppel principles
12 of, inter alia, Blonder-Tongue Laboratories, Inc. v.
University of Illinois Foundation, 402 U.S. 313 (1971),
13 Co | NN ®holdings in these actions that the patents are invalid
14 would likely prove dispositive of related issues in the
15 other two actions. Holdings of validity of these patents
16 could have a dispositive effect as well. See Illinois
17 Tool Works, Inc. v. Foster Grant Co., Inc., 547 F.2d
18 1300, 1302-03 (7th Cir. 1976). :
19 We have previously pointed out that the parties involved
20 in the two advanced Illinois actions have already demonstrated
their ability and willingness voluntarily to cooperate
21 concerning pretrial matters, and we observe that opponents
22 of transfer have expressed their desire to continue these
23 cooperative efforts. We note that many suitable alternatives
24 to Section 1407 transfer, some of which counsel in this [25 litigation may already have utilized, exist in order
to minimize the possibility of duplicative or unreasonable

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—-9-
1 discovery in the future. For example, the parties may
[ 2 request from the appropriate district courts that discovery
3 completed in either of the more advanced Illinois actions
4 and relevant to any of the other actions be made applicable
. to those actions; the parties could seek to agree upon
> a stipulation that any discovery relevant to more than
6 one action may be used in all those actions; notices
7 for a particular deposition could be filed in all actions,
8 thereby making the deposition applicable in each action;
9 and any party could seek orders from the courts before
10 whom the actions are pending to direct the parties to
11 coordinate their pretrial efforts. Moreover, the parties
could seek stays of the Wisconsin action and the most
12 recently filed Illinois action pending a resolution of
® 13 the two Illinois actions which are nearing trial. See
14 In re Allen Compound Bow Patent Litigation, 446 F. Supp.
15 248, 250 (J.P.M.L. 1978}.
16 Also, consultation and cooperation among the concerned
17 district courts, if deemed appropriate by those courts,
18 coupled with the cooperation of the parties, would minimize
° : the possibility of conflicting pretrial rulings. See
: id. at 250-51.20
IT IS THEREFORE ORDERED that the motion to transfer
21 the actions listed on the following Schedule A be, and
22 the same hereby is, DENIED.
23
24
@ 25

Case MDL No. 412 Document 2 Filed 05/20/15 Page 10 of 10
1
DOCKET NO. 412
® 2 Schedule A
3 3 NORTHERN DISTRICT OF ILLINOIS Civil Action No.
| 4 Panduit Corp. v. All States 76-C-4012 Co
* 5 Plastic Manufacturing Co., Inc.
Panduit Corp. v. Dennison 78-C-4973
6 Manufacturing Co., Inc.
7 Bowthorpe-Hellerman Ltd. v. All 76-C-3574
States Plastic Manufacturing Co., Inc.
8 EASTERN DISTRICT OF WISCONSIN
9 Panduit Corp. v. Tyton Corp. 78-C-812
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