United States District Court, E.D. Texas, Tyler Division
MEMORANDUM OPINION AND ORDER
W. SCHROEDER, III UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs Tinnus Enterprises, LLC and ZURU
Ltd.'s ("Plaintiffs") Motion to Reconsider
(Docket Nos. 423 (sealed), 425) and ZURU Inc., ZURU LLC, ZURU
Pty Ltd., and ZURU UK Ltd.'s ("ZURU entities")
Motion to Reconsider (Docket Nos. 422 (sealed), 424).
Defendants Telebrands Corporation and Bulbhead.com,
LLC ("Defendants") filed a response (Docket No.
435), to which Plaintiffs filed a reply (Docket No. 451), and
Defendants filed a sur-reply. Docket No. 465. On October 25,
2017, the Court held an evidentiary hearing on the matter.
For the reasons set forth herein, the Motions (Docket Nos.
422, 423, 424, 425) are DENIED
January 26, 2016, Plaintiffs filed the instant action against
Telebrands, alleging infringement of U.S. Patent No. 9, 242,
749 ("the '749 Patent"). Docket No. 1. On April
19, 2016, Plaintiffs amended their complaint to add
allegations of infringement of U.S. Patent No. 9, 315, 282
("the '282 Patent"). Docket No. 3. On April 20,
2017, Plaintiffs filed corporate disclosure statements
identifying no parent corporations. Docket Nos. 5, 6. This
case proceeded on a trial schedule through the completion of
discovery and expert discovery and through the filing of
dispositive motions. On July 7, 2017, Defendants filed a
motion for partial summary judgment, alleging for the first
time that Defendants were entitled to summary judgment on
Plaintiffs' claim for lost profits because ZURU Ltd. had
not made sales of the Bunch O Balloons products in the United
States, but rather ZURU Inc. had made those sales and was not
a named party to this action. Docket No. 334. Plaintiffs
filed a response to Defendants' motion for partial
summary judgment and also filed a separate motion to join the
remaining ZURU entities. Docket No. 383. Thereafter, on
August 29, 2017, the ZURU entities filed a motion to
intervene. Docket No. 395. On September 1, 2017, Plaintiffs
filed an amended notice of interested parties, including ZURU
Inc. and ZURU LLC. Docket No. 401. Given the overlapping
issues presented by the motions, the Magistrate Judge took up
all matters related to Plaintiffs' claim for lost profits
at a hearing held on September 7, 2017.
September 11, 2017, the Magistrate Judge issued three
opinions related to Plaintiffs' claim for lost profits:
(1) a Memorandum Opinion and Order granting-in-part and
denying-in-part Defendants' Motion to Exclude Alan
Ratliff s Opinions on Lost Profits (Docket No. 405); (2) a
Report and Recommendation recommending that Defendants'
Motion for Summary Judgment of No Lost Profits be
granted-in-part and denied-in-part (Docket No. 406); and (3)
an Order denying Plaintiffs' Motion to Join and the ZURU
entities' Motion to Intervene as Moot in light of the
concurrent findings (Docket No. 407).
Plaintiffs and the ZURU entities filed the instant motions to
reconsider on the Magistrate Judge's denial of their
respective motions to join and intervene, the basis they seek
for reconsideration arises from the Magistrate Judge's
finding in the Report and Recommendation that the ZURU
entities did not have sufficient rights to collect lost
profits during the time of alleged infringement. See,
e.g., Docket Nos. 422, 423. The following timeline
summarizes the relevant dates and events presented by
August 19, 2014
Original license between Tinnus and ZURU Ltd.
(Docket No. 364-4).
November 19-20, 2014
First letter from Mr. Malone authorizing ZURU Inc.
to “use the Intellectual Property subject to
the terms of the License.” Email from Johanna
Bejarano at ZURU to Josh Malone requesting that
ZURU Inc. be added to the letter granting Trademark
Assignment (Docket No. 435-7).
June 9, 2015
U.S. Patent No. 9, 051, 066 (“the '066
Patent”) issues; Tinnus and ZURU Ltd. file
complaint for alleged infringement of the '066
Patent against Bed Bath & Beyond Inc.,
Prometheus Brands, LLC, Telebrands Corporation.
(Case No. 6:15-cv-551.)
July 1, 2015
Josh Malone writes letter to ZURU stating that ZURU
Inc. is “authorized by Tinnus to use the
Intellectual Property subject to the terms of the
License.” (Docket No. 390-2.)
November 4, 2015
Tinnus and ZURU Ltd. execute first amended license
agreement. (Docket No. 364-5.)
December 22, 2015
Order on Injunction issues as to '066 Patent.
(Case No. 6:15-cv-551, Docket No. 91.)
January 26, 2016
U.S. Patent No. 9, 242, 749 (“the '749
Patent”) issues and Tinnus and ZURU Ltd. file
the instant action against Telebrands. (Docket No.
April 19, 2016
U.S. Patent No. 9, 315, 282 (“the '282
Patent”) issues and Tinnus and ZURU Ltd. file
an amended complaint against Telebrands. (Docket
September 29, 2016
The Court grants Plaintiffs' Motion for
Preliminary Injunction against Telebrands. (Docket
October 18, 2016
Tinnus and ZURU Ltd. execute the second amended
license agreement. (Docket No. 364-6.)
October 31, 2016
Injunction Order issues on the '749 and
'282 Patents. (Docket Nos. 159.)
July 7, 2017
Telebrands files motion for summary judgment of no
lost profits. (Docket No. 334.)
July 31, 2017
Tinnus and ZURU Ltd. execute addendum to the second
amended license agreement, expressly including all
ZURU entities as licensees. (Docket No. 372-3.)
August 11, 2017
Plaintiffs file motion to join the ZURU entities.
(Docket No. 383.)
August 29, 2017
ZURU entities file motion to intervene. (Docket No.
September 1, 2017
Tinnus and ZURU Ltd. file amended notice of
interested parties including the ZURU entities.
(Docket No. 401.)
Federal Rules of Civil Procedure do not specifically provide
for motions for reconsideration. Shepherd v. Int'l
Paper Co., 372 F.3d 326, 328 n.1 (5th Cir. 2004).
Motions to reconsider are considered rare and filed only for
the limited purpose: "to permit a party to correct
manifest errors of law or fact, or to present newly
discovered evidence." Krim v. pcOrder.com,
Inc., 212 F.R.D. 329, 331 (W.D. Tex. 2002) (citations
omitted). Mere disagreement with an order of the Court does
not warrant reconsideration of that order. Id. at
332. A party should not restate, recycle, or rehash arguments
that were previously made. Id.
motions to reconsider, Plaintiffs argue that the evidence
suggests ZURU Inc. had an exclusive license to the
patents-in-suit during the period of infringement. Docket No.
422 at 2. In his Report and Recommendation, the Magistrate
Judge noted that at the hearing on September 7, 2017,
Plaintiffs argued that ZURU Inc. had an oral license to the
patents-in-suit that was confirmed by a July 1, 2015 letter
from Josh Mai one. Docket No. 406 at 6. In relevant part,
that letter states that ZURU Inc. is "authorized by
Tinnus to use the Intellectual Property subject to the terms
of the License." Docket No. 390-2. The Magistrate Judge
found that this letter "did not provide ZURU Inc. with
the exclusive rights to the patents-in-suit needed to recover
lost profits in this action." Docket No. 406 at 6,
citing Poly-America, L.P. v. GSE Lining Tech., Inc.,
383 F.3d 1303, 1311 (Fed. Cir. 2004) ("a licensee
generally may not sue for damages unless it has exclusive
rights under a patent, including the right to sue.").
now seek to supplement the record with: (1) testimony from
Mr. Malone and Ms. Anna Mowbray regarding the fact that an
oral license did exist during the time of infringement; (2)
evidence of royalty payments made during the period of
alleged infringement; (3) sales by ZURU Inc. during that
time; and (4) the course of conduct of the parties. Docket
No. 422 at 7-11. As an initial matter, Plaintiffs have no
legal basis to seek reconsideration given that this evidence
was previously available to them and not presented to the
Court when provided with such opportunities during briefing
and at the Magistrate Judge's September 7, 2017 hearing.
Beneficial Innovations, Inc. v. Blockdot, Inc., No.
2:07-CV-263-TJW-CE, 2010 WL 11469805, at *2 (E.D. Tex. Oct.
27, 2010) (denying reconsideration where "new
evidence" was not convincing because it was not
"new evidence at all."). Indeed, Plaintiffs do not
contest that this evidence was previously available, nor do
they explain why they did not present this evidence or
testimony to the Magistrate Judge or why Ms. Mowbray or Mr.
Malone were unable to provide their current statements in
their prior declarations. However, for completeness of the
record, the Court agreed to take in the new evidence at its
October 25, 2017 hearing.
hearing, Mr. Malone and Ms. Mowbray testified to the
existence of an oral agreement between ZURU Inc. and Tinnus.
Hearing Transcript "Tr." at 58:4-6; 87:20-22. Mr.
Malone ultimately testified to a meeting he had with Ms.
Mowbray in China where they reached an agreement that
culminated in the August 19, 2014 original license agreement
between ZURU Ltd. and Tinnus. Tr. at 58:7-60:2. Mr. Malone
admits that ZURU Inc. was never included in any written
license agreement until the October 2016 second amended
license agreement but states that in his mind ZURU was ZURU
and so he had no reason to distinguish the rights between
ZURU Ltd. and ZURU Inc. Id. He confirmed ZURU Inc.
had rights in letters for ZURU's customers. Id.
Mr. Malone testified that, based on his understanding, an
oral agreement between ZURU Inc. and Tinnus would have been
in effect since November 2014. Tr. at 60:14-25. He admits he
was unaware of ZURU Inc. at the time the original license
agreement was executed in August 2014. Tr. at 61:1-9. Ms.
Mowbray confirmed the meeting in China in August of 2014 and
testified that the terms of the oral agreement between ZURU
Inc. and Tinnus were the same as the terms of the original
license agreement between ZURU Ltd. and Tinnus. Tr. at
87:23-89:9. Ms. Mowbray also contends that the oral agreement
would have been in effect as of November 19, 2014 based upon
Mr. Malone's November 2014 letter to ZURU. Tr. at
the evidence in the record establishes an oral license to
ZURU Inc. during the time of infringement as Mr. Malone and
Ms. Mowbray testified, as the Magistrate Judge pointed out,
the question is not merely whether an oral license existed
but what rights to the patents-in-suit ZURU Inc. had during
the time of alleged infringement. Docket No. 406 at 6-7.
Indeed, it is the bundle of rights held by the alleged
licensee that determines whether ZURU Inc. can recover lost
profits for that time period. See Poly-America, 383
F.3d at 1311 ("a licensee generally may not sue for
damages unless it has exclusive rights under a patent,
including the right to sue."); see also Arachnid,
Inc. v. Merit Indus., Inc.,939 F.2d 1574, 1579 (Fed.
Cir. 1991) ("The ...