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Case: 1:08-cv-06584 Document #: 253 Filed: 06/16/10 Page 1 of 5 PageID #:4923

IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MCDAVID KNEE GUARD, INC., ) Civil Action No.: 08 CV 6584


an Illinois corporation, and )
STIRLING MOULDINGS LIMITED, ) Chief Judge James F. Holderman
an English corporation, )
) Magistrate Judge Gilbert
Plaintiffs, )
)
v. )
)
)
NIKE USA, INC., an Oregon corporation,
)
)
Defendant.
)

PLAINTIFFS’ MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

Plaintiffs, McDavid Knee Guard, Inc. (“McDavid”), and Stirling Mouldings Limited
(“Stirling”), hereby move pursuant to Fed.R.Civ.P. 15(a) and Fed.R.Civ.P. 16(b) for leave to file
their Second Amended Complaint, a copy of which is attached hereto as Exhibit 1. Plaintiffs
seek leave to amend their complaint in light of the recent reissue of U.S. Patent No. 6,743,325 as
Reissue Patent No. RE41,346. In support of the motion, Plaintiffs state as follows:
On June 1, 2004, U.S. Patent No. 6,743,325 (the “‘325 Patent”) was duly and legally
issued to Stirling. On November 11, 2005, Stirling filed for reissue of the ‘325 Patent. On
November 17, 2008, Plaintiffs initiated the instant action against Defendant Nike USA, Inc.
(“Nike”) alleging, inter alia, infringement of the ‘325 Patent. On May 25, 2010, the ‘325 Patent
was duly and legally reissued to Stirling as Reissue Patent No. RE41,346 (the “Reissue Patent”).
The effect of this Reissue is stated in Section 252 of the Patent Statute, which reads, in part:
The surrender of the original patent shall take effect upon the issue of the reissued
patent, and every reissued patent shall have the same effect and operation in law,
on the trial of actions for causes thereafter arising, as if the same had been
originally granted in such amended form, but in so far as the claims of the original
and reissued patents are substantially identical, such surrender shall not affect any
action then pending nor abate any cause of action then existing, and the reissued
patent, to the extent that its claims are substantially identical with the original
Case: 1:08-cv-06584 Document #: 253 Filed: 06/16/10 Page 2 of 5 PageID #:4924

patent, shall constitute a continuation thereof and have effect continuously from
the date of the original patent.
Count I of the present complaint alleges infringement of the ‘325 Patent. However, under
Section 252, the ‘325 Patent was surrendered “upon the issue of the reissued patent.” Thus, the
complaint no longer identifies the proper patent-in-suit. Through this motion, Plaintiffs seek to
remedy this by updating Count I of the complaint and the respective Prayer for Relief to reflect
the recent Reissue of the ‘325 Patent as Reissue Patent No. RE41,346, and to assert the claims of
the Reissue Patent (i.e., claims 1-4, 6-8, 13, and 22-25) that Plaintiffs contend are infringed by
Nike.
Pursuant to Section 252, Plaintiffs are entitled to recovery for infringement of the Reissue
Patent. Claims 1-4, 6-8, and 13 of the Reissue Patent are identical to claims 1-4, 6-8, and 13 of
the now-surrendered ‘325 Patent, and therefore, Plaintiffs can recover for infringement of these
claims from the issuance of the ‘325 Patent. Indeed, Nike does not oppose Plaintiffs’ request to
amend the complaint to the extent that Reissue claims 1-4, 6-8, and 13 are identical to those of
the ‘325 Patent, as indicated in the letter of June 9, 2010, a copy of which is attached hereto as
Exhibit 2. Plaintiffs are also entitled to recovery for infringement of independent claim 22 of the
Reissue Patent, as well as its dependent claims 23-25, which were added during the reissue
proceeding.
Plaintiffs recognize that, pursuant to the Minute Entry of November 12, 2009, Plaintiffs
were permitted to a file motion to amend the complaint up to and including November 16, 2009.
(Docket No. 157). To amend the complaint after the expiration of the court’s scheduling order
deadline, Fed.R.Civ.P. 16(b) provides that Plaintiffs must show “good cause.” Trustmark Ins.
Co. v. General & Cologne Life Re of Am., 424 F.3d 542, 553 (7th Cir. 2005). Fed.R.Civ.P.
16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking amendment.
Id. Here, because the complaint no longer identifies the proper patent-in-suit (i.e., the Reissue
Patent), Plaintiffs have demonstrated good cause to modify the Court’s scheduling order.
Furthermore, Plaintiffs are filing the instant Motion for Leave to File Second Amended
Complaint shortly after the issuance of the Reissue Patent. Thus, Plaintiffs are diligent.
“Once ‘good cause’ has been shown for a late amendment under Rule 16(b), the Court
must consider the application of Rule 15(a).” Connell v. KLN Steel Prods. Co., 2006 U.S. Dist.
LEXIS 29419, *17 (N.D. Ill. 2006). Fed.R.Civ.P. 15(a)(2) allows for the amendment of
pleadings upon leave of Court and declares that the “court should freely give leave when justice

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so requires.” “In the absence of any apparent or declared reason – such as undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of the amendment, etc. – the leave sought should, as the rules require, be
‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962); see also King v. Cooke, 26 F. 3d
720, 723-24 (7th Cir. 1994).
The requested leave to amend will not prejudice Nike. As noted, claims 1-4, 6-8, and 13
of the Reissue Patent are identical to claims 1-4, 6-8, and 13 of the now-surrendered ‘325 Patent.
To this extent, Nike does not oppose Plaintiffs’ request to amend the complaint. (Exhibit 2.)
Furthermore, Nike will not be prejudiced by Plaintiffs’ infringement contentions regarding the
added claims 22-25 of the Reissue Patent. Indeed, judicial economy, convenience, and fairness
support the adjudication of these added claims in the present matter. Any additional discovery
would be relatively minimal as Plaintiffs’ infringement contentions as to these added claims are
based on the same infringing method practiced by Nike’s supplier. At most, adjudication of
claims 22-25 would require additional claim construction for the single independent claim 22
and three dependent claims 23-25. Any such additional claim construction should be conducted
in the present matter to promote judicial economy as Plaintiffs’ only alternative is to file a
second lawsuit, effectively causing the repeat of the actions taken by the parties and the Court
over the last nineteen months. Any prejudice to Nike in adjudicating claims 22-25 in the present
matter is clearly out weighed by the hardships for both Nike and Plaintiffs that would result from
a second lawsuit.
In view of the timeliness of Plaintiffs’ motion and the status of the proceedings in this
action, the Court should grant Plaintiffs’ motion for leave to file the proposed Second Amended
Complaint.
WHEREFORE, Plaintiffs request that this Court grant its motion for leave to file the
Second Amended Complaint.

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Respectfully submitted,

Date: June 16, 2010 s/ Paul B. Henkelmann


Karl R. Fink
John F. Flannery
Paul B. Henkelmann
FITCH, EVEN, TABIN & FLANNERY
120 South LaSalle Street, Suite 1600
Chicago, Illinois 60603
Telephone: (312) 577-7000
Facsimile: (312) 577-7007

Attorneys for Plaintiffs, McDavid Knee Guard,


563007
Inc. and Stirling Mouldings Limited

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CERTIFICATE OF SERVICE

I hereby certify that on June 16, 2010, a copy of the foregoing PLAINTIFFS’ MOTION FOR

LEAVE TO FILE SECOND AMENDED COMPLAINT was caused to be filed electronically. Notice of

this filing will be sent to the following parties by operation of the Court’s electronic filing

system. Parties may access this filing through the Court’s system.

Parties receiving service electronically are as follows:

Steven Yovits William C. Rooklidge


HOWREY LLP Alyson G. Barker
321 North Clark Street, Suite 3400 Ryan E. Lindsey
Chicago, Illinois 60654-4717 HOWREY LLP
Telephone: (312) 595-1239 4 Park Plaza, Suite 1700
Facsimile: (312) 595-2250 Irvine, California 92614
ATTORNEY FOR DEFENDANT, NIKE USA, INC. Telephone: (949) 721-6900
Facsimile: (949) 721-6910
ATTORNEYS FOR DEFENDANT, NIKE USA, INC.

s/ Paul B. Henkelmann
One of the Attorneys for Plaintiffs, McDavid Knee
Guard, Inc. and Stirling Mouldings Limited
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EXHIBIT 1
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IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MCDAVID KNEE GUARD, INC., ) Civil Action No. 08 CV 6584


an Illinois corporation, and )
STIRLING MOULDINGS LIMITED, ) Chief Judge James F. Holderman
an English corporation, )
) Magistrate Judge Gilbert
Plaintiffs, )
)
v. ) JURY TRIAL DEMANDED
)
)
NIKE USA, INC., an Oregon corporation,
)
)
Defendant.
)

SECOND AMENDED COMPLAINT

Plaintiffs, McDavid Knee Guard, Inc. (“McDavid”) and Stirling Mouldings Limited

(“Stirling”), complain against Defendant Nike USA, Inc. (“Nike”) as follows:

1. McDavid is a corporation incorporated under the laws of the State of Illinois, with

its principal place of business in Woodridge, Illinois.

2. Stirling is a corporation registered in England, with its principal place of business

in Accrington, Great Britain.

3. McDavid and Stirling entered into a license agreement dated June 30, 2005. In

the license agreement, Stirling granted to McDavid an exclusive license to certain intellectual

property, including U.S. Reissue Patent No. RE41,346, for McDavid to make, have made, use,

sell, offer for sale, lease, import, distribute and otherwise dispose of licensed products within the

Sporting Goods Field of Use.

4. Nike is a corporation incorporated under the laws of the State of Oregon, with its

principal place of business at One Bowerman Drive, Beaverton, Oregon. Nike is registered to do
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business in Illinois, and named as its agent National Registered Agents, Inc., 200 West Adams

Street, Chicago, Illinois 60606.

5. Count I of this action for patent infringement arising under the Patent Laws of the

United States, 35 U.S.C. §§ 271 et seq.

6. The Court has subject matter jurisdiction over Count I pursuant to 28 U.S.C.

§§ 1331 and 1338(a).

7. Count II is brought by McDavid pursuant to the Consumer Fraud Act, 815 ILCS

505/1 et seq., to seek redress for Nike’s unlawful conduct in violation of state law. McDavid is a

corporation incorporated under the laws of Illinois, with its principal place of business in Illinois.

Nike is a corporation incorporated under the laws of Oregon, with its principal place of business

in Oregon. The amount in controversy, without interest and costs, exceeds the sum or value

specified in 28 U.S.C. § 1332.

8. Count III is brought by McDavid pursuant to the Illinois Uniform Deceptive

Trade Practices Act, 815 ILCS 510/1 et seq. The facts underlying Count III share a common

nucleus of operative facts and law with Count II. This Court, therefore, has supplemental subject

matter jurisdiction pursuant to 28 U.S.C. § 1367.

9. Count IV is brought by McDavid pursuant to Illinois Common Law of Tortious

Interference with Prospective Business Advantage. The facts underlying Count IV share a

common nucleus of operative facts and law with Count II.

10. Count V is brought by McDavid pursuant to 15 U.S.C. § 1125 (the Lanham Act).

This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1338.

11. This Court has personal jurisdiction over Nike.

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COUNT I
Infringement of Reissue Patent No. RE41,346

12. The allegations of paragraphs 1 and 11 are incorporated as though fully set forth

herein.

13. On May 25, 2010, U.S. Reissue Patent No. RE41,346 (“the ‘346 Patent”) entitled

“Flexible Material” was duly and legally issued to Stirling, on an application filed by David

Stirling Taylor. A copy of the ‘346 Patent is attached as Exhibit A.

14. Stirling is the owner of all right, title and interest in the ‘346 Patent. McDavid is

the exclusive licensee in the Field of Use.

15. Nike has been, and is willfully infringing, directly and/or indirectly, claims 1-4, 6-

8, 13, and 22-25 of the ‘346 Patent by importing into the United States, and by offering to sell,

selling, and/or using within the United States, foam padded garments, sold under the marks

“Deflex” and “Nike Pro Combat,” which are made in Taiwan and South Korea by the process

patented by the ‘346 Patent. Unless enjoined by the Court, Nike will continue to infringe the

‘346 Patent.

16. Nike’s acts of infringement have injured and damaged McDavid and Stirling.

17. Nike’s infringement has caused irreparable injury to McDavid and Stirling and

will continue to cause irreparable injury until Nike is enjoined from further infringement by the

Court.

COUNT II
Violation of the Consumer Fraud Act, 815 ILCS 505/1 et seq.

18. McDavid is a manufacturer and seller of foam padded garments, including foam

padded girdles. Foam padded girdles are form fitting compression shorts worn under pants for

football, basketball or other contact sports to provide maximum protection and performance for

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the athlete. The girdles are constructed with lightweight hydravent moisture movement fabric

which regulates and stabilizes the wearer’s core temperature while giving the wearer protection

on his hips, thighs and tailbone.

19. McDavid created the market for foam padded girdles. It first made the foam

padded girdles on about July 2005. It began selling its foam padded girdles soon thereafter to

athletic departments of colleges, universities, and high schools, to professional basketball

players, and to the public through sporting goods stores. Recently, McDavid has been informed

by certain universities that they could no longer buy foam padded girdles from McDavid because

the universities were required by contract to buy all foam padded girdles from Nike.

20. In July 2006, Nike entered into an exclusive Trademark/Supply Agreement with

the University of Illinois (“U of I”) in which the U of I is required to display the Nike “Swoosh”

logo visibly on all U of I’s athletic competition apparel. The Agreement has a term of 10 years,

with Nike having the right of first refusal after the 10 year term. The Trademark/Supply

Agreement makes Nike the exclusive supplier of athletic competition apparel and prevents the U

of I from purchasing any athletic competition apparel from any third party without Nike’s

approval. The essence of the Trademark/Supply Agreement is the placement of the Nike

Swoosh logo prominently on U of I’s athletic competition apparel to thereby enable the public to

see the Nike logo. U of I agreed that its athletes and coaches will publicize the Nike Swoosh

logo on the competitive athletic apparel they wear. Nike also obtained the right to utilize the U

of I athletic competition apparel with the Nike logo in any media and the right sell competitive

athletic apparel bearing the U of I trademarks to sporting goods stores.

21. Under the Agreement, the Nike athletic competition apparel sold to the U of I are

to be made available on an exclusive basis to be worn by team members, coaches and staff of the

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U of I. During activities, no team member, coach or staff member may wear athletic competition

apparel manufactured by companies other than Nike. Under the Trademark/Supply Agreement,

Nike has the right to terminate the Trademark/Supply Agreement if a member of any U of I

athletic team fails to wear or use the Nike athletic competition apparel with the Nike Swoosh

logo displayed prominently thereon during practices, games, exhibitions, clinics, sports camps or

other occasions during which team members wear or use Nike athletic competition apparel.

22. The foam padded girdles are worn under the pants of the athlete. Nike’s Swoosh

logo is on one of the legs of Nike’s foam padded girdles, and the Nike name is on the waistband.

Thus, any Nike trademark or logo on the foam padded girdles is hidden from public view by the

overlying pants and will not be visible to the public on television or other media. Therefore,

Nike’s marks are not promoted when an athlete wears its foam padded girdles, which is contrary

to the purpose of the Trademark/Supply Agreement. Moreover, the foam padded girdles are a

new product developed by Nike and sold after the effective date of the U of I Trademark/Supply

Agreement and therefore do not form part of the Agreement. Thus, the purchase of the foam

padded girdles from McDavid should not have been precluded by the Trademark/Supply

Agreement.

23. The Trademark/Supply Agreement prohibits the U of I from purchasing any

athletic competition apparel from any third party without Nike’s approval. The U of I began to

purchase foam padded girdles from McDavid in about 2006. Upon information and belief, the U

of I believed that it was unnecessary to inform Nike that it was purchasing and that its athletes

were wearing foam padded girdles purchased from McDavid. Upon information and belief, Nike

did not grant its approval and it did not object.

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24. Upon information and belief, Nike has similar Trademark/Supply Agreements

with 75 colleges and universities. Upon information and belief, in the last year, Nike has made

substantial sales of its athletic competition apparel to the colleges and universities.

25. Upon information and belief, Nike has entered into Trademark/Supply

Agreements to be the exclusive supplier of athletic/competition apparel to over 35 high schools.

Nike also supplies athletic competition apparel to sporting goods stores.

26. Upon information and belief, Nike has over 50% of the athletic competition

apparel market in the United States.

27. In about the beginning of October 2008, Nike falsely informed the colleges,

universities, and high schools that have Trademark/Supply Agreements with Nike that they are

not allowed under the Agreements to order foam padded girdles from McDavid, but must order

the foam padded girdles from Nike. They have ordered foam padded girdles from Nike and

ceased buying padded girdles from McDavid.

28. McDavid, on information and belief, alleges that the customers have been

prevented from choosing among foam padded girdles on their merits, thereby foreclosing

competition in the foam padded girdles market.

29. McDavid, on information and belief, alleges that the effect of Nike’s statement to

customers is to force the customers into buying foam padded girdles from Nike that the customer

did not wish to acquire or might have preferred to purchase from McDavid on different terms.

30. McDavid, on information and belief, alleges that Nike has intentionally deceived

and exploited customers by falsely informing customers that they are required by Agreement to

purchase padded girdles from Nike.

COUNT III
Violation of State Unfair Competition Law

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Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq.

31. McDavid hereby incorporates by reference all of the allegations of paragraphs 19-

30 as if fully set forth herein.

32. McDavid, on information and belief, alleges that the foregoing conduct amounts

to an unlawful and/or unfair business practice by Nike within the meaning of the Illinois

Uniform Trade Practice Act 510/et seq.

COUNT IV
Violation of the Common Law of Tortious Interference
With Prospective Business Advantage

33. McDavid hereby incorporates by reference all of the allegations of paragraphs 19-

32 as if fully set forth herein.

34. McDavid had a business relationship or had a reasonable expectation of entering

into a business relationship with each of the colleges, universities, and high schools.

35. Nike had knowledge of that relationship and expectation.

36. Nike intentionally interfered with that business relationship or prevented

McDavid from realizing the expectation of the business relationship.

COUNT V

Violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125

37. McDavid hereby incorporates by reference all of the allegations of paragraphs 19-

36 as if fully set forth herein.

38. Nike made a false statement of fact to the equipment managers, athletic directors,

and coaches at the college, university, and high school levels that they could not purchase foam

padded girdles from McDavid because they were prevented from doing so by the

Trademark/Supply Agreement with their respective college, university, and high school.

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39. The false statement was made in promotion or the sale of foam padded girdles

sold by Nike bearing the “Swoosh” logo.

40. Upon information and belief, the statement actually deceived most, if not all, of

the university and high school personnel.

41. The deception is material because it has prevented some of the college, university,

and high school personnel to stop buying McDavid’s foam padded girdles and upon information

and belief, most of the remainder of the college, university, and high school personnel will stop

buying McDavid’s foam padded girdles.

42. Upon information and belief, the false statements were made to college,

university, and high school personnel all over the United States.

43. McDavid has been damaged by loss of sales of its foam padded girdles and is

likely to suffer substantial damage as a result of the false statement by direct diversion of sales

from McDavid to Nike.

PRAYER FOR RELIEF

WHEREFORE, McDavid and Stirling pray for relief on Count I as follows:

1. Judgment that claims 1-4, 6-8, 13, and 22-25 of the ‘346 patent are valid,

enforceable and infringed by Nike;

2. A preliminary and permanent injunction enjoining Nike, its officers, directors,

agents, employees, servants, attorneys, licensees, successors, assigns, customers, and those

persons acting in active concert or participation with Nike from infringing, inducing

infringement of, or contributorily infringing claims 1-4, 6-8, 13, and 22-25 of the ‘346 Patent;

3. An award of damages arising out of infringement by Nike of claims 1-4, 6-8, 13,

and 22-25 of the ‘346 Patent, together with interest;

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4. Judgment that the damages so adjudged be trebled;

5. A judgment that McDavid and Stirling be awarded their reasonable attorneys’

fees, costs and expenses incurred in this action; and

6. Such other and further relief as the Court may deem just and proper.

WHEREFORE, McDavid prays for relief as to Counts II-V as follows:

1. Entering judgment for McDavid against Nike on Counts II-V;

2. Award McDavid compensatory and statutory money damages, including treble

damages and punitive damages, as appropriate;

3. Award prejudgment interest, as appropriate;

4. Declare Nike’s actions to be in violation of state law of unfair competition, the

common law, and the Lanham Act, and enjoin Nike from carrying on such conduct;

5. Enter such other preliminary and permanent injunctive relief as is necessary and

appropriate to restore competitive conditions in the markets affected by Nike’s unlawful conduct;

and

6. Award the costs of this action.

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JURY DEMAND

McDavid and Stirling demand trial by jury of all issues triable of right by a jury.

Date: June 16, 2010 s/ Paul B. Henkelmann


Karl R. Fink
John F. Flannery
Paul B. Henkelmann
FITCH, EVEN, TABIN & FLANNERY
120 South LaSalle Street, Suite 1600
Chicago, Illinois 60603
Telephone: (312) 577-7000
Facsimile: (312) 577-7007

Attorneys for Plaintiffs, McDavid Knee Guard, Inc.


and Stirling Mouldings Limited
562947

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CERTIFICATE OF SERVICE

I hereby certify that on June 16, 2010, a copy of the foregoing SECOND AMENDED

COMPLAINT was caused to be filed electronically. Notice of this filing will be sent to the

following parties by operation of the Court’s electronic filing system. Parties may access this

filing through the Court’s system.

Parties receiving service electronically are as follows:

Steven Yovits William C. Rooklidge


HOWREY LLP Alyson G. Barker
321 North Clark Street, Suite 3400 Ryan E. Lindsey
Chicago, Illinois 60654-4717 HOWREY LLP
Telephone: (312) 595-1239 4 Park Plaza, Suite 1700
Facsimile: (312) 595-2250 Irvine, California 92614
[ATTORNEY FOR DEFENDANT, NIKE USA, INC.] Telephone: (949) 721-6900
Facsimile: (949) 721-6910
[ATTORNEYS FOR DEFENDANT, NIKE USA, INC.]

s/ Paul B. Henkelmann
One of the Attorney for Plaintiffs, McDavid Knee
Guard, Inc. and Stirling Mouldings Limited

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EXHIBIT A
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Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 16 of 23 PageID #:4943
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 17 of 23 PageID #:4944
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 18 of 23 PageID #:4945
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 19 of 23 PageID #:4946
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 20 of 23 PageID #:4947
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 21 of 23 PageID #:4948
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 22 of 23 PageID #:4949
Case: 1:08-cv-06584 Document #: 253-2 Filed: 06/16/10 Page 23 of 23 PageID #:4950
Case: 1:08-cv-06584 Document #: 253-3 Filed: 06/16/10 Page 1 of 2 PageID #:4951

EXHIBIT 2
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4 Park Plaza
Suite 1700
Irvine, CA 92614-2559
T 949.721.6900
F 949.721.6910
www.howrey.com

June 9, 2010
ELECTRONIC MAIL

Paul B. Henkelmann, Esq.


Fitch Even Tabin & Flannery
120 South La Salle Street, Suite 1600
Chicago, Illinois 60603-3406

Re: McDavid Knee Guard, Inc. et al. v. Nike USA, Inc.

Dear Paul:

Thank you for contacting the clerk to schedule our August 30th settlement conference
before Magistrate Gilbert. We look forward to having a meaningful exchange regarding
settlement with his assistance.

In our telephone conversation on Monday June 7, you indicated that McDavid and
Adidas have entered into a settlement agreement and that the court dismissed that case on June 4.
I write to request that McDavid immediately produce the settlement agreement between
McDavid and Adidas, and any other documents related to that agreement. The agreement is
responsive to several of Nike’s document requests, including at least request no. 56 that calls for
all documents regarding damages, as well as request no. 61 that calls for all documents reflecting
McDavid’s patent licensing practices and policies. Moreover, the settlement agreement is
relevant to McDavid’s reasonable royalty calculations pursuant to the Federal Circuit’s recent
decision in ResQNet.com v. Lansa, Inc., (Fed. Cir. Feb. 5, 2010). Nike therefore requests that
McDavid produce a copy of the settlement agreement and related documents to comply with
McDavid’s duty to supplement its document production under Federal Rule of Civil Procedure
26(e).

In our June 7 telephone conversation, you also informed me that McDavid intends to seek
leave to amend its complaint to include claims from McDavid’s reissue patent. To the extent
that McDavid intends to amend its complaint to include asserted claims that are identical to those
of the Stirling patent, Nike does not oppose McDavid’s request to amend. If, however, as you
indicated in our telephone conversation today, McDavid will seek to assert new claims from the
reissue patent that are not identical to those of the Stirling patent, Nike opposes McDavid’s
request.

Please call me if you have questions.


Best regards,

Ryan E. Lindsey
AMSTERDAM BRUSSELS CHICAGO EAST PALO ALTO HOUSTON IRVINE LONDON LOS ANGELES
MADRID MUNICH NEW YORK NORTHERN VIRGINIA PARIS SALT LAKE CITY SAN FRANCISCO TAIPEI WASHINGTON, DC

DM_US:23304509_1

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