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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
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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,
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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.
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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Plaintiffs, McDavid Knee Guard, Inc. (“McDavid”) and Stirling Mouldings Limited
1. McDavid is a corporation incorporated under the laws of the State of Illinois, with
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
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
5. Count I of this action for patent infringement arising under the Patent Laws of the
6. The Court has subject matter jurisdiction over Count I pursuant to 28 U.S.C.
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
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
Interference with Prospective Business Advantage. The facts underlying Count IV share a
10. Count V is brought by McDavid pursuant to 15 U.S.C. § 1125 (the Lanham Act).
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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
14. Stirling is the owner of all right, title and interest in the ‘346 Patent. McDavid is
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
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
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
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.
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
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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
26. Upon information and belief, Nike has over 50% of the athletic competition
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
28. McDavid, on information and belief, alleges that the customers have been
prevented from choosing among foam padded girdles on their merits, thereby foreclosing
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
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-
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
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-
into a business relationship with each of the colleges, universities, and high schools.
COUNT V
37. McDavid hereby incorporates by reference all of the allegations of paragraphs 19-
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
40. Upon information and belief, the statement actually deceived most, if not all, of
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
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
1. Judgment that claims 1-4, 6-8, 13, and 22-25 of the ‘346 patent are valid,
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,
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6. Such other and further relief as the Court may deem just and proper.
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
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JURY DEMAND
McDavid and Stirling demand trial by jury of all issues triable of right by a jury.
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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
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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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
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.
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