The parties raise significant factual issues under both inquiries concerning Intex’s new air
mattress. As such, the matter is not ripe for determination based upon the pleadings submitted by
the parties, Therefore, a hearing will be held to determine whether Intex’s new air mattress is in
violation of the injunction.

CONCLUSION

For the foregoing reasons, Intex is ordered to forthwith cease and desist selling products
containing product numbers prohibited by the injunction. A hearing will be set for
February 10, 2005, at 10:30 a.m.;: (1) for Intex to show that it has ceased and desisted from
selling the products with the numbers set out above and (2) to determine whether Intex has

violated the terms of the injunction.

Dated besetee 15°
JO} :
Unitgd States District Judge



Intex shall forthwith cease and desist selling products with Intex product nos. 66701,
66712, 66715, 66787-66795, 66905-66922, 66985-95, 66707W, 66791 W, 66792K, 66792W,
66992W, and Wal-Mart product nos. 993809 and 993816. A hearing will be held; at which time,
Intex shall demonstrate compliance with this order.

Summary Contempt Proceeding

Plaintiffs next seek summary contempt proceedings to hold Intex liable for infringing
claims 9 and 12-15 of the ‘726 patent. According to Plaintiffs, Intex manufactured an air
mattress different from that presented at trial which incorporates a valve that infringes the ‘726
patent because the valve is materially identical to the accused device, which was the subject of
this litigation. Intex contends that it has not violated the Court’s order in this regard and that a
separate infringement action must be brought by Plaintiffs and that Plaintiffs should have raised
issues concerning the new valve during trial.

To succeed in a summary contempt proceeding, the patentee must prove, by clear and
convincing evidence, that “the modified device falls within the admitted or adjudicated scope of
the claim and is, therefore, an infringement.” Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 1569
(Fed. Cir. 1995) (Arbek Mfg.) (citation omitted). Contempt motions may be decided by using
affidavits and exhibits without resorting toa full trial, Arbek Mfg., 55 F.3d at 1569; but “the
movant bears the heavy burden of proving violation by clear and convincing evidence,” KSM

Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1524 (Fed. Cir. 1985).



Minute Order Form (0697)

United States District Court, Northern District of Ilinois

wenge Magistrate Judge John W. Darrah Sinan Augned Sodge

CASE NUMBER 02 C 2590 DATE 12/15/2004
CASE Aero Products Intl., Inc. vs. Intex Recreation Corp., et. al.
TITLE

{In the following box (a) indicate the party filing the motion, eg., plaintiff, defendant, 3rd party plaintiff, and (b) state bricfly the nature
of the motion being presented,]

MOTION:

DOCKET ENTRY:

(1) o Filed motion of [ use listing in “Motion” box above.]

(Q) a Brief in support of motion due____. |
(3) a Answer brief to motion due__. Reply to answer briefdue__. |
(4) Q Ruling/Hearingon____ssetfor_ at , |
(5) a Status hearing[held/continued to] (set for/re-set for]on___——sset for Sat |
(6) im Pretrial conference{held/continued to] [set for/re-setforJon__—ssetfor__— at. |
(2) Oo Trial[set for/re-set for}on at

(8) 0 [Bench/Jury trial] [Hearing] held/continuedto ss at__

(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}

OOFRCP4(m) CLocal Rule 41.1 OFRCP41(a\(1) OFRCP41(a)(2).

ao [Other docket entry] _ For the reasons stated in the attached memorandum opinion and order, Intex
is ordered to forthwith cease and desist selling products containing product numbers prohibited by
injunction. A hearing will be set for 2/10/05 at 10:30 a.m. for Intex to show that it has ceased and desisted
from selling the products with the numbers set out above and to determine whether Intex has violatred
the terms of the injunction. The Court strikes the hearing date of 1/27/05, stated in open Court. Enter
Memorandum Opinion and Order. Defendant to file an answer to plaintiff's motion for contempt by
12/29/04, ruling by mail.

a) [For further detail see order attached to the original minute order.]
‘No notices required, advised in open court.

No notices required.

umber of povies
Notices mailed by judge's staff,
Notified counsel by telephone. DEC a 5 700k

x. | Docketing to mail notices.

Mail AO 450 form. 1p
Copy to judge/magistrate judge.
a9
courtroom
MF deputy's
initials

Date/time received in
central Clerk's Office



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DOCKETED

AERO PRODUCTS INTERNATIONAL, INC., ) DEC 1 6 2004
a Florida corporation, and
ROBERT B. CHAFFEE, an individual,

Plaintiffs,

v. No: 02 C 2590
INTEX RECREATION CORPORATION,
a California corporation;

QUALITY TRADING, INC.,

a California corporation; and
WAL-MART STORES, INC.,

a Delaware corporation,

Judge John W. Darrah

wwe www rw eres ae

Defendants.

MEMORANDUM OPINION AND ORDER

The Plaintiffs, Aero Products International, Inc. (“Aero”) and Robert B. Chaffee, filed
suit against the Defendants, Intex Recreation Corporation (“Intex”); Quality Trading, Inc.; and
Wal-Mart Stores, Inc. A trial by jury was held, and Defendants were found to have willfully
infringed Plaintiffs’ patent, United States Patent No. 5,367,726 (“‘the ‘726 patent”), for a valve
used in an inflatable air mattress and for violating Plaintiffs’ trademark. Thereafter, an
injunction issued preventing Intex from selling certain product numbers.’

Presently before the Court is Plaintiffs’ Motion for Contempt. Plaintiffs raise two issues:

(1) whether Intex has violated the injunction by selling products with product numbers prohibited

' Aero Prods. Int'l v. Intex Recreation Corp., No. 02 C 2590, 2004 WL 2091996 (N.D.
Ill. Sept. 16, 2004); Aero Prods. Int'l v. Intex Recreation Corp., No. 02 C 2590, 2004 WL
2255984 (N.D. Ill. Sept. 16, 2004).



by the injunction and (2) whether Intex has sold another product that was not part of this
litigation which infringes the ‘726 patent — Plaintiffs seek summary contempt proceedings in this
regard.
ANALYSIS
Violation of the Injunction

Plaintiffs argue that Intex has violated the injunction by selling products with product
numbers prohibited by the injunction. Plaintiffs seek a coercive fine of $10,000.00 per day,
payable to the Court, until Intex changes its product numbers, starting one week after the ruling
on this motion.

Seventh Circuit law is applicable in the resolution of this issue. See, e.g., Shockley v.
Arcan, Inc., 248 F.3d 1349, 1358 (Fed. Cir. 2001). A party must prove by clear and convincing
evidence that the opposing party violated an injunction. E.g., Goluba v. Sch. Dist. of Ripon,
45 F.3d 1035, 1037 (7th Cir. 1995) (citations omitted) (Goluba). The violation need not be
willful if the opposing party has not been “reasonably diligent and energetic in attempting to
accomplish what was ordered.” Goluba, 45 F.3d at 1037 (citation omitted). A fine may be
entered to coerce obedience with an injunction. Connolly v. J.T. Ventures, 851 F.2d 930, 932
(7th Cir. 1988) (Connolly).

Intex does not dispute that it sold products with product numbers prohibited by the

injunction.