Makers of Bionic Wrench awarded $5.9M by federal jury against Sears in willful infringement verdict

By Steve Brachmann
June 19, 2017

In the middle of May, a federal jury in the U.S. District Court for the Northern District of Illinois (N.D. Ill.) awarded nearly $6 million in damages to a father-and-son hand tool business against major American retailer Sears (NASDAQ:SHLD) and Apex Tool Group, a Maryland-based manufacturer of hand and power tools. The victory for LoggerHead LLC, which includes a finding of willful infringement, is a rare example of a small business taking on much larger entities in a patent infringement battle and coming away with a major victory.

LoggerHead asserted two of its patents in the case:

  • U.S. Patent No. 6889579, titled Adjustable Gripping Tool. It claims an adjustable gripping tool for engaging a workpiece to impart work thereto which is designed to automatically configure to differently dimensioned and shaped workpieces and has self-energizing and de-energizing capabilities.
  • U.S. Patent No. 7992470, same title as the ‘579 patent. It also claims an adjustable gripping tool having aligning elements which are advantageous when timing of the engagement between gripping elements and the workpiece are desired.

The inventor of the two patents-in-suit is Dan Brown, Sr., president and founder of LoggerHead. He also teaches engineering at Northwestern University’s Segal Design Institute. Brown came up with the concept for the adjustable gripping tool, which LoggerHead markets as the Bionic Wrench, after watching his son try to work on a lawnmower with a pair of pliers. Realizing that there was no good tool to serve as a substitute, Brown worked for three years to create a suitable gripping tool while performing market research, evaluating sales channels and searching for an American manufacturer for the product, according to LoggerHead’s second amended complaint filed in the case.

Brown first applied for a patent covering the Bionic Wrench in January 2004, about a year prior to founding LoggerHead and releasing the first Bionic Wrench to the market. The tool enables users to work a nut or bolt by providing a grip on the flat sides of hardware rather than its corners, as a typical wrench would, improving a user’s ability to work with a fastener having worn edges. The Bionic Wrench’s adjustable features allow it to easily fit both metric and nonmetric hardware within a certain range of size. Brown chose a U.S.-based supplier, Penn United Technologies, to manufacture and assemble the Bionic Wrench to develop a “Made in America” brand identity, despite the higher cost of domestic manufacturing compared to foreign suppliers.

The initial release of the Bionic Wrench earned a great deal of critical acclaim and commercial success. In March 2006, The Wall Street Journal covered an international design award won by LoggerHead making it one of two U.S. entities to earn such industry praise, the other being consumer electronics giant Apple. LoggerHead’s complaint notes that, by mid-2012, gross sales of Bionic Wrench units reached $20 million with Penn United employing between 20 and 50 employees to manufacture the device, succeeding despite the global economic recession. During that time, Brown turned down overtures from other retailers who offered to sell the Bionic Wrench under their brands. LoggerHead also obtained trademark status for the Bionic Wrench name in 2008 and the tool’s design in 2014. In the complaint, LoggerHead notes that it has shipped 1.75 million units of the Bionic Wrench by the time of the complaint’s filing.

The business relationship between LoggerHead and Sears goes back to before Christmas of 2009; Sears ordered 15,000 units to be sold in its retail stores during that holiday season. Sears sold every unit both that year and the next, when it ordered 75,000 Bionic Wrenches. As a result of this success, LoggerHead and Sears entered into a one-year supply agreement effective February 1st, 2011. Under the agreement, Sears was responsible for promoting the Bionic Wrench by subsidizing the production of a direct response television ad campaign; in return, LoggerHead agreed to exclusively sell the Bionic Wrench through Sears and not Home Depot or Lowes. Sears sold 300,000 units of the Bionic Wrench that year, exceeding the company’s own sales forecast by 23 percent.

Following this very successful sales campaign, Sears and LoggerHead discussed extending their supply agreement. LoggerHead alleged that Sears agreed to purchase 73,000 Bionic Wrench units for Father’s Day 2012 and a total 300,000 units through the year. LoggerHead worked to fulfill these orders from December 2011 until June 2012, when Sears sent a revised sales forecast of 2,971 Bionic Wrench units for the 2012 holiday season, drastically reducing its Christmas commitment from more than 200,000 units. Sears also backed out of a commitment to help produce additional direct response ads for the Bionic Wrench. LoggerHead alleged that Sears told it that disagreements between the parties led to their breaking the agreement, but that no true disagreement was ever identified by Sears.

In September 2012, Sears’ Craftsman tool brand announced that it would begin sales of the Max Axess Locking Wrench. LoggerHead alleged that Sears had purchased the trademark-protected Bionic Wrench title as an advertisement keyword, directing users of Google and other search engines to Sears’ webpage selling the Max Axess knockoff. LoggerHead alleged that this action constituted trademark dilution and caused consumer confusion. Sears then ran a direct response TV ad campaign for the Craftsman knockoff using elements that were identical to those in the Bionic Wrench ad campaign. The Max Axess unit sold for $9.99, a price point much lower than the Bionic Wrench which was achieved, in part, by copying successful elements of the Bionic Wrench. LoggerHead alleged that the decision to copy the Bionic Wrench was caused, in part, by the success of the Bionic Wrench, which “did not sit well” with Apex, a manufacturer of Sears’ Craftsman branded tools for two decades, and Sears employees responsible for promoting Craftsman. LoggerHead’s complaint notes that Sears and Apex employed an “efficient infringement” business model in which they calculated the benefits of copying patented technology against the risk of getting caught. “If the benefits exceed the cost, they steal,” LoggerHead’s complaint reads, citing a website on efficient infringement which appears to no longer be active.

The Markman order filed in the case identifies several terms from claims from LoggerHead’s asserted patents which were disputed, including “arm portion”, “body portion”, “workpiece” and “circumferentially engage the workpiece”. In most cases, the judge’s ruling in the Markman order appeared to be favorable to LoggerHead’s interpretation of the claims.

The post-trial briefing schedule order entered by the court shows that LoggerHead had filed motions for enhanced damages, entry of judgment and permanent injunction while defendants Sears and Apex moved for judgment as a matter of law (JMOL) under Rule 50(b) as well as a motion for remittitur or alternatively a Rule 59(a) motion for a new trial. Briefs were to be filed between late June and early July.

LoggerHead’s lead counsel in this case was Paul Skiermont of Skiermont Derby LLP; joining him from that firm were Sarah Spires and Sadaf Abdullah. Jason Peltz, Asha Spencer and Jeanne Tinkham, all from Bartlit Beck Herman Palenchar & Scott LLP, also joined the defense. Sears and Apex were represented by counsel from Kirkland & Ellis LLP, including Marc Sernal, Eric Hayes, Ian Block and Katherine Rhoades. Sears had one additional counsel member from Winston & Strawn LLP, James Hilmert.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 15 Comments comments. Join the discussion.

  1. Tesia Thomas June 19, 2017 10:12 am

    Yay! Wonder why SEARS didn’t try to kill the patents though.
    But this makes me think mechanical products are probably still ok for sure.

    But when mech tech becomes hard to protect then we’ve completely lost the patent system…

  2. Invention Rights June 19, 2017 12:51 pm

    Way too early to celebrate. Post trial motions, appeal, remand on some secondary issue, 2-3 IPRs, more appeals. Sears is still in the driver seat. It is important that readers are not mislead into thinking patent owners can win more than they spend in litigation.

  3. Valuationguy June 19, 2017 1:54 pm

    Sorry to say but the judgment against Sears is about 1-year too late. Sears will be in bankruptcy proceedings by August…..as soon as they anniversary the 5-year look-back provision the bankruptcy court is allowed to use against fraudulent conveyance (in relation to Sear’s sale of its real estate to entities related to its controlling owner).

    Since the judgement is not yet “final” since appeals need to go forward….proceedings will be stayed and probably ultimately disposed of entirely by the bankruptcy court since Loggerhead doesn’t yet qualify as a creditor.

    Sears will get off scott-free in this instance….a pyhricc victory since Sears will probably cease to exist soon anyway….there is little value in the brand left.

  4. Tesia Thomas June 19, 2017 2:12 pm

    This is ridiculous.

    What was the inventor supposed to do?
    Never sell anything?

    Can’t he get money from Apex for manufacture of the tech if Sears is going bankrupt?

    If his claims are invalidated then not even mechanical arts are patentable.
    IPR takes away patentability of everything.

    We don’t have a patent system at all.
    It’s just throwing money away.

  5. B June 19, 2017 4:05 pm

    “But this makes me think mechanical products are probably still ok for sure.”

    After much study, I’ve identifies several types of abstract – this wrench may fall into the last category.

    Real Abstract – O’Reilly v. Morse – reject because, hey, its abstract

    Practically Abstract – Gottschalk, Mayo – reject because, even though there are non-abstract limitations, granting the patent would effectively be a monopoly on an abstract idea

    Pseudo Abstract – Alice Corp – “Old is the new abstract,” and automating old stuff isn’t deserving of a patent.

    Bedevere’s Duck Abstract – RecogniCorp, Electric Power Group – Wacky per se rules for simple jurists

    https://www.youtube.com/watch?v=zrzMhU_4m-g

  6. Tesia Thomas June 19, 2017 4:54 pm

    Anything is possible. Ugh

    But, to clarify, patents were initially created to protect mechanical arts. But that’s really because mechanical arts were the only tech possible then and one had to show something functioning (working model) to get a patent.

    Software is new. Arguing that software is too abstract to be patented is BS but at least there’s the argument that the patent office wasn’t originally intended to allow anything that couldn’t be physically made or touched.

    I tell every inventor I know that they can’t protect software in the US.
    There are many older inventors who are still stuck in the 80s and 90s and haven’t updated their patent knowledge. And they invented the first software. But now realize they can’t after I explain the little bit of the law that I know.

    But nothing is safe.
    Now I understand the estoppel problem.

    It’s akin to buying a house and homesteading it. Then people come in and try to take it from you or live there too by challenging your deed.
    In the end, all you have is a worthless piece of paper and you’re one lost battle away from being homeless.

    You don’t and never did own anything. You just possess it…until it’s taken from you.

  7. Tesia Thomas June 19, 2017 4:58 pm

    @B

    You’re totally right with the Monty Python analogy.

    It’s invalid (a witch) because…we want it to be.

  8. Tesia Thomas June 19, 2017 5:05 pm

    Oh and to add to my homesteading/property analogy:

    It’s akin to buying a house and homesteading it. Then people come in and try to take it from you or live there too by challenging your deed.
    In the end, all you have is a worthless piece of paper and you’re one lost battle away from being homeless.

    *And from losing all the money you paid for the house.*

    You don’t and never did own anything. You just possess it…until it’s taken from you.

    There were even ‘land patents’ as predecessors to ‘deeds’ to land. People were granted land way back when.

    No one not even the govt should be able to challenge your right to own your house/land if you paid for it and have the deed.

    Same with patents. Or else it’s all just worthless pieces of paper and throwing money away.

    All property falls apart when the government devalues pieces of paper.

    Possession is not ownership.
    Like renting a house vs owning it.

  9. Tesia Thomas June 19, 2017 5:11 pm

    When TJ said everyone can have an idea without lessening the idea like lighting ones candle doesn’t extinguish your own that is POSSESSION.
    not ownership.

    What comes from me belongs to me no matter how many people can have it.
    That’s why you have to be the FIRST, right??

  10. Tesia Thomas June 19, 2017 5:14 pm

    The person who builds the house or pays for its inception owns it.
    And he can let anyone live in it or possess it.
    But he has to transfer ownership with a govt backed piece of paper.

    Sorry for the numerous posts.
    I’m basically thinking out loud in these comments. xD

  11. Tesia Thomas June 19, 2017 6:01 pm

    Actually, has any attorney used a description like this to argue patent rights?

    Compared deeds to IP.
    Because the two parts of a deed are a statement of ownership and a description of the property…and signatures.
    A patent has to have these things too: specification and who the owners are and a signature from govt official.

    That’s why the uspto director signs it right?

    Is someone more knowledgeable about property law…?

  12. Paul F. Morgan June 20, 2017 4:12 pm

    If I remember correctly this is not the first time Sears has been sued on a small inventor’s patented tool?
    ——————————————————
    Re the pessimistic comment above about the danger of post-trial motion activities, note that that can cut both ways – it might include motions to enhance up to treble damages for willful infringement and motions for attorney fees.

  13. Jason Wicker June 20, 2017 11:04 pm

    “…which appears to no longer be active.” In this field of work, you should know how to look up archived and/or “dead” web pages.

  14. Gene Quinn June 21, 2017 10:02 am

    Jason Wicker-

    Thanks for the smarmy, stupid comment. Seriously, people like you really are amazing. As if your brilliant insight somehow changes the fact that the website is no longer active. I guess if we were to look up the website on the Way Back Machine that would mean it is still active?

    Thanks for the laugh.

  15. Anon June 21, 2017 7:08 pm

    Jason,

    Your post did come across more than a little bit snarky (and that’s not a good first impression to make here)>

    May I suggest instead, that you take the paragraph in which the term appears:

    LoggerHead’s complaint notes that Sears and Apex employed an “efficient infringement” business model in which they calculated the benefits of copying patented technology against the risk of getting caught. “If the benefits exceed the cost, they steal,” LoggerHead’s complaint reads, citing a website on efficient infringement which appears to no longer be active.

    And instead of being snarky, supply a copy of the now-not-active website page (if possible) from the Wayback Machine? If instead you attempted this task, and noted the page (or the lack of the page, since the Wayback Machine is not perfect), your contribution would have been much more appreciated.

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