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Blue Gentian v. Tristar Products, Inc.

United States District Court, D. New Jersey

January 15, 2019

BLUE GENTIAN, et al., Plaintiffs,
TRISTAR PRODUCTS, INC., et al., Defendants.

          DAVID S. STONE BRADFORD W. MULLER STONE & MAGNANINI LLP Attorneys for Plaintiff Telebrands Corp.


          EDWARD PAUL BAKOS NOAM JOSEPH KRITZER BAKOS & KRITZER Attorneys for Defendant Tristar Products, Inc., Wal-Mart Stores, Inc. d/b/a Sam's Club, and Sam's Wholesale Club.

          J. STEVEN BRAUGHMAN MEGAN RAYMOND PAUL, WEISS, RIFKIND, WHARTON & GARRISON, LLP Attorneys for Defendant Tristar Products, Inc.


          NOEL L. HILLMAN, U.S.D.J.

         Presently before the Court is the issue of whether Gary Ragner, a non-party, should be deemed a co-inventor, pursuant to 35 U.S.C. § 256, of certain patents-in-suit held by Michael Berardi. The Court held a multi-day hearing taking testimony and admitting certain documents and exhibits into evidence. All parties have been well-represented and the Court has benefitted from both the oral advocacy and tutorials at the hearing and the thoughtful and extensive pre- and post-hearing submissions. For the reasons stated below, this Court finds Gary Ragner is a co-inventor of the Michael Berardi patents-in-suit.


         This case has a lengthy and complicated factual and procedural history. At one time, three different judges presided over suits related to the contested patents and matters are still pending before the undersigned and a district judge in the Newark vicinage. In lieu of recounting those details, which have been penned by this Court and others numerous times over the years of this litigation, this Court will focus on only the details relevant to the consideration of the matter disposed of in this Opinion.

         On July 28, 2017, Defendants moved under Federal Rule of Civil Procedure 42(b) for a hearing on correction of inventorship for the Berardi patents-in-suit pursuant to 35 U.S.C. § 256. On January 30, 2018, this Court granted Defendants' request to hold a hearing to determine whether Gary Ragner should be added as a co-inventor on the Berardi patents-in-suit. Discovery for the hearing ensued and all other pending matters have been staying pending resolution of Defendant's motion.[1]

         On September 5-7, 2018, January 29 and 30, 2019, and April 30, 2019, this Court commenced a hearing on correction of inventorship (the “Inventorship Hearing”). At the Inventorship Hearing, the Court received the live testimony of Gary Ragner, Robert de Rochemont, Jr., Margaret Combs, Keith Mirchandani, Ajit Khubani, Bala Iyer, Manish Israni, Cheryl Berardi, and Michael Berardi.

         On May 29, 2019, the parties submitted post-hearing briefs. On June 12, 2019, the parties submitted responsive post-hearing briefs. On June 26, 2019, the parties presented closing arguments to the Court. The issues have been fully briefed and are ripe for adjudication.[2]

         As noted, the issue currently before the Court stems from a larger dispute between the Plaintiffs, Blue Gentian, National Express, and Telebrands Corp., and the Defendants, Tristar Products, and Wal-Mart Stores. Plaintiffs market, promote, distribute, and sell a garden hose known as the “XHose.” Blue Gentian owns several patents related to the XHose. Defendants also produce and promote a garden hose known as the “Flex~Able Hose.” In a matter not currently before the Court, Plaintiffs allege that Defendants have infringed on Plaintiffs' patents for the XHose.

         In this proceeding, Defendants allege that Gary Ragner, a non-party to this case, co-invented the XHose with Blue Gentian's principal, Michael Berardi. Defendants therefore argue that six of Blue Gentian's patents should be corrected to reflect Gary Ragner's inventorship.[3]

         The bulk of the evidence relevant to determining inventorship comes from a single three to four-hour meeting held on August 23, 2011. The relevant facts before, after, and including this meeting are discussed below.

         A. The Expandable Garden Hoses in Question

         a. The XHose

         The XHose is a lightweight, expandable garden hose. The length and width of the XHose changes depending on the amount of water running through it. The XHose features an elastic inner tube that acts as both a water conduit and a retracting force.

         Blue Gentian owns all intellectual property rights in and related to the XHose, including U.S. Patent No. 8, 291, 941 and U.S. Patent No. 8, 291, 942. Michael Berardi is listed as the inventor of the XHose on these patents. Blue Gentian granted National Express and exclusive license to use, sell, import, market, promote and distribute the XHose.

         b. The Flex~Able Hose and Pocket Hose

         Though not relevant to this opinion, the Court notes that the Flex~Able Hose and Pocket Hose are also lightweight, retractable hoses available for consumer distribution and use.

         c. The MicroHose

         Gary Ragner and Robert de Rochemont created an expandable hose called the “MicroHose.” When the Ragner Technologies team and Michael Berardi met, Ragner and de Rochemont used a prototype of the MicroHose to demonstrate their product. Ragner described this prototype is a “cutdown version” of the MicroHose, featuring a small diameter, elastic vinyl hose, wire coil for biasing, and a nylon or polyester valley cord[4] epoxied to each end for reinforcement. According to Ragner, the valley cord's purpose was both to double the amount of pressure the hose could handle and to help the hose hold its shape. Ragner testified that this prototype did not expand radially, nor did the internal surgical tube in the MicroHose prototype serve as a conduit for water. To date, no version of the MicroHose has been manufactured or sold commercially.

         As will be elaborated below, Ragner testified that at the August 23 meeting the attendees discussed “prototype 2” of the MicroHose. The parties agree that this prototype was not physically present at this meeting. According to Ragner, prototype 2 is a vacuum hose with a surgical tube inside. As Ragner described, the internal surgical tube is epoxied to each end of the MicroHose prototype to act as a retracting force.

         B. Michael Berardi's Background and Knowledge Prior to the August 23 Meeting

         Michael Berardi is an accomplished songwriter and video producer. During his time at CBS Records and Born Music, he copyrighted over 150 songs. Michael Berardi also has significant experience with the direct marketing industry and co-owns Berardi Productions with his wife, Cheryl. Together, Cheryl and Michael Berardi have produced hundreds of television commercials.

         Despite having no technical background, prior to patenting the XHose, Michael Berardi had applied for two patents and taught himself how to edit and produce commercials. Michael Berardi credits his creative thinking and experience working in his father's hardware store for his success inventing new products. During his eleven years as an employee and three years as a manager at his father's hardware store, Michael Berardi testified that he sold and repaired various products, including garden hoses.

         In either late July or early August 2011, an acquaintance, Thomas Moran, told Michael Berardi about a potential investment opportunity in a product called the MicroHose. Based on this conversation, Michael Berardi testified that he searched the Internet to learn more about the MicroHose and Ragner Technologies. Through this search, Michael Berardi found a news article about Ragner Technologies that contained a video demonstration of a MicroHose prototype. Michael Berardi testified that after watching the video, he thought the MicroHose was “a very neat product” that “could be a fantastic Direct Response TV product.” Michael Berardi watched the video three to four times, zooming in to see parts of the hose demonstration more closely.

         Michael Berardi testified that right after watching the video demonstration of the MicroHose, he experienced a “eureka moment” in his community gym. After looking at certain gym equipment, Michael Berardi was struck by the idea of running water through a tube similar to the ones used in the resistance bands at the gym. Michael Berardi testified that “it kind of reminded me I guess maybe of the expanding hose that Ragner had invented” and that he wondered “what would happen if I put water through this?”

         Michael Berardi told Cheryl Berardi about his idea for a new hose. Cheryl Berardi responded that they should “not put any energy there” because they already planned to meet with Ragner Technologies. Michael Berardi agreed with Cheryl Berardi's assessment that it would be easier to work with a completed product. Michael Berardi also stated that he was in the middle of pursuing two other large projects during this time period. Ultimately, Michael Berardi did not take any steps to create the hose he imagined following his eureka moment but retained a “nebulous concept” for his hose.

         Soon after Berardi watched the online video demonstration of the MicroHose, an agent from Ragner Technologies, Margaret Combs, contacted him about setting up an investment meeting on August 23, 2011. On August 16, 2011, Ragner Technologies sent Michael Berardi and other meeting attendees a username and password to access a website containing a business plan and three-year cash flow analysis.

         C. Gary Ragner's Background and Knowledge Prior to the August 23 Meeting

         Gary Ragner is an engineer and co-founder of Ragner Technologies. He holds a Bachelor of Science in physics and a master's degree in mechanical and aerospace engineering. Ragner also completed coursework in fluid dynamics and has seventeen years of experience designing hoses, for both vacuums and outdoor use. Ragner holds several dozen patents for various inventions in the energy, aerospace, and electronic fields, among others.

         Since the mid-1990s, Ragner has co-invented with his current business partner, Robert de Rochemont. Together Ragner and de Rochemont approached Combs, a retired business executive, about taking on various administrative, advisory, and management responsibilities within Ragner Technologies. Eventually, Margaret Combs became the CEO and a 10% equity partner in Ragner Technologies.

         Beginning in 2004, Ragner and de Rochemont began buying supplies and experimenting with hose designs. Since September 2005, Ragner and de Rochemont have held U.S. Patent No. 6, 948, 527 for a “pressure-actuated linearly retractable and extendible hose.” On January 30, 2006, Ragner and de Rochemont applied for U.S. Patent No. 8, 776, 836 for a “linearly retractable pressure hose structure.” This patent was granted on July 15, 2014, after being published in 2013. After working on a similar design for a retractable vacuum hose, Ragner testified that he thought this design could apply to garden hoses as well. By August 2011, de Rochemont and Ragner had created between eighteen and twenty prototypes of the MicroHose.

         D. The August 23 Meeting

         This meeting is particularly important to the determination of co-inventorship. This meeting was the sole interaction between Michael Berardi and Gary Ragner. The Court draws its facts regarding this meeting from the hearing record and documents before it. The parties contest certain details of this meeting. These disputed details will be acknowledged and discussed below.

         Michael and Cheryl Berardi hosted this meeting at their home in Palm Beach Gardens, Florida starting around 10:00 AM on August 23, 2011. The attendees were:

(1) Michael Berardi, principal of Blue Gentian and co-owner of Berardi Productions;
(2) Cheryl Berardi, co-owner of Berardi Productions and wife of Michael Berardi;
(3) Ed Kelly, owner of National Express;
(4) Gary Ragner, CEO and founder of Ragner Technologies;
(5) Robert de Rochemont, former Executive Vice President of Quality Assurance and current CEO of Ragner Technologies;
(6) Margaret Combs, former CEO and current equity partner of Ragner Technologies;
(7) Greg Jansen, a “money finder” for Ragner Technologies; and
(8) Vince Simonelli, a “money finder” for Ragner Technologies.

         The parties agree that the primary purpose of this three to four-hour meeting was to secure a $3 million investment for Ragner Technologies to build machines that could manufacture the MicroHose. Earlier in the week, Combs, de Rochemont, and Ragner had concluded a similar meeting with a different investor in Boca Raton, Florida. Combs ...

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