Following Repairify’s request two weeks ago for a ruling reversal in its patent infringement lawsuit against Elitek, the defendant takes issue with Repairify’s claim that a bill of sale was newly discovered.

The suit alleges that Keystone, an LKQ subsidiary doing business as Elitek, infringes on three of Repairify’s remote servicing and programming system and method patents on vehicles through an OBD or OBD-II interface. It was filed Aug. 9, 2021 in the U.S. District Court for the Western District of Texas.

In September, Repairify said a 2015 bill of sale that proves its ownership of two patents had only recently been discovered by its new attorney. Elitek contends the document was attached to a briefing filed two years ago.

Elitek says Repairify’s request “merely attempts to rehash” its previously rejected arguments.

“The possible existence of the executed version has been known to both the parties and this court since October 24, 2022,” Elitek’s Oct. 3 motion states. “As the bill of sale was allegedly signed by Repairify’s vice president, Michael Zoch… the existence of an executed version was undisputably known to Repairify.

“Notably, while Elitek has not been able to take any discovery on this issue, it appears the Mr. Zoch is currently employed by Repairify’s owner, Kinderhook Investments, as the managing director of the Repairify investment. No declaration was submitted to suggest that Repairify itself does not have in its possession an executed copy of the bill of sale. Moreover, it is apparently admitted that Repairify’s own lawyers (bankruptcy counsel) possessed an executed copy of the bill of sale.”

Elitek also argues that Repairify “strategically chose not to argue that the bill of sale was meant to transfer any patent rights.”

Instead, Repairify chose to argue that the patents were assigned through either the patent assignment or other sections of the APA (original motion) or through the Bankruptcy Court Order (motion to reconsider), according to the motion.

“Repairify does not establish that the executed Bill of Sale was previously unavailable or that Repairify was unable to locate it until now through reasonable diligence… Repairify never identifies exactly what alleged mistake was made or by whom. Regardless, for a ‘mistake attributable solely to the negligence or carelessness of that party’s attorney, then it would be an abuse of discretion for the court to reopen the case and to consider the evidence.’”

Elitek argues that if any of Repairify’s attorneys made negligent mistakes or proceeded without reasonable diligence, the company has other options to make itself whole.

“None of those options involve having this Court yet again reconsider the same issue or prejudicing Elitek’s trial preparation at this late stage,” the Elitek motion states.

“Trial is going forward with a Repairify patent from the same patent family, which covers essentially the same invention. Even Repairify’s damages expert opined that no additional damages should be awarded if Elitek is found to infringe the ’334 Patent as well as the ’313 Patent.”

Elitek also argues that the bill of sale doesn’t prove Repairify’s ownership.

“[T]he bill of sale does not provide Repairify with ownership of the ’500 Patent. Repairify selectively quotes from the bill of sale, removing key language that clarifies that the bill of sale does not apply to assets assigned via ‘other bills of sale or other instruments of sale, transfer, assignment, and conveyance.’”

“…Even if the Bill of Sale was newly discovered evidence, under Rules 54(b) and 59(e), Repairify must prove the document could not have previously been discovered by Repairify.”

In 2022, Elitek moved to dismiss Repairify’s claims that it owned two of the patents in question, arguing that Repairify lacked standing and the documents produced didn’t establish its ownership. Repairify’s ownership claim on the third patent was dismissed in May after which Repairify asked the dismissal be reconsidered. In June, the court denied reconsideration and granted summary judgment.

On June 12, 2024, the parties reached an agreement in principle to settle the dispute and then spent the next six weeks trying to finalize a formal written agreement, according to background information provided in Repairify’s Sept. 19 motion. However, by July 26, the parties had reached an impasse on several key terms, leading Elitek to file a motion to enforce a settlement.

On Sept, 5, the enforcement motion was denied and the case was set for trial.

As of Friday, Repairify hadn’t filed any other documents in the case.

In other scan technology company litigation news, AirPro Diagnostics recently amended its lawsuit against Opus IVS subsidiary, Drew Technologies, to add a second breach of contract claim.

AirPro filed suit against Opus and Drew in December 2022 in the U.S. District Court for the Eastern District of Michigan over an agreement between the companies that was signed Feb. 13, 2017. Under the terms, the parties agreed to exchange information with one another, including “business strategies, pricing, techniques, computer programs, methods, drawings, formulas, specifications, software, or other data of a business or technical nature[.]”

The new claim is against AutoEnginuity, an aftermarket automotive diagnostics software company owned by Drew Technologies. Each of the companies has been accused by AirPro of unfair competition and tortious interference with business expectancy. Drew is also accused of breach of contract.

“The proposed breach of contract claim only became known during the course of discovery, and AirPro immediately undertook an internal evaluation of whether the claim was viable and is now seeking leave to amend to add that claim,” a Sept. 16 motion states. “Defendants would suffer no prejudice by virtue of the amendment since the facts underlying the claim are almost identical to those underlying the claims that have been part of the case since the outset.”

AutoEnginuity is accused of breach of contract by using information and technical knowledge provided by AirPro under a confidentiality agreement “to wrongfully assist and establish a competing business.”

Within the amended complaint, AirPro also adds that it has suffered damages in excess of $85 million. Until September, the suit had only said millions.

Images

Featured image: Elitek’s EVS OBD-II plug-in is shown. The device allows Elitek to conduct remote diagnostics on a vehicle within a body shop. (Provided by Elitek)