A month after getting smacked with a nearly $30 million patent infringement verdict over football helmets, Litchfield, Ill.-based Schutt Sports has filed for bankruptcy as a means of blocking payment of that award to competitor Riddell.
The Am Law Litigation Daily reported on Perkins Coie‘s victory for client Riddell over Schutt and its lawyers from Kirkland & Ellis in a U.S. district court in Madison, Wis., two weeks ago. An eight-person jury found that Schutt had infringed on Riddell’s patent for a jaw protection device on football helmets.
The device is of particular importance for Riddell, which is the official helmet provider for the National Football League, where concussions have been a major topic of discussion before the start of the 2010 season this week. (Studies have found that most concussions are caused by hits near the jaw.)
Schutt and Riddell agreed to a joint stipulation on August 20 that stayed the judgment and other proceedings against Schutt until September 6. The stipulation, which hadn’t been signed by the judge at the time of the Litigation Daily’s story, also prevented Schutt from selling assets or making other unusual business moves during that period.
A call to Perkins Coie patent litigation cochair Michael Warnecke in Chicago, who led a team from the firm representing Riddell in the case, was not immediately returned by the time of this post. Christopher Hanewicz, another Perkins Coie patent and IP litigation partner involved in the case, says the firm still is evaluating the effect of the Schutt bankruptcy on the litigation with Riddell.
“At this point we’re just not ready to comment,” Hanewicz says. “We’re looking through the filings and hope to know more in the coming days once we fully digest and, if necessary, respond to the pleadings going forward.”
As part of Schutt’s bankruptcy filing in Delaware on Monday, the company began an adversary proceeding against Riddell in Delaware seeking declaratory and injunctive relief from the patent verdict in Madison. The filing will preclude any activity in the Wisconsin patent litigation and ensure that Riddell litigates against Schutt in Delaware.
Schutt’s bankruptcy filing also reveals that the company, which claims to be the world’s largest maker of football helmets, owes more than $2.6 million to three law firms. (That’s in addition to the approximately $29 million judgment that the company owes Riddell from the Wisconsin litigation.)
Kirkland is owed $589,681–the firm’s fees from the Wisconsin litigation. Ropes & Gray, which was not involved in the Madison case with Riddell, is owed almost $2 million, according to the filing. Another firm, Pittsburgh-based Thorp Reed & Armstrong, is due $40,658.
Kirkland patent litigation partner William Streff, Jr., who led an eight-lawyer team from the firm advising Schutt in its patent fight with Riddell, declined to comment. The company had retained Wisconsin firm Whyte Hirschboeck Dudek as local counsel in the case, but the firm does not appear on Schutt’s list of unsecured creditors.
Keith Shapiro, cochair of the business reorganization and bankruptcy practice at Greenberg Traurig, is serving as lead bankruptcy counsel to Schutt along with bankruptcy partners Nancy Peterman and Victoria Counihan. The firm has not yet filed billing statements in the Chapter 11 case.