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A federal judge has ruled that the makers of “The Club” — the popular auto theft-protection device that locks onto the steering wheel — must stop selling its new product that immobilizes a car’s brake pedal because it infringes on another brake-lock maker’s patent. In her 55-page opinion in Lawman Armor Corp. v. Winner International Inc., U.S. District Judge Mary A. McLaughlin of the Eastern District of Pennsylvania found that while Southeastern, Pa.-based Lawman Armor is unlikely to show that Winner’s product literally infringes on its patents, it is likely to win on its claim of infringement under “the doctrine of equivalents.” McLaughlin also found that Sharon, Pa.-based Winner introduced “The Club Auto Brake Lock” not for the legitimate purpose of entering the market as a competitor to Lawman Armor’s “The Unbreakable Auto Lock,” but with the intention of damaging the “entire auto brake lock market” in order to protect sales of its more popular steering wheel lock. McLaughlin found that James Winner, the president of Winner International, stated that he intended to enter the brake lock market in order to drive prices down and put Lawman Armor out of business. As further proof of Winner’s bad motives, McLaughlin noted that it has never spent any money to advertise its brake lock, but has spent money on advertising that criticizes Lawman Armor’s brake locks even though the same criticisms would apply to its own products. McLaughlin took the rare step of issuing an injunction that forbids any sales of the Winner brake lock, but said her order can’t be deemed to inflict harm on Winner. “Here, a preliminary injunction would prevent Winner … from selling a product which it does not promote, does not back up with a guarantee, and which belongs to a product category that Winner has actively disparaged. This is not a ‘harm’ of which equity should take cognizance,” McLaughlin wrote. The ruling is a victory for Lawman Armor’s lawyers — Gary A. Rosen, Martin G. Belisario and Christopher M. Mikson of Akin, Gump, Strauss, Hauer & Feld. Lawman Armor was founded in 1997 by Robert Vito, a tax and finance professional who decided to invent his own auto theft prevention device after his own car was stolen. The suit says Vito’s device was the first to use the brake pedal shaft which is one of the strongest parts of a vehicle. The device uses a T-shaped base on the floor of the car with a U-shaped housing that covers the brake pedal and an L-shaped extending rod that can lock the device in place. The device is especially effective because, in many cars, the brake must be depressed before the car can even be put into gear. Vito says he worked with engineers to perfect it because the original locking rod could be defeated by pounding on it with a hammer. Although the device does not fit certain cars, the product is sold in a package that clearly describes which cars it fits, the suit says. Vito mortgaged his home and invested $700,000 of his own money to start the company, but has since brought in more than $9.5 million from investors, according to court papers. Lawman Armor began marketing in 1998 with a television commercial that cost $200,000 to produce. But the product soon garnered favorable media attention from the likes of Good Housekeeping, Time and Popular Mechanics. It soon expanded its marketing efforts to a 30-minute infomercial that cost $12 million to air 200 to 500 times per week during 1999. Winner was founded in 1986 by James Winner and its signature product is The Club which has sold more than 30 million units in the past 15 years. After Lawman started advertising its product, the suit says, Winner wanted to talk about a deal. The Lawman infomercial showed steering wheels being cut — a claim that was designed to undermine consumer confidence in the effectiveness of The Club. Winner sued for false advertising, but the suit did not focus on the steering wheel demonstrations. Instead, the suit alleged that Lawman Armor was making a false claim that brake pedal locks can render cars undriveable since they can often still be driven with just the emergency brake. A judge refused to issue an injunction and Winner withdrew the suit. Lawman’s success with its product continued to grow when K-Mart agreed to carry the product — its first penetration into the retail market. At that point, the suit says, Winner proposed a merger and said in a meeting that if Winner was not granted a license, it would come out with its own cheaper “knockoff” product and reduce the price to drive Lawman out of business. Vito testified that Winner said he wasn’t concerned about patents and that if Lawman won an injunction, he would design around it within a few months. He said Winner threatened to market its product for $14.95 — less than a third of Lawman’s retail price. Vito testified that he thought the photo of the Winner prototype product was fake and that Winner was bluffing. But he said he learned later it was no bluff and that Winner was soon marketing a product called “The Club Auto Brake Lock” that also uses a T-shaped base, but with legs that are too short to prevent slippage and metal that can be easily cut. The Winner brake lock was invented by Winner’s patent attorney, Robert Vickers, who was given a copy of Lawman Armor’s patents and asked to come up with a non-infringing design, according to court papers. And like the Lawman product, Winner’s also won’t work on certain cars, but its packaging doesn’t warn of that fact, the suit says. Both products are now sold in auto supply stores such as Pep Boys where they are often displayed side-by-side, the suit says. Winner introduced its brake lock at $39.99, but later reduced the price to $29.97 and later to $19.99. Lawman was selling its product at $59.95, but says it was forced to reduce to $39.95 to compete. “This price erosion is not the result of normal, robust competition for sales, but rather reflects James Winner’s stated strategy of eroding price points to destroy the auto brake lock category without regard to profitability,” Lawman’s lawyers wrote in their post-hearing brief. Lawman also claimed that Winner told Auto Zone — the nation’s largest auto supply retailer — that he intended to recall the Winner brake lock and that he believed such a move would minimize or even destroy the entire category. And in another anti-competitive move, Lawman claimed that Winner gave Strauss Discount Automotive “markdown money” to induce it to lower price. Lawman argued that Winner does no advertising for the brake lock, but has spent money on a commercial that disparages the Lawman lock by focusing on cars that have a feature that allows for an “override” of the function that requires brake depression prior to putting the car in gear. The plaintiff’s lawyers argued that Winner’s commercial doesn’t even mention that Winner offers its own brake lock even though all of the criticisms could be applied to that product as well. Winner has sold just 12,000 brake locks, but continues to sell 2 million steering wheel locks every year. Winner International’s lawyers — Christopher A. Rothe of Dann, Dorfman, Herrell & Skillman in Philadelphia and Reese Taylor, Laura J. Gentilcore and John J. Cuniff of Renner, Kenner, Grieve, Bobak, Taylor & Weber in Akron, Ohio — argued that its product does not infringe Lawman’s, but instead incorporates several design concepts used in previous Winner products. They also argued that Winner is legally protected because it consulted a patent lawyer before marketing its brake lock. The defense team said Lawman Armor isn’t entitled to an injunction since it couldn’t prove that its loss in sales was the result of its own decision to reduce advertising. But McLaughlin found that Lawman Armor had proven every element necessary to win an injunction and that without one, its very corporate life was threatened. “Lawman Armor spent a significant amount of money to develop a market for its auto brake lock, and damage to that market would threaten the survival of Lawman Armor’s business, which consists entirely of its auto brake lock products,” McLaughlin wrote.

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