Updated: Aug 7
A recent patent infringement complaint in North Carolina illustrates how patents cover and help sporting events. While golf is the undeniable king of patents in the sports realm, with over 22,000 patents since 1976, other sports do see innovation and patenting as well.
Take, for example, Michael J. Costabile’s inventions captured in U.S. Patent Nos. 7,920,052 and 10,504,300 (the “’052 and ‘300 patents”). Mr. Costabile is a formed NBA referee who alleges that his claim to fame is blowing “a whistle on a foul in the last moments of an NBA game between the Milwaukee Bucks and Philadelphia 76ers that resulted in Charles Barkley making two free throws and winning the game for the 76ers by a single point”, which was highly contested due to the timing of the whistle and uncertainty if it was blown before or after the end of game buzzer.
Using this as an origin story, Mr. Costabile claims he had an epiphany to invent, and came up with a system in which stopped a clock upon a whistle by a ref, and which started a clock by a button on the ref’s belt. This was used by the North Carolina High School Athletic Association for years. As is done, the system was fine-tuned, and additional patent applications were filed, which resulted in the ‘052 and ‘300 patents. In addition, a company, Precision Times System, was created to market and sell products covered by the ‘052 and ‘300 patents (http://precisiontimesystem.com/).
Enter Keith Fogleman and his company, USTOPIT, LLC. In a recently filed complaint for patent infringement, Mr. Costabile alleges that Mr. Fogleman has infringed the ‘052 and ‘300 patents. The complaint alleges that Mr. Fogleman, with knowledge of the Precision Times System products and patents, reached out to multiple entities in order to reverse engineer the inventions. The complaint goes so far as to state that one engineer even stopped the process when he learned of the existing patents. Mr. Fogleman did end up offering a competing product, which led to the filing of the infringement complaint.
While this is at an initial stage, there are a couple key issues and reminders to take from the allegations in the complaint. For one, patent damages are predicated on knowledge of patents, and the date of knowledge can be very important as to when infringement begins. The complaint states that Mr. Fogleman knew of the patents through his previous employment as a basketball referee himself and also as an employee of Major Display Scoreboards, who may or may not have had possession of an early version of Precision Time System’s products. Still further, patent statutes give courts authority to increase the damages in patent infringement lawsuits up to three times the amount found or assessed. This is known as the “treble damages” award. The trebling of damages is discretionary, and usually only done in cases of willful or wanton infringement.
In the complaint, there is allegation that Mr. Fogleman attempted to reverse engineer products covered by the ‘052 and ‘300 patents, and was even told that one party would not do so due to the patents. If true, this may raise the case to be a willful or wanton infringement. However, the complain also acknowledges that a notice letter was sent to Mr. Fogleman’s patent attorney, who replied that he believed that Mr. Fogleman’s product has designed around the ‘052 patent.
This last part is important. Having valid opinion of patent counsel can aid in limiting damages in a patent infringement suit, such as by indicating that there was no willful infringement. However, there are requirements. There would need to be a formal and signed opinion of non-infringement. In addition, such an opinion is not binding on any court, and there could still be a finding of infringement with damages. The opinion could potentially limit the damages, and preclude the court from trebling the damages.
This will be an interesting case to follow, and it will be seen if Mr. Costabile has blown the start whistle too soon. However, the complaint does offer some reminders that it is always good to talk to a patent attorney when being accused of infringement, as there are many factors to consider for moving forward with a proposed product. These can result in moving forward with caution, waiting for an official analysis and opinion, or blowing your own whistle to stop everything.
Luke T. Mohrhauser is a Patent Attorney and Chair of the Mechanical and Electrical Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visit www.ipmvs.com or contact Luke directly via email at [email protected]