Hershey Creamery Supports Motion for Stay in Milkshake Machine Case

In mid-July, a Delaware District Judge ruled that Hamilton Beach and Hershey Creamery must stop selling and using machines used for milkshakes that allegedly infringed on multiple patents owned by F’Real Foods. The defendants appealed that decision, and on Friday filed a Reply in Support of Motion for Stay on the Injunction Pending Appeal. 

F’Real originally brought a patent infringement case against the appellants in January 2016. In April and May of 2019, a four-day jury trial was held, where ultimately the jury awarded F’Real $2,988,869.00 in lost profits. The appellants challenged that decision as well.

The appellants specifically pointed out that F’Real only “asserted [that] harm is lost sales and competition, which [the] Appellants addressed in their Motion as being compensable by money damages.” However, Hershey raised “a number of concrete harms posed by imposition of the injunction or recall that cannot be remedied if [the] Appellants prevail on appeal.” Specifically, Hershey proffered unrebutted evidence that it cannot recall all of its SSE MIC2000 machines due to complications caused by the COVID-19 pandemic. The company also faces potential sanctions. The appellants also refuted claims that they are merely filing this motion to “needlessly prolong” the complicated litigation. In support, the appellants point that they have already prevailed on several issues in the suit, including securing a remittitur of nearly $900,000 in speculative lost profits. 

The appellants raised several issues in the motion, including 1) the balance of harms plainly favors [the] appellants; 2) Sato is a publicly printed publication, and 3) the district court improperly resolved a factual dispute regarding the ‘rinse chamber’ in granting summary judgment for the ‘150 patent. First, the appellants argued the F’Real’s lost sales were outweighed by the fact Hershey will be unable to sell its remaining pre-filled cup inventory if the injunction remains in place. Hershey does not charge retailers for equipment but rather charges a cup upcharge. When originally asserting its entitlement to lost profits, F’Real argued it would adopt Hershey’s method of not selling equipment, but having a cup upcharge. Additionally, the appellants argue the F’Real can still sell its machines to former Hershey locations without any interference from the injunction prevailing or not. With Hershey being unable to complete the recall in 30 days, they will face potential sanctions for failure to comply with the District Court’s order.

Next, the appellants argued that the Sato publications were publicly accessible as of its publication date, and it should not have mattered that F’Real could not locate Sato in an English keyword search—Sato was published in Japanese. According to the appellants, the district court wrongfully decided this issue, and at trial, the appellants would have presented its invalidity defense based on Sato. Thus, “there is a strong likelihood of success on appeal because a determination that Sato is a printed publication as a matter of law compels a remand for a trial on invalidity.” 

Finally, the appellants argued, contrary to the district court’s ruling, the accused outer door assembly is not “an enclosure in which a rinse apparatus is positioned to provide rinsing.” They asserted that the actual rinse chamber is formed by the lid and surrounding cup shield and that there is no door. Additionally, “F’Real’s own expert conceded (1) that all of the rinsing occurs within the enclosure formed by the lid and cup shield; and (2) no rinsing occurs within the area between the outer door assembly and the actual rinse chamber of the accused products.” The appellants argue they have “a strong likelihood of appeal on this issue.”

The appellants are being represented by Faegre Drinker Biddle & Reath. F’Real is being represented by Sideman & Bancroft and Morris, Nichols, Arsht & Tunnell.