Cemco Llc V. Kpsi Innovations Inc Et Al

Case Background

On June 16, 2023, California Expanded Metal Products Co. (CEMCO), a manufacturer of steel framing and metal products, filed a patent infringement lawsuit against KPSI Innovations, Inc., a fireproofing products company, along with Serina Klein, Kevin Klein, and James A. Klein in the U.S. District Court for the Western District of Washington in Seattle. Judge James L. Robart presided over this case. [Case number: 2:23cv918]

Cause

The case focused on claims that the Defendants knowingly encouraged customers to violate CEMCO’s patents for fire-resistant construction products, specifically head-of-wall assemblies. This dispute was part of an ongoing conflict over patents originally granted to James Klein, a former CEMCO employee, in 2009. The patents in question included U.S. Patent Nos. 7,681,365; 7,814,718; 8,136,314; and 8,151,526.

Damages

CEMCO pursued compensatory damages, treble damages, and injunctive relief to prevent further infringement and asset dissipation.

Key Arguments and Proceedings

Legal Representation

  • Plaintiff(s): California Expanded Metal Products Co. (CEMCO)
    • Counsel for Plaintiff(s): Dylan C. Dang | Francis Wong | R. Trojan | Paul D. Swanson
  • Defendant(s): KPSI Innovations, Inc. | Serina Klein | Kevin Klein | James A. Klein
    • Counsel for Defendant(s): Adam M. Starr | Chad Colton | Josephine C. Kovacs | Patrick C. Bageant | Thomas E. Loop

Claims

The complaint accused the Defendants of patent infringement and fraudulent asset transfers. CEMCO claimed that KPSI and the individual Defendants violated its patents for head-of-wall fire-blocking devices. According to CEMCO, KPSI used these patents to produce and sell unauthorized products. Additionally, CEMCO alleged that the Defendants fraudulently transferred assets. It asserted that S4S, a company previously found liable for similar violations, moved its assets to KPSI to avoid legal judgments.

Defense

On April 23, 2024, the Defendants responded to the lawsuit, admitting certain facts, such as KPSI’s incorporation and CEMCO’s patent ownership. However, they denied many allegations, including patent infringement and fraudulent asset transfers. They also raised several defenses, arguing that the claims lacked merit, no infringement occurred, and the patents were invalid. Additionally, they countersued, asking the court to declare the patents invalid and rule that no infringement took place.

In August 2024, U.S. District Judge James L. Robart issued a default order against the Defendants for failing to provide key customer instruction videos.

Jury Verdict

The jury had to decide whether the infringement was intentional, whether fraudulent asset transfers occurred, and how much CEMCO should receive in damages.

On December 9, 2024, the jury awarded CEMCO nearly $786,000 for willful patent infringement and an additional $300,000 for fraudulent asset transfers. The total award reached approximately $1.1 million. The jury held KPSI, James Klein, and Serina Klein responsible.

Court Documents:

Documents are available for purchase upon request at jurimatic@exlitem.com