("Slowinsky") to form Laser Wedding Bands, Inc. ("Laser"). While employed at Jan, Kielpinski became aware of the '294 Patent held by Brzozowski. At the time Laser was formed, Kielpinski and Slowinsky decided to determine whether the product they intended to produce would infringe the '294 Patent. Laser sought the advice of counsel regarding the scope of the '294 Patent on channel-set jewelry constructed with a trapezoidal- or U-shaped groove. Laser's counsel determined that the proposed products would not infringe the '294 Patent and concluded that the '294 Patent was weak and could be invalidated. Laser relied upon this advice and began manufacturing channel-set jewelry using trapezoidal- and U-shaped grooves.
By the end of 1989, the partnership between Kielpinski and Slowinsky ended, and Kielpinski formed Jesse with three other individuals. On the basis of the advise of Laser's counsel, Jesse began producing channel-set jewelry with trapezoidal- and U-shaped grooves. Jesse also sought a second independent "validity and infringement" opinion regarding Brzozowski's '294 Patent. As a result of this second opinion and in an effort to avoid litigation, Jesse stopped production of jewelry using the trapezoidal-shaped groove.
Prior to the creation of Jesse, Accent, a Swiss-cutting jewelry manufacturer, was formed and operational. Using the business relationships and customers of Accent, Jesse began to sell its services. Jesse developed a clientele which included Feature Rings, Inc. ("Feature") and David Klein Mfg. Co. Inc. ("Klein").
In or prior to March 1991, Brzozowski saw a catalog in which Klein used photographs of the rings having the Defendants' patented V-shaped groove sometime after Klein had stopped purchasing rings from Jan. The Defendants requested that their counsel prepare a cease-and-desist letter, which the Defendants sent to Klein on or about March 15, 1991, advising it of the Defendants' rights in the '294 Patent and the apparent infringement of that patent by certain products Klein was offering for sale.
Upon receiving the cease-and-desist letter from Jan, Klein contacted Jesse and expressed concern about the possibility of a being made a party to legal action by Jan. The Plaintiffs contend that, as a result of this concern, Klein curtailed the sales of a substantial portion of its product which was being manufactured by Jesse.
In or about February 1991, Brzozowski saw rings with V-shaped grooves being sold by Wright & Lato ("Wright") at a trade show. Wright had not bought these rings from the Defendants. On or about March 22, 1991, as the Defendants had previously done with Klein, they sent a letter to Wright advising it of the Defendants' rights in the '294 patent. According to the Plaintiffs, the results of this letter were also similar; Jesse lost a substantial portion of Wright's business.
On or about September 12, 1991, the Defendants sent a similar letter to Leo Ingwer, Co. ("Ingwer"), which, the Plaintiffs assert, had a similar detrimental impact on the business relationship between Ingwer and Jesse.
Beginning prior to 1991, Brzozowski designed and Jan sold to Feature Rings, Inc. ("Feature") different styles of rings consisting of gemstones mounted in and forming parts of different artistic settings. At one point, Feature stopped buying a number of these styles from Jan and became a major customer of Jesse. Feature was informed orally by Jan that Jesse was infringing the '294 Patent, and in the Plaintiffs' view, these representations caused Feature to stop doing business with Jan.
The Plaintiffs allege that Jesse lost additional business as a result of Jan's representations to actual and potential customers that it was suing Jesse. In response to these representations, Jesse contends that business from Hayes Merchandise Mart and Faculty Enterprises was diminished or lost.
In anticipation of the National Manufacturers, Jewelers, and Silversmiths of America Trade Show (the "1992 Trade Show"), scheduled for March 15, 1992, the Plaintiffs sought expedited discovery to facilitate their preparations for a motion for a preliminary injunction. As was noted above, expedited discovery was granted to both parties to eliminate the possibility of prejudicing the Defendants. Several depositions had been conducted by the end of February, and by the second week of March, the Plaintiffs had prepared the preliminary injunction motion. However, due to the short period of time prior to the 1992 Trade Show, the aforementioned Order to Show Cause was sought, and out of concerns of fairness to both parties, the hearing was scheduled for and held on April 2, 1992.
During the Preliminary Injunction Hearing, Philip Perlmutter, an officer and stockholder of both Accent and Jesse, testified regarding the structure of the products made by the Plaintiffs. The preliminary relief sought was confined to jewelry having the in-shaped groove, which was the shape of the channel purported used in 98% of the Plaintiffs' products. The remainder of the channel-set jewelry had grooves of various shapes, including a trapezoidal-shaped groove which was constructed into approximately 1,000 to 2,000 out of some 15,000 rings.
After a day of testimony at the Preliminary Injunction Hearing, the preliminary injunction motion was denied on the ground that the Plaintiffs failed to demonstrate that they would suffer irreparable harm if the preliminary relief were not granted. This Court concluded:
There has been no quantification of any damages. Indeed, there hasn't been any evidence presented . . . in a probative fashion that these letters have produced a reason in the marketplace to harm the plaintiff, and indeed, even if such a reaction could be established, the degree of irreparability certainly hasn't been established.
Prelim. Inj. Hr'g Tr. at 192.
I. The Defendants' Motion For Partial Summary Judgment Is Granted
A. Rule 56 Standards for Summary Judgment
The Rule 56 motion for summary judgment is "an integral part" of the Federal Rules of Civil Procedure and facilitates the overall purpose of the Rules as stated in Rule 1, namely, "to secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). A motion for summary judgment may be granted only when there is no genuine issue of material fact remaining for trial and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Silver v. City Univ. of New York, 947 F.2d 1021, 1022 (2d Cir. 1991).
The Second Circuit has unambiguously defined the role of the district court in deciding Rule 56 motions:
The district court's role . . . requires the court not to resolve disputed issues of fact itself, but rather to see if there are issues of fact to be resolved by the factfinder at trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). That is to say, when examining the record before it to see if there are any genuine issues of material fact, the court's focus is on issue-finding, not on issue-resolution. In making its assessment, the trial court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor. See United States v. Diebold, 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962) (per curiam).