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A federal jury in Marshall has ordered The Hillman Group Inc., to pay rival Hy-Ko Products Co. $16 million for infringing patents related to key duplication machines.
A federal jury in Marshall has ordered The Hillman Group Inc., to pay rival Hy-Ko Products Co. $16 million for infringing patents related to key duplication machines.
A federal jury in Marshall ordered key copying giant The Hillman Group Inc. to pay competitor Hy-Ko Products Co. $16 million for infringing patents related to key duplication machines.
Hy-Ko was seeking $115 million in the case, which kicked off last week with U.S. District Chief Judge Rodney Gilstrap presiding.
In the case, Hy-Ko accused Hillman’s key duplication machines, KeyKrafter and PKOR, of infringing Hy-Ko’s patented technology.
According to a report by Bloomberg Law, Hy-Ko sued Hillman in June 2021, alleging that its PKOR and KeyKrafter machines violated the patents-in-suit in an attempt “to maintain and expand control of the lucrative key duplication business” — a retail industry worth $600 million annually.
The lawsuit notes that rival companies are two of the top three automated key duplication vendors in the nation.
“On information and belief, Hillman introduced the KeyKrafter and PKOR (the ‘accused products’) into interstate commerce and has marketed these accused products to various retailers throughout the United States and this District, including but not limited to Walmart, The Home Depot, Lowe’s, and ACE,” the lawsuit states filed in Marshall’s federal court states.
“Hy-Ko, a family-owned business since 1949, suddenly had a downturn when Hillman was competing with its infringing products,” Hy-Ko’s attorney, Joseph Meckes, of San Francisco, California-based Squire Patton Boggs LLP, said in opening statements.
Hillman’s lead attorney Sam Baxter, of McKool Smith PC, in Marshall, argued that Hillman did not infringe, stating that the defendant just has a better product, which was evident by its thousands of sales in the market compared to Hy-Ko’s volume of sales in the same timeframe.
“Our machine is better; we have better support staff,” said Baxter. “It’s got to do with who is the best company, who has the best machine; and the market spoke.”
“We installed 5,800 KeyKrafters between 2016 (Hy-Ko’s KeyKrafter launch date) to 2020,” he added. “At the same time, Hy-Co installed 279 KID machines. I don’t know how louder the market can speak.”
“Those are numbers you just can’t run away from and it doesn’t have anything to do with the two patents in this case,” Baxter said.
Witnesses testifying for the plaintiff, Hy-Ko, in the case included William “Bill” Much, a co-inventor of the patented technology in suit; Michael Bass, CEO and president of Hy-Ko; and Steven DeVries of the DeVries family. The family owns Midwest Fastener, which acquired Hy-Ko Products in 2020.
Kevin Becker, a former Hy-Ko engineer who applied for a job at Hillman after being laid off, also testified via deposition regarding alleged inquiries Hillman made to him concerning Hy-Ko’s patented technology.
The federal jury in Marshall ordered that the reasonable royalty be paid to Hy-Ko in a one-time lump sum for past and future sales.
Robin Y. Richardson is an award winning print journalist, serving as the county government and courts reporter. She earned her journalism degree from TSU and master's from LSUS. She is the proud mother of one daughter.
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