Dethmers Mfg. Co. v. Automatic Equipment Mfg.

Page 944

70 F.Supp.2d 944

DETHMERS MANUFACTURING COMPANY, INC., Plaintiff, v. AUTOMATIC EQUIPMENT MFG. CO., Defendant.

No. C 96-4061-MWB.

United States District Court, N.D. Iowa, Western Division.

September 2, 1999.

David Tank of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, Iowa, and Michael Gilchrist and Brian J. Laurenzo of Dorsey & Whitney, LLP, Des Moines, Iowa, for Plaintiff Dethmers Manufacturing Company, Inc.

Donald R. Schoonover of Fremont Hills, Missouri, Tim Engler of Harding, Shultz & Downs, Lincoln, Nebraska, Defendant Automatic Equipment Manufacturing Company.

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT OF PATENT INVALIDITY AND PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND TO DISMISS FOR LACK OF CONTROVERSY

BENNETT, District Judge.

                                      TABLE OF CONTENTS
I. INTRODUCTION ......................................................................  946
    A. Procedural Background .........................................................  946
    B. Factual Background ............................................................  949
       1. The '166 patent ............................................................  949
       2. The '240 and Re482 patents .................................................  950
       3. The '851 patent ............................................................  951
       4. The Parent-Automatic-Dethmers triangle .....................................  953
       5. Facts relevant to false advertising and false marking claims ...............  955
II. LEGAL ANALYSIS ...................................................................  955

A. The '851 Patent ...............................................................  955
       1. Subject matter jurisdiction ................................................  955
          a. The parties' contentions ................................................  955
          b. Subject matter jurisdiction in patent cases .............................  956
          c. Subject matter jurisdiction here ........................................  957
              i. Explicit threat and reasonable apprehension .........................  957
             ii. Present activity of the alleged infringer ...........................  960
       2. Summary ....................................................................  960
    B. The '166 Patent Revisited .....................................................  961
       1. Contentions of the parties .................................................  961
       2. Prosecution history estoppel ...............................................  961
          a. The nature of prosecution history estoppel ..............................  962
          b. The Warner-Jenkinson presumption ........................................  964
       3. Prosecution history estoppel here ..........................................  966
          a. Prosecution history .....................................................  966
          b. Presumption and rebuttal ................................................  971
    C. False Advertising .............................................................  973
       1. Which circuit's law applies? ...............................................  974
       2. Summary judgment standards .................................................  974
       3. Elements of this "false advertising" claim .................................  975
       4. The record evidence ........................................................  978
          a. The "patented flex joint" representation ................................  978
              i. Falsity .............................................................  979
             ii. Injury ..............................................................  980
          b. The infringement representations ........................................  982
    D. False Marking .................................................................  982
III. CONCLUSION ......................................................................  984

In ruling on the parties' first round of dispositive motions, the court found that the "devil was in the details" in granting summary judgment of invalidity of one of the plaintiff's patents in suit, declining to grant summary judgment of non-infringement of the defendant's patent in suit, and in ruling on various challenges to other patent and non-patent claims. See Dethmers Mfg. Co., Inc. v. Automatic Equip. Mfg. Co., 23 F.Supp.2d 974 (N.D.Iowa 1998). Details appear just as likely to bedevil the second round of dispositive motions in this case, as the court is called upon to consider the invalidity of yet another of the plaintiff's patents, reconsider "equivalents" infringement of the defendant's patent in suit in light of recent decisions of the Federal Circuit Court of Appeals on prosecution history estoppel, and address a new set of challenges to various other claims.

I. INTRODUCTION

A. Procedural Background

The parties to this lawsuit are both makers of tow bars used to tow an automobile behind a recreational vehicle (R.V.) and the patents in suit relate to such tow bars. Plaintiff Dethmers Manufacturing Company, Inc.,¹ filed this action on June 26, 1996, seeking primarily a declaratory judgment, pursuant to 28 U.S.C. §§ 2201 and 2202, of non-infringement of a patent owned by defendant Automatic Equipment Manufacturing Company² and declaratory, injunctive, and damages relief for Automatic's alleged infringement of one of Dethmers's patents.

More specifically, in Count I of its second supplemental amended complaint, filed on November 20, 1997, Dethmers sought declaratory judgment that the tow bars Dethmers manufactures do not infringe one of Automatic's patents, United States Patent No. 5,356,166 (the '166 patent or the Automatic patent), that the '166 patent is invalid and unenforceable, and that Automatic is without right or authority to threaten or to maintain suit against Dethmers for alleged infringement of the '166 patent. Count II sought damages for, as well as injunctive and declaratory relief from, infringement by Automatic of Dethmers's own patent, United States Patent No. Re32,482 (the Re482 patent or the Dethmers reissue patent), which is a reissue of United States Patent No. 5,232,240 (the '240 patent or the Johnson patent), a patent Dethmers alleges it acquired from the successors in interest to the inventor, Andrew B. Johnson of Barton, North Dakota. Count III sought compensatory and punitive damages and injunctive relief for Automatic's alleged breach of a contract with Dethmers, as the assignee of Richard A. Parent, not to produce products incorporating the "Parent Invention" without permission or payment of consideration. Count IV sought compensatory and punitive damages and injunctive relief for "statutory" misappropriation by Automatic of a trade secret, the "Parent Invention." Count V was a comparable "common-law" claim of misappropriation of a trade secret, also seeking compensatory and punitive damages and injunctive relief. Count VI alleged conversion of the "Parent Invention" and sought compensatory and punitive damages and injunctive relief. Count VII alleged misappropriation of the "intellectual property" of Dethmers, again identified as the "Parent Invention," and sought compensatory and punitive damages and injunctive relief. Finally, Count VIII alleged unjust enrichment by Automatic as the result of its use of design concepts of the "Parent Invention" in its products, and sought compensatory and punitive damages and injunctive relief.

On December 5, 1997, instead of answering the second supplemental amended complaint, Automatic filed the first of the dispositive motions ruled upon in the court's prior decision, a motion to dismiss or in the alternative for partial summary judgment, for more definite statement, and to strike. On March 11, 1998, Automatic filed a motion for summary judgment on the invalidity of the Dethmers reissue patent, the Re482 patent. On June 2, 1998, Dethmers took the offensive with its own motion for summary judgment or in the alternative partial summary judgment, asserting that it was entitled to summary judgment that it is not liable for infringing Automatic's '166 patent on grounds of invalidity and unenforceability of the patent itself, and non-infringement of the patent by Dethmers's tow bars.

In its order of September 29, 1998, on the parties' first round of dispositive motions, the court ruled as follows:

1. Automatic's December 5, 1997, motion to dismiss or in the alternative for partial summary judgment, for more definite statement, and to strike is granted as to summary judgment on all prayers for punitive damages on state-law claims, but otherwise denied.

2. Automatic's March 11, 1998, motion for summary judgment on the invalidity of the Re482 patent is denied as to insufficiency of "errors," and assertion that the reissue patent is not for the "same invention" as the original '240 patent, but granted as to the inadequacy of the reissue declaration, on the ground that it does not comply with the detail required by the decisions of the Federal Circuit Court of Appeals in Nupla [Corp. v. IXL Mfg. Co., Inc., 114 F.3d 191 (Fed.Cir.1997),] and [In re] Constant, [827 F.2d 728 (Fed.Cir.1987), cert. denied, 484 U.S. 894, 108 S.Ct. 251, 98 L.Ed.2d 209 (1987),] and the former version of 37 C.F.R. § 1.175, and the Re482 patent is hereby declared invalid.

3. Dethmers June 2, 1998, motion for summary judgment or in the alternative partial summary judgment on patent invalidity, unenforceability, and non-infringement is denied in its entirety.

Dethmers Mfg. Co., Inc., 23 F.Supp.2d at 1044. The court subsequently denied Dethmers' motion to reconsider, but certified its ruling on the first set of dispositive motions for interlocutory appeal pursuant to ...