Vectra Fitness, Inc. v. Icon Health & Fitness

288 F.Supp.2d 1155

VECTRA FITNESS, INC., a Washington corporation, Plaintiff, v. ICON HEALTH & FITNESS, INC., a Delaware corporation; and Sears Roebuck and Company, a New York corporation Defendants.

Icon Health & Fitness, Inc., a Delaware corporation, Counterclaimant, v. Vectra Fitness, Inc., a Washington corporation, Counterclaim Defendant.

No. C02-635R.

United States District Court, W.D. Washington.

August 27, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

L David Griffin, Larry R Laycock, William R. Richter, Charles L. Roberts, L. Rex Sears, C.J. Veverka, David R. Wright, Workman Nydegger & Seeley, Salt Lake City, Gillis E Reavis, Stephen Tan, Brown Reavis & Manning PLLC, Seattle, WA, for Icon Health & Fitness Inc, Sears Roebuck & Co, Defendants.

Paul T Meiklejohn, Brian Chung Park, Dorsey & Whitney LLP, Seattle, WA, Jose Luis Sanchez, Vectra Fitness Inc, Kent, WA, for Vectra Fitness Inc, Plaintiff.

ORDER DENYING DEFENDANTS' MOTION FOR A FINAL JUDGMENT; GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON IN VALIDITY DEFENSES; GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON EQUITABLE DEFENSES; AND DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AS TO LOST PROFITS

ROTHSTEIN, District Judge.

THIS MATTER comes before the court on four motions: (1) the motion for entry of final judgment pursuant to Federal Rule of Civil Procedure 54(b) by defendants ICON Health and Fitness, Inc. ("Icon") and Sears, Roebuck and Company ("Sears"); (2) plaintiff Vectra Fitness, Inc.'s ("Vectra") motion for partial summary judgment as to defendants' invalidity defenses; (3) Vectra's motion for partial summary judgment on defendants' equitable defenses; and (4) Icon's motion for partial summary judgment as to Vectra's lost profits damages.

The court has previously set forth the general background of this matter in its orders addressing the parties' cross-motions for summary judgment on the issue of literal infringement. Additional background relevant to the present motions is set forth below in the pertinent section.

Having reviewed the pleadings filed in support and in opposition to these motions, the court finds and rules as follows:

I. DISCUSSION

A. Icon's Motion for Entry of Final Judgment

The court first addresses Icon's motion for entry of a Federal Rule of Civil Procedure 54(b) judgment, in which motion Icon asks the court to enter a final judgment denying its counterclaim of non-infringement and for a stay of proceedings so that it may appeal this court's claim construction.¹

On March 22, 2002, Vectra filed this action alleging infringement of U.S. Patent No. Re. 34,572 (the "572 patent") by Icon as well as one of Icon's retailers, Sears. Icon counterclaimed for a declaratory judgment of non-infringement seeking a determination that "Icon's manufacture, sale, and use of its line of fitness equipment do not infringe any claim of the '572 patent." Answer and Counterclaim at ¶ 16.

On October 24, 2002, Vectra filed a motion for partial summary judgment of literal infringement of claims 25 and 26 of the '572 patent by two of Icon's products. In a February 14, 2003 Order, the court concluded that the WeiderPro 9930 infringed both claims 25 and 26 and that the WeiderPro 9940 infringed claim 26. Icon subsequently filed two additional motions for partial summary judgment of non-infringement, which Vectra opposed and cross-moved for summary judgment of literal infringement. In a July 3, 2003 Order, the court construed the remaining disputed claim terms and found that all of the Icon products at issue in those motions literally infringe the '572 patent. Still undecided are Icon's affirmative defenses of invalidity and estoppel as well as damages.²

Notwithstanding these remaining issues, Icon argues its declaratory judgment of non-infringement must be denied and a final judgment on that claim entered.

Federal Rule of Civil Procedure 54(b), which provides for appeal of a single adjudicated claim in a multi-claim case³:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.

A judgment is not final for purposes of Rule 54(b) unless it is an "ultimate disposition of an individual claim entered in the course of a multiple claims action." Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 435, 76 S.Ct. 895, 100 L.Ed. 1297 (1956); Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945) (stating that a district court's judgment is final where "it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment").

In view of the definition of a "final judgment," it is clear that such a judgment is inappropriate here. The court's prior orders have adjudicated only part of the claim for patent liability—literal infringement —and thus do not finally dispose of Vectra's infringement claim or Icon's counterclaim for non-infringement.

The cases on which Icon relies support this view. In each of these cases, the court granted a Rule 54(b) certification because it had granted summary judgment of non-infringement to the defendants. See Northrop Grumman Corp. v. Intel Corp., 325 F.3d 1346, 1348 (Fed.Cir.2003) ("The district court ruled in the defendants' favor on the issue of infringement. The court subsequently entered a final judgment under Rule 54(b)."); Rheox, Inc. v. Entact, Inc., 276 F.3d 1319, 1324 (Fed.Cir.2002) ("[T]he court granted Entact's motion for summary judgment of non-infringement [and] entered final judgment pursuant to [Rule 54(b)] on the issue of non-infringement, noting that outstanding counterclaims and third-party claims remained."); Trilogy Communications, Inc. v. Times Fiber Communications, Inc., 109 F.3d 739, 741 (Fed.Cir.1997) (same). Thus, in all of these cases, the court determined that the plaintiff had failed to establish infringement, thereby disposing of the plaintiff's patent claim.

Here, in contrast, the court has determined that Icon's accused products literally infringe the '572 patent, and Vectra, to prevail in this case, must now prove that its patent is valid and enforceable. Icon has cited no case, and the court's research reveals none, in which a court has entered a final judgment under Rule 54(b) in a case with a similar posture. Cf. Va. Panel Corp. v. Mac Panel Co., 887 F.Supp. 880 (W.D.Va.1995) (noting that, since the court had granted summary judgment of literal infringement, defendant's "patent misuse defense still could affect the patent infringement claim by making the patent unenforceable," and thus certification under Rule 54(b) was inappropriate). In sum, there has been no final determination of Vectra's infringement claim, or of Icon's counterclaim for non-infringement.

Accordingly, the motion for a final judgment and stay pending appeal is denied.⁴

B. Vectra's Motion for Summary Judgment as to Invalidity Defenses

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Genuine issues of material fact that preclude summary judgment are "disputes over facts that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding a summary judgment motion, the court must view all facts and inferences therefrom in the light most favorable to the non-moving party. See Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995).

1. Invalidity

In its Answer, Icon asserts affirmative defenses under 35 U.S.C. § 102 (non-anticipation), § 103 (non-obviousness), and § 112 (defective specification). In this motion, Vectra moves for partial summary judgment as to each of these invalidity defenses.

a. Anticipation and Defective Specification

Icon has abandoned its defective specification defense. Opp'n at 4.

As to its § 102 defense, Icon admitted, in response to Vectra's Request for Admissions, that it does "not allege that any prior art renders any claim of the '572 patent invalid based on anticipation based on [§ 102]." Meiklejohn Decl., Ex. 2. Despite this prior admission, Icon now argues that it has identified a prior art device known as the AMF 9000, which, according to Icon, in light of the court's interpretation of various claim terms, "clearly contains all but one element of claim 26." Opp'n at 3. Icon states that the twenty-year-old brochure of the AMF 9000 is "unclear about the connection between the press arm and the floating pulley" but that "[i]f information clarifying that the connection is a cable can be identified prior to trial, Defendants will proceed with a defense of anticipation based on the AMF 9000 product." Id. at 3-4.

Icon's assertion of its anticipation defense at this time is problematic for at least two reasons. First, Federal Rule of Civil Procedure 36(b) states that "[a]ny matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission." Icon has never moved to withdraw its admission regarding its anticipation defense. Second, Icon states that it has yet to finalize this affirmative defense, despite the fact that discovery has been closed for some time, and trial is less than a month away. Icon, believing its defense is still timely, cites 35 U.S.C. § 282, which states that "the party asserting invalidity ... shall give notice ... to the adverse party at least thirty days before the trial ... of any...