3m Co. v. Avery Dennison Corp.
| Decision Date | 21 December 2010 |
| Docket Number | Civil No. 10-2630 |
| Parties | 3M Company and 3M Innovative Properties Company, Plaintiffs, v. Avery Dennison Corporation, Defendant. |
| Court | U.S. District Court — District of Minnesota |
John C. Adkisson and Ann N. Cathcart Chaplin, Fish & Richardson P.C., Kevin H. Rhodes and William D. Miller, 3M Innovative Properties Company and Courtland L. Reichman, and Natasha H. Moffitt, King & Spalding, Counsel for Plaintiffs.
Kurt J. Niederluecke and Lora M. Friedemann, Fredrikson & Byron, P.A. and Charles K. Verhoeven, David Bilsker, Christopher E. Stretch and James E. Baker, Quinn Emanuel Urquhart & Sullivan, LLP, Counsel for Defendant.
This matter is before the Court upon Plaintiffs 3M Company and 3M Innovative Properties Company's (collectively "3M") motion for a preliminary injunction and Defendant Avery Dennison Corporation's ("Avery") motion to exclude the testimony of Mary Jo Abler.
In moving for preliminary injunctive relief, 3M focuses on its infringement allegations of two of its patents, U.S. Patent No. 7, 556, 386 ("the '386 patent") and U.S. Patent No. 7, 152, 983 ("the '983 patent"). 3M asserts that with respect to these two patents, it is clear on the record thus far that Avery infringes claim 1 of the '386 patent and claim 26 of the '983 patent. Unless the Court takes quick action to preserve the status quo, 3M asserts that Avery's infringing product will be allowed to flow through complex distribution channels supporting state and local highway projects, and Avery could use its infringing product to procure the release of federal funds for these projects under the incorrect assumption that Avery's infringing product will be available for use. 3M further argues that if it succeeds on the merits of its infringement claims, 3M will be left with an injunction it cannot enforce without creating chaos and disruption in the marketplace. 3M further asserts it will suffer irreparable harm if the injunctive relief is not granted due to serious damage to its reputation and irreversible price erosion.
As discussed in more detail below, preliminary injunctive relief in patent cases is reserved only for those extraordinary cases in which it is clear that the patents are valid and infringed and the patentee can establish it will sufferirreparable harm if the requested injunctive relief is not granted. However, even though the parties have extensively briefed the issue, the Court finds that this case is not one that warrants such extraordinary relief. Rather, the Court finds that Avery has raised a substantial question as to the validity of the patents and that 3M has failed to show that it cannot be compensated by money damages if the requested relief is not granted.
This action involves thirteen patents, the rights, title and interest having all been assigned to, which cover different aspects of retroreflective sheeting. In the Amended Complaint, 3M alleges that Defendant makes, uses, and sells a product called the OmniCube T-11500 Prismatic Reflective Film that embodies the inventions claimed in the patents-in-suit.
The patents in suit involve retroreflective sheeting for use on roadways. 3M's Traffic Safety Systems ("TSS") division has been in this business for over 60 years and 3M currently has over 180 patents directed to retroreflective sheeting. This sheeting is an important invention as it reflects light emitted from a vehicle's headlights back towards the driver, making the sign or marker conspicuous andeasy to read. (Declaration of Dr. Kenneth L. Smith ¶ 9.)
The American Society for Testing and Materials ("ASTM") has classified this sheeting into various types, such as Type I, II etc. (Id. ¶ 17.) The highest tier presently is Type XI. (Id. ¶ 16.) This type uses "full cube" technology, which is almost twice as bright as the next brightest sheeting available. (Id. ¶¶ 14-18.) 3M asserts that this type of sheeting is much more difficult to manufacture on a commercial scale, and it wasn't until 3M invented solutions enabling cost effective mass production that the Type XI sheeting was commercialized. (Id. ¶ 14.) 3M released the first Type XI sheeting, called DG3. (Declaration of Mary Jo Abler ¶ 18.)
3M asserts that there was a need in the industry for the Type XI sheeting due to new headlights, larger vehicles and an aging population. (Id. ¶¶ 19-20.) Given these needs, 3M asserts the DG3 product has been a commercial success. (Id. ¶ 21.) It represents 35% of 3M's business in durable sheeting products and is highly profitable. (Id.)
3M learned that Avery had announced earlier this year that it would be entering the Type XI sheeting market. (Id. ¶ 34; Declaration of Barry Sullivan ¶ 7.) 3M does not believe that to date, Avery has sold any such product. In July, however, Avery allegedly offered to sell its OmniCube product to a sign fabricator. (Abler Decl. ¶ 34; Sullivan Decl. ¶¶ 7-9.)
It is Avery's position that retroreflective sheeting has existed for almost 100 years, and that Avery has continually been in the forefront of this technology. Retroreflective sheeting was first made in the early 1900's by a company called Stimsonite Corporation; a company Avery acquired in the late 1990's.
Avery asserts that Jonathan Stimson obtained a patent for a novel retroreflective design in 1928, U.S. Patent No. 1, 671, 086. (Declaration of Dr. Russell Chipman, Ex. 6.) This design was built on the concept of triple reflectors, which reflect light parallel to its source, unlike a mirror which reflects at an angle opposite its entrance angle. Avery asserts that over the years, Stimson made several improvements to his design, including varying the angles of the intersecting reflecting surfaces slightly off 90 °. Avery asserts that today, these variations are referred to as dihedral angle errors. (Id. at ¶ 28.) Avery further asserts that it was Stimson who discovered that forming the three reflective surfaces in the shape of squares increased the amount of light returned, as described in U.S. Patent No. 1, 848, 675. . The square shaped retroreflectors are known as "full cube corners" or "preferred geometrycube corners."
Avery asserts that academics began to study the relationship between various parameters, such as light spread and dihedral angle errors. (Id., Ex. 1 at 497, Table II; ¶ 28.) Later, a Stimson employee, Sidney Heenan, obtained U.S. Patent No. 3, 833, 285 ("the '285 patent"). (Id., Ex. 4.) Heenan used specific angle errors to spread the light over a broad range of observation angles. Heenan also obtained the patent for a technique for miniaturizing and manufacturing retroreflective sheeting; U.S. Patent No. 6, 015, 214 ("the '214 patent") reissued as U.S. Reissued Patent No. RE40, 700 ("the RE700 patent"). (Id., Ex. 5.)
The ultimate customers for retroreflective sheeting are state and local governments, either directly or through contractors. (Abler Decl. ¶ 22.) Sales usually begin through the bidding process, and invitations to bid usually specify an ASTM type of sheeting to be used. (Id. ¶ 23; Declaration of Terry Yeager ¶¶ 16-17.) The funding for such projects are from federal funds or state/local funds. (Abler Decl. ¶ 25.)
Federal funds are subject to the Proprietary and Patented Products Rule ("PPPR"). The PPPR provides: Federal funds shall not participate, directly or indirectly, in payment for any premium or royalty on any patented or proprietary material, specification, or process specifically set forth in the plans and specifications for a project...
See C.F.R. 635.411. An exception to this rule is when the patented or proprietary item is purchased or obtained through competitive bidding with equally suitable unpatented items. See id. at (a)(1). Up until now, 3M's DG3 product has been the only commercially available product that meets the ASTM Type XI specification for retroreflective sheeting. (Abler Decl. ¶ 28.) Pursuant to the PPPR, state and local governments typically may not specify only ASTM Type XI sheeting where the sheeting is to be purchased with federal funds. As a result, Type XI sheeting is usually purchased with state/local funds. (Id. ¶ 32.) If Avery enters the market during the pendency of this action, a second source of Type XI sheeting would become available-allowing federal funds to be used to pay for such sheeting. First, however, Avery would need to be approved by states to be added to the Qualified Products List ("QPL"). (Id. ¶ 30.) To 3M's knowledge, Avery's OmniCube T-11500 sheeting is only on one state's QPL. (Id.)
Mary Jo Abler is the Business Director of the Highway Safety Business Unitfor 3M's Traffic Safety Systems Division, and has been in this division for over six years. In all, she has worked for 3M for over twenty years. She submitted a declaration in support of 3M's motion for a preliminary injunction, and in said declaration, Abler stated that she has personal knowledge of the matters set forth, except where otherwise stated. (Abler Decl. ¶ 2.)
Avery has moved to exclude Abler's testimony to the extent she opines on irreparable harm in the form of loss of goodwill and price erosion, as Abler is not qualified to provide any such opinions. Avery asserts that Abler is not an economist. She has no training or expertise in the specific issues surrounding the analysis of a potential permanent injunction or the resulting loss of goodwill.
3M responds that Mary Jo Abler was not offered as an expert witness. Abler's testimony is based on her experience as a 3M employee and as the current head of 3M's TSS Division. She is the best person to provide a real-world business view of the harm 3M may suffer from Avery's infringement. Abler is offering testimony based upon first hand knowledge, not based on scientific, technical or specialized knowledge, thus her testimony is admissible...
To continue reading
Request your trial