Alloc, Inc. v. Norman D. Lifton Co.

Citation653 F.Supp.2d 469
Decision Date08 September 2009
Docket NumberNo. 03 Civ. 4419(PAC).,03 Civ. 4419(PAC).
PartiesALLOC, INC., Berry Finance, N.V., and Välinge Aluminum AB, Plaintiffs, v. NORMAN D. LIFTON CO., Balta U.S., Inc. and Balterio, N.V., Defendants.
CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

Charles Bart Cummings, Baker & McKenzie LLP, NY, NY, Daniel J. O'Connor, David I. Roche, Jasmine C. Abdel-Khalik, Shima S. Roy Baker & McKenzie, Chicago, IL, for Plaintiffs.

Anthony Andrew Pastor, William James McCabe, Ropes & Gray, LLP, New York, NY, for Defendants.

OPINION & ORDER

PAUL A. CROTTY, District Judge:

Plaintiffs Alloc, Inc., Berry Finance, N.V., and Välinge Innovation AB1 (collectively "Alloc") hold three related patents: U.S. Patent No. 6,516,579 (the "'579 Patent"), U.S. Patent No. 6,023,907 (the "'907 Patent"), and U.S. Reissued Patent No. RE39,439 (the "Re '439 Patent") (collectively the "Pervan Patents"). The Pervan Patents are part of a family of patents that describe a system of interlocking floor panels. Alloc brings this action against Defendants Norman D. Lifton Co., Balta U.S., Inc., and Balterio, N.V. (collectively "Balterio") because it claims that the "Click Xpress" floor panels manufactured and sold by Balterio infringe upon the Pervan Patents.

Balterio moves for summary judgment on four separate grounds. First, it argues that the Click Xpress floor panels do not, as a matter of law, infringe upon the Pervan Patents. Second, it contends that even if the Click Xpress panels do infringe upon the Pervan Patents, Alloc cannot demonstrate that this infringement was willful. Third, it claims that the '579 Patent and Re '439 Patent are invalid. Finally, it alleges that the '579 Patent is unenforceable due to inequitable conduct on the part of Alloc's patent attorney and Välinge's president during the patent prosecution process.

For the following reasons, Balterio's second motion for summary judgment, on the issue of willful infringement, is GRANTED. Its first, third, and fourth motions for summary judgment—on the issues of non-infringement, invalidity, and unenforceability—are DENIED.

BACKGROUND

Plaintiff Välinge, a Swedish corporation, is the assignee of the Pervan Patents. The Pervan Patents originated with a 1993 Swedish patent application made by Välinge, which in turn formed the basis for five U.S. patents, including the '579, '907, and Re '439 patents presently at issue. Plaintiff Berry, a Belgian corporation, is the exclusive licensee of the Pervan Patents, and Plaintiff Alloc is a U.S. affiliate of Berry and sub-licensee of the patents.

Defendant Balterio, a Belgian corporation, manufactures the Click Xpress floor panels that Alloc alleges infringe upon the Pervan Patents. Defendants Norman D. Lifton Co. and Balta are U.S. corporations that sell Click Xpress panels in the U.S.

The present case is one in a series of actions brought by Alloc against various defendants since 2000, alleging infringement of the Pervan Patents. (See Transcript of Oral Argument on Feb. 2, 2009 ("OA Tr.") at 72:23-73:4.) Alloc filed its original Complaint on June 18, 2003 and filed an Amended Complaint on May 10, 2006.

On July 18, 2007, pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), the Court issued an Opinion & Order on Claim Construction construing the meaning of the relevant claim language in the Pervan Patents.2 Alloc, Inc. v. Norman D. Lifton Co., No. 03 Civ. 4419(PAC), 2007 WL 2089303 (S.D.N.Y. July 18, 2007). The Court adopted the findings made by the United States Court of Appeals for the Federal Circuit in Alloc, Inc. v. International Trade Commission, 342 F.3d 1361 (Fed.Cir.2003), which considered some of the same claim construction issues raised in the present matter.3 See Alloc, 2007 WL 2089303, at *6, *11. Specifically, the Court adopted the Federal Circuit's definition of the term "play" as "a space between a locking groove on a first panel and the locking element of a panel adjacent to the first panel." See id. at *6. It further agreed with the Federal Circuit that all of the patents in the Pervan family incorporated the element of "play" into their designs, i.e. they all described a space between the locking element and locking groove. Id. at *11.

Following the Court's ruling on claim construction, Balterio filed its present motions for summary judgment on March 28, 2008.

DISCUSSION
I. Standard of Review for a Motion for Summary Judgment

The standard of review for a motion for summary judgment in a patent infringement case is the same as in any other type of action. See Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1571 (Fed. Cir.1984). Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted).

The moving party initially bears the burden of demonstrating that no genuine issues of material fact remain. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once this showing is made, the non-moving party may not rely solely on "[c]onclusory allegations, conjecture, and speculation," but must present specific facts demonstrating that there is a genuine issue for trial. Niagara Mohawk Power Corp. v. Jones Chem. Inc., 315 F.3d 171, 175 (2d Cir.2003) (citations and internal quotation marks omitted); see also Fed.R.Civ.P. 56(e)(2). The Court resolves all ambiguities and draws all factual inferences in favor of the non-moving party, but "only if there is a `genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (citing Fed.R.Civ.P. 56(c)).

II. Non-Infringement

"To establish literal infringement, every limitation set forth in a claim must be found in an accused product, exactly." Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1575 (Fed.Cir.1995). This Court has defined play and has concluded that the element of play is found in each of the Pervan Patents. Consequently, if Balterio's Click Xpress panels do not contain play, they cannot infringe upon the Pervan Patents.

Accordingly, Balterio moves for summary judgment on the issue of non-infringement by arguing that its Click Xpress panels do not contain play as that term has been defined by the Court. (See Def. Mem. in Support of Summ. J. on Non-Infringement ("Def. Mem. Non-Infringement") at 13-21.) On the record before it, however, the Court cannot conclude as a matter of law that Balterio's floor panels do not infringe on Alloc's patents.

Patent infringement suits are typically "inappropriate for summary disposition." Union Carbide, 724 F.2d at 1571; see also Southwall Techs., 54 F.3d at 1575 ("Infringement ... is an issue of fact.") The parties' submissions on this motion consist almost entirely of factual allegations and are practically barren of citations to any legal authorities that would support judgment as a matter of law. (See Def. Mem. Non-Infringement at 13-21; Pl. Opp. to Summ. J. on Non-Infringement ("Pl. Opp. Non-Infringement") at 4-18.)

The question of infringement clearly boils down to a battle between Balterio's expert, Dr. Albert DeBonis, who claims that the Click Xpress panels do not contain play (see Def. Mem. Non-Infringement at 16), and Alloc's expert, Dr. Robert Rice, who claims to have found play in the panels. (See Pl. Opp. Non-Infringement at 9-17.)4 Both sides vigorously dispute the methods and conclusions of the other side's expert—Balterio claims that Dr. Rice used an erroneous definition of play and improperly altered the Click Xpress floor panels to obtain his results, while Alloc argues that Dr. DeBonis failed to test any of the products at issue in the case. (See Def. Mem. Non-Infringement at 13-21; Pl. Opp. Non-Infringement at 6-8.) At oral argument, each party expended considerable time and energy attempting to convince the Court that its expert's methods and conclusions were superior to the methods used and conclusions reached by the other side's expert. (See O.A. Tr. at 7:17-19:16.) That time and energy should be expended attempting to convince a jury. This case involves numerous disputes over complex issues of material fact that go to the heart of Alloc's infringement claims and Balterio's defenses. Balterio's motion for summary judgment on non-infringement is therefore denied.

III. No Willful Infringement

In In re Seagate Technology, LLC, 497 F.3d 1360 (Fed.Cir.2007), the Federal Circuit announced a heightened standard for establishing willful infringement. The Seagate court established a two-prong test for demonstrating willfulness. First, "a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." Id. at 1371. If that initial threshold is met, "the patentee must also demonstrate that this objectively-defined risk ... was either known or so obvious that it should have been known to the accused infringer." Id.

Balterio argues that it is entitled to summary judgment on the issue of willfulness because the undisputed factual record demonstrates that it sought to design around the Pervan Patents by excluding the element of play from its Click Xpress panels. (Def. Mem. in Support of Summ. J. on Wilfulness...

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