Cimline, Inc. v. Crafco, Inc.

• Decision Date: 02 December 2009
• Docket Number: Civ. No. 07-3997 (RHK/JSM).
• Citation: 672 F.Supp.2d 916
• Parties: CIMLINE, INC., Plaintiff, v. CRAFCO, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

672 F.Supp.2d 916

CIMLINE, INC., Plaintiff, v. CRAFCO, INC., Defendant.

Civ. No. 07-3997 (RHK/JSM).

United States District Court, D. Minnesota.

December 2, 2009.

COPYRIGHT MATERIAL OMITTED

Lauris A. Heyerdahl, Foley & Mansfield, P.L.L.P., Minneapolis, MN, for Plaintiff.

Eric H. Chadwick, Casey A. Kniser, Aaron W. Davis, Patterson, Thuente, Skaar & Christensen, P.A., Minneapolis, MN, for Defendant.

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

This is a patent case concerning sealant melters, which are used to seal cracks in pavement. Defendant Crafco, Inc. ("Crafco") is a manufacturer of pavement-maintenance equipment, including sealant melters, and holds United States patent #5,967,375 (the "`375 patent") entitled "Sealant Melter with Retrofittable Sealant Block Feed Assembly." Plaintiff Cimline, Inc. ("Cimline") is one of Crafco's competitors in the sealant-melter market. The parties are old adversaries; in 2000, Crafco sued Cimline for patent infringement in the United States District Court for the District of Arizona regarding a different patent and, from time to time since, has accused Cimline of infringing the '375 patent.

Cimline commenced the present action in 2007. In its Amended Complaint, it seeks a declaration that the '375 patent is invalid or, in the alternative, that its current sealant melter does not infringe the '375 patent. It also alleges unfair-competition and antitrust claims based on Crafco wielding the "invalid" patent. Crafco has counterclaimed, alleging that Cimline's sealant melter infringes. Presently before the Court is Crafco's Motion for Summary Judgment. For the reasons set forth below, the Court will grant the Motion and will also grant summary judgment to Crafco sua sponte on its counterclaim.¹

BACKGROUND

Sealant melters are used in the maintenance of pavement. Typically, they are mounted on trailers and work by heating— and thus melting—blocks of sealant material in a reservoir tank, which is sometimes called the "kettle." The melted sealant is then dispensed from the tank through a pipe or hose to seal pavement cracks. Generally speaking, sealant melters are used by government agencies or contractors hired by them to maintain roadways.

When sealant melters were first used, moving sealant blocks into the reservoir tank proved difficult. The blocks are large, bulky, and heavy, which made loading them into the tank a labor-intensive task. In addition, the blocks typically were dropped into the tank from above, causing hot sealant—often over 500°—to splash out, posing a substantial burn hazard to the melter's operators.

In the mid-1990s, Raymond Rugh, the Chief of Specifications for the Pennsylvania Department of Transportation ("Penn DOT"), contemplated a better way to deliver sealant blocks into melters. He theorized that a conveyer belt could be attached to the reservoir tank, which would allow blocks of sealant to be rolled down the belt and dropped into the tank mechanically, rather than by hand. He also envisioned a hinged door on the top of the tank through which the sealant blocks would drop. The door would open as a block fell through and then snap shut, preventing any sealant from splashing out of the tank. (See Rugh Dep. Tr. at 13-16.)

Rugh apparently was not alone. Sometime prior to October 1995, Robert Schegan, the Equipment Manager for Schuylkill County, Pennsylvania, visited Monroe County, another county in his maintenance district, and had seen modifications like those envisioned by Rugh. In particular, he saw that Monroe County had modified its melters by adding manual (i.e., unpowered) conveyor belts and installing extension boxes on top of the reservoir tanks, through which blocks of sealant would pass when falling from the conveyor belt. (Schegan Dep. Tr. at 9-12; see also Rugh Dep. Tr. at 19-20.) The extension boxes contained a hinged door to prevent hot sealant from splashing out of the tanks. (Schegan Dep. Tr. at 30; Rugh Dep. Tr. at 20.) Schegan decided to implement similar modifications to two sealant melters Schuylkill County had previously purchased from Crafco. (Schegan Dep. Tr. at 17.)

On October 23, 1995, Tim McKenney, an employee of Crafco's northeast distributor, Artco Equipment Sales, Inc. ("Artco"), traveled to Schuylkill County and observed the modifications that Schegan had made to Crafco's melters. (Heyerdahl Aff. Ex. 10; McKenney Dep. Tr. at 10, 28-30.) He was immediately concerned about them and conveyed his concerns to Artco's President, Eric Stone. (Id. at 11.) Stone then sent a letter to Ron Doemland, Penn DOT's Equipment Division head. (Heyerdahl Aff. Ex. 10.) The letter noted that McKenney had found "a three foot high extension box with a flap welded to the top of the Crafco melter," and that a "conveyor to load boxes of sealant material into the top portal was attached to this extension." (Id.) Stone wrote that Crafco's melters were not built with such modifications in mind and that the top of the melter was "not designed to hold the weight off" the extension box. (Id.) He also noted that the extension box acted like a chimney, reducing the temperature of the reservoir tank and increasing the time necessary for sealant to melt. (Id.) Accordingly, he informed Penn DOT that it would not honor the warranty on the modified melters and it would not be responsible for any injuries resulting from the modifications, and he recommended that Penn DOT discontinue using the modified melters. (Id.) Although not entirely sure, McKenney "thought" that Stone spoke to Crafco about Penn DOT's modifications. (McKenney Dep. Tr. at 11; see also id. at 18.)

In September 1996, Penn DOT had a meeting regarding the modifications described above, which had been in use at that point for more than a year. (See Heyerdahl Aff. Ex. 12; Rugh Dep. Tr. at 16-18.) The meeting was attended by several Penn DOT employees (including Rugh), McKenney, and Tom Kelly, a Crafco sales representative. (See Heyerdahl Aff. Exs. 13-14; Rugh Dep. Tr. at 24-25; Kelly Dep. Tr. at 23.) At the meeting, Penn DOT explained how it had modified its melters and asked Crafco if it could build melters with an "autoloading" system —a powered conveyor belt that would drop sealant blocks through a door into the melter. (Id. at 23, 26-27; Kelly Dep. Tr. at 29, 40.)

On October 3, 1996, Kelly wrote Larry Allen, a Penn DOT equipment manager who had attended the September meeting, regarding Penn DOT's request. The letter stated:

As we discussed in our meeting, Crafco has now and would be pleased to provide to your department a loading conveyor and hatch to be installed on your melters. This device, shown in the pictures you were provided, is very similar to the attachment that your Field Operations has designed on their own. Per your request, Crafco will evaluate the ability to provide this loading conveyor with a powered belt conveyor.

* * *

Although the design of the attachment you showed me was similar to the design that Crafco has available, there are many differences. Crafco cannot provide you with an endorsement that the use of this equipment will be safe nor can we state that the units will operate properly.

(Heyerdahl Aff. Ex. 14.) Kelly later wrote Rugh, stating that "Crafco has started a design project for the conveyor as we understand your requirements." (Id. Ex. 15.) Those requirements included a "powered conveyor that runs from the loading hatch on a[] ... melter.... Sealant blocks will be able to be lined up on the conveyor and feed to the melter as needed. The loading hatch will be equipped with a splash resistant loading tower that will automatically close as sealant blocks are dropped. The system will be able to be field installed on all the units presently owned by" Penn DOT. (Id.)

David Barnes, a newly hired Crafco employee, was given the task of creating a melter meeting Penn DOT's requirements. The parties hotly dispute what Barnes was told and by whom. Crafco contends that Barnes was simply asked to design a system to safely deliver sealant blocks into a melter and was never told how Penn DOT had been modifying its melters. (See Barnes Dep. Tr. at 14-15, 29, 42.) On the other hand, Cimline points to evidence, both direct and circumstantial, suggesting that Kelly provided information to Barnes about Penn DOT's modifications and how to develop a melter meeting its requirements. (See id. at 41-42; Brooks Dep. Tr. at 26-28.)

Regardless, Barnes set to the task of creating a melter with a conveyor system to deliver sealant blocks to the tank, along with a splash-proof box. In the course of doing so, he learned that Crafco had previously built melters with such systems. (Barnes Dep. Tr. at 42-44, 67-68; Heyerdahl Aff. Ex. 23.)² Its engineering department possessed drawings and pictures of those melters, which Barnes discovered sometime prior to August 4, 1997. (Barnes Dep. Tr. at 42-44; Heyerdahl Aff. Ex. 22.) Indeed, Crafco had sold melters with manual conveyor belts and splash-proof boxes to the Texas Department of Transportation during the 1980s, a fact Barnes learned before submitting the application for the '375 patent. (Schave Dep. Tr. 14-24; Barnes Dep. Tr. at 42-44, 67-68; Heyerdahl Aff. Ex. 23.) He conveyed that information to Crafco's patent counsel. (Id.)

On August 7, 1997, Barnes (through counsel) filed the '375 patent application; the Patent and Trademark Office ("PTO") granted the application and issued the '375 patent on October 19, 1999. (See Kniser Decl. Ex. 1.) In the background section, the patent recites how sealant melters work and discusses the splashing problem encountered by dropping sealant blocks into the reservoir tank. (Id. col. 1, ll. 14-45.) The only mention of the "prior arts"³ is the following:

One prior attempted solution to this problem involved the use of an unpowered gravity-feed roller conveyor that led from the towing/storage vehicle to a receptacle on the sealant tank. The receptacle took the...