A.G. Design & Associates v. Trainman Lantern Co.
| Decision Date | 20 June 2008 |
| Docket Number | Case No. C07-5158RBL. |
| Citation | 630 F.Supp.2d 1275 |
| Court | U.S. District Court — Western District of Washington |
| Parties | A.G. DESIGN & ASSOCIATES, LLC, a Washington Limited Liability Company, Plaintiff, v. TRAINMAN LANTERN COMPANY, INC., a Washington Corporation d/b/a American Lantern Company, Inc.; American Lantern, Inc., a Foreign Corporation; Marcus Mukai, individually and as a marital community with Jane Doe Mukai; G. Scott Mukai; and John Doe Defendants 1 Through 10, Defendant. |
Halfred Martin Hofherr, Law Office of Hal M. Hofherr, Bellingham, WA, for Plaintiff.
Jefferson H. Coulter, II, Jefferson Coutler PLLC, Julie Wiediger, Shannon Maureen Whitemore, Axios Law Group, Andrea D. Orth, Jerry Nolan Stehlik, Bucknell Stehlik Sato & Stubner, Seattle, WA, for Defendants.
Robert Leslie Christie, Thomas P. Miller, Christie Law Group PLLC, Seattle, WA, for Plaintiff/Defendant.
ORDER DENYING SUMMARY JUDGMENT IN PART AND GRANTING SUMMARY JUDGMENT IN PART
This matter is before the Court on a Motion for Partial Summary Judgment by Defendants Trainman Lantern Company, Marcus Mukai, and G. Scott Mukai. [Dkt. # 120] For the reasons set forth below, the motion is DENIED in part and GRANTED in part.
Plaintiff A.G. Design & Associates, LLC (A.G. Design or plaintiff) is a Washington limited liability corporation that sells lanterns to Burlington Northern Santa Fe (BNSF) and other railroads for use by trainmen and engineers. [Dkt. # 1] One of A.G. Design's main products is a trainman lantern for which it is holder of U.S. Patent No. 7,118,245 B1 (the '245 patent). [Dkt. # 15-4] A.G. Design's president and C.E.O., Allen Herrington, is listed as the inventor of the '245 patent. [Dkt. # 1]
Defendant Trainman Lantern Company, Inc. is a Washington corporation; brothers Marcus Mukai and G. Scott Mukai are individuals and residents of Washington and Hawaii respectively (collectively T.L.C. or Defendants). [Dkt. # 1, 28]. Trainman Lantern Co. markets the M2K trainman lantern (the accused device). [Dkt. # 14]
A.G. Design claims T.L.C. infringed the '245 patent by developing and manufacturing a trainman lantern "virtually identical to that being manufactured and sold by A.G. Design." [Dkt. # 133]; 35 U.S.C. §§ 271 & 281. This court has subject matter jurisdiction subject to 28 U.S.C. § 1338. A preliminary injunction was issued by Judge Burgess ordering Defendants to cease marketing the accused device. [Dkt. # 26] This injunction was vacated by the Court of Appeals for the Federal Circuit. [Dkt. # 100] T.L.C. now moves this Court to grant summary judgment in its favor on A.G. Design's patent infringement claim.
Pursuant to a 2000 contract with BNSF, A.G. Design developed various prototype lanterns for railroad use. [Dkt. # 6] During this period of development for what would eventually become the '245 patented device, A.G. Design sold and advertised various lanterns. It is disputed exactly what features were contained in these various lanterns. T.L.C. claims that the devices sold had sufficient similarities to the '245 patented device and that that the patent is invalid because A.G. Design sold some of those devices more than one year before it applied for the '245 patent. [See Dkt. # 120, 135] A.G. Design contends that none of the crucial design elements were present in any of the lanterns sold prior to that date and that the first patented device was not ordered until March 31, 2003, or delivered until June 4, 2003. [See Dkt. # 132]
On May 11, 2004, work on the trainman lantern led to Herrington's filing for the '245 patent with the United States Patent and Trademark Office (PTO). In claim 1 of the original application, Herrington described his trainman's lantern as containing "at least one secondary light source mounted external to said reflector so that light from said secondary light source is reflected by said outer reflective surface so as to project in a generally lateral direction from said lantern." [Dkt. # 15-4] On September 26, 2005, the PTO Examiner issued an Office Action Summary rejecting the application. Id. After amendment, claims 7-12 and 18-22 were accepted. Id. On July 14, 2006, Herrington again modified his claim, adding limitations to claim 1 including "a plurality of ports in said reflector that permit light from said primary source to pass through in a lateral direction so as to augment said light source from at least one secondary source." Id. Claims 1 and 8-22 were accepted and the '245 patent was issued August 7, 2006. Id.
Herrington and Marcus Mukai met in 2000 when A.G. Design hired Pulse Power, Mukai's employer, to develop rechargeable batteries for its lanterns. [Dkt. # 6, 13, 14] Mukai was interested in A.G. Design and became a sales representative, though he continued working for Pulse Power. He also expressed an interest in purchasing A.G. Design. [Dkt. # 6, 13] Mukai entered into a Non-Exclusive Sales Representative Agreement with A.G. Design on April 1, 2003. [Dkt. # 6, 13] Mukai also formed TLC as an entity through which to negotiate the purchase of A.G. Design and the two parties negotiated on the subject. [Dkt. # 120] The relationship soured and the purchase deal fell through. A.G. Design sent Mukai his final check on July 30, 2004. [Dkt. # 6]
TLC continued to exist and now claims that it began researching the possibility of manufacturing an all-LED sportsman's lantern for wholesale outlets. [Dkt. # 120] T.L.C. claims it actively entered the railroad lantern business only after being encouraged to do so by the Union Pacific and Norfolk Southern Railroads in October 2006. Id. A.G. Design filed this suit on April 3, 2007. [Dkt. # 1]
Defendants seek summary judgment, arguing the '245 patent (1) is invalid due to prior art; (2) is unenforceable due to the patentee's misconduct; and (3) is not infringed by the accused device because the device does not have "a plurality of ports." [Dkt. # 120] Plaintiff argues there are disputed facts regarding invalidity and unenforceability. Plaintiff also argues that T.L.C.'s device does infringe the '245 patent because the patent's "plurality of ports" limitation has "only a tangential relationship to the [accused device]." [Dkt. # 120, 133]
The district court views a motion for summary judgment on the issue of patent infringement with great care. Palumbo v. Don-Joy Co., 762 F.2d 969, 974 (Fed.Cir. 1985), overruled on other grounds Markman v. Westview Instruments, Inc., 52 F.3d 967, 976-79 (Fed.Cir.1995). Summary judgment is only appropriate if there is no genuine issue of material fact, when the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Fed. R.Civ.P. 56. If the moving party presents evidence which is sufficient to support a verdict at trial, the burden shifts to the nonmoving party to show specific facts which demonstrate a genuine issue for trial. Anderson, 477 U.S. at 250, 106 S.Ct. 2505; Fed.R.Civ.P. 56(e)(2). The nonmoving party's bare assertion of a dispute is insufficient to create a material issue of fact and defeat summary judgment. Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505.
T.L.C. first argues that the '245 patent is both (1) invalid and (2) unenforceable and requests summary judgment in those respects. Because material issues of fact remain, T.L.C.'s motion on these issues is DENIED.
First, T.L.C. claims the '245 patent is not valid because the patented subject matter was on sale more than one year prior to when the patentee filed for the patent. A person is not entitled to receive a patent if the invention sought to be patented is "on sale in this country, more than one year prior to the date of the application for patent." 35 U.S.C. § 102(b). To invalidate a patent for lack of novelty, the defendant must prove that every limitation in the claim exists in a single prior art reference. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1358 (Fed.Cir.2001). Once issued, a patent is presumptively valid and a party seeking to challenge that validity must prove their claim by clear and convincing evidence. Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1364 n. 2 (Fed. Cir.1997).
There is a material issue of fact as to whether the specific lantern patented was on sale prior to the crucial date. Therefore, summary judgment is not appropriate. It is undisputed that the Plaintiff applied for the '245 patent on May 11, 2004. Complaint, at 4. [Dkt. # 1] The crucial date, therefore, is May 11, 2003; any lanterns sold before this date which contained every limitation in the patent '245 would constitute prior art on sale and would invalidate the patent. While A.G. Design clearly sold lanterns prior to this date, there is a material issue of fact exactly what lanterns were sold at that time. T.L.C. contends that the A.G. Design Titan III Trainman Lantern contains all the patented elements of the '245 lantern. Mukai Dec'l, at 2-32. [Dkt. # 14-2] Plaintiff contends that none of the "prototype" lanterns which lead to the '245 patented lantern contain the "plurality of ports" referenced in claim 1 of the patent. Declaration of Herrington, at ¶¶ 5-7. [Dkt. # 18] The Court must view the evidence in the light most favorable to the nonmoving party, A.G. Design. The evidence on this issue is disputed and the motion for summary judgment is DENIED.
Second, T.L.C. claims the '245 patent is unenforceable. A patent is unenforceable for misuse when its owner attempts to use it to exclude competition knowing that the patent is invalid or unenforceable. See Affymetrix, Inc. v. PE...
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