GEN. AMER. TRANSP. v. CRYO-TRANS
| Decision Date | 14 July 1995 |
| Docket Number | No. 91 C 1305.,91 C 1305. |
| Citation | 893 F. Supp. 774 |
| Parties | GENERAL AMERICAN TRANSPORTATION CORPORATION, Plaintiff, v. CRYO-TRANS, INCORPORATED, Defendant. CRYO-TRANS, INCORPORATED, Counterclaim-Plaintiff, v. GENERAL AMERICAN TRANSPORTATION CORPORATION, Counterclaim-Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
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Scott William Petersen, Thomas Irving Ross, Randall Thomas Erickson, Hill, Steadman & Simpson, Chicago, IL, for plaintiff General American Transp. Corp.
James P. Donohue, Bruce A. Kaser, Miller, Nash, Wiener, Hager & Carlsen, Seattle, WA, Kenneth E. Rechtoris, Carol Ann Genis, Bell, Boyd & Lloyd, Chicago, IL, for defendant Cryo-Trans, Inc.
Due to the continued fast pace of American life, the production of frozen food products has continually expanded during the last decade. Yet, because railroad carriers had not replaced aging mechanical refrigeration cars since the early 1970's, the American transportation system explored the feasibility of using liquid carbon dioxide ("CO2") to create cryogenic railcar systems which could economically transport frozen food products. These developments led to the dispute in this case.
Beginning on May 1, 1995 and continuing through May 10, 1995, this Court held a bench trial on this matter. During this patent trial, this Court has been called upon to decide questions of patent validity and infringement concerning competing cryogenic refrigerated railcars. During the trial, the Court received testimony and documentary evidence and conducted a site visit to personally inspect and view the railcars at issue in this case. Thereafter, the Court considered the written post-trial submissions filed by each party. The Court hereby enters the following Findings of Fact and Conclusions of Law, which in contrast to its prior order in this matter, are based upon consideration of all the admissible evidence as well as this Court's own assessment of the credibility of the trial witnesses. To the extent, if any, that the Findings of Fact as stated may be deemed Conclusions of Law, they shall be considered Conclusions of Law. Similarly, to the extent that matters expressed as Conclusions of Law may be deemed Findings of Fact, they shall also be considered Findings of Fact.
1. This case involves a patent dispute between General American Transportation Corporation and Cryo-Trans Inc.
2. Plaintiff General American Transportation Corporation ("GATC") is a corporation organized under the laws of New York, with its principal place of business in Chicago, Illinois.
3. Defendant Cryo-Trans, Inc. ("Cryo-Trans") is a corporation organized under the laws of Maryland, with its principal place of business in Mt. Airy, Maryland.
4. GATC's claim is an action for declaratory judgment, pursuant to 28 U.S.C. § 2201, with respect to the enforceability of United States Patent 4,704,876 ("the '876 Patent") against a cryogenic railcar produced and marketed by GATC. (Pl.'s Ex. A).
5. The '876 Patent is owned by Cryo-Trans which has counterclaimed for patent infringement pursuant to 35 U.S.C. § 281. Figure 1 of the '876 Patent is hereby incorporated into this opinion as Appendix A. (Pl.'s Ex. A).
6. Venue in this case is proper under 28 U.S.C. §§ 1391 and 1400(b) and jurisdiction is proper under 28 U.S.C. § 1338.
7. On March 1, 1991, GATC filed a fourcount complaint against Cryo-Trans seeking a declaratory judgment that the cross-motions for preliminary injunction. On August 12, 1994, Magistrate Judge Rosemond issued a formal Report and Recommendation which found in favor of GATC with respect to the issues raised before him in the parties' cross-motions for preliminary injunction.
8. This Court adopted the recommended findings in the Magistrate Judge's Report in a Memorandum Opinion dated December 20, 1994, which granted a preliminary injunction in favor of GATC, except that this Court rejected, as premature, Magistrate Judge Rosemond's recommendation that GATC's motion for attorney fees under 35 U.S.C. § 285 be granted. The Court's December 20, 1994 order expressly indicated that this Court had not made any final determinations on the merits of this case.
9. GATC has been in the business of leasing railcars to the railroad industry for approximately 80 years, and for many years with respect to the business of manufacturing and leasing mechanically refrigerated railcars. In late 1990, GATC introduced a prototype non-mechanical, cryogenically refrigerated railcar using a bunker-style design. This prototype cryogenic railcar was designated the GARX 68000, and was built under the supervision of Mr. Erling Mowatt-Larssen, GATC's Director of Engineering. The GARX 68000 was built and used only for demonstration and marketing purposes to solicit orders from frozen food shippers for the company's anticipated production of a cryogenically refrigerated railcar called the "Arcticar." The prototype railcar has never been, and is not, available for lease by customers.
10. Around April of 1991, the GARX 68000 was modified several times to become the GATX production car design styled the "Arcticar." Thereafter, in November of 1991 GATC obtained United States Patent 5,168,717 which incorporated the modified design. Figure 1 from this patent is hereby incorporated into this opinion as Appendix B. (Def.'s Ex. 228). The primary modification was the blocking up of the openings in the bunker floor adjacent the end walls. As a result, the Arcticar production railcar has no openings adjacent the end walls of the car. In early 1991, GATC obtained its first order for Arcticar railcars.
11. Cryo-Trans is the owner by assignment of the cryogenically refrigerated railcars are referred to as CRYX railcars. Mr. Weiner is also the president of Mt. Airy Cold Storage ("Mt. Airy"), a frozen food storage facility used by frozen food processors which is located in Mt. Airy, Maryland.
12. The declared inventor of the '876 Patent is Mr. Ralph P. Hill. Mr. Hill has not obtained other patents. (Tr. 118, 122).
13. At all relevant times prior to his retirement in 1988, Mr. Hill was vice president of distribution at Lamb-Weston, Inc. in Portland, Oregon. (Stip. No. 5). He was also a past chairman and long-time member of the American Frozen Food Institute's Physical Distribution Council. Mr. Hill is credited with having made many outstanding contributions in rail transportation of frozen foods.
14. A critical issue facing the frozen food industry in the 1980's was the availability of mechanical refrigerator cars owned by the nation's railroads. The then-current policy of the railroads was not to replace aging mechanically refrigerated railcars as they became unserviceable. The frozen food industry's dependence on mechanical refrigerator cars for long-haul movement was expected to be compounded by the continuing escalation of diesel fuel prices which would preclude long-haul truck movement and make the industry even more dependent on the railroads. Finding an alternative to the use of mechanical refrigerator cars had been a high priority matter for the American Frozen Food Institute Distribution Council and Transportation Committee since at least 1982.
15. The American Frozen Food Institute ("AFFI") and the International Association of Refrigerated Warehouses ("IARW") through the Refrigeration Research Foundation jointly formed a cryogenic railcar research and development task force (AFFI-IAWR Refrigerated Railcar Task Force) to explore the feasibility of using total loss refrigerants, such as liquid CO2 to ensure an adequate transportation system for the expected growth of the frozen food industry. The United States Department of Agriculture provided the scientific monitoring and evaluation for the test shipments. Additionally, there was substantial resource involvement by the Burlington Northern Railroad.
16. Recognizing that the supply of mechanically refrigerated cars was steadily declining, Mr. Hill initiated the Cryogenic Rail Car Research Project. The project involved development of prototype railcars that relied on CO2, rather than mechanical systems, to provide refrigeration. Hill was a leading force behind the project.
17. Mr. Hill first initiated the Cryogenic Rail Car Research Project under the joint sponsorship of the AFFI and IARW, and later through a separately incorporated organization called the American Frozen Food Cryogenic Association for Rail Car Research—better known as AFFCAR — which was a non-profit shipper's association formed to purchase refrigerated railcars with which the AFFI cryogenic research and development task force could experiment. Hill was chairman and leader of AFFCAR throughout its existence. Throughout the Cryogenic Rail Car Research Project, Mr. Hill championed the need for research, raised funds, supervised the design, engineering and...
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