Global Traffic Techs., LLC v. Emtrac Sys., Inc.

• Decision Date: 24 May 2013
• Docket Number: Civil No. 10–4110 ADM/JJG.
• Citation: 946 F.Supp.2d 884
• Parties: GLOBAL TRAFFIC TECHNOLOGIES, LLC, Plaintiff, v. EMTRAC SYSTEMS, INC., Kristopher Morgan, Andrew Morgan, Rodney K. Morgan, and KM Enterprises, Inc., Defendants, KM Enterprises, Inc., Plaintiff, v. Global Traffic Technologies, LLC, Defendant, Global Traffic Technologies, LLC, Plaintiff, v. STC, Inc., Defendant.
• Court: U.S. District Court — District of Minnesota

946 F.Supp.2d 884

GLOBAL TRAFFIC TECHNOLOGIES, LLC, Plaintiff,

v.EMTRAC SYSTEMS, INC., Kristopher Morgan, Andrew Morgan, Rodney K. Morgan, and KM Enterprises, Inc., Defendants,KM Enterprises, Inc., Plaintiff,

v.Global Traffic Technologies, LLC, Defendant,Global Traffic Technologies, LLC, Plaintiff,

v.STC, Inc., Defendant.

Civil No. 10–4110 ADM/JJG.

United States District Court,

D. Minnesota.

May 24, 2013.

Chad Drown, Esq., James Poradek, Esq., Timothy E. Grimsrud, Esq., Kate Razavi, Esq., Luke Tomsich, Esq., Timothy Sullivan, Esq., Ari B. Lukoff, Esq., and David J.F. Gross, Esq., Faegre Baker Daniels LLP, Minneapolis, MN, on behalf of Global Traffic Technologies, LLC.

Jonathan D. Jay, Esq., Terrance C. Newby, Esq., and Nicholas S. Kuhlmann, Esq., Leffert Jay & Polglaze, P.A., Minneapolis, MN, on behalf of KM Enterprises, Inc., STC, Inc., Emtrac Systems, Inc., Kristopher Morgan, Andrew Morgan, and Rodney Morgan.

MEMORANDUM OPINION AND ORDER

ANN D. MONTGOMERY, District Judge.

I. INTRODUCTION

On February 15, 2013, the undersigned United States District Judge heard oral argument on the parties' cross-motions for summary judgment and on the parties' motions to exclude expert testimony. For the reasons set forth below, Defendants' summary judgment motion is denied. Plaintiff's summary judgment motion is denied in part and granted in part. Plaintiff's motion to exclude is granted and Defendants' motion to exclude is denied.

II. BACKGROUND

A. Technology at Issue

By law and tradition, emergency vehicles are given priority on the road to respond as quickly as possible to calls for help. Emergency vehicles are equipped with flashing lights and sirens to alert drivers to their presence. When drivers see flashing lights or hear sirens from emergency vehicles, they must pull over, stop, and keep clear of intersections so the emergency vehicle can quickly and safely respond to a call.

Unfortunately, people on the road do not always hear the sirens or see the flashing lights and, especially at intersections, accidents do occur. Increasingly, municipal governments equip emergency vehicles with technology to enable improved response times and an increase in safety to both emergency personnel and the public. Also, more recently, municipal governments have decided to give certain public transportation vehicles priority for increased efficiency and to allow light rail transit to cross roadways safely.

Emergency vehicles and public transportation vehicles can now be equipped with a traffic preemption system (“TPS”). See Am. Compl. [Docket No. 30] Ex. B, United States Patent No. 5,539,398 (the “'398 Patent”), at 1:22–23. Emergency vehicles often need to cross intersections against a red light and with speed. Id. at 1:27–32. A TPS functions to either prolong a green light or switch a light from red to green to allow the equipped vehicle to proceed through the intersection safely. Id. at 1:41–45.

From their inception in the 1960s, TPS's have evolved significantly. TPS originally relied on, and some systems still rely on, an optical preemption system, whereby an emitter on top of a vehicle produces strobes of light directed at detectors mounted on or near traffic lights. Id. at 1:36–39 (citing U.S. Patent No. 3,500,078). These detectors then relay a signal to the intersection cabinet, which processes the signal and directs the traffic light to change from red to green. Id. Optical systems have several disadvantages, including that the vehicle needs a direct line of sight to the intersection for the strobe light to hit the detector; weather can also interfere with the transmission of the strobe light. Id. at 2:55–58, 3:42–43.

TPS developed to rely on a radio preemption system, which sends radio signals, rather than light beams, from the vehicle to the intersection. Id. at 2:65–67. Radio preemption systems do not require a direct line of sight, and are not as focused or directionally-oriented as the optical systems. Id. at 3:31–33. However, radio-based systems sometimes result in the unintended triggering of traffic signal systems at adjacent intersections. Id. at 3:5–11.

The third generation TPS uses integrated Global Positioning System (“GPS”) technology to enable priority vehicles to pass unimpeded through selected intersections. Id. at 3:48–53.

B. Claims

Plaintiff Global Traffic Technologies (“GTT”) is the owner by assignment of all right, title, and interest in the '398 Patent, which relates to TPS using GPS technology. See Am. Compl. ¶ 17. Defendants and Counterclaimants KM Enterprises, Inc. (“KME”), STC, Inc. (“STC”), Emtrac Systems, Inc. (“Emtrac”), Kristopher Morgan, Andrew Morgan, and Rodney Morgan (collectively, “Defendants”) are all involved in some manner with the manufacture and sale of the Emtrac Priority Control System (also referred to as the “Accused Product”).

GTT asserts Defendants have infringed its '398 Patent by making, using, selling, and installing traffic control management systems, namely the Emtrac Priority Control System, in violation of 35 U.S.C. § 271. Id. GTT also seeks to hold Rodney K. Morgan personally liable for the alleged infringement. ¹Id. at ¶¶ 29–39. GTT alleges Morgan continued to sell the Emtrac Priority Control System under the Emtrac corporate name after the company had been dissolved as a corporate entity. Id. at ¶ 37. Thus, GTT claims Morgan is liable as a director of Emtrac under Illinois' Business Corporations Act, 805 Ill. Comp. Stat. 5/8.65(3). Id.

Defendants deny the Emtrac Priority Control System infringes GTT's ' 398 Patent, and Defendants seek a declaratory judgment of non-infringement and of invalidity. In addition, Defendants have filed a counterclaim against GTT for allegedly using unfair and illegal practices to prevent Defendants' Emtrac Priority Control System from competing in the market. See KME's Compl. ¶ 1.² Specifically, Defendants claim GTT has violated the Lanham Act, 15 U.S.C. § 1125 et seq., by using images of Defendants' Emtrac Priority Control System to market GTT's Opticom GPS System. Id. Finally, Defendants also assert Minnesota state law claims for false advertising under Minn.Stat. § 325F.67 et seq., deceptive trade practices under Minn.Stat. § 325D.44 et seq., and a common law claim for tortious interference with prospective contractual relations. Id.

C. Procedural Posture

Defendants' Motion for Summary Judgment [Docket No. 123] (“Defs.' Mot. Summ. J.”) seeks rulings that: (1) GTT cannot prove an invention date prior to the '398 Patent's filing date; (2) certain publications are prior art to GTT's patent; (3) GTT's patent is invalidated by a prior invention; (4) laches prevents GTT from bringing its case; (5) Defendants have not infringed directly, indirectly, or willfully; (6) the individual Defendants cannot be held personally liable; and (7) GTT failed to comply with the patent marking statute.

GTT filed its own Motion for Summary Judgment [Docket No. 126] (“GTT's Mot. Summ. J.”) also seeking summary judgment on multiple issues. First, GTT seeks summary judgment that KME's two counterclaims, (1) KME's false advertising claim and (2) KME's tortious interference claim, fail as a matter of law. Second, GTT seeks summary judgment on patent issues, namely that: (1) Defendants' alleged prior art references are not actually prior art; and (2) Defendants' anticipation defenses fail.

GTT also filed a Motion to Exclude Expert Testimony [Docket No. 132] by Defendants' expert Dean Thompson (“GTT's Daubert Motion”). Similarly, Defendants filed a Motion to Exclude Testimony [Docket No. 160] by GTT's expert Donald Gorowsky (“Defs.' Daubert Motion”).

D. GTT's Version of Invention and the '398 Patent

In early December 1992, Tim Hall and Steven Hamer discussed an idea for GPS-based traffic preemption system while on a flight returning from a business trip. Hall Decl. [Docket No. 137] ¶ 3; Hamer Decl. [Docket No. 139] ¶ 3. At the time, Hall and Hamer worked for Minnesota Mining and Manufacturing Company (“3M”). When they returned to work, Hall and Hamer discussed the idea with Mark Schwartz, also an employee of 3M. Schwartz suggested adding features to take advantage of differential GPS and improve the system's accuracy. Schwartz Decl. [Docket No. 138] ¶ 3; Hall Decl. ¶ 5; Hamer Decl. ¶ 5. On December 17, 1992, Hall recorded the inventors' idea in his 3M laboratory notebook. Hall Decl. ¶ 6; Drown Decl. Supp. GTT's Mot. Summ. J. [Docket No. 129] (“Drown Decl.”) Ex. 3. By December 13, 1993, 3M had built a prototype that confirmed the invention worked as intended—namely, the prototype used GPS data to determine if a vehicle was within an allowed approach of an intersection and, if so, issued a preemption request. Schwartz Decl. ¶ 6–7; Drown Decl. Ex. 4. The inventors filed patent application number 178,881 on January 7, 1994, on behalf of 3M. The inventors filed a continuation of this application on August 16, 1995, which matured into the '398 Patent, issued on July 23, 1996. '398 Patent at 1:4–5. In 2007, 3M divested its Traffic Safety Division. 3M sold the rights to the '398 Patent and the Opticom Priority Control Systems to TorQuest Partners, Inc., which formed GTT to manage the former 3M Traffic Safety Division. Drown Decl. Ex. 10.

E. Defendants' Version of Prior Invention

Defendants argue that a combination of Defendants and other companies invented the first GPS-based system for a TPS, making the '398 Patent invalid under 35 U.S.C. § 102(g).

According to Defendants, around 1986, Rodney Morgan and Brad Cross worked together inventing the first Emtrac TPS product (the “Early Emtrac System”), a radio-based TPS, which they sold through a company called Traffic Control Devices (“TCD”). Jay Decl. Supp. Defs.' Mot. Summ. J. (“Jay Decl.”) [Docket No. 130] Ex. 1 (“Morgan Dep.”), at 38:20–39:12. In 1990, Morgan licensed to Econolite Company (“Econolite”) the right to sell the Early Emtrac System, patented under U.S. Patent No. 4,914,434 (the “'434 Patent”). Id. Ex. 62 (...