GNB Battery Technologies, Inc. v. Exide Corp.

• Decision Date: 10 February 1995
• Docket Number: Civ. A. No. 88-407-RRM.
• Citation: 876 F. Supp. 582
• Parties: GNB BATTERY TECHNOLOGIES, INC., Plaintiff, v. EXIDE CORPORATION and General Battery Corporation, Defendants.
• Court: U.S. District Court — District of Delaware

876 F. Supp. 582

GNB BATTERY TECHNOLOGIES, INC., Plaintiff, v. EXIDE CORPORATION and General Battery Corporation, Defendants.

Civ. A. No. 88-407-RRM.

United States District Court, D. Delaware.

February 10, 1995.

COPYRIGHT MATERIAL OMITTED

Robert H. Richards, III, Richards, Layton & Finger, Wilmington, DE, Gordon R. Coons, Charles H. Mottier, Pamela J. Ruschau, Leydig, Voit & Mayer, Chicago, IL, for plaintiff.

Paul E. Crawford, James D. Heisman, Connolly, Bove, Lodge & Hutz, Wilmington, DE, Frank J. Benasutti, Benasutti, P.C., Wynnewood, PA, for defendants.

OPINION

McKELVIE, District Judge.

This is a patent case. GNB Battery Technologies, Inc. ("GNB") is the owner of U.S. Patents 4,645,725 ("the '725 patent") and 4,701,386 ("the '386 patent"), which cover specific configurations of dual-terminal batteries. On July 18, 1988, GNB filed suit against the defendants claiming infringement of both the '386 and '725 patents. Defendants denied infringement and alleged that both patents were invalid.

The parties stipulated to trying the liability and damage issues separately. The issues of infringement and validity were tried to a jury over a period of six days in November of 1993. On November 30, 1993, the jury returned a verdict in favor of GNB on the issue of infringement of certain claims of the '386 and '725 patents. The jury also found in favor of GNB on defendants' claim that the '386 patent was invalid. However, the jury was unable to reach a unanimous verdict on the proof of invalidity of the claims of the '725 patent. On December 22, 1993, the court declared a mistrial with respect to the '725 patent.

Defendants have filed a motion for judgment as a matter of law, or alternatively, for a new trial on the issue of the validity of the '386 patent. This is the court's decision on that motion. This Opinion will first set forth the evidence offered by both parties in support of their respective positions during the course of trial. It will also discuss the significant procedural events which occurred at trial. Unless otherwise noted, the facts cited in this Opinion are taken from testimony or documents offered during the course of trial. The Opinion will then analyze the defendants' arguments regarding judgment as a matter of law and the plaintiff's contention that substantial evidence supports the jury's verdict.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The technology at issue in this case relates to automotive replacement batteries such as the battery one would purchase in a K-Mart retail store to replace a worn-out battery in one's car. A replacement battery must meet certain size requirements of particular automobiles and provide sufficient power, or cold cranking amps, to start the car and power the lights and appliances. Such batteries are called starting, lighting and ignition ("SLI") batteries in the trade.

A. Problems Faced in the Industry and Solutions

Originally, batteries had terminals that protruded through the cover on top and towards the front of the battery to which the battery cables from the car were connected. As automobile manufacturers became concerned with the weight of cars they began to limit the length of cable used to connect to the battery terminals. In addition, smaller cars required smaller batteries to fit under the hood. This posed a problem because some cars required the positive terminal on the right while others required the positive terminal on the left. As a result, battery manufacturers had to produce and retailers had to sell both right- and left-handed batteries for the different size and power requirements of various cars. This increasing number of batteries also posed a problem for retailers because the average shelf-life of an SLI battery is 30 to 60 days.

In response, battery makers devised top terminal batteries with the terminals on the centerline of the cover. Thus, the same battery could be used both for right- and left-handed applications simply by turning it 180 degrees.

In the 1970s General Motors began requiring batteries in its cars where the terminal connections to the battery were on the side of the battery as opposed to on the top. This added yet another category of batteries to those replacement battery manufacturers were required to produce and retailers were required to stock.

By the early 1980s the battery industry had become extremely competitive. Retailers had to carry 50 to 60 different sized batteries to fit the different sized cars, and these batteries had varying power and quality levels. Consequently, a retailer had to carry on the order of 200 different types of batteries. This posed an inventory problem for the retailer and a manufacturing problem for the producer.

The major battery manufacturers sought ways to solve this problem. One solution was a short-line, which is a reduced number of batteries designed to fit a broad number of applications. For example, battery makers would add a piece of plastic to the base of the battery container of smaller sized batteries which would allow them to fit into cars normally requiring larger sized batteries. At this time, Johnson Controls ("JCI") developed a short-line of three batteries which were sold under the Die Hard Incredicell trademark by Sears. One of the batteries, called the "pig tail" battery in the trade, had wires coming out of the side of the battery. It could be installed in a car requiring either top or side terminals by cutting the connections and splicing the two wires together. Consumers encountered problems in fitting the pig tail Incredicell in their cars and in making the required connections.

Another solution was to provide a dual-terminal battery with both side and top terminals so that it could be used either in a GM configuration or a standard configuration. One such dual-terminal battery was the Torque Starter made and sold by Chloride Group PLC, and later by GNB after it acquired Chloride.

The parties disputed the success of the Torque Starter battery as a solution to the mounting inventory and manufacturing problems. Defendants offered the testimony of Dr. Lesley E. Holden formerly of Chloride Group on the success of the Torque Starter. Holden testified that the Torque Starter battery fit a large number of applications and that many were sold.

GNB, however, called Thomas O. Minner, Vice President and General Manager of the Automotive Battery Division at GNB, who testified that problems quickly developed with the battery. For example, the battery had difficulty fitting into cars in which it was designed to fit and many batteries were returned. GNB also offered the deposition testimony of E.R. Musgrove, product engineering manager for Exide during the relevant period. He testified that the Torque Starter had a number quality control problems. For example, batteries would not last as long as they were designed to last. Other batteries would explode under the hoods of cars. According to Musgrove, when Exide was developing a dual-terminal battery, it rejected the Torque Starter approach because the internal connections to the bushings require a number of manufacturing operations including the connections of the top and side terminal and the assembly of different parts to be molded into the cover. GNB also offered testimony from Thomas Pfost of General Battery who stated that in his opinion the Torque Starter was useful only as a "boat anchor."

After GNB assumed control over the Chloride battery group, it decided to cease production of the Torque Starter because of quality concerns highlighted by the number of batteries returned due to defects. GNB, however, continued to supply the Torque Starter to some existing customers.

In addition to problems with increasing numbers of batteries, a common problem encountered throughout the battery industry with lead-acid batteries has been electrolyte and gas leakage. The typical automotive battery is comprised of a plastic container and cover, which encase the electrochemical heart of the battery — the acid and plates that generate the electrical energy. Electrical power travels from the heart of the battery through a post, which is connected to a bushing, molded in some way into the cover. It then passes from the bushing to the terminals, where the connection is made to the automobile.

Leaks occur along the seal between the bushing and the cover and hamper the electrical performance of the battery by adding resistance at the terminal connections. Several factors such as the seal construction, over-tightening (or over-torquing) of terminal connections and vibration during use can cause leaks to develop.

Faced with these problems, the major battery makers began to investigate ways to solve the problems of the ever-increasing numbers of stock keeping units ("SKUs") for replacement batteries and of the structural integrity and leakage around the bushings.

B. Development of GNB's Invention

In early 1984, GNB began developing a new dual-terminal battery that would reduce the number of SKUs and provide a structurally stable, leakproof battery. Joseph J. Jergl, Vice President of Engineering, and William H. Kump, Manager of Product Engineering, undertook the design of a dual terminal battery for GNB. For a year, Kump and Jergl worked on designs to create a single connection from the electrochemical heart of the battery to a terminal bushing which would then branch out and provide a top and side terminal configuration in which the bushing was almost completely embedded in the cover material of the battery so that it provided a sturdy leakproof seal. They worked through a dozen concepts before settling on their final design, which became the Champion dual-terminal battery.

Jergl testified that GNB sought to accomplish a number of objectives with the Champion battery. First, it sought to reduce the number of batteries retailers would be required to stock and producers would be required to make. Second, it wanted to provide a...