In Re Convertible Rowing Exerciser Patent Lit.

• Decision Date: 01 February 1993
• Docket Number: Misc. No. 85-14. MDL Docket No. 623.
• Citation: 814 F. Supp. 1197
• Parties: In re CONVERTIBLE ROWING EXERCISER PATENT LITIGATION.
• Court: U.S. District Court — District of Delaware

814 F. Supp. 1197

In re CONVERTIBLE ROWING EXERCISER PATENT LITIGATION.

Misc. No. 85-14. MDL Docket No. 623.

United States District Court, D. Delaware.

February 1, 1993.

Bruce M. Stargatt, of Young, Conaway, Stargatt & Taylor, Wilmington, DE (Harold J. Birch, and Alan I. Cantor, of Banner, Birch, McKie & Beckett, Washington, DC, of counsel), for plaintiffs.

Allen M. Terrell, Jr., of Richards, Layton & Finger, Wilmington, DE (Melvin F. Jager, and Cynthia A. Homan, of Willian Brinks Olds Hofer Gilson & Lione Ltd., Chicago, IL, of counsel), for defendant Ajay Enterprises Corp.

Neil M. Rose, Sunbeam Corp., Downers Grove, IL, for Allegheny Intern. Exercise Co.

Todd B. Serota, of Poms, Smith, Lande & Rose, Los Angeles, CA, for Rocket Industries, Inc.

Philip B. Polster, of Polster, Polster and Lucchesi, St. Louis, MO, for Roadmaster, Inc.

John J. Dempsey, of Chapin, Neal & Dempsey, Springfield, MA, for Columbia Mfg. Co.

Myron Amer, of Bauer & Amer, Mineola, NY, for Beacon Enterprises, Inc., Saw Mill River Industries, Inc.

Kenneth R. Glaser, of Glaser, Griggs & Schwartz, Dallas, TX, for Walton Mfg. Co.

Thomas J. Rossa, of Trask, Britt & Rossa, Salt Lake City, UT, for defendant Weslo, Inc.

Peter M. Sieglaff, of Potter Anderson & Corroon, Wilmington, DE, Liaison Counsel, for defendants.

Edmond Falgowski, of Dept. of Justice, Wilmington, DE (Lyn M. Schlitt, James A. Toupin, Jack M. Simmons, U.S. Intern. Trade Comm'n, Washington, DC, of counsel), amicus curiae.

OPINION

LONGOBARDI, Chief Judge.

I. NATURE AND STAGE OF THE PROCEEDINGS

The International Trade Commission ("ITC") action which is the subject of the current motion was filed by Plaintiff Diversified Products ("DP") in December, 1984. DP's complaint in that action alleged that Defendant Weslo committed acts constituting unfair trade practices in violation of 19 U.S.C. § 1337 by importing goods which infringed its 4,477,071 (the "`071 patent") patent. Defendant Weslo responded to that complaint by asserting, inter alia, that the '071 patent was invalid and not infringed. The Administrative Law Judge ("ALJ") held that the '071 patent was invalid because it was anticipated and obvious in light of the prior art Beacon 3002 device and, therefore, no violation of 19 U.S.C. § 1337 had occurred. The full Commission reviewed the ALJ's conclusions and reversed on the anticipation issue but sustained the ALJ on all other grounds. In the Matter of Certain Convertible Rowing Exercisers, ITC Investigation No. 337-TA-212 (1985). On DP's appeal of the obviousness finding, the Federal Circuit affirmed the ITC's determination that the '071 patent was invalid for obviousness and that no violation of 19 U.S.C. § 1337 had occurred. Diversified Products Corp. v. United States Intern. Trade Com'n, 824 F.2d 980 (Fed.Cir.1987).

Defendant Weslo then filed a motion for summary judgment in this Court seeking preclusive effect for the ITC legal determination of patent invalidity. The motion was denied by this Court in In Re Convertible Rowing Exerciser Patent Lit., 721 F.Supp. 596 (D.Del.1989), aff'd, 904 F.2d 44 (Fed.Cir. 1990), cert. denied, 498 U.S. 897, 111 S.Ct. 248, 112 L.Ed.2d 207 (1990). In denying that motion, the Court essentially determined that neither the principles articulated in Blonder-Tongue v. University Foundation 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971)¹ nor the doctrine of "administrative res judicata" as articulated in United States v. Utah Construction, 384 U.S. 394, 421-22, 86 S.Ct. 1545, 1549-50, 16 L.Ed.2d 642 (1965)² operate to prevent the re-litigation of the patent invalidity issue. In Re Convertible Rowing Exerciser Patent Lit., 721 F.Supp. at 600-03. The Court concluded, therefore, that an ITC determination under section 1337 that a patent is invalid, which is affirmed by the Federal Circuit, does not estop the District Court from adjudicating the question of the validity of the same patent under 28 U.S.C. § 1338. Id. at 604.

In arriving at this conclusion, this Court emphasized the fact that Congress had vested the District Court with original jurisdiction to consider patent matters under 28 U.S.C. § 1338. Id. at 601. We noted that under 19 U.S.C. §§ 1332(b) and 1337 the ITC has original jurisdiction only over unfair practices in import trade and, that pursuant to that jurisdiction, the ITC has the authority to determine the patent validity issue only for the limited purposes of its administration of section 1337. Id. at 601.³ Accordingly, we determined that questions examined by the ITC under 19 U.S.C. § 1337 and the question the District Court examines under 28 U.S.C. § 1338 are quite different in form and substance and that "jurisdiction over unfair trade acts lies with the ITC while jurisdiction over the validity, enforceability and infringement of patents lies with the federal District Courts." In Re Convertible Rowing Exerciser Patent Lit., 721 F.Supp. at 601 (citations omitted).

Additionally, in further support of its conclusion, the Court relied in part on two other considerations. First, the Court referred to the decisions of a number of other courts where it was recognized that ITC patent validity determinations did not affect the ability of the District Court to consider patent validity in cases between the same parties in the context of section 1338. Id. at 602.⁴ Second, the Court gave favorable consideration to that portion of the legislative history apparently supporting a finding of non-preclusion as regards any legal interpretations made by the ITC concerning the U.S. patent laws in particular factual contexts. Id.⁵ These factors, when viewed with the unequivocal statutory structure providing for a jurisdictional division between 19 U.S.C. § 1337 and 28 U.S.C. § 1338 as relates to the legal determination of a patent's validity, produced the decision that the validity of the patent in this suit was to be decided by the District Court, notwithstanding the ITC and Federal Circuit's determinations of patent invalidity.

The reach of this Court's prior decision is directly implicated by one of the motions for summary judgment presently before the Court. Particularly, Defendant Weslo essentially claims that this Court's prior opinion is expressly limited to the ITC's legal findings and therefore seeks partial summary judgment to prevent the re-litigation of the ITC's findings of fact relating to patent validity. Docket Item ("D.I.") 197. Additionally, two other motions for summary judgment are before the Court. Defendant Weslo seeks summary judgment on the grounds of invalidity and non-infringement of the Plaintiff's patent, D.I. 196, and Defendant Roadmaster seeks summary judgment on the grounds of non-infringement of its Octa-Gym device. D.I. 198. These motions were filed in the ongoing pretrial proceedings of this litigation.⁶

II. SUMMARY JUDGMENT STANDARDS

Summary judgment is appropriate under Federal Rule of Civil Procedure 56(c) when the moving party establishes that there is no genuine issue of material fact that can be resolved at trial and that the moving party is entitled to a judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The mere existence of some factual dispute will not by itself defeat a motion for summary judgment; there must be a genuine issue of material fact." Looney v. City of Wilmington, 723 F.Supp. 1025, 1029 (D.Del.1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986)). A dispute is genuine only if a reasonable jury could return a verdict for the non-moving party. Looney, 723 F.Supp. at 1029. Furthermore, a dispute over facts is material only if it could affect the outcome of the suit. Id.

III. DISCUSSION

A. Applicability of Preclusion Doctrine to ITC's Factual Findings

The first issue the Court confronts is whether it should grant preclusive effect in a patent infringement action brought under 28 U.S.C. § 1338 to the factual findings of the ITC. The Defendants assert initially that despite our earlier decision relative to the ITC conclusions of law, D.I. 200 at 7, their motion for summary judgment should be granted and preclusive effect given to the ITC findings of fact pursuant to the Supreme Court's decision in United States v. Utah Construction, 384 U.S. 394, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966) (holding that the factfinding of administrative bodies are properly afforded preclusive effect in District Court action). In support of this argument, they assert that there is a recognized distinction between legal determinations and underlying findings of fact, with findings of fact not considered determinations within the meaning of 19 U.S.C. § 1337. D.I. 200 at 8, citing American Tel. and Tel. Co. v. ITC, 626 F.2d 841, 842 (C.C.P.A.1980).⁷ In essence, the Defendants take the position that for purposes of collateral estoppel a distinction exists between findings of fact and determinations of law and that our earlier decision relative to the ITC legal determinations does not prevent our giving preclusive effect to the agency's findings of fact. Id. at 7-11. The Plaintiff characterizes Defendants' current motion as merely a repackaging and revisitation of the issues this Court addressed in In Re Convertible Rowing. D.I. 213 at 4-9. The Plaintiff essentially contends that the distinction the Defendant draws between legal and factual determinations is of no moment. Id. at 10-15.

As a threshold matter, the Court rejects Plaintiff's "repackaging" argument. This is not merely a revisitation of the issue decided in our earlier opinion which related only to the preclusive effect to be afforded the ITC's legal determinations. The issue presented here relates to the preclusive effect to be afforded to the ITC's factual findings. This distinction between legal conclusions and findings of fact is clearly evidenced by those cases appropriately cited by the Defendants supporting...