In re Litig.., Case No. 1:09cv1217.

• Citation: 748 F.Supp.2d 543
• Decision Date: 18 October 2010
• Docket Number: Case No. 1:09cv1217.
• Parties: In re: OUTSIDEWALL TIRE LITIGATION.
• Court: U.S. District Court — Eastern District of Virginia

748 F.Supp.2d 543

In re: OUTSIDEWALL TIRE LITIGATION.

Case No. 1:09cv1217.

United States District Court, E.D. Virginia,Alexandria Division.

Oct. 18, 2010.

William Edgar Copley, Derek Yoshio Sugimura, Gilbert Oshinsky LLP, Washington, DC, for Plaintiffs.Brett Heather Freedson, Laura Nicolle Fellow, Bracewell & Giuliani LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

T.S. ELLIS, III, District Judge.

At issue in these closely-related consolidated ¹ international business tort cases is defendants' Rule 59 motion for a new trial following a jury verdict in favor of plaintiffs on claims for copyright infringement, unfair competition and deceptive trade practices,² conversion, and civil conspiracy. For the reasons that follow, this motion must be denied.

I.

Plaintiffs in these consolidated cases are (i) Jordan Fishman, a Florida citizen, and three companies he owns and controls: (ii) Tire Engineering & Distribution LLC (“TED”), a Florida company, (iii) Bearcat Tire ARL, LLC (“Bearcat”), also a Florida company, and (iv) Bcatco A.R.L., Inc. (“Bcatco”), which is incorporated under the laws of the Jersey Channel Islands. During times relevant to this litigation, plaintiffs were in the business of designing, manufacturing, and marketing rubber tires for use on underground mining vehicles.

There are two sets of defendants. The first set, collectively referred to as “Al Dobowi defendants,” consists of (i) Al Dobowi, Ltd., (ii) Al Dobowi Tyre Co., LLC, (iii) TyreX International, Ltd., and (iv) TyreX International Rubber Co., Ltd., all of which are corporations based in the United Arab Emirates and owned by Surender Kandhari, a citizen of Dubai. The second set of defendants, collectively known as “Linglong defendants,” includes (v) Shandong Linglong Rubber Co., Ltd. and (vi) Shandong Linglong Tire Co., Ltd., both of which are incorporated and based in China. All defendants are, inter alia, in the business of designing, manufacturing, and/or marketing rubber tires.

The central allegation in this matter was that defendants designed, manufactured, and sold specialized mining tires copied from mining tires originally designed and sold by plaintiffs and protected by plaintiffs' intellectual property rights. In the course of the six-day trial, plaintiffs presented live and videotaped testimony from several witnesses, including (i) Sam Vance, plaintiffs' former employee and an alleged employee of Al Dobowi defendants; (ii) Surender, Harjeev, and Jasjeev Kandhari, who together operate the Al Dobowi defendant entities; (iii) John Canning, a tire design consultant to Al Dobowi defendants with personal knowledge of the alleged conspiracy; and (iv) Merry Wang, an executive with Linglong defendants. Plaintiffs also presented documentary evidence, including e-mail exchanges among the alleged co-conspirators admitted pursuant to Rule 801(d)(2)(E), Fed.R.Evid. Defendants, in response, presented live testimony from Jasjeev Kandhari, a director of the Al Dobowi entities, and Merry Wang, a marketing director with Shandong Linglong Tire Co. The parties also presented competing expert witnesses on the issues of infringement and damages.

The credible evidence adduced at trial was sufficient to allow a reasonable juror to conclude by the requisite standard of proof as follows:

• In the first week of May 2005, Surender Kandhari and John Canning, both representing one or more Al Dobowi defendants, met with Sam Vance in the lobby of the Jefferson Hotel in Richmond, Virginia.³ During this hour-long meeting, Vance, Canning, and Surender Kandhari discussed the possibility of Al Dobowi defendants—which had never before manufactured or sold mining tires—producing a line of mining tires based on plaintiffs' line of mining tires, known as “Alpha tires.” ⁴

• Vance apparently retained blueprints belonging to plaintiffs without plaintiffs' permission even though a warning on the drawings indicated that they were confidential, and that reproduction or other use must be expressly authorized in writing.⁵

• By September 2005, Vance was working with Linglong defendants to adapt the Alpha tire blueprints into drawings for Al Dobowi defendants' new “Infinity Mining tires” series. Vance indicated in a contemporaneous e-mail to Merry Wang that he was working “on the 2 drawings.” ⁶ In this e-mail message dated September 1, 2005, Vance sought to confirm that Linglong defendants' engineering department was “working on the reccommendations [sic] for the changes to the drawings” to ensure that “our Infinity Mining tires would not look like the AA (Awful Alpha) Ha!” ⁷

• In a September 8, 2005 e-mail from Canning to Vance, to which the three Kandharis were copied, Canning asked Vance a series of questions about Vance's proposed drawings, noting: “I understand we can't copy exactly what Jordan [Fishman] has done but as 1 said the tyre has to look the part.” ⁸

• Vance, Canning, and Linglong defendants proceeded to design new tire blueprints and molds based on the Alpha tire blueprints, despite having ample notice—including several communications from plaintiff Jordan Fishman—that the blueprints contained protected intellectual property. Indeed, in a September 22, 2006 e-mail from Vance to Sean DeCosta, an Al Dobowi sales manager, Vance notes: “Please remember we copied existing products in the field.” ⁹

• Additionally, the Infinity Tire's sidewall also contains the marking “L–6T”, a marking that also appears on Alpha tires. As Vance acknowledged in an e-mail message to a Linglong employee, the L–6T mark suggests a tire with significant tread depth, but the mark itself has no technical meaning; to the contrary, “this was only a marketing thing.” ¹⁰ The Tyre & Rim Association standards for tread depth measurement range from L–1 to L–5; an Alpha tire branded as L–6T had an L–5 tread depth rating. In the September 2006 e-mail to DeCosta, Vance notes: “The brand copied used a marketing stratigy [sic] of L–6 to give the impression of having the most tread depth. So as not to give the imression [sic] of having less we copied the L–6T strategy.” ¹¹ This message strongly indicates that defendants chose to use the L–6T mark on the basis of the meaning that plaintiffs' use of the L–6T mark had acquired in the industry.

• Both the Alpha tires and the Infinity tires carried the mark “A Recap.” There was disputed evidence as to whether the “A” mark is arbitrary, or whether it is in fact commonly used on tires to indicate the point at which a tire needs to be retreaded.¹²

• On more than one occasion, Vance and/or family members of Al Dobowi stated that they were not concerned about liability for infringing Fishman's designs because they “didn't believe Jordan Fishman would ever get his case to court [because] he would die or run out of money first.” ¹³

The jury found for plaintiffs on all counts on July 15, 2010, and awarded $26 million in damages. On July 20, defendants renewed their previously-deferred motion for judgment as a matter of law pursuant to Rule 50(b), Fed.R.Civ.P.¹⁴ This motion was granted in part and denied in part. See In re Outsidewall Tire Litigation, No. 1:09cv1217, 2010 WL 2929626 (E.D.Va. July 21, 2010) (Order) (“ July 21 Order ”). As indicated in the July 21 Order, the evidence presented at trial was sufficient to show infringement of at least two of the eleven unregistered marks, namely the marks “L–6T” and “A Recap.” Accordingly, the jury's verdict on the unfair competition claim under § 43 of the Lanham Act, 15 U.S.C. § 1125(a), was sustained in this regard. The verdict was also sustained with respect to the copyright, common law conspiracy, and conversion claims. Yet, defendants were granted judgment as a matter of law with respect to the registered trademark claims because the evidence was insufficient to show a likelihood of confusion on plaintiffs' registered “Mine Mauler” mark. Defendant Surender Kandhari was also dismissed from the case as an individual defendant because he was not served in an individual capacity. See July 21 Order.

II.

The standards for evaluating a motion for a new trial pursuant to Rule 59, Fed.R.Civ.P., are too well-settled to require elaboration here. Under Rule 59(a), a new trial may be granted in an action in which there has been a trial by jury “for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States.” Rule 59(a), Fed.R.Civ.P. In this regard, Fourth Circuit precedent instructs that a new trial is warranted for “(1) intervening changes in the law; (2) new evidence not available at trial; and (3) to correct a clear error of law or prevent a miscarriage of justice.” Douglas v. McCarty, 87 Fed.Appx. 299, 302 (4th Cir.2003) (citing EEOC v. Lockheed Martin Corp., Aero & Naval Sys., 116 F.3d 110, 112 (4th Cir.1997)). Thus, a new trial is also appropriate where the verdict is “against the clear weight of the evidence.” Atlas Food Systems and Services, Inc. v. Crane Nat. Vendors, Inc., 99 F.3d 587, 594 (4th Cir.1996). And in this regard, the district court in evaluating the evidence may consider the credibility of the witnesses. See Wyatt v. Interstate & Ocean Transport Co., 623 F.2d 888, 891 (4th Cir.1980).

III.

In support of their motion for a new trial, defendants offer the following arguments:

1. The general damages award is fatally infirm because it is impossible to tell from the verdict form whether the jury awarded damages based on any improper legal theories, such as (a) registered trademark infringement, a claim that was dismissed on defendants' Rule 50(b) motion; (b) conspiracy to infringe plaintiffs' registered trademarks, since the underlying claim for registered trademark infringement was dismissed; (c) the conspiracy and conversion claims in their entirety, because they are both preempted; or (d) the copyright infringement claim to the extent the jury awarded damages on the erroneous jury instruction of contributory copyright...