Knorr-Bremse Systeme Fuer Nutzfahrzeuge v. Dana

• Decision Date: 06 June 2005
• Docket Number: No. CIV.A. 1:00CV803.,CIV.A. 1:00CV803.
• Citation: 372 F.Supp.2d 833
• Parties: KNORR-BREMSE SYSTEME FUER NUTZFAHRZEUGE GMBH, Plaintiff, v. DANA CORPORATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

Page 833

372 F.Supp.2d 833

KNORR-BREMSE SYSTEME FUER NUTZFAHRZEUGE GMBH, Plaintiff, v. DANA CORPORATION, et al., Defendants.

No. CIV.A. 1:00CV803.

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

June 6, 2005.

Jeffrey David Sanok, Michael Ivan Coe, Crowell & Moring LLP, Washington, DC, for Plaintiff.

Rebecca Everett Kuehn, LeClair Ryan, Alexandria, VA, for Defendants.

Stephen Deane Chace, Goldstein Loots PC, Washington, DC, Thomas C. Junker, LeClair Ryan, Alexandria, VA, for Defendants-Claimants.

MEMORANDUM OPINION

ELLIS, District Judge.

In this remanded patent infringement action, the plaintiff sued three of its competitors in the worldwide brake industry for literal and willful infringement of U.S. Patent No. 5,927,445 (the '445 patent), which claims an invention in the field of air disk brakes used in large commercial road vehicles. Following a Markman¹ claim construction hearing and various summary judgment rulings, a bench trial was held on the remaining infringement and validity issues, resulting in findings of literal and willful infringement, an award of partial attorney's fees to plaintiff pursuant to 35 U.S.C. § 285, and the entry of a Final Judgment and Injunction. On defendants' direct appeal challenging only the findings of willful infringement and the award of attorney's fees to plaintiff, an en banc panel of the Court of Appeals for the Federal Circuit overruled a long-standing principle of willful infringement law, thus necessitating the instant remand for a re-determination on the issues of willful infringement and the award of attorney's fees under the "exceptional case" standard set forth in 35 U.S.C. § 285. See Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., et al., 383 F.3d 1337, 1340 (Fed.Cir.2004).

I.²

A brief summary of the facts is necessary to put the remanded issues of willful infringement and attorney's fees in context. Specifically, the record reflects that plaintiff, Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH (Knorr), a German brake manufacturer, is the owner by assignment of the patent in issue, namely U.S. Patent No. 5,927,445 (the '445 patent). All three defendants are major competitors of Knorr in the worldwide brake industry. Defendant Haldex Brake Products AB (Haldex AB) is a Swedish manufacturer of various components of heavy vehicle braking systems, while defendant Haldex Brake Products Corporation (Haldex Corp.) is the American affiliate of Haldex AB.³

The record reflects that Haldex began developing a product to compete in the emerging air disk brake market in approximately 1994, long before the instant litigation. A prototype of this first design was completed sometime late that year. This original air disk brake product was referred to by Haldex internally as the Mark I device. The following year, in 1995, Haldex began development of an alternative air disk brake design — the so-called Mark II device — which later precipitated the filing of this action. The first prototype of the Mark II air disk brake was developed by Haldex sometime in 1996.

In the late 1990's, Haldex teamed with defendant Dana Corporation, an American retailer of commercial vehicle products, to manufacture and offer for sale an air disk brake product in the United States. In furtherance of this joint venture, from late 1997 to 1999, Haldex shipped to Dana, free of charge, between 100 and 200 Mark II air disk brakes to allow Dana the opportunity to undertake extensive testing of the Mark II device in U.S. laboratories and on U.S. test tracks and roadways. In this regard, to gain "real-world experience" during the testing period, Dana installed some of these Mark II devices on its in-house truck fleet, while others were installed on several of Dana's customers' vehicles at no charge to the customers. In all, Dana equipped approximately eighteen vehicles with Haldex-manufactured Mark II air disk brakes in the course of the joint venture.

On July 27, 1999, while Dana and Haldex were collaborating with respect to the Mark II device, the '445 patent was issued by the Patent and Trademark Office (PTO). This patent was acquired by Knorr via an assignment and claims an invention in the field of air disk brakes. The '445 patent consists of a total of 11 claims, nine of which were at issue in this litigation, namely claims 1-5 and 8-11. Claim 1, in particular, begins with a preamble general description of the claimed invention as being a

[d]isk brake for, road vehicles, having a caliper which comprises a brake disk and on one side of which a brake application unit is arranged which has a rotary lever swivellable by an operating cylinder, the rotary lever being capable of acting by means of an eccentric onto a bridge which can be displaced against a spring force in the direction of the brake disk and has at least one adjusting spindle provided with a pressure piece....

Claim 1 of the '445 patent then adds the following elements to the claimed art air disk brake:

a) the caliper is constructed in one piece such that the section of the caliper receiving the application unit is largely closed in a rearward area facing away from the brake disk, with the exception of an opening for the access of the operating cylinder, and

b) the application unit is insertable as a preassembled unit into the caliper through the opening facing the brake disk when the caliper is removed from the brake disk.

Claims 2, 3, 4, 5 and 8 are all dependent claims that add certain elements to the claimed invention. For example, claim 2 adds an element to claim 1, from which it depends, in that "the opening of the caliper facing the brake disk, when the application unit is inserted, is closed off by a closing plate which is penetrated by at least one pressure piece." Claim 4 also depends from claim 1 and additionally requires that the brake application unit be "joined together as a preassembled unit by means of a bow element." Claims 3 and 5, which depend from claims 2 and 4, respectively, add the identical element that "the pressure pieces are in each case sealed off by means of bellows with respect to the closing plate penetrated by them." Claim 8, which depends from claim 1, then further requires that the closing plate be screwed to the caliper by means of studs.

Claim 9 of the '445 patent is an independent claim pertaining to assembly, requiring (i) a brake disk, (ii) a caliper and (iii) a brake application unit that includes a rotary lever, an eccentric, a displaceable bridge, at least one adjusting spindle and at least one pressure piece. Like claim 1, claim 9 requires that the caliper be formed in one piece, with the section of the caliper receiving the brake application unit being substantially closed in an end area. Claim 9 also requires that the brake application unit be capable of being inserted as a preassembled unit into the caliper through an opening facing the brake disk. Claim 10, which depends from claim 9, then requires that the caliper opening be closed off by a closing plate that is penetrated by at least one pressure piece.

Finally, claim 11, an independent method claim, recites the following three-step method for making the claimed invention: (i) forming a one-piece caliper that is largely closed in a rearward area facing away from the brake disk, (ii) preassembling a brake application unit that includes a rotary lever capable of acting by an eccentric to push selectively at least one brake shoe against the brake disk, and (iii) inserting the preassembled brake application unit into the caliper through an opening facing the brake disk, and then closing this opening with a cover plate that is penetrated by a pressure piece capable of acting against at least one brake shoe.

Shortly after issuance of the '445 patent, Knorr filed a patent infringement action against Haldex in the District of Duesseldorf, Germany, alleging that the Mark II air disk brake infringed the German counterpart to the '445 patent, namely German patent DE 195 15 063. Knorr and Haldex subsequently held a meeting sometime in August 1999 regarding resolution of the German patent litigation. In the course of this meeting, Knorr advised Haldex that the '445 patent had recently been issued in the United States. Haldex thus obtained a copy of the '445 patent at, or shortly after, this August 1999 meeting with Knorr concerning the German litigation.

After learning of the '445 patent, Haldex contacted European counsel regarding infringement and validity issues. Additionally, at some point thereafter, Haldex obtained verbal opinions, and at least one written opinion, from American counsel regarding the '445 patent. The substance of these opinions, however, is not a part of this record, as Haldex elected not to waive the attorney-client privilege with respect to these particular communications. Dana, on the other hand, did not conduct an independent patent search or investigation or obtain any legal opinions, either oral or written, with respect to validity and infringement issues relating to the Mark II air disk brake and the '445 patent. Instead, in light of an indemnification agreement entered into with its partner in the joint venture,⁴ Dana relied on Haldex to handle any and all potential infringement issues concerning the '445 patent.

In November 1999, several months after Haldex had learned of the '445 patent, Dana and Haldex jointly displayed the Mark II air disk brake at an automotive show in Detroit, Michigan, and distributed promotional literature regarding the Mark II device to potential customers in the course of this show. At around the same time, in late 1999, Haldex began developing another air disk brake product — referred to as the Mark III device — in a good faith, yet ultimately unsuccessful, effort to design an air disk brake that did not infringe the various claims of the '445 patent.⁵ Yet, because Haldex required additional time to manufacture and ship the redesigned product to the...