Malibu Boats, LLC v. Skier's Choice, Inc.

• Decision Date: 20 April 2021
• Docket Number: Civil Action No. 3:18-cv-00015,C/w 3:19-cv-00225
• Citation: 534 F.Supp.3d 888
• Parties: MALIBU BOATS, LLC, Plaintiff, v. SKIER'S CHOICE, INC., Defendant.
• Court: U.S. District Court — Eastern District of Tennessee

534 F.Supp.3d 888

MALIBU BOATS, LLC, Plaintiff,

v.SKIER'S CHOICE, INC., Defendant.

Civil Action No. 3:18-cv-00015

C/w 3:19-cv-00225

United States District Court, E.D. Tennessee, Knoxville Division.

Signed April 20, 2021

Cameron W. Westin, Pro Hac Vice, Meng Xu, Pro Hac Vice, O'Melveny & Myers, LLP, Newport Beach, CA, Darin W. Snyder, Pro Hac Vice, David S. Almeling, Pro Hac Vice, O'Melveny & Myers LLP, San Francisco, CA, Michael E. Robinson, Matthew M. Googe, Robinson IP Law, PLLC, Knoxville, TN, for Plaintiff.

Ian Garrett McFarland, John T. Winemiller, R. Bradford Brittian, Merchant & Gould, P.C., Knoxville, TN, Lindsay Jones, Pro Hac Vice, Merchant & Gould P.C., Minneapolis, MN, Michael J. LaBrie, Pro Hac Vice, Spencer F. Smith, Pro Hac Vice, Zachary a.P. Oubre, Pro Hac Vice, McAfee & Taft, Oklahoma City, OK, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTIONS FOR SUMMARY JUDGMENT

JON P. McCALLA, UNITED STATES DISTRICT JUDGE

Before the Court are Defendant's Motion for Partial Summary Judgment, filed on July 15, 2020 ("First Motion," ECF No. 95) and Defendant's Second Motion for Partial Summary Judgment, filed on September 8, 2020 ("Second Motion," ECF No. 143) (collectively, "Summary Judgment Motions"). For the reasons stated below, Defendant's Summary Judgment Motions are GRANTED-IN-PART and DENIED-IN-PART .

I. BACKGROUND

This is a consolidated civil action for patent infringement and corresponding counterclaims for noninfringement and invalidity of the subject patents. Plaintiff Malibu Boats ("Malibu Boats") seeks a judgment finding that U.S. Patent Nos. 9,260,161 (the "’161 Patent"), 8,578,873 (the "’873 Patent"), and 10,322,777 (the "’777 Patent") (collectively, "Asserted Patents")¹ have been infringed by Defendant Skier's Choice, Inc. ("Skier's Choice"). (ECF No. 1 at PageID 39–40.)² Malibu Boats also seeks injunctive relief enjoining Skier's Choice from infringing the Asserted Patents, along with willful infringement damages, attorney's fees, and interest. (Id. ) Specifically, Malibu Boats asserts the following claims from each Asserted Patent:

’161 Patent : Claims 1, 7, 10, 12–15, 19, 20, 22–25, 29, 31–35, and 41–45

’777 Patent : Claims 1–5, 8, 10–11, 13–17, 19–23, and 25–27

’873 Patent : Claims 1, 2, 17, and 20.

(Collectively, "Asserted Claims," ECF No. 96-2 at PageID 3402.)

A. Factual Background

Plaintiff Malibu Boats is a Delaware corporation with its principal place of business in Loudon, Tennessee. (Id. at PageID 5.) Defendant Skier's Choice is an Oklahoma corporation with its principal place of business in Marysville, Tennessee. (Id. ) Malibu Boats makes "inboard sport boat[s]." (Id. at PageID 1.) Malibu Boats has patented critical aspects of a technology that allows the driver of a boat to displace water in the wake of a boat at a "push of a button" in order to create a surf wake on either side of the boat for the purpose of wake surfing. (Id. at PageID 2.) Malibu Boats brands this technology as "SURF GATE®." (Id. )

Skier's Choice has its own line of surf systems on its Moomba and Supra lines of boats, including the Moomba Flow and Supra Swell systems. (Id. at PageID 4.) Malibu Boats alleges that the Moomba Flow and Supra Swell systems infringe the Asserted Patents, specifically the "innovative and entirely revolutionary redirection of at least water on one side to modify and improve the wake on the opposite side." (Id. at PageID 5.)

On a normal boat, there are pneumatic devices that extend flaps into the water to prevent a boat from tilting, or listing, to one side or another due to the positions of the individuals or materials within the boat. These flaps are called "trim tabs." By extending downward from the vessel, trim tabs displace water, which enables the boat to stay balanced regardless of the arrangement of weight in the vessel. Additional weight is also typically required in order to tilt the boat from one side to another and displace more water, and must be moved from one side of the boat to the other in order to generate a wake on the other side of the boat. ’873 Patent col. 1, l. 61–64.

The Asserted Patents, all entitled "Surf Wake System for a Watercraft," purport to "enhance[ ] a wake formed by a watercraft travelling through water." See, e.g., ’873 Patent at Abstract. This is achieved through a system that "may include a flap for deflecting water traveling past the stern of the watercraft, and/or a positioner operably connected to the flap for positioning the flap relative to a longitudinal axis of the watercraft between a neutral position and an outward position." (Id. ) Furthermore, "[p]ositioning a port flap in its extended position enhances astarboard surf wake, and positioning the starboard flap in its extended position enhances a port surf wake." (Id. )

’873 Patent at Fig. 1.

In the illustrated embodiment, "the surf wake system may enhance surf wakes with or without supplemental ballast[.]" ’873 Patent, col. 5, l. 65–66. The embodiment in Figure 1 of the Asserted Patents utilizes "water diverters [ ] in the form of flaps" that can be "moveably mounted directly or indirectly on the transom." ’873 Patent, col. 6, l. 1–12. The surf wake system includes "one or more positioners or actuators" that are "configured to pivot the flaps about their respective pivot axis and position the flaps in different positions[.]" ’873 Patent, col. 7, l. 6–10. Generally, as a boat travels through water, it "displaces water and generates waves including bow waves and diverging stern waves," but those waves tend to be "small, choppy or too close to the watercraft to be suitable and safe for water sports, and particularly not suitable for wake surfing." ’873 Patent col. 8, l. 10–20. The Asserted Patents purport to solve this by "moving a flap of the present invention to an outward position," which redirects water and "may lead to constructive interference to form a larger wake having a higher peak and a smoother face, which wake is conducive for surfing." ’873 Patent col. 8, l. 21–25.

Malibu Boats claims that its "SURF GATE®" product "allows users to more easily configure a boat for surfing on a desired side and readily and straightforwardly switch to configuring the boat for surfing on the other side, even doing so without stopping." (ECF No. 1 at PageID 3.) It claims that "[s]uch configurations vastly improve the usability of the boats for wake surfing and allows surfers to perform previously impossible moves." (Id. ) Malibu Boats contends that boats with the Supra Swell, Swell 2.0, Swell 3.0, as well as boats with the Moomba Flow 2.0 and Flow 3.0 (collectively, "Accused Products") infringe the Asserted Patents because they utilize surf wake systems that "modify the wake to enhance the starboard wave to have a face substantially smoother than a face of the port wave and/or to enhance the port wave to have a face substantially smoother than a face of the starboard wave." (Id. at PageID 14.) Skier's Choice contends that "Malibu did not invent wake surfing or boats used for wake surfing," nor did it "invent the diversion of water." (ECF No. 19 at PageID 195.) It further denies that the Accused Products "were copied from or developed as a result of systems or purported inventions of Malibu" and instead asserts that Skier's Choice is the owner of "numerous patents, patent applications, and proprietary systems, methods and developments." (Id. at PageID 196.)

B. Procedural Background

On January 12, 2018, Malibu Boats filed the Complaint as to the ’161, ’873, and ’695 Patents. (ECF No. 1.) On March, 9, 2018, Defendant filed its Answer and Counterclaims. (ECF No. 19.) Skier's Choice asserts a counterclaim for declaratory judgment, seeking a judgment of "non-infringement, invalidity, and unenforceability" for the Asserted Patents. (Id. at PageID 214.) On April 3, 2018, Malibu Boats filed its Answer to Skier's Choice's Counterclaim. (ECF No. 25.) On June 19, 2019, Malibu Boats filed the second case, asserting infringement of the newly issued ’777 Patent. (Case No. 3:19-cv-225, ECF No. 33.) The Court granted Skier's Choice's Motion to Consolidate the Cases on November 27, 2019. (ECF No. 73.)

Malibu Boats filed its First Motion for Summary Judgment on July 15, 2020. (ECF No. 95.) Skier's Choice filed a Response in Opposition to Malibu Boats’ First Motion on August 5, 2020. (ECF No. 122.) Malibu Boats filed its Reply to Skier's Choice's Response on August 12, 2020. (ECF No. 125.) The Court issued its Claim Construction Order as to the Asserted Patents on August 25, 2020. ("Markman Order," ECF No. 132.) In light of the Court's Markman Order, the Court allowed the parties to file another round of summary judgment briefing. (Transcript of Video Conference Proceedings on August 27, 2020.) Malibu Boats then filed its Second Motion for Partial Summary Judgment on September 8, 2020. (ECF No. 143.) Skier's Choice filed a Response in Opposition to Malibu Boats’ Second Motion on September 22, 2020. (ECF No. 151.) On September 29, 2020, Malibu Boats filed a Reply to Skier's Choice's Response. (ECF No. 152.)

II. LEGAL STANDARD

A party is entitled to summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A fact is ‘material’ for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense." Bruederle v. Louisville Metro Gov't, 687 F.3d 771, 776 (6th Cir. 2012).

"In considering a motion for summary judgment, [the] court construes all reasonable inferences in favor of the non-moving party." Robertson v. Lucas, 753 F.3d 606, 614 (6th Cir. 2014) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact." Mosholder v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2...