Melea Limited v. Quality Models Ltd., CIV. 03-71338.
| Decision Date | 12 November 2004 |
| Docket Number | No. CIV. 03-71338.,CIV. 03-71338. |
| Parties | MELEA LIMITED, a Gibraltar corporation, and Plastic Molded Technologies, Inc., a Michigan corporation, Plaintiff, v. QUALITY MODELS LIMITED, a Michigan corporation, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Robert C. Brandenburg, Ernie L. Brooks, Gordon S. Gold, Southfield, MI, for plaintiffs.
Marjory G. Basile, Detroit, MI, for defendant.
The underlying action in this case is a patent infringement dispute between the owner of a patent for gas-assisted injection molding and a manufacturer. After Plaintiffs filed suit and notified some of Defendant's customers of the alleged patent infringement, Defendant filed a counterclaim alleging tortious interference and unfair competition. Defendant filed a Motion to Dismiss or for Summary Judgment on Plaintiffs' Conversion, Unjust Enrichment and Patent Infringement claims. Plaintiffs opposed Defendant's motion. On July 30, 2003, this Court issued an opinion and order1 addressing Defendant's motion.
After this Court issued that opinion and order, Plaintiff filed three motions. Defendant opposes all three motions.
First, Plaintiffs move, pursuant to Fed.R.Civ.P. 56, for summary judgment on count one (conversion) and count two (unjust enrichment).
Second, Plaintiffs move for partial summary judgment on (1) two of Defendant's affirmative defenses, No: 4 (common law fraud or misrepresentation); and 10 (implied and/or express license); and (2) count three of Defendant's counterclaim (estoppel).
Third, Plaintiffs move to dismiss count one (tortious interference with advantageous business relations) and count two (unfair competition in violation of 15 U.S.C. § 1125(a)) of Defendant's counterclaim, pursuant to Fed.R.Civ.P. 12(b)(6).
For the reasons below:
• the July 30, 2003, Opinion and Order Melea Ltd. v. Quality Models Ltd., 274 F.Supp.2d 909 (E.D.Mich.2002) (), should be VACATED.
Enrichment and/or Patent Infringement is GRANTED.
• the remainder of Plaintiffs' Motion for Summary Judgment on its own claims and on Defendant's counterclaims is therefore moot;
• Plaintiffs' Motion to Dismiss Counts One and Two of Defendant's Counterclaims is GRANTED.
Plaintiff Melea Limited ("Melea") holds patents, including U.S. Patent No. 5,098,637 ("the '637 patent"), covering certain GAIN molding processes used by suppliers to automotive and other manufacturers. ( The '637 patent protects a particular patented gas-assisted injection molding process ("GAIN Process"), entitled "Process For Injection Molding and Hollow Plastic Article Produced Thereby." Id. The '637 patent protection applies to the manufacturing which employs this particular GAIN process which is commonly used in the production of automotive parts. Id.
Plaintiff Plastic Molded Technologies, Inc. ("PMT"), based in Sterling Heights, Michigan, manufactures and sells goods, machinery, and equipment. (Pls.' Mot. for Summ. J. on Counts One and Two at 1.) As Melea's appointed independent representative, PMT manufactures and sells GAIN equipment. Id. PMT licenses the patented technology and also enforces Melea's patent rights. Id.
Defendant Quality Models Limited ("QML"), manufactures automotive parts for sale to automotive suppliers. (Def.'s Opp'n to Pls.' Mot. for Summ. J. on Counts One and Two at 2.) QML and PMT have conducted business together over the past nine years. (Pls.' Mot. for Summ. J. on Counts One and Two at Ex. A, Dec. Teasdale, ¶ 3.)
Richard Vandermuren conducted business as Vandermuren Manufacturing and Engineering ("VME"), and was engaged by PMT, through a Technical Representative Agreement, as a "technical representative." (Def.'s Opp'n to Pls.' Mot. for Summ. J. on Counts One and Two at Ex. 7.) Plaintiff PMT agreed with VME that VME would build, as an independent contractor, certain GAIN equipment. Id. Under the contract VME would also provide consultation services to PMT regarding PMT's engineering, licensing, service, and marketing matters. Id.
In 1995, Defendant QML purchased a "GAIN unit" from PMT. Id. at 2. A "GAIN unit ... regulates and injects gas into a mold while a plastic product is being molded." Id. at 2, n. 1. "The gas pushes the liquid plastic against the sides of the mold, thereby producing a hollow plastic part." Id. QML dealt primarily with Steven VanHoeck ("VanHoeck"), then Sales Director for PMT. Id. at Ex. 2, Dec. VanHoeck, ¶ 1. William Szekesy ("Szekesy"), the President of QML, contends that QML "paid PMT in full" for the GAIN unit. Id. at Ex. 4, Dec. Szekesy, ¶ 2.
Plaintiffs allege that "PMT conditioned use of the GAIN unit on [QML's] signing of the[...]" Equipment Purchase Agreement ("EPA"). (Pls.' Mot. for Summ. J. on Counts One and Two at 10, n. 9.) Defendant claims that it understood that it had the right to use the GAIN unit without signing an EPA. (Def.'s Opp'n to Pls.' Mot. for Summ. J. on Counts One and Two at 2.) Defendant, citing VanHoeck, alleges "that by purchasing the unit, QML automatically was authorized to use all of Plaintiffs' proprietary processes, including the process covered by the patent." Id. at 2, Ex. 2, ¶ 4.
Defendant alleges that "[a]fter QML purchased the GAIN Unit from PMT, representatives of PMT helped QML set up the GAIN unit, trained QML how to use the equipment, and trained QML how to practice the GAIN Process that Plaintiffs now assert QML is not authorized to use." Id. at 3. Additionally, "[o]ver the next several years, QML used the GAIN unit it had purchased from PMT," and "PMT serviced the unit and sold QML replacement parts." Id. at Ex. 4, Dec. Szekesy, ¶ 7. Furthermore, "PMT never suggested or alleged to QML that its use of the unit violated any patent owned by PMT or Melea Limited, or never informed QML that it had to execute an [EPA] in order to use the equipment." Id. at Ex. 4, Dec. Szekesy, ¶ 7.
In June of 1998, Defendant allegedly learned that PMT contacted one of its customers and accused that customer of infringing PMT's patents. Id. at 3. QML developed the parts at issue, NS Minivan Running Boards, "using the GAIN Unit it had purchased from PMT." Id. QML responded, on June 12, 1998, sending a letter to PMT asking to discuss the issue. Id. at Ex. 5, Letter of June 12, 1998. Szekesy "never received a response from PMT" and "therefore concluded that PMT was satisfied and considered the matter closed." Id. at. 4, Dec. Szekesy, ¶ 8.
PMT agreed with VME that VME would build certain GAIN equipment. Id. at Ex. 7. PMT and VME also agreed that PMT would furnish VME with all the raw materials and components necessary to build the equipment. Id. Allegedly, this equipment included a "GAIN Gas Assist Unit" and a machine known as a "Nitrogen Control Unit." (Pls.' Mot. for Summ. J. on Counts One and Two at Ex. A, Dec. Teasdale, ¶ 5.) VME signed a confidentiality agreement and non-disclosure agreement that stated PMT would retain possession of all the material shared with VME, required VME to return all this material upon demand and precluded VME from disclosing the patented processes. Id. at Ex. C, Non-Disclosure Agreement.
In 1998, QML purchased (Def.'s Opp'n to Pls.' Mot. for Summ. J. on Counts One and Two at 4.) Defendant asserts that QML knew VME was selling the parts as a result of a fee dispute between VME and PMT. Id. at 5.
Vandermuren claims that, "[d]uring the third quarter of 1998, a dispute arose concerning [PMT's] failure to pay outstanding amounts that it owed to VME." Id. at Ex. 6, Dec. Vandermuren, ¶ 5. On September 25, 1998, VME wrote to PMT requiring that PMT pay its outstanding debts to VME "...in full ... by 5 PM Monday October 5, 1998," or VME "will dispose of any machines and components and credit your account with the amounts received." Id. at Ex. 14, Letter of Sept. 25, 1998.
PMT alleges that it "never fell behind on any of its ... obligations to [VME]." (Pls.' Mot. for Summ. J. on Counts One and Two at 4.) On the contrary, Plaintiffs allege that PMT "overpaid [VME]...to keep [VME] from following through on his threat to sell GAIN equipment out of his inventory." Id. at 5. However, according to Vandermuren, PMT did not pay VME by the deadline. ( Therefore, VME sold the machines and components in its possession and credited PMT's account with the amounts received. Id. at Ex. 6, Dec. Vandermuren, at ¶ 7-9. VME sold components to QML among others. Id. at ¶ 9.
According to Vandermuren, VME sold a prototype nitrogen generator as well as some components for a gas assist unit to QML. Id. at ¶ 11. However, Plaintiffs allege VME used PMT's materials "to fabricate a counterfeit GAIN unit" to sell to QML. (Pls.' Mot. for Summ. J. on Counts One and Two at 6.) Vandermuren testified that he told PMT it could take possession of the remaining assets in VME's possession after VME had sold enough of PMT's assets to satisfy PMT's obligations to VME. Id. at ¶ 10.
Plaintiffs allege that after QML purchased the GAIN equipment from VME, QML "concealed" the equipment "from PMT inside of its Ontario facility." (Pls.' Mot. for Summ. J. on Counts One and Two at 9.) However, Defendant claims that it never concealed the component purchase from Plaintiffs. (Def.'s Opp'n to Pls.' Mot. for Summ. J. on Counts One and Two at 6.) Defendant offers evidence that it asked Plaintiffs to come to its facility to service...
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