Minebea Co., Ltd. v. Papst

• Court: U.S. District Court — District of Columbia
• Writing for the Court: Paul L. Friedman
• Citation: Minebea Co., Ltd. v. Papst, 444 F.Supp.2d 68 (D. D.C. 2006)
• Decision Date: 17 August 2006
• Docket Number: Civil Action No. 97-0590 (PLF).
• Parties: MINEBEA CO., LTD., et al., Plaintiffs, v. Georg PAPST, et al., Defendants.

444 F.Supp.2d 68

MINEBEA CO., LTD., et al., Plaintiffs, v. Georg PAPST, et al., Defendants.

Civil Action No. 97-0590 (PLF).

United States District Court, District of Columbia.

August 17, 2006.

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Benjamin Levi, Joel E. Lutzker, Schulte Roth & Zabel, LLP, New York City, Rodney Ray Sweetland, III, Tom M. Schaumberg, Scott Alex Lasher, Adduci, Mastriani & Schaumberg, LLP, Washington, DC, Jason

Marin, Schulte Roth & Zabel, LLP, New York City, for Plaintiffs.

A. Sidney Katz, Jerold B. Schnayer, R. Mark Halligan, Walter J. Kawula, Craig M. Kuchii, Daniel R. Cherry, Richard W. McLaren, Jr., Steven E. Feldman, John L. Ambrogi, Welsh & Katz, Limited, Chicago, IL, Campbell Killefer, Venable LLP, James K. Archibald, Venable LLP, Daniel Joseph, Akin Gump Strauss Hauer & Feld, LLP, Washington, DC, for Defendants.

OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW

PAUL L. FRIEDMAN, District Judge.

TABLE OF CONTENTS

PART ONE: BACKGROUND AND FACTUAL FINDINGS..................................................77
                  I.  BACKGROUND...........................................................................77
                      A. The Joint Venture.................................................................78
                      B. Minebea's Claims Against Papst....................................................79
                 II.  THE TRIAL............................................................................82
                      A.  Minebea's Witnesses..............................................................82
                          1.  Minebea's Testifying Fact Witnesses..........................................82
                          2.  Minebea's Expert Witnesses...................................................83
                      B.  Papst's Witnesses................................................................84
                          1.  Papst's Testifying Fact Witnesses............................................84
                          2.  Papst's Expert Witnesses.....................................................85
                      C.  Hague Convention Witnesses and Deposition Testimony..............................85
                III.  FINDINGS OF FACT.....................................................................87
                      A.  Introduction.....................................................................87
                      B.  Creation of the Joint Venture, its Termination, the 1995 Settlement, and
                            Beyond.........................................................................88
                          1.  The Inception of the Joint Venture...........................................88
                          2.  The Agreements Founding the Joint Venture....................................91
                              a.  The General Business Agreement...........................................92
                              b.  The Joint Venture Agreement..............................................92
                              c.  The Agreement for the Sale of Intangible Assets..........................93
                          3.  Operation of the Joint Venture...............................................94
                          4.  Termination of the Joint Venture.............................................97
                          5.  Post-termination Communications..............................................99
                          6.  The 1995 Settlement Agreement...............................................103
                          7.  Papst's Licensing Agreements With Minebea's Customers.......................104
                          8.  The Instant Litigation and Consolidated Cases...............................105
                      C.  The Written Contracts Define the Parties' Relationship..........................106
                          1.  Minebea's Rights During the Joint Venture...................................106
                              a.  Minebea's rights under Paragraph 4(a) of the Intangible Assets
                                     Agreement............................................................106
                                    i.  "Required and Necessary" under the Intangible Assets
                                         Agreement........................................................106
                                   ii.  Corresponding international patents...............................109
                              b.  Minebea's rights under Paragraph 4(d) of the Intangible Assets
                                         Agreement........................................................110
                          2.  Minebea's Rights After Termination of the Joint Venture.....................111
                          3.  Minebea's Rights Under the 1995 Settlement Agreement........................113
                              a.  Definitions.............................................................114
                              b.  Scope of rights under the 1995 Settlement Agreement.....................115
                              c.  Minebea's rights to Papst Drive Patents under the 1995 Settlement
                                         Agreement........................................................118
                              d.  Minebea's rights to Papst Patents under the 1995 Settlement
                                         Agreement........................................................118
                

              e.  Minebea's rights to Future Patents under the 1995 Settlement
                                         Agreement........................................................120
                              f.  Summary of Minebea's patent rights after Settlement.....................124
                      D.  The Parties Always Understood the Distinction Between Drive Patents
                                         and Motor Patents................................................125
                      E.  The Parties Always Understood that Papst Could Sue Minebea's
                                         Customers Under the Drive Patents................................129
                PART TWO: CONCLUSIONS OF LAW..............................................................133
                  I.  SUBJECT MATTER JURISDICTION.........................................................133
                 II.  COUNT I: PATENT EXHAUSTION..........................................................136
                      A.  The Law of Patent Exhaustion....................................................137
                      B.  Sales "Under" United States Patents.............................................139
                          1.  Must a Sale "Under" a U.S. Patent Occur in the United States?...............139
                          2.  Minebea's Sales in the United States........................................142
                              a.  The evidence adduced on summary judgment and at trial...................143
                              b.  The specific motors claimed.............................................146
                                    i.  Hewlett Packard...................................................146
                                   ii.  Quantum...........................................................148
                                  iii.  Conner Peripherals................................................149
                                   iv.  Seagate...........................................................150
                                    v.  Maxtor............................................................150
                                   vi.  Western Digital...................................................151
                                  vii.  IBM...............................................................151
                              c.  Which motor sales occurred under United States patents?.................151
                      C.  Minebea's Authority to Sell Motors..............................................151
                          1.  Patents Related to HP Wolverine III Motors..................................152
                              a.  U.S. Patent No. 4,894,738...............................................152
                              b.  U.S. Patent No. 4,843,500...............................................153
                              c.  U.S. Patent No. 5,173,814...............................................154
                          2.  Patents Related to Quantum Empire Motors....................................155
                              a.  Re 34,412...............................................................155
                              b.  U.S. Patent No. 4,519,010...............................................155
                              c.  U.S. Patent No. 4,535,373...............................................156
                              d.  U.S. Patent No. 5,006,943...............................................156
                              e.  U.S. Patent No. 4,658,312...............................................157
                      D.  Unconditional Sale..............................................................157
                      E.  Essential Feature/No Non-infringing Use.........................................160
                          1.  Non-infringing Uses of Minebea Motors.......................................162
                              a.  There are no reasonable uses for Minebea motors that do not
                                    involve incorporation into hard disk drives...........................162
                              b.  Minebea's motors have no HDD-related uses that do not involve
                                    assembly into potentially infringing hard drives......................164
                          2.  Essential Features..........................................................166
                      F.  Conclusion......................................................................169
                III.  COUNT V: CONVERSION AND UNJUST ENRICHMENT...........................................170
                      A.  Factual Background..............................................................170
                      B.  Papst's Defenses................................................................172
                          1.  Statute of Limitations......................................................172
                              a.  When did Minebea's claims accrue?.......................................172
                              b.  The law of inquiry notice...............................................174
                              c.  Was Minebea on inquiry notice?..........................................175
                          2.  Releases....................................................................178
                          3.  The Mannheim Court

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