Minitube of Am., Inc. v. Reprod. Provisions, LLC, Case No. 13-CV-685-JPS
| Decision Date | 01 May 2014 |
| Docket Number | Case No. 13-CV-685-JPS |
| Court | U.S. District Court — Eastern District of Wisconsin |
| Parties | MINITUBE OF AMERICA, INC., Plaintiff, v. REPRODUCTION PROVISIONS, LLC, MINITüB GMBH, and MINITUBE INTERNATIONAL AG, Defendants. |
This is nominally a patent case (see Docket #4), and to be sure it does involve allegations of patent infringement (see Docket #1, Exs. 1, 2). But, in reality, it is best viewed as a multi-faceted business dispute between family members. At its core, the case derives from competitive advances made by one family-affiliated business—the Europe-centered Minitüb GmbH, and various related entities—into the American market controlled by another. Minitube of America, Inc., has controlled the American market for years, as part of an informal agreement between its principals and the principals of Minitüb GmbH. Seeing as those principals are all family members, there likely was little urgency to formalize any understanding (explicit or implicit) between the parties. Likewise, the principals of Minitube of America, Inc., probably never expected their European counterparts to begin encroaching on the American market.
But, Minitüb GmbH did just that, leading Minitube of America, Inc. to file this suit. (Docket #1). In turn, Minitüb GmbH filed a number of counterclaims. (Docket #16).
Thus, now before the Court is a twisted gnarl of claims—patent, trademark, business disputes, and more—that largely turn on the existence and content of informal agreements between the parties. The parties, in turn, have filed cross-motions for summary judgment (Docket #32, Docket #45), which are fully briefed (Docket #47, #57, #67, #82, #87, #99) and thus ready for resolution.
To say that this case is complex would be a vast understatement. But the Court has thoroughly reviewed the parties' submissions and will do its best to address the relevant facts and arguments in a manner that is both thorough and succinct. To do so, the Court will begin by setting forth a detailed version of the underlying facts. Thereafter, the Court will address the substantive arguments and applicable law.
As already mentioned, the facts underlying this case are complex. They involve informal business arrangements across continents between family members, simmering tensions between those family members, and still-evolving business decisions. Fortunately, the parties have stipulated to certain facts. (Docket #30 (the statement of stipulated facts, which the Court will refer to as "SF")). But the parties continue to disagree over certain events. (See, e.g., Docket #69, Ex. 1; Docket #79).1 Here, the Court sets out the relevant background facts. After discussing the factual background, the Court will recount the totality of the claims being alleged by the parties.
Because the factual background of this case is so complex, the Court divides this discussion into multiple parts. First, the Court provides some background about the identity of the parties and their respective owners. Second, the Court provides additional historic context by describing the relationships between the parties and the properties owned by them. Third, the Court recounts the more recent actions giving rise to this specific lawsuit. Fourth, the Court discusses the recent sale of Minitube of America, Inc., to another business.
For purposes of simplicity, the Court will refer to Minitube of America, Inc., as "Minitube of America" for the remainder of this order. Likewise, the Court will refer to Minitüb GmbH and its affiliated entity—Minitube International AG ("MTI")—as "Minitüb Germany," and will also refer to them collectively as a single company of the same name.
Minitube of America and Minitüb Germany are engaged in similar business. Both develop, manufacture, and supply products that are used on farms to assist in livestock reproduction. (SF ¶¶ 5, 8). For instance, both companies manufacture products intended to assist in artificial insemination and embryo transfer of livestock. (SF ¶¶ 5, 8).
Both companies are also owned by separate groups of family members. Ludwig Simmet owns Minitube of America in conjunction with his wife, Rebekah (and three trusts for Ludwig's and Rebekah's daughters). (SF ¶ 4). Minitube of America is a Wisconsin corporation and domiciled in Verona, Wisconsin. (SF ¶ 3). Meanwhile, Ludwig's brothers—Christian, Florian, and Rudolf—own Minitüb Germany which is located in Tiefenbach,Germany. (SF ¶¶ 6-7, 10). Richard and Debra Shoenbeck are of no apparent relations to the Simmets; they operate Reproduction Provisions, which is registered as a Wisconsin LLC, and operates from Walworth, Wisconsin.
Reproduction Provisions, LLC, is also named as a defendant, but is owned by a different group of individuals (SF ¶¶ 11-12); the Court will refer to it as "Reproduction Provisions." Reproduction Provisions distributes artificial reproduction products for livestock, of the sort marketed by Minitube of America and Minitüb Germany. (SF ¶ 41).
This section provides pertinent historical information regarding: the creation of Minitüb Germany and Minitube of America; the relationship and operations between them; the properties owned and developed by them; and additional information regarding the relationship between Minitube of America and Reproduction Provisions.
The Simmets' father and mother established Minitüb Germany in Germany in 1970.2 (SF ¶ 15). They retired in 1996. (SF ¶ 18).
Before their retirement, the seeds of this suit had been sown: in 1986, Ludwig formed Minitube of America in Wisconsin, using funds from Minitüb Germany to establish the business. (SF ¶ 17; PPFF ¶ 3; DPFF ¶ 4 and Resp.). Christian, meanwhile, took over Minitüb Germany as CEO in 1993, and operated the company in Germany. (SF ¶ 18).
At the time, this division did not create a problem. Indeed, the two companies appear to have operated harmoniously in separate geographic areas—Minitube of America in North America (beginning operations in Canada in 1996 and Mexico in June 2001), Minitüb Germany in Germany and elsewhere in the world—but collaborated on much of their manufacturing, research and development, and sales. . In fact, both companies typically marketed and sold the same products and used the same trademarks, albeit in their separate geographic areas. (SF ¶¶ 21, 23). Occasionally, the companies would even purchase products from one another. (SF ¶ 22).3
Of particular relevance to some of the claims in this suit, the companies would often share trade-sensitive information. For example, Minitüb Germany shared information with Minitube of America about its supplier of a certain chemical used in its products and other manufacturing techniques. (See PPFF ¶¶ 54-59 and Resp.). In spite of that fact and the factthat all other Minitüb Germany distributors sign agreements including a confidentiality clause, Minitüb Germany never required Minitube of America to sign written confidentiality agreements and were not extremely diligent about marking information as a trade secret.4 (PPFF ¶ 88, 90 and Resp.).
Given the extreme closeness of the companies' involvement with one another, they discussed merging. (SF ¶ 25). In 2009, the companies formed MTI with the hope that it would provide an appropriate structure for the two companies to merge. (SF ¶ 26). Those discussions failed, though, and Minitüb Germany seemingly began to operate MTI. (SF ¶ 27; see SF ¶¶ 28-29). Despite the failure of merger negotiations, Minitube of America told its customers that it would no longer present itself as affiliated with Minitüb Germany, but that the companies would still cooperate in limited fashion. (DPFF ¶ 13 and Resp.). In keeping with that representation, Ludwig asserted his right to sell Minitube of America to a third party and sharply reduced orders from Minitüb Germany between 2012 and 2013. (DPFF ¶¶ 14-15 and Resp.). In fact, in a departure from the parties' standard procedure, Minitube of America began manufacturing US BAGs5 on its own in 2012, without informing Minitüb Germany of that fact; thus, in 2013, Minitube of America did not purchase any US BAGs from Minitüb Germany. (DPFF ¶¶ 37, 38).
Despite the companies' significant economic entwinement and occasionally antagonistic relationship, they never entered into any written agreements with one another.6 (SF ¶ 24).
Ludwig and Christian—owners of Minitube of America and Minitüb Germany, respectively—together invented a boar semen collection bag and jointly received a patent thereon in 1999. (SF ¶¶ 30-31, 33). In spite of the fact that they had co-invented the bag, they assigned the full and exclusive right, title, and interest in the patent covering it—U.S. Patent No. 5,961,503 ("the '503 patent")—to Minitube of America. (SF ¶¶ 30, 32, 33). In other words, Christian relinquished his rights to the '503 patent, essentially doing so in favor of Ludwig, by virtue of the fact that Ludwig owned and operated Minitube of America, the recipient of those rights. (SF ¶ 32).
It is not clear exactly why Christian did so. However, from the facts, the Court can surmise that there was likely an informal agreement between Ludwig and Christian that Minitüb Germany would be allowed to market the product based upon...
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