Natare Corporation v. Aquatic Renovation Systems, Inc., IP 95-145-C-B/S.
| Decision Date | 26 May 2000 |
| Docket Number | No. IP 95-145-C-B/S.,IP 95-145-C-B/S. |
| Citation | 99 F.Supp.2d 986 |
| Parties | NATARE CORPORATION, Plaintiff, v. AQUATIC RENOVATION SYSTEMS, INC., d/b/a A.R.S., Inc., and Stewart J."Jason" Mart, Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
Dwight D. Lueck, Barnes & Thornburg, Indianapolis, IN, for Plaintiff.
Michael L. Einterz, Indianapolis, IN, for Defendant
ENTRY DENYING PLAINTIFF'S MOTION FOR SANCTIONS
On December 4, 1997, we held that the parties in this case were bound by a settlement agreement reached on May 15, 1997.1 Pursuant to that ruling, on January 7, 1998 we entered an Order of Judgment that incorporated the terms of the agreement. In November of 1998 we denied a motion of Defendants, Aquatic Renovation Systems, Inc. (d/b/a A.R.S., Inc., and as "RenoSys") and Stewart J. "Jason" Mart (collectively, "ARS") for sanctions for contempt of the Court's Order against Plaintiff Natare Corporation ("Natare") alleging that Natare violated the terms of the agreement as set forth in the Order of Judgment. Now Natare has filed its own motion for civil contempt sanctions against ARS, claiming that ARS violated the Order by infringing Natare's patent. After full consideration of the parties' briefs and the arguments and evidence presented on May 10, 2000, we DENY Natare's motion for the reasons discussed below.
Natare and ARS are fierce competitors in the swimming pool installation and rehabilitation industry. The lawsuit that gave rise to the settlement agreement incorporated in the Order of Judgment at issue concerned Natare's patented method for installing swimming pool liners (the "'294 patent"). In the Order, we compelled the parties to adhere to an agreement they had reached in settlement of Natare's claim that ARS had been infringing the '294 patent and ARS' counter-claim that the patent was invalid. As one of the terms, ARS, its "officers, agents, servants, employees and attorneys, and those in active concert or participation with them" were "permanently enjoined from infringing the '294 patent, inducing others to infringe the '294 patent, or contributorily infringing the '294 patent."
ARS now offers a method (the "RenoSys method") similar to the '294 patented method of installing pool liners that Natare agrees does not infringe its patent. In addition, ARS offers a completely different and less expensive method (the "104-L method").
Last December, a Natare salesperson furnished information and plans regarding its pool liner system, including the '294 patent method of installation, to Brian Meyer, the Aquatic and Fitness Director of the Rolling Meadows Park District in Rolling Meadows, Illinois (the "Park District"). Meyer needed to refurbish an older pool (the "Plum Grove" pool) owned by the Park District, but lacked the engineering or design resources to plan the project. Among the promotional materials Natare furnished to Meyer was a set of project specifications ("section 13850") suitable for use in a bid solicitation. See Pl.'s Ex. 1. Meyer prepared a request for bids package for the Plum Grove pool project2 incorporating section 13850, which includes the following language:
Part 2: Products
2.01 Manufacturers
All base bids are to include the Natatec Swimming Pool Membrane System which is a proprietary product of Natare Corporation, located in Indianapolis, Indiana, and the characteristics and standards listed herein. Bids for substitute PVC membrane systems, proven in commercial and public pool applications, are encouraged. All bids shall include the base bid system and a deductive alternate for the substitution.
The rest of Part 2 lists chemical and physical properties of the components and equipment to be used. The third part of section 13850, "Execution," subsection 3.01-J, describes a method of pool liner termination that is identical to the '294 patented method and states: "Only those systems that incorporate the termination method described above will be acceptable." However, this subsection does not indicate that the termination method specified is a patented method owned by Natare. Section 13850 contains no mention of the '294 patent and the sole reference to the proprietary nature of Natare's system is found as quoted above in subsection 2.01.
Meyer testified that he did not know the pool liner termination method was patented when he included the specifications calling for its use in the Park District's bid solicitation. Natare claims its patent for the method was clearly indicated on "other" promotional materials it had furnished to Meyer along with section 13850.
After ARS received the Plum Grove bid solicitation packet, it recognized the termination method specified therein as belonging to Natare. Steve Draughon, an ARS salesman, contacted Meyer in accordance with the instructions in the Park District's bid packet3 to explain that ARS could not bid to install the pool liner as specified because Natare owns the termination method designated in section 13850 of the Park District's request for bids. Draughon sent a fax to Meyer explaining that ARS could not submit a bid including the Natare '294 method due to the background of litigation but that ARS could use its comparable, non-infringing RenoSys system, a diagram of which he included in the fax. See Pl.'s Ex. 7. Meyer reviewed the RenoSys materials and assured Draughon that ARS would be permitted to bid on the project using the RenoSys system.
The Plum Grove project bid solicitation required potential bidders to visit the site before submitting a proposal. Draughon visited the Plum Grove pool on behalf of ARS, met with two Park District employees, promoted the RenoSys pool liner system, furnished them with another copy of the RenoSys pool liner termination detail and again demonstrated how ARS' termination method differs from Natare's. According to both Draughon and Meyer, the Park District understood the differences between Natare's and ARS' respective termination methods and requested that ARS submit a bid to do the project using its RenoSys method. Draughon asked the Park District to issue an Addendum to its bid solicitation packet to allow fair and competitive bidding on the project and Meyer did so in an effort to convey that the Park District would accept equivalent pool liner systems that performed as well as the one called for in the original packet. See Pl.'s Ex. 2. Addendum 2 altered the bid specifications by "correcting" section 13850 to read:
B. Part 2: Products
2.01 Manufacturers
The system specified is based solely upon the chemical and physical properties listed herein. The listed standards have been established as the minimum acceptable values for any membrane product to be offered on this project. Any membrane system meeting or exceeding the performance characteristics and application experience qualifications listed will be considered. As all aspects and equipment within the pool system have been designed to utilize the membrane principle, products not meeting the minimum requirements listed will not be accepted as that could adversely affect the performance of the system.
The Park District believed this Addendum opened the bidding to a performance basis because the termination method is part of a company's pool liner "system." Draughon and Meyer agreed that ARS could and would bid upon the Plum Grove project based upon the RenoSys system, using the RenoSys termination method as they had discussed, and that the system would be acceptable to the Park District on a performance basis.4
Only Natare and ARS bid on the Plum Grove project. See Pl.'s Exs. 1, 2. As provided for in the contract documents, ARS included two separate figures in its bid proposal and attached drawings detailing the second, less expensive alternate (the 104-L method). ARS submitted all of the required documents in accordance with the instructions, including the original bid solicitation that contained Natare's specifications in section 13850; ARS did not explicitly indicate that its base bid was based upon the RenoSys system. ARS's bid proposal did not specify that its installation method varied from the one described in section 13850. Likewise, Natare's bid contained no drawings or references to its patented method, what system or termination method it would use, or how the Natare system met the Park District's performance specifications. ARS' base bid to do the project (using the RenoSys system, including its own termination method) was lower than Natare's bid (based on its system, which uses the '294 patent method) and Meyer recommended to his supervisor, the District Superintendent, that Rolling Meadows accept ARS' bid. After the Park District awarded the project to ARS, Natare obtained the bid documents pursuant to the Freedom of Information Act and filed the instant motion.
To prevail on a motion for civil contempt, the movant must prove by "clear and convincing evidence" that the non-movant violated a court order. Stotler and Co. v. Able, 870 F.2d 1158, 1163 (7th Cir.1989); see also Goluba v. School Dist. of Ripon, 45 F.3d 1035, 1037 (7th Cir. 1995).5 The district court "must be able to point to a decree from the court `which sets forth in specific detail an unequivocal command' which the party in contempt violated." Stotler, 870 F.2d at 1163 (citations omitted). The district court does not, however, "ordinarily have to find that the violation was `willful'" and may find a party in civil contempt if that party "has not been `reasonably diligent and energetic in attempting to accomplish what was ordered.'" Id. (citations omitted).
Congress' amendment of 35 U.S.C. § 271, adding offers to sell to the list of behaviors constituting patent infringement, took effect in 1996. See 35 U.S.C. § 271(a) (...
To continue reading
Request your trial
-
Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., No. Civ.A. AW-01-1504.
...35 U.S.C. § 271(i) (Supp. 1997), Congress offered no other guidance as to meaning of the phrase."); Natare Corp. v. Aquatic Renovation Sys., Inc., 99 F.Supp.2d 986, 990 (S.D.Ind.2000) (assuming that § 271(a) could apply to an offer to perform a patented process). What is clear, however, is ......
-
City Of Aurora v. Ps Sys. Inc.
...in both cases- FieldTurf Int'l, Inc. v. Sprinturf, Inc., 433 F.3d 1366, 1370 (Fed.Cir.2006), and Natare Corp. v. Aquatic Renovation Sys., Inc., 99 F.Supp.2d 986, 991 (S.D.Ind.2000)-found that the bids at issue constituted offers for sale. However, the courts in FieldTurf and Natare found no......
-
Fieldturf Intern., Inc. v. Sprinturf, Inc.
...alleged to constitute an "offer to sell" to determine whether a patent was infringed. Natare Corp. v. Aquatic Renovation Systems, Inc., 99 F.Supp.2d 986, 990, 991 (S.D.Ind.2000) (rejecting plaintiff's argument that the court should consider only the subject bid documents, rather than all th......