Omniglow Corp. v. Unique Industries, Inc.

• Citation: 184 F.Supp.2d 105
• Decision Date: 11 February 2002
• Docket Number: No. Civ.A. 99-30052-MAP.,Civ.A. 99-30052-MAP.
• Parties: OMNIGLOW CORPORATION, Plaintiff, v. UNIQUE INDUSTRIES, INC., Defendant.
• Court: U.S. District Court — District of Massachusetts

Page 105

184 F.Supp.2d 105

OMNIGLOW CORPORATION, Plaintiff, v. UNIQUE INDUSTRIES, INC., Defendant.

No. Civ.A. 99-30052-MAP.

United States District Court, D. Massachusetts.

February 11, 2002.

COPYRIGHT MATERIAL OMITTED

Thomas A. Kenefick, Springfield, MA, Daniel M. Gantt, Donald K. Reedy, Fish & Neave, New York City, for Plaintiff.

C. Jeffrey Kinder, Fierst & Pucci, Northampton, MA, Gerard F. Dunne, New York City, for Defendant.

MEMORANDUM REGARDING PLAINTIFF'S MOTIONS FOR PARTIAL SUMMARY JUDGMENT, DEFENDANT'S MOTION TO AMEND, AND DEFENDANT'S MOTIONS FOR PARTIAL SUMMARY JUDGMENT

(Docket Nos. 64, 68 and 73-78)

PONSOR, District Judge.

I. INTRODUCTION

Omniglow Corporation ("Omniglow") has sued Unique Industries, Inc. ("Unique") for the alleged infringement of Patents 4,717,511 ("Patent '511") and 5,122,306 ("Patent '306"). In counts I and II of the amended complaint, plaintiff asserts that defendant is infringing Patents '511 and '306 by importing, selling and offering for sale products that contain certain chemicals without authority or license from the plaintiff. Both parties now move for partial summary judgment. Defendant also moves for leave to amend its Pretrial Memorandum.

There are eight motions before the court:

1) Defendant's Motion to Amend the Pretrial Memorandum (Docket No. 73);

2) Defendant's Motion for Summary Judgment of Non-Infringement of Patent '306 (Docket No. 78);

3) Plaintiff's Motion for Partial Summary Judgment that Any Infringement of the Patents in Suit Has Been Willful (Docket No. 64);

4) Plaintiff's Motion for Partial Summary Judgment that U.S. Patent '306 is Not Invalid for Failure to Comply with Any of 35 U.S.C. §§ 101, 102, 103 and/or 112 (Docket No. 68);

5) Defendant's Motion for Summary Judgment of Invalidity of Patent '306 under Section 102 of the Patent Statute (Docket No. 77);

6) Defendant's Motion for Summary Judgment Concerning the Application of the Doctrine of Equivalents to U.S. Patent '511 (Docket No. 74);

7) Defendant's Motion for Summary Judgment Precluding Damages for any Infringement Resulting from the Use of Chemicals Purchased from Jame Fine Chemicals, Inc. (Docket No. 75); and

8) Defendant's Motion for Summary Judgment Precluding Any Award of Damages Beyond a Reasonable Royalty (Docket No. 76).

For the reasons set forth below, this court will allow the defendant's motion to amend its Pretrial Memorandum. The court will also allow plaintiff's second motion for partial summary judgment, in part, and hold that patent '306 is not invalid as a matter of law under 35 U.S.C. §§ 101, 103 or 112. The issue of invalidity under § 102 will be left for trial. Finally, the court will allow the sixth motion listed above, defendant's motion for summary judgment concerning application of the doctrine of equivalents. All other motions for summary judgment will be denied.

II. FACTS

The facts are presented in the light most favorable to the non-moving party. Both Omniglow and Unique are engaged in the business of selling chemiluminescent products. These products include glowing bracelets, glowing necklaces and night sticks. (Docket No. 66, Exhibit B). Omniglow is the owner of all right, title and interest in Patent '511, which is known as Chemiluminescent Composition.¹ (Docket No. 55 at 4). Patent '511 relates to the reaction of compositions containing an oxalate and a fluorescer with hydrogen peroxide to produce chemiluminescent blue light, which is in turn used in the production of chemiluminescent products. (Docket No. 79, Exhibit B at Column 4, Claim 1).

In addition, Omniglow is the owner of all right, title and interest in Patent '306 which is known as Chemiluminescent Solution based on Substituted Perylene.² The inventors of what eventually became Patent '306 first filed their invention in Belgium on June 20, 1989. This patent relates to the reaction of compositions containing a perylene dye with hydrogen peroxide to produce chemiluminescent red light, which is in turn used in the production of chemiluminescent products. (Docket No. 70, Exhibit A at Columns 5-6, Claim 1).

Between July of 1994 and June of 1998, Omniglow and Unique were parties to a distributorship agreement under which Omniglow supplied to Unique all of the chemiluminescent products that Unique sold. (Docket No. 66 at Exhibit D). Unique was aware of Omniglow's patents, and their strength was a factor in Unique's decision to enter into the agreement. (Docket No. 66 at Exhibit E). Furthermore, the patents at issue were specifically listed in the distributorship agreement, and the patent numbers were identified on Unique's packaging for the products that it purchased from Omniglow for resale. (Docket No. 66, Exhibit D at 16).

In February of 1998, Unique commenced discussions with Tianjin Dragon Chemiluminescent Tubes Co., Ltd. ("Tianjin Dragon") about the possibility of Tianjin Dragon becoming an alternate supplier for Unique. (Docket No. 66, Exhibit F at 38-40). Around that time, Craig Novak ("Novak"), Unique's president, met with On Ning ("Ning"), the general manager of Tianjin Dragon. Novak made no attempt to review the Omniglow patents prior to meeting with Ning. During the meeting, Ning assured Novak that Tianjin Dragon's products would not infringe Omniglow's patents. Novak took Ning's word for this. He did not inquire into whether Tianjin Dragon had received a formal legal opinion with regard to the Omniglow patents. (Id. at 40-41). Finally, Novak did not request or receive the opinion of legal counsel on whether the products offered by Tianjin Dragon would infringe the patents at issue in this suit. (Id. at 65, 76-77).

Thus, in assessing whether the Tianjin Dragon products would infringe the Omniglow patents, Unique relied almost entirely on Ning's assurances of non-infringement. (Docket No. 66, Exhibit G at 34-35; Docket No. 98 at ¶ 12; Docket No. 99 at ¶ 3-5). Ning's opinion of non-infringement was based on information received by her from two sources. First, Ning met with George Keyko ("Keyko") of Jame Fine Chemicals, Inc. ("Jame Fine"). (Docket No. 98 at ¶ 7). Jame Fine provided chemicals to Tianjin Dragon for at least some of the products that were manufactured for Unique. Keyko assured Ning that the products to be supplied had been studied and would not infringe the Omniglow patents. Second, Ning contacted a law firm for additional assurance that the physical design of the Tianjin Dragon products would not infringe the patents.³ (Docket No. 98 at ¶¶ 7-11). Unique refused to buy products from Tianjin Dragon that it had reason to know might possibly infringe Omniglow's patents. (Docket No. 98 at ¶ 13; Docket No. 97 at ¶ 7-9).

Scott Brown ("Brown"), Unique's general counsel, did at some point obtain the oral advice of experienced legal counsel with respect to the validity of patents '306 and '511 and the possible infringement by Unique's products, although it is not clear whether this advice was given before or after the commencement of this suit. (Docket No. 97 at ¶¶ 3-5). It is clear, however, that Brown only learned the actual chemical compositions of Tianjin Dragon's products after the complaint and answer were filed with this court. (Docket No. 66, Exhibit G at 37-38; Docket No. 97 at ¶¶ 3-5).

In 1998 and 1999, Unique imported into the United States and/or sold within the United States chemiluminescent products of various colors that contained the blue fluorescer 9,10-bis(4-methoxyphenyl)-2-chloroanthracene ("methoxy fluorescer"). (Docket No. 66, Exhibit B). Omniglow claims that these Unique products infringe claims one through six of the '511 patent. (Docket No. 55 at 4). However, use of this fluorescer appears to have been minimal and was discontinued as soon as Unique learned of the chemical's possible infringement of Patent '511. (Docket No. 97 at ¶ 7).

Also, in 1998 and 1999, Unique imported into and/or sold in the United States chemiluminescent products of various colors, including pink, orange and purple, that contained a red fluorescer known by the trade name Lumogen F-300 ("Lumogen Red"), which is available from BASF in Germany. (Docket No. 66, Exhibit B). Omniglow claims that these Unique products infringe claims 1,7,8,9 and 10 of the '306 patent. (Docket No. 55 at 5).

Beginning in 1999 and continuing to the present, Unique has imported and/or sold in this country chemiluminescent products of various colors that contain either one or both of the blue fluorescers entitled 9,10-bis (4-ethoxyphenyl)-2-chloroanthracene ("ethoxy fluorescer") and 9,10-bis(4-methoxyphenyl) anthracene ("non-chlorinated methoxy fluorescer"). Omniglow contends that these products infringe claims one through six of the '511 patent. (Docket No. 55 at 4).

In January of 1999, Onmiglow's counsel reminded Unique of Omniglow's patents and identified the Unique products that, in his view, were infringing Omniglow's patents. (Docket No. 66, Exhibit H). About two months later, on March 12, 1999, Omniglow filed suit against Unique in this court.

III. DISCUSSION

A. Standard of Review

A motion for summary judgment is granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). According to the Supreme Court, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). It is the substantive law which identifies those facts that are material. Id. at 248, 106 S.Ct. 2505. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. Furthermore, ...