Ramp Research and Development v. Structural Panels
| Decision Date | 10 April 1997 |
| Docket Number | No. 94-6156-CIV.,94-6156-CIV. |
| Citation | 977 F.Supp. 1169 |
| Parties | RAMP RESEARCH AND DEVELOPMENT, INC., and Elite Aluminum Corporation, Plaintiffs/Counterdefendants, v. STRUCTURAL PANELS, INC., a/k/a Structall Building Systems, Inc., Defendant/Counterplaintiff. |
| Court | U.S. District Court — Southern District of Florida |
Thomas F. Munro, Foley & Lardner, West Palm Beach, FL, John J. Feldhaus, Foley & Lardner, Washington, DC, for Plaintiff/Counterdefendant Ramp Research and Development, Inc.
Robert Edward Pershes, Ft. Lauderdale, FL, for Plaintiff/Counterdefendant Elite Aluminum Corp.
Richard Michael Saccocio, Ft. Lauderdale, FL, Lee Anne LeBlanc, Hollywood, FL, for Defendant/Counterplaintiff.
FINAL JUDGMENT
This case is about a persistent effort on the part of the plaintiffs to circumvent a protected monopoly, which efforts have not been discouraged by prior administrative and judicial determinations. This judgment, hopefully, is another step toward giving the inventor final relief from the costly nine-year litigation.
Ramp Research and Development, Inc., ("Ramp") commenced this action against Structural Panels, Inc., ("Structural") and Elite Aluminum Corp., ("Elite"), seeking a declaratory judgment that patents held by Structural are invalid and not infringed by an aluminum panel manufactured and sold by Elite as Ramp's licensee.1 Additionally, Ramp alleges that Claim 6 of Structural's U.S. Patent Number 5,086,599 ('599) is invalid because (1) it was anticipated by prior art, and (2) Structural failed to cite relevant references to the patent examiner. Structural counterclaimed for patent infringement and for injunctive relief. Specifically, Structural claims that the Ramp panel infringes Claim 1 of Structural's U.S. Patent Number 4,769,963 ('963) and Claim 1 of the improvement patent '599.
Ramp makes snap-together panels with a polystyrene core and aluminum outer skin which is used for walls and patio roofs in the building industry. Elite is Ramp's exclusive licensee in Florida for the manufacture and sale of the Ramp panels. Elite is also licensed by Structural to manufacture and sell similar aluminum panels. Structural is the owner of the original and reexamination patents at issue. Its owner, Steve Meyerson, is the inventor of the '963 and '599 patented devices.
The original '963 patent describes a building panel having a snap together joint that fastens adjacent panels, without external means, and having an insulating foam core and aluminum outer skirts. The panels snap together as a function of the joint design at the end of the outer metal skirts. The interconnecting relationship of the aluminum sheets causes the foam core of the receptive panels to form an edge-to-edge insulating fit. A reexamination certificate was issued for the '963 patent which added four additional independent claims and twenty-five additional dependent claims.
Structural's '599 patent improves on the innovative joint of the '963 patent by providing a sealant pocket and a press which accommodates the internal caulking. It also includes a stabilizer portion which keeps the panels laterally aligned. In all other respects the '599 patent is similar to the '963 patent.
The accused device is Ramp's building panel manufactured and sold under U.S. Patent Number 5,138,812. It is an insulated panel with a snap together joint and a foam core which abuts that of the adjacent panels forming an insulating fit. Ramp's building panel also has a sealant pocket which accommodates the sealant, a sealant press and a stabilizing component which provides lateral stability.
Steve Meyerson, founder and president of Structural, undertook in 1987 to make condensation and leak proof aluminum panels for use in patio roofs. He built prototypes which featured a snapping interlock without metal protrusions, designed with grooves to eliminate the need for extraneous adhesives. Mike Palmerston, Meyerson's co-worker, and investor in the business, was familiar with the product design. Palmerston accompanied Meyerson to the office of the patent attorney who prepared the application for what was to become the disputed '963 patent. That patent issued on September 13, 1988.
Elite began an immediate "knockout" of the product, prompting an infringement lawsuit.2 Structural prevailed in the lawsuit.
In 1989, Palmerston, who had left employment with Structural, set up his own corporation, "Flips" to sell non-competing aluminum panels for refrigeration units. Beginning in 1992, Palmerston made and sold roof and wall aluminum panels in competition with Structural under the name of Ramp Research, Inc. Elite, the co-plaintiff which had been unsuccessful in its 1988 litigation against Structural, became the exclusive licensee for the manufacture and sale of Palmerston's aluminum panels. Notably, in the 1988 litigation with Elite, Palmerston testified for Structural against Elite's challenge to the validity of Meyerson's '963 patent.
After leaving Structural in 1989 on unfavorable terms, Palmerston applied for and obtained a patent on an aluminum snap-lock panel similar to Meyerson's patented product. In the application he omitted reference to Meyerson's '963 patent.
This second effort to misappropriate Structural's patented invention was both collusive and coercive. Elite, a major competitor and loser in the earlier litigation, provided the manufacturing and marketing capability for the infringing product. Structural's exclusive supplier of foam used as insulation in the aluminum panel was Imperial Foam. The president and owner of Imperial Foam was Robert Ahrens who was president of Ramp and 51% owner of the company. Meyerson was unaware that his foam supplier was the majority owner of Ramp. Allegedly, the name Ramp is taken from the initials of the owners — Robert Ahren and Mike Palmerston, owner of the remaining 49%. Ahrens and his sales representative, Chris Bache, were frequent visitors to Structural's plant and knew how Structural's panels were constructed.3
A confidential licensing agreement between Ramp and Elite contemplated that Structural would again sue for infringement. As a settlement plan in the event of this lawsuit, the Ramp/Elite agreement proposed a cross-licensing agreement with financially-strapped Structural. The settlement offer made no provision for additional damages in light of the litigation or additional damages that might flow from a finding of willful infringement.
David Pettis, a patent attorney, testified that he was engaged by Ramp for a limited opinion solely on whether the accused device manufactured under Palmerston's '812 patent literally infringed on Meyerson's '963 patent. For that purpose he was sent only a copy of both patents, a certificate of reexamination and a photocopy of a panel cross-section. He said he did not believe he was sent a search report or evidence of prior litigation. Neither did he know that Palmerston had previously testified in support of the validity of the '963 patent. Particularly, he was not asked to do a validity opinion, and was not sent a file history which would have been necessary to a complete opinion under the Doctrine of Equivalents.4
William Thomson, an engineer and attorney called by Ramp, admitted to little experience with wall panels and in testifying as an expert. Although he had an opinion that the Ramp product did not infringe on the Structural patent, he candidly expressed trouble understanding the first element of the claim. Mr. Thomson's testimony focused on infringement. On the validity question he acknowledged that the examiner had accepted the applicant's distinguishing arguments over prior art, admitted that he had made no independent search to determine what was out there before Meyerson's contribution, and finally agreed that Meyerson had made a `contribution' to the art. His demonstrations on the functioning of prototype and marketed panels were helpful to the court.
On the question of literal infringement the witness, Thomson, outlined each element of the '963 and '599 patents identifying areas where, in his opinion, the claims did not read on the accused device.
Structural called Robert Schwartz, a registered patent attorney, as its expert. His testimony covered essentially three areas. Using diagrams, and parts of the aluminum panels for demonstrations in support of his opinions, he testified that there was literal infringement and infringement under the Doctrine of Equivalents as to claim 1 of both the '963 and '599 patents. Second, he opined, Ramp is estopped to challenge the validity of Structural's patents as the invalidity-by-prior art contention made here was previously rejected by a trial and appellate court, and by the Patent and Trademark Office in a posttrial application for reexamination.
Lastly, Mr. Schwartz testified that the infringement by Ramp and Elite is willful because an opinion of noninfringement by an attorney which does not include examination of file wrapper history and prior art is not a good faith opinion which would negate a finding of willfulness.
According to Steve Meyerson, and undisputed, is that Structural is the only source for the patented aluminum building panels and that the company has four licensees selling its product for royalty fees. Licensing agreements were entered into with Elite and Texas Aluminum pursuant to settlement negotiations after infringement lawsuits were brought. Ramp, he said, is the only company still infringing on his patent.
Under the Structural/Elite licensing agreement, Elite pays Structural a 3% royalty based on gross profits. The Ramp/Elite licensing agreement for the manufacture and sale of the infringing products incorporates the same terms.
Nothing presented at trial differs from what had been considered by the patent examiner when...
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