Rothschild v. Ford Motor Co.

• Citation: 2 F.Supp.2d 941
• Decision Date: 27 March 1998
• Docket Number: No. 96-40275.,96-40275.
• Parties: John J. ROTHSCHILD, James L. Donahue, and Jero Engineering, Plaintiffs, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

2 F.Supp.2d 941

John J. ROTHSCHILD, James L. Donahue, and Jero Engineering, Plaintiffs, v. FORD MOTOR COMPANY, Defendant.

No. 96-40275.

United States District Court, E.D. Michigan, Southern Division.

March 27, 1998.

COPYRIGHT MATERIAL OMITTED

Arnold S. Weintraub, Weintraub & Brady, Bingham Farms, MI, for John J. Rothschild, James L. Donahue, Jero Engineering.

Ernie L. Brooks, Frank A. Angileri, Brooks & Kushman, Southfield, MI, for Ford Motor Company.

Ernie L. Brooks, for Ford Motor Company.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND GRANTING SUMMARY JUDGMENT TO DEFENDANT ON ITS COUNTERCLAIM

GADOLA, District Judge.

On May 1, 1996, plaintiffs John J. Rothschild, James L. Donahue, and Jero Engineering filed the instant action against defendant Ford Motor Company alleging two counts of patent infringement, as well as claims of unfair competition and unjust enrichment. Presently before this court is the defendant's motion for summary judgment on all of the plaintiffs' claims. For the following reasons, the defendant's motion will be granted.

FACTS

Sand is used in metal casting foundries to make molds and cores for casting things like engine blocks for automobiles. The sand that is used in the molds and cores is coated with an organic binder that holds the grains of sand together like wet sand grains in sand castles on a beach. Before sand can be reused, the binder must be removed. The process by which the binder is removed from the sand is known as "sand reclamation."

In the past, it was considered uneconomical to reclaim sand. Historically, foundries discarded used sand because the cost-per-ton of reclaiming sand exceeded the combined cost-per-ton of buying new sand and disposing of it in a landfill. By the 1990's, however, reclaiming sand became a viable economic alternative because disposal costs had risen while energy costs had remained fairly constant. In addition, environmental awareness had risen, prompting foundries to avoid landfill use if possible.

Methods of Sand Reclamation

One particular type of sand reclamation is known as "thermal sand reclamation." In this process, the binder-coated sand grains are exposed to temperatures ranging from 650 to 900 degrees Celsius (approximately 1200 to 1650 Fahrenheit) for a time period sufficient to completely burn off the binder, leaving clean sand for reuse.

Numerous thermal sand reclamation systems are known in the art. For instance, one kind of thermal sand reclamation system involves passing a horizontal bed of sand through a furnace and exposing the bed to heat and oxygen to burn off the binder. A second type of thermal sand reclamation system involves stacking sand in a vertical column and exposing it to heat to burn off the binder. A third type of thermal sand reclamation system is a horizontal rotary kiln (a.k.a. a "calciner"). This kiln has a refractory-lined cylinder sloped toward the discharge end and a burner mounted at either the feed or discharge end which heats the kiln to about 1,100 degrees Celsius (approximately 2,000 degrees Fahrenheit). The sand is tumbled through the kiln because of the rotary motion and the sand is thereby exposed to heat and air which burns off the binder.

A common problem with all of the aforementioned types of thermal sand reclamation systems is that they are not very efficient from the standpoint of the quantity of sand that can be reclaimed per unit time. Sand must remain in these reclamation units for a long period of time (i.e., 15-30 minutes) in order to burn off the binder. Aside from being inefficient, there is another problem with these systems. Frequently, these systems overheat causing an unwanted change in the sand's chemical characteristics.

"Gravity flow sand reclamation" was designed to solve the problems inherent in the above-described thermal sand reclamation systems. In the gravity flow reclamation process, sand is placed into a tower-like furnace. As the sand falls to the bottom of the furnace by the force of gravity, the binder is exposed to heat and is burned off. Gravity flow sand reclamation is seemingly more efficient than other thermal sand reclamation processes since sand requires less retention time in the furnace to incinerate the binder.

Actually, a primary advantage of gravity flow sand reclamation (i.e., less retention time) is also a disadvantage. Sand descends in gravity flow sand reclaimers at such a rapid rate that, from the time the sand enters the reclaimer to the time it reaches the bottom, not enough heat transfers to the sand to completely burn off all the binder. In an effort to combat this problem, plaintiff Jero Engineering Company ("Jero"), through its principal John J. Rothschild¹ and in cooperation with James L. Donahue,² designed the so-called "Jero Reclaimer" and obtained two patents for their invention. The first patent, "the '288 Patent," was obtained for the Jero Reclaimer apparatus itself and the other patent, "the '888 Patent," was obtained for the method of using the Jero Reclaimer.³

The Jero Reclaimer, depicted below, works as follows. Sand is fed into the top of the Jero Reclaimer (28) and then is moved by a conveyor (32) to a chute (34) which dumps the sand into a furnace (16). After entering the furnace, sand falls down it by the force of gravity, passing through a series of grids as it descends (52A-52F). As the sand cascades from grid to grid, the binder material on the sand is incinerated by torch heating burners (56) mounted to the side of the furnace.

Upon exiting the furnace, the sand falls into a retention well (62) where it is kept for an additional 45 seconds to two minutes. The retention well is made up of air permeable walls (66) through which heated air passes. This heated air further removes any binder material remaining on the sand.

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After designing the Jero Reclaimer, plaintiffs sought out entities to manufacture it on a full-scale basis. One particular place plaintiffs solicited prospective manufacturers was the American Foundry Society meeting in 1990. At that meeting, Rothschild distributed flyers describing the Jero Reclaimer to persons at the meeting. Rothschild also approached George Good, an engineer at Ford Motor Company ("Ford"), to discuss the possibility of an arrangement in which Ford provided the funding and plaintiffs supplied the engineering knowledge to develop and test a production size version of the Jero Reclaimer.

Good and his supervisor, Richard Lipka, Manager of Ford's Plant Engineering Department, were interested in Rothschild's offer. From 1991 through 1993, Lipka, Good and other Ford engineers worked to obtain $785,000 for the Jero Reclaimer project from Ford's "Factory of the Future" fund, a research and development fund, as well as Ford's Casting and Forging operations fund.⁴ Ford's engineers also worked with plaintiffs in an attempt to negotiate a written agreement. In the end, no agreement was reached and the parties discontinued their relations. The parties blame each other for their failed contractual relationship.

After the dealings with plaintiffs fell through, Lipka instructed Good to continue development of a gravity flow thermal sand reclaimer with outside consultants. The Montrose firm, a Windsor, Ontario engineering design firm, Rorison Industrial Electric, a Windsor, Ontario electrical design engineering firm, and North American Manufacturing, a company based in Cleveland, Ohio, all were hired by Ford to continue the gravity flow thermal sand reclamation project.

In 1994, the so-called "Ford Reclaimer" (which is referred to by the defendant as the "Montrose Reclaimer") was finally constructed. The Ford Reclaimer, depicted below, operates in the following fashion. Sand enters the Ford Reclaimer at the top of the apparatus and falls through the device by the force of gravity. Cylindrical tubes, 2823 to be exact, slow the flow of the sand through the apparatus down to a trickle. Two burners in the bottom of the Ford Reclaimer heat the 2823 cylindrical tubes which in turn heat the sand on contact, burning off the binder material. The sand exists the Ford Reclaimer through a funnel at the base.

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In May, 1996, Jero, Rothschild and Donahue, after learning about the Ford Reclaimer, filed this action. Plaintiffs allege that the Ford Reclaimer infringes patents '288 and '888. Plaintiffs also allege that in designing the Ford Reclaimer, defendant used plaintiffs' proprietary information without plaintiffs' permission which constitutes unfair competition and unjust enrichment. On August 29, 1997, Ford filed the instant motion for summary judgment on all of the plaintiffs' claims.

Summary Judgment Standard

Federal Rule of Civil Procedure 56(c) empowers the court to render summary judgment "forthwith if 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). There is no genuine issue of material fact when the "record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The court must decide "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." In re Dollar Corp., 25 F.3d 1320, 1323 (6th Cir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). "The mere existence of some alleged factual dispute between the parties will not defeat the otherwise properly supported motion for summary judgment; the requirement is that...