Stairmaster Sports/Med. Prod. v. Groupe Procycle, Civil Action No. 97-396 MMS.

• Decision Date: 29 July 1998
• Docket Number: Civil Action No. 97-396 MMS.
• Parties: STAIRMASTER SPORTS/MEDICAL PRODUCTS, INC., a Delaware corporation, Plaintiff, v. GROUPE PROCYCLE, INC., a Canadian corporation, and Procycle U.S.A., Inc., a Delaware corporation, Defendants.
• Court: U.S. District Court — District of Delaware

25 F.Supp.2d 270 STAIRMASTER SPORTS/MEDICAL PRODUCTS, INC., a Delaware corporation, Plaintiff,
v.
GROUPE PROCYCLE, INC., a Canadian corporation, and Procycle U.S.A., Inc., a Delaware corporation, Defendants. Civil Action No. 97-396 MMS. United States District Court, D. Delaware. July 29, 1998. Opinion Denying Reargument September 3, 1998.

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Donald F. Parsons, Karen L. Pascale, of Morris, Nichols, Arsht & Tunnell, Wilmington, DE, for plaintiff; Paul T. Meiklejohn, Ramsey M. Al-Salam, Brian G. Bodine, of Seed and Berry LLP, Seattle, WA, of counsel.

Allen M. Terrell, Jr., Jeffrey L. Moyer, of Richards, Layton & Finger, Wilmington, DE, for defendants; Bernard L. Sweeney, Robert Kenney, Edward H. Sikorski, Mary Ann Capria, of Birch, Stewart, Kolasch & Birch, LLP, Falls Church, VA, of counsel.

OPINION

Murray M. SCHWARTZ, Senior District Judge.

I. INTRODUCTION

StairMaster Sports/Medical Products, Inc. ("StairMaster") filed a patent infringement action against Groupe Procycle, Inc. and Procycle U.S.A., Inc. (collectively "Procycle"), alleging infringement of their U.S. Patent No. Re. 34,959 entitled "Stair-Climbing Exercise Apparatus" ("the '959 Patent"). Specifically, StairMaster alleges that Procycle's Quantum and Executive Stair-Climbing devices infringe its '959 Patent. Procycle answered StairMaster's complaint by denying it had infringed the '959 Patent and by counter-claiming for a declaratory judgment that the '959 Patent is invalid, not infringed, and unenforceable.

In StairMaster Sports/Medical Products, Inc. v. Group Procycle, Inc., 1998 WL 290296 (D.Del. May 20, 1998), the Court construed disputed claim language of the '959 Patent as the first part of its infringement analysis. Currently before the Court is StairMaster's Motion for partial summary judgment on infringement of Claim 9 of the '959 Patent under a theory of literal infringement and Procycle's Motion for summary judgment on noninfringement of Claims 1, 7, 9 and 11 of the '959 Patent and on invalidity of the '959 Patent based on violations of the patent reissue statute, 35 U.S.C. § 251. Jurisdiction is proper under § 1338(a). StairMaster's motion for partial summary judgment will be denied, while Procycle's motion for summary judgment will be granted in part and denied in part.

II. FACTUAL BACKGROUND A. HISTORY BEHIND ISSUANCE OF '959 PATENT

Lanny L. Potts ("Potts"), the inventor of StairMaster's stair-climbing (also referred to as "stepper") technology, filed a patent application with the Patent and Trademark Office ("PTO") on August 4, 1986. Throughout the initial prosecution of this patent, Potts was represented by a patent attorney, William S. Dorman ("Dorman"). Potts filed a Petition

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to Make Special to have his patent application granted "special status" and examined on an expedited basis under 37 C.F.R. § 1.102(d).¹ Under this special expedited procedure, the patent examiner's search is limited to the subject matter encompassed by the claims.

Dorman prepared the petition, verified its contents with Potts, and filed the Petition to Make Special. Although the PTO initially found the Petition to be insufficient, subsequently a renewed Petition was filed and the Petition was granted. After accepting the application under the specialized procedures, the patent examiner performed the limited prior art search. The claims as submitted were found to be allowable and United States Patent No. 4,708,338 ("the '338 Patent"), entitled "Stair Climbing Exercise Apparatus," issued to Tri-Tech, Inc. ("Tri-Tech"), to whom Potts had assigned the patent.

Subsequently, on September 25, 1989, Tri-Tech, through its attorney, Richard L. Hughes ("Hughes"), filed an application for reissue of the '338 Patent. As required by the applicable regulations, this application was accompanied by a Reissue Declaration signed by Potts, in which Potts identified certain features of the '338 Patent that were believed to contain either improper claim language or to lead to a too narrow scope of patent protection. In his Declaration, Potts stated these errors occurred because of his inexperience with patent matters and a misunderstanding by his attorney, Dorman. Potts also pointed out that a competitor had observed that the original claims were overly narrow in their scope. Based on the representations made by Potts, Hughes filed amended claims in an effort to correct the alleged errors.

On July 14, 1990, Potts passed away. Two months later, the PTO issued a first office action rejecting the application for reissue. In January of 1991, however, Tri-Tech filed a request for permission to waive the PTO rules and allow Edmund J. Farrell ("Farrell"), then president of Tri-Tech, to file a supplemental declaration to address the deficiencies in Pott's Reissue Declaration. This request was allowed by the PTO and amendments to the claims were filed. Over the course of the next year, Farrell submitted four Supplemental Declarations.

On August 14, 1992, Tri-Tech registered a name change with the PTO, from Tri-Tech, Inc., to StairMaster Sports/Medical Products, Inc. This name changed reflected the merger of Tri-Tech and StairMaster Southwest, Inc. Randall Peterson ("Peterson") became the president of the newly formed StairMaster company. Shortly thereafter, Peterson filed a first Supplemental Declaration on September 24, 1992, in which he identified additional errors in the pending reissue claims and filed an amendment. These newly added reissue claims received a final rejection from the PTO on January 21, 1993. A First Amendment After Final [Rejection] and Notice of Appeal from the Final Rejection to the Board of Patent Appeals and Interferences was filed by Hughes on StairMaster's behalf in April of 1993.

Thereafter, StairMaster retained a new attorney, George C. Rondeau, Jr. ("Rondeau"). Rondeau filed a Second, Third, Fourth and Fifth Amendment After Final [Rejection] and conducted interviews with the patent examiner. Additionally, Peterson filed a Second Supplemental Declaration on April 4,

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1994. Thereafter, a Notice of Allowability issued on August 16, 1994. Subsequently, the '959 Reissue Patent issued on May 30, 1995. The '959 Patent is identical to the superseded '338 Patent, except that five new claims have been added — Claims 7 through 11.

B. THE '959 INVENTION

The '959 Patent describes an exercise device that simulates stair-climbing for a user. The StairMaster 4000PT is just one of many possible embodiments of the '959 invention; however, the Court provides the following brief description of its operation to provide context for the subsequent summary judgment discussion.

The 4000PT has two pedals for the user to stand on during exercise. These pedals swivel on the end of pedal arms that, in turn, pivot at a location at the bottom of the frame in front of the pedals. As a result, during use, each pedal travels down and to the rear. Because of a spring mechanism, when not in use, each pedal returns to an "up" position. When the user steps on a pedal, the pedal sinks under the weight of the user. By simulating a stair-climbing motion by alternatively stepping on the two pedals, the user keeps the pedals from fully sinking to the floor. The velocity of the pedals are controlled by the use of a control and braking mechanism and the stair-climber will operate whether the user takes relatively long steps or short steps. Because each pedal is independently linked to a drive shaft, when the user steps on the pedal, the pedal arm pulls on a chain that is attached at approximately the middle of the pedal arm. This same chain connects to a sprocket in the drive shaft which converts the oscillating motion of the independent pedals to unidirectional rotary motion by being connected to a drive shaft which has both a second sprocket attached to it, "the drive sprocket," and one-way clutches. Importantly, the patent requires that the angle between the pedal arm line and this chain must be less than 90 degrees when the pedals are in their upper most position.

After reaching the drive sprocket, the rotary motion is then transferred by means of another chain to a transmission which transmits and increases the rotational speed. In turn, the transmission is connected to a brake or alternator. The brake increases resistance when the user begins stepping too quickly. Thus, the brake makes the drive shaft more difficult to turn, thereby transmitting resistance to the pedal arms. The brake continues to impart resistance until the speed drops below a predetermined level. To increase velocity, the brake momentarily decreases resistance. These factors tend to create a narrow range of speed during use.

Since its introduction, the 4000PT stair-climbing or "stepper" device has achieved enormous commercial success, with revenues generated in excess of $219 million. Use of these type of stepper devices in the United States have increased dramatically and Stair-Master has entered into numerous licensing agreements and settlements with competitors based on this technology.

C. THE ACCUSED DEVICES

Procycle manufactures and sells four models of stair-climbers: Quantum LS, Quantum LS2, Executive LS, and Executive LS2. These four stair-climbers are modified versions of the stair-climbers previously produced by a now-defunct Canadian corporation, Monark Bodyguard Fitness Corporation. Procycle has conceded, for purposes of this motion only, that all their stair-climbers may be considered to be substantially the same, except where otherwise noted.

The accused Procycle stair-climbers have two rotating axles. The first axle has rotary motion transmitted to it when the user presses the right or left pedal of the device downward in a reciprocating motion. A first cable attached to the pedal arm is also attached to a drive shaft, which has connected to it by a key and keyway a...