Symbol Technologies v. Metrologic Instruments

• Decision Date: 08 August 1991
• Docket Number: Civ. A. No. 88-0461,88-4686.
• Citation: 771 F. Supp. 1390
• Parties: SYMBOL TECHNOLOGIES, INC., Plaintiff, v. METROLOGIC INSTRUMENTS, INC. and C. Harry Knowles, Defendants.
• Court: U.S. District Court — District of New Jersey

771 F. Supp. 1390

SYMBOL TECHNOLOGIES, INC., Plaintiff, v. METROLOGIC INSTRUMENTS, INC. and C. Harry Knowles, Defendants.

Civ. A. Nos. 88-0461, 88-4686.

United States District Court, D. New Jersey.

August 8, 1991.

COPYRIGHT MATERIAL OMITTED

Sprung Horn Kramer & Woods by Arnold Sprung, Nathaniel D. Kramer and Ira J. Schaefer, Tarrytown, N.Y., and Brown & Connery by Warren W. Faulk, Westmont, N.J., for plaintiff.

Hopgood Calimafde Kalil Blaustein & Judlowe by Stephen B. Judlowe, Francis J. Murphy and William A. Alper, New York City, and Max Goldman, Cherry Hill, N.J., for defendants.

OPINION

BROTMAN, District Judge.

Presently before the court, in Civil Action No. 88-0461, are plaintiff's motion for partial summary judgment on the issue of patent validity, plaintiff's motion for partial summary judgment on the issue of infringement, and defendant's motion for summary judgment based on the equitable doctrine of estoppel.¹

I. FACTS AND PROCEDURE

Plaintiff, Symbol Technologies Inc. ("Symbol"), is a corporation organized under the laws of the State of Delaware with its principal place of business in New York State. Plaintiff manufactures and sells laser bar code scanners. Laser scanners are devices which, through the use of light sensitive optics and compact helium-neon based or solid-state infra-red (visible light diode) lasers, read and discern an analogue bar code pattern which contains information about the items on which they are imprinted.²

Defendant, Metrologic Instruments Inc. ("Metrologic"), is a New Jersey corporation that also engages in the manufacture and sale of laser scanners. Defendant C. Harry Knowles ("Knowles") has been the sole owner and President of Metrologic since February 10, 1986, and serves as one of three members on Metrologic's Board of Directors.

On February 29, 1980, plaintiff filed an application with the Patent and Trademark Office for a patent to cover a hand-held laser scanner which it developed and produced. During that period, Metrologic was developing its own version of the hand-held laser scanner. By 1982, Metrologic had developed its Model 190 hand-held laser scanner and had reached an agreement with NCR for NCR to incorporate it in "point of sale" devices it sold.

In November of 1982, Symbol suggested to NCR that the hand-held laser scanners NCR was purchasing from Metrologic infringed one or more claims in a patent application Symbol had on file with the Patent and Trademark Office. NCR promptly notified Metrologic of Symbol's claim. After consulting its patent counsel, Metrologic concluded that Symbol would be unable to obtain a valid, enforceable patent with such broad claims covering hand-held, trigger operated laser scanners and that Metrologic's MH-190 scanner would not infringe Symbol's patents, once issued. Nevertheless, Metrologic and Symbol met on several occasions to discuss Metrologic's hand-held laser scanners, the claims of the pending application, and the possibility of various business arrangements between Symbol and Metrologic. The discussions, however, did not result in any agreement between Symbol and Metrologic with respect to the patent applications on file with the Patent and Trademark Office.

On June 7, 1983, the Patent and Trademark Office issued United States Patent No. 4,387,297 (the "'297 patent") to plaintiff. Re-examination of the '297 patent was completed on December 16, 1983. Patent '297 covers the basic invention:

a laser scanning system for reading bar code symbols, a light weight easy-to-manipulate laser scanning head normally supportable only by a user throughout the reading of the symbols ...

To read a bar code, a gun-shaped device is aimed at the bar code and a trigger is squeezed. Laser scanners eliminate many of the problems associated with non-laser forms of scanners, such as light pens or wands, and allow minimally trained personnel to read bar codes quickly and accurately.

The second patent at issue, United States Patent No. 4,593,186 (the "'186 patent"), was issued to plaintiff on June 3, 1986. Patent '186 is a division of the '297 patent. The patent is generally directed to a combination of object sensing, scanning and decoding, and specifically to the idea of an automatic termination of the scanning process.

In January of 1984, after the issuance of the '297 patent, plaintiff sued Spectra Physics, a California based corporation, for patent infringement. Symbol Technologies, Inc. v. Spectra Physics, No. C-84-20051, (N.D.Ca. filed Jan. 27, 1984). Plaintiff notified Metrologic, who was manufacturing and marketing the MH-190 hand-held laser scanners, that Symbol would determine its future actions based on the outcome of the liability phase of the Spectra Physics suit. The Spectra Physics suit, however, was resolved by a Consent Judgment on January 6, 1986.

On August 13, 1985, due to the poor sales of defendant's MH-190 scanners, Metrologic declared bankruptcy under Chapter 11 and submitted a plan of reorganization. Metrologic's plan of reorganization was confirmed by the bankruptcy court on February 11, 1986. At the time of the settlement of the Spectra Physics suit, Metrologic was still in bankruptcy, operating as a debtor in possession.

Plaintiff continued to enforce its patent against other infringers. On November 14, 1986, plaintiff sued Opticon, Inc., a subsidiary of the Japanese based Opto Electronics Co. Ltd. (referred to collectively as "Opticon"), for patent infringement. Symbol Technologies, Inc. v. Opticon, Inc., No. 86-8736, (S.D.N.Y.). During the course of this suit, Symbol subpoenaed Knowles to testify at the Opticon trial. Although Metrologic and Knowles were not parties in the Opticon suit, Knowles testified for two days on direct examination on behalf of Opticon and for seven days on cross examination by Symbol. Knowles also voluntarily submitted voluminous Metrologic records to Opticon to assist in their defense and even materially altered an earlier laser scanner in an attempt to convince the court that Symbol's patent was invalid due to prior art. In Opticon, the court held that Opticon did in fact infringe plaintiff's patents and that plaintiff's '297 and '186 patents were valid and enforceable. Symbol Technologies, Inc. v. Opticon, Inc., No. 86-8736, Slip Op. at 2, 1990 WL 58887, 1990 U.S.Dist. Lexis 5186, 17 U.S.P.Q.2d (BNA) 1737 (S.D.N.Y. May 3, 1990). The decision was affirmed on appeal by the Federal Circuit. Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569, 19 U.S.P.Q.2d (BNA) 1241 (Fed.Cir.1991).

In the meantime, defendant Metrologic had obtained refinancing and had emerged out of bankruptcy. In the second half of 1987, defendant Metrologic began making and selling a new series of hand-held laser scanners known as the '90 Series. In fact, Knowles personally conceived of the Series '90 scanners. He then assembled and headed a team in May of 1987 to develop what resulted in the MH-290 scanner, one of the objects of the present infringement suit. Additionally, Knowles personally solicited potential customers and discussed the scanners with them.

On January 26, 1988, plaintiff commenced this suit, Civil Action No. 88-0461, against Metrologic and Knowles alleging that Metrologic's Series '90 laser scanners infringed two of plaintiff's patents relating to laser scanners: patents '297 and '186. Defendants move for summary judgment based on estoppel, arguing that Symbol should be estopped from bringing this action since it knew of Metrologic's hand-held laser scanner development in 1982, but did not file this suit until January of 1988 after Metrologic had incurred substantial expense in developing its product lines. Defendants contend that Metrologic reasonably relied on Symbol's silence to conclude that Symbol would not bring an action for patent infringement against them.

Plaintiff moves for partial summary judgment on the issue of patent validity on the '297 and '186 patents. Plaintiff argues that Metrologic and Knowles should be issue precluded from litigating the validity of the '297 and '186 patents as they played an active role in the litigation of the Opticon matter and the district court upheld the validity of those patents in Opticon. Plaintiff also brings a motion for partial summary judgment on the issue of infringement against Metrologic and Knowles. Metrologic concedes its infringement if the patents are found to be valid, but Knowles contests it. Plaintiff contends that since undisputed facts establish that Knowles committed the tort of patent infringement, summary judgment on the issue of infringement should be entered in its favor against Knowles.

Since plaintiff's partial summary judgment motions are relevant only if the court concludes that plaintiff should not be estopped from bringing this suit, the court will first address defendants' summary judgment motion.

II. DISCUSSION

A. Summary Judgment Standard

The standard for granting summary judgment is a stringent one, but it is not insurmountable. A court may grant summary judgment only when the materials of record "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); see Hersh v. Allen Prods. Co., 789 F.2d 230, 232 (3d Cir. 1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir.1983). In deciding whether there is a disputed issue of material fact the court must view all doubt in favor of the nonmoving party. Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n. 2 (3d Cir.1983), cert. denied, 465 U.S. 1091, 104 S.Ct. 2144, 79 L.Ed.2d 910 (1984); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir.1972). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

Recen...