Transclean Corp. v. Bridgewood Services, Inc., Civ. 97-2298 RLE.

Decision Date12 November 1999
Docket NumberNo. Civ. 97-2298 RLE.,Civ. 97-2298 RLE.
Citation77 F.Supp.2d 1045
PartiesTRANSCLEAN CORPORATION, James P. Viken, Jon A. Lang, and Donald E. Johnson, Plaintiffs, v. BRIDGEWOOD SERVICES, INC., Defendant.
CourtU.S. District Court — District of Minnesota

Jon S. Swierzewski, Alan Marshall Anderson, Renee L. Jackson, Christopher K. Larus, Larkin Hoffman Daly & Lindgren, Bloomington, MN, for Plaintiffs.

Karl L. Cambronne, Becky L. Erickson, Chestnut & Cambronne, Minneapolis, MN, Warren E. Olsen, Fitzpatrick Cella Harper & Scinto, Washington, DC, for Defendants.

MEMORANDUM ORDER

ERICKSON, United States Magistrate Judge.

I. Introduction

This matter came before the undersigned United States Magistrate Judge pursuant to the consent of the parties, made in accordance with the provisions of Title 28 U.S.C. § 636(c), upon the Plaintiffs' Motion for partial Summary Judgment, and upon the Defendant's Motion for Summary Judgment. A Hearing on the Motions was conducted on April 6, 1999, at which time the Plaintiffs appeared by Alan M. Anderson and Christopher K. Larus, Esqs., and the Defendant appeared by Warren E. Olson and Karl L. Cambronne, Esqs.

For reasons which follow, the Motions are granted in part, and denied in part.

II. Factual and Procedural Background

This case arises from commercial strife between competitors in the automotive service, equipment manufacturing business. The dispute centers on the patenting, and marketing, of their respective automatic transmission fluid changing devices.

Traditionally, automatic transmission fluid could only be changed through the "gravity drain," or "service fill" method, in which the old transmission fluid was allowed to drain out of the transmission sump, and new transmission fluid was introduced to replace it. This process could never effect a total exchange of fluids, because unaided drainage would leave a significant portion of fluid trapped in remote areas of the transmission chamber. See, e.g., Operator's Manual for the TFX Total Fluid Exchange System at 8, Affidavit of Christopher K. Larus Supp. Pls.' Part. Mot. Summ. J. on Infringement ("Larus Infringement Aff."), Ex. 3.

The relatively new1 technology, which serves as the root of this litigation, replaces the traditional fluid changing method with a machine that claims to be able to replace almost all of the vehicle's transmission fluid, by equalizing the simultaneous influx of new transmission fluid with the drainage of the old. This form of flow regulation is designed to ensure that all of the transmission fluid is replaced in one smooth, fifteen-minute process, and that the greatest displacement of old fluid can be accomplished with the least amount of new fluid. This process, assertedly, conserves both time and expense.

Plaintiff Transclean Corporation ("Transclean"), and the Defendant Bridgewood Services, Inc. ("Bridgewood"),2 each have ownership rights to one of these innovative, automatic transmission fluid changing systems, and they are in direct competition in both the manufacture and sale of their products. The parties' technological and competitive proximity having engendered this litigation, their dispute concerns their respective patent and trademark rights, as well as the legality of Bridgewood's advertising claims. The Plaintiffs contend that their patent — U.S.Patent No. 5,318,080 (the "Viken Patent") — which was issued to the Plaintiff James Viken ("Viken"), is being infringed by a similar device, which is manufactured by Bridgewood, and which was patented by Jerry Burman ("Burman"), on June 4, 1996, as U.S.Patent No. 5,522,474 (the "Burman Patent"). Bridgewood denies that its device infringes the Viken Patent, and affirmatively maintains that the Viken Patent is invalid, or unenforceable, on several grounds. In addition, the Plaintiffs assert that Bridgewood's advertising of its device encroaches upon Transclean's common law right to the trademarks "TOTAL FLUID EXCHANGE," and "TOTAL FLUID X-CHANGE," in violation of the Lanham Act, Title 15 U.S.C. § 1125, and the Minnesota Deceptive Trade Practices Act ("MDTPA"), Minnesota Statutes Section 325D.44. Lastly, in their third cause of action, the Plaintiffs seek damages, and injunctive relief, for Bridgewood's alleged false advertising which, purportedly, violates the Lanham Act, the MDTPA, and the Minnesota Consumer Fraud Act, Minnesota Statutes Section 325F.67.

A. The Viken Patent and its Prosecution. As noted, the Viken Patent was issued on June 7, 1994, and was issued from Application Serial No. 07/781,322, which was filed on October 23, 1991. Generally, the patent claims an apparatus for "[f]luid changing in an automatic transmission by opening the cooler line and draining used fluid, at the flow of normal circulation, out of the cooler line from the transmission into a drain receptacle for receiving used fluid and simultaneously supplying fresh fluid, from a pressurized supply receptacle, into the cooler return line to the transmission at a similar controlled rate that is equal to or greater than the rate of flow of the used fluid into the drain receptacle." Viken Patent, abstract.

The Viken Patent contains thirteen claims for an automatic fluid changing apparatus, only the first of which is an independent claim — that is, a claim which is entirely self-contained — while the remaining twelve claims refer back to Claim 1, and incorporate its limitations.3 Accordingly, each of the thirteen claims embody the following provisos, as set forth in Claim 1:

In a fluid replacing apparatus for an automatic transmission an improvement having fluid circulation inlet and outlet ports comprising;

a fluid receiver adapted to be connected to the fluid circulation output port on an automatic transmission;

a source of fresh transmission fluid adapted to be connected to the fluid circulation inlet port on said automatic transmission so that fluid circulates therethrough; and

means connected to said fluid receiver and said source of fresh fluid, for equalizing the fluid flow into said fluid receiver and out of said source of fluid.

Id., col. 8, 10-24.

The Viken Patent specification discloses three different structures that perform the function recited in Claim 1, the most pertinent of which is that described in Figure 3 of the Viken Patent.

Figure 3 of the Viken Patent depicts a closed tank that has a "flexible, rubber-like diaphragm," which divides the tank into two chambers, and separates the fresh fluid from the used fluid. Id., col. 4, 54-68, col. 5, 1-8. The depiction is shown as being operated with the upper half of the tank filled with fresh fluid, and connected to the inlet port on a vehicle's transmission, and the lower half, which is set to collect the used fluid, being connected to the transmission's outlet port. Id., col. 3, 19-33. When the user activates the transmission pump, and new fluid begins to displace the old within the transmission, the diaphragm maintains a state of equilibrium between both halves of the tank, such that the total volume of fluid contained in the tank is constant, the pressure in the tank is symmetrical, and the rate of flow of old and new fluid is automatically equalized by the diaphragm. See, id., col. 3, 33-40; Expert Report of Richard J. Goldstein at 1, Second Affidavit of Christopher K. Larus, Ex. 24. The other two depictions of the Viken Patent — Figures 4 and 6 — incorporate manual processes for equalizing the flow of the old and new transmission fluids. Each of these depictions employs a pressure gauge, and a manually operated relief valve, to equalize the fluid replacement process.

Viken applied for a patent for this device on October 23, 1991. At that time, Viken had not yet built a working prototype of the device that is depicted in Figure 3. Deposition of James P. Viken at 28-30, Bridgewood App. P 8. Under Title 35 U.S.C. 102(b) — which states that an invention which "was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States," is not patentable — October 23, 1990, becomes a critical date in the U.S.Patent and Trademark Office's (the "PTO's") consideration of Viken's application. Indeed, two conceptions of prior art, consisting of U.S.Patent No. 3,513,941 (the "Becnel Patent"), which was issued to Neil Becnel ("Becnel"), and a Japanese patent, JP 2-72299, which both disclose an automatic transmission fluid changing device, predate Viken's application by more than one year, and are indisputably relevant to the claims of the Viken Patent.

Viken did not submit a copy of the Becnel Patent to the Patent Examiner in an Information Disclosure Statement, and the file history bears no suggestion that the Examiner independently obtained either reference for purposes of considering Viken's application. In his application, Viken listed the Becnel Patent among various other patents, in the "Description of the Prior Art." Application Serial No. 07/781,322 at 2, PTO File for Viken Patent, Bridgewood App. 1. Viken related that the Becnel Patent, and U.S.Patent No. 4,745,989, were "believed to be the most directly pertinent" to Viken's invention. Id. at 3. Although Viken had only recently been made aware of the existence of the Becnel Patent, he represented to the Examiner that he had utilized the concepts present in the Becnel Patent "in a similar manner," and had encountered performance problems. Id. at 5.

Since it is not disputed that Viken was not aware of the Becnel Patent until July of 1991, there is some question as to the veracity of his representation, to the PTO, that he had utilized the method disclosed by the Becnel Patent in the course of designing his invention. In his Affidavit, Viken explains that he had been experimenting with a "free discharge" method for...

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