U.S. Gypsum Co. v. Lafarge North America, Inc.

• Decision Date: 03 April 2007
• Docket Number: No. 03 C 6027.,03 C 6027.
• Citation: 508 F.Supp.2d 601
• Parties: UNITED STATES GYPSUM COMPANY, Plaintiff, Counterdefendant, v. LaFARGE NORTH AMERICA, INC., Defendant, Counterplaintiff, and LaFarge S.A., Daniel C. Myslinski, David Downs, John D. Yockey, Tom Huffer, Charles Jett, Ed Green, William Hartford, Walter Weldon, Kurt F. Kruzshak, and Sidney Spear, Defendants.
• Court: U.S. District Court — Northern District of Illinois

Page 601

508 F.Supp.2d 601

UNITED STATES GYPSUM COMPANY, Plaintiff, Counterdefendant, v. LaFARGE NORTH AMERICA, INC., Defendant, Counterplaintiff, and LaFarge S.A., Daniel C. Myslinski, David Downs, John D. Yockey, Tom Huffer, Charles Jett, Ed Green, William Hartford, Walter Weldon, Kurt F. Kruzshak, and Sidney Spear, Defendants.

No. 03 C 6027.

United States District Court, N.D. Illinois, Eastern Division.

April 3, 2007.

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H. Michael Hartmann, Bruce Michael Gagala, David M. Airan, Eley O. Thompson, Jason Tsuytoshi Murata, Lisa K. Kelly, Mark E. Phelps, Paul J. Filbin, Paul J. Korniczky, Salim Arif Hasan, Leydig, Voit & Mayer, Ltd., Chicago, IL, Aaron Ross Feigelson, Leydig, Voit & Mayer, Ltd., Rockford, IL, for PlaintifVCounter Defendant.

John W. Treece, Douglas I. Lewis, Eric Stephen Mattson, Paul E. Veith, Richard J. O'Brien, Sidley Austin LLP, Steven Yovits, Howrey LLP, Charles B. Sklarsky, Seth A. Travis, Jenner & Block LLP, Chicago, IL, Bruce T. Weider, Burns, Doane, Swecker & Mathis, Alexandria, VA, for Defendants/Counterplaintiffs.

MEMORANDUM OPINION AND ORDER

HART, District Judge.

In its Second Amended Complaint, plaintiff United States Gypsum Company ("USG") alleges that defendant. LaFarge North America, Inc. ("LNA") has infringed certain claims of USG's U.S. Patent No. 5,683,635 related to producing foamed gypsum wallboard. Defendant LaFarge, S.A. ("LSA"), a French corporation that owns a majority share of LNA, is also alleged to be liable for patent infringement.¹ Also named as defendants are ten individuals (collectively, the "Individual Defendants") who are current or former employees of LNA and who worked for USG prior to being employed by LNA. The Individual Defendants are Daniel Myslinski, David Downs, John Yockey, Tom Huffer, Charles Jett, Ed Green, William Hartford, Walter Weldon, Kurt Kruzshak, and Sidney Spear. In addition to the federal patent claims against the Corporate Defendants, the Corporate Defendants and Spear are alleged to have violated two federal statutes, the Stored Communications Act ("SCA"), 18 U.S.C. §§ 2701-12, and the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. All other claims are based on state law.² All defendants are alleged to be liable for misappropriation of USG trade secrets and conversion. The Individual Defendants are all also alleged to be liable for breach of fiduciary duty, and some are alleged to be liable for breach of contract. The Corporate Defendants are also alleged to be liable for unfair competition, tortious interference with contract, inducement of breach of fiduciary duty, and unjust enrichment.

LNA brings a five-count Counterclaim against USG. Each count seeks declaratory relief only. The respective Counter claim counts seek declarations that: (I) LNA did not infringe the '635 patent; (II) claims of the '635 patent are invalid; (III) the '635 patent is unenforceable because of inequitable conduct; (IV) USG cannot claim infringement based on the doctrine of equivalents in that it would cause the claims to read on prior art; and (V) positions the patentee took before the United States Patent and Trademark Office ("PTO") estop USG from making certain contentions regarding the. '635 patent.

Each side has engaged in extensive discovery, all of which is complete. Presently pending are cross motions for summary judgment. Defendants move for summary judgment dismissing all counts of the Second Amended Complaint. To the extent any claims against them are not dismissed on other grounds, LSA and four Individual Defendants (Hartford, Huffer, Myslinski, and Jett) seek dismissal of the claims against them on the ground that there is no personal jurisdiction over them in this court. LNA also moves for summary judgment on Counts I and III of its Counterclaim. USG moves for summary judgment dismissing the Corporate Defendants' patent infringement affirmative defense of inequitable conduct, as well as Count III of LNA's Counterclaim which also raises inequitable conduct. USG also moves for summary judgment that there is personal jurisdiction over LSA and the four Individual Defendants.

In this case, Federal Circuit law controls as to substantive patent issues. As to procedural issues such as summary judgment procedure, however, the Federal Circuit holds that a district court should follow the law of the circuit in which it is located. Applied Medical Resources Corp. v. United States Surgical Corp., 435 F.3d 1356, 1364 (Fed.Cir.2006); Arthur A. Collins, Inc. v. Northern Telecom Ltd., 216 F.3d 1042, 1047-48 (Fed.Cir.2000); Vivid Technologies, Inc. v. American Science & Engineering, Inc., 200 F.3d 795, 807 (Fed. Cir.1999); Massey v. Del Laboratories, Inc., 118 F.3d 1568, 1572 (Fed.Cir.1997); Kim v. Conagra Foods, Inc., 2004 WL 626140 *1 n. 2 (N.D.Ill. March 26, 2004). Seventh Circuit law also applies to issues such as the admissibility of evidence, Micro Chemical, Inc. v. Lextron, Inc., 317 F.3d 1387, 1390-91 (Fed.Cir.2003); general credibility issues, Applied Medical, 435 F.3d at 1364; and the sufficiency of evidence supporting non-patent claims, Duro-Last, Inc. v. Custom Seal, Inc., 321 F.3d 1098, 1106 (Fed.Cir.2003).

As to each side's motion for summary judgment, the entire record is considered with all reasonable inferences drawn in favor of the nonmovant and all factual disputes resolved in favor of the nonmovant. Eisencorp, Inc. v. Rocky Mountain Radar, Inc., 398 F.3d 962, 965 (7th Cir. 2005); Estate of Moreland v. Dieter, 395 F.3d 747, 758 (7th Cir.), cert. denied, 545 U.S. 1115, 125 S.Ct. 2915, 162 L.Ed.2d 296 (2005); Hall v. Bennett, 379 F.3d 462, 464 (7th Cir.2004); Hudson v. Chicago. Transit Authority, 375 F.3d 552, 558 (7th Cir. 2004). The burden of establishing a lack of any genuine issue of material fact rests on the movant. Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir.2001); Wollin v. Gondert, 192 F.3d 616, 621-22 (7th Cir. 1999). The nonmovant, however, must make a showing sufficient to establish any essential element for which he or it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Binz v. Brandt Construction Co., 301 F.3d 529, 532 (7th Cir.2002); Traylor v. Brown, 295 F.3d 783, 790 (7th Cir.2002). The movant need not provide affidavits or deposition testimony showing the nonexistence of such essential elements. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. Also, it is not sufficient to show evidence of purportedly disputed facts if those facts are not plausible in light of the entire record. See Yasak v. Retirement Board of Policemen's Annuity & Benefit Fund of Chicago, 357 F.3d 677, 679 (7th Cir.2004); NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 236 (7th Cir.), cert. denied, 515 U.S. 1104, 115 S.Ct. 2249, 132 L.Ed.2d 257 (1995); Covalt v. Carey Canada, Inc., 950 F.2d 481, 485 (7th Cir.1991); Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 476-77 (7th Cir.), cert. denied, 488 U.S. 852, 109 S.Ct. 137, 102 L.Ed.2d 110 (1988); Shyman v. UNUM Life Insurance Co. of America, 2004 WL 609280 *2 (N.D.Ill. March 25, 2004), aff'd, 427 F.3d 452 (7th Cir.2005). As the Seventh Circuit has summarized:

The party moving for summary judgment carries the initial burden of production to identify "those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Logan v. Commercial Union Ins. Co., 96 F.3d 971, 978 (7th Cir.1996) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citation and internal quotation omitted)). The moving party may discharge this burden by "`showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct. 2548, 91 L.Ed.2d 265. Once the moving party satisfies this burden, the nonmovant must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "The nonmovant must do more, however, than demonstrate some factual disagreement between the parties; the issue must be `material.'" Logan, 96 F.3d at 978. "Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute." Id. (citation omitted). In determining whether the nonmovant has identified a "material" issue of fact for trial, we are guided by the applicable substantive law; "[o]nly disputes that could affect the outcome of the suit under governing law will properly, preclude the entry of summary judgment." McGinn v. Burlington Northern R.R. Co., 102 F.3d 295 298 (7th Cir.1996) (citation omitted). Furthermore, a factual dispute is "genuine" for summary judgment purposes only when there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Hence, a "metaphysical doubt" regarding the existence of a genuine fact issue is not enough to stave off summary judgment, and "the nonmovant fails to demonstrate a genuine issue for trial `where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party ....'" Logan, 96 F.3d at 978 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

Outlaw, 259 F.3d at 837.

Unless otherwise indicated, the facts set forth below resolve all factual disputes and draw all reasonable inferences in favor of USG. Both sides move for summary judgment regarding inequitable conduct and personal jurisdiction. On those issues, it will be indicated...