Ultra-Mek, Inc. v. United Furniture Indus., Inc.
| Decision Date | 30 March 2021 |
| Docket Number | 1:18CV281 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | ULTRA-MEK, INC., Plaintiff and Counter Defendant, v. UNITED FURNITURE INDUSTRIES, INC., OISEYS INTERNATIONAL, INC., MAN WAH HOLDINGS LTD., JIANGSU YULONG SMART TECHNOLOGY CO., LTD., REMACRO MACHINERY TECHNOLOGY CO., LTD., TAIZHOU CHENGUANG VEHICLE CO., LTD., and MAN WAH (USA), INC., Defendants and Counter Claimants. |
This matter comes before the court on Plaintiff Ultra-Mek, Inc.'s ("Plaintiff" or "Ultra-Mek") Motion for Summary Judgment, (Doc. 134). Also before the court is the Motion for Summary Judgment, (Doc. 142), filed Defendants United Furniture Industries, Inc. ("UFI"); Oiseys International, Inc. ("Oiseys"); Man Wah Holdings Ltd. ("Man Wah Holdings"); Jiangsu Yulong Smart Technology Co., Ltd. ("Jiangsu"); Remacro Machinery Technology Co., Ltd. ("RMT"); Taizhou Chenguang Vehicle Co., Ltd. ("TZ Vehicle"); and Mah Wah (USA), Inc. ("Man Wah (USA)") (together "Defendants").
Plaintiff Ultra-Mek, Inc., is the assignee and owner of two patents: both patents describe a reclining chair with reciprocating capability. (First Amended Complaint ("Am. Compl.") (Doc. 31) ¶¶ 22-25.) Both patents were invented by D. Stephen Hoffman and Marcus L. Murphy. (Id. ¶¶ 23-24.) U.S. Patent Number 8,016,348 (the "'348 patent") was filed on July 24, 2009 and issued on September 13, 2011. (See id., Ex. A (Doc. 31-1).) U.S. Patent Number 8,297,693 (the "'693 patent") was filed on September 9, 2011 and issued on October 30, 2012. (See id., Ex. B (Doc. 31-2).) The '693 patent is a continuation of the '348 patent, and the parties agree that the patents are generally identical in nature and scope. (See Defs.' Opening Claim Constr. Br. (Doc. 92) at 131; Pl.'s Corr. Opening Claim Constr. Br. (Doc. 94) at 6.)
According to Plaintiff, Defendants are producing and selling seating units that infringe upon the relevant patentswithout Plaintiff's permission. (Am. Compl. (Doc. 31) ¶ 26.) Plaintiff further alleges that this infringement has continued despite Defendants' knowledge of the patents, while certain Defendants have posted YouTube videos demonstrating how to construct chairs using patented mechanisms. (Id. ¶¶ 28, 31, 34.) Finally, Plaintiff alleges that certain Defendants violated a permanent injunction issued in a prior case in this district by importing and selling recliners covered by that injunction and breached the settlement agreement in that case. (Id. ¶¶ 41-47, 66-67.)
Defendants answered the Amended Complaint, denied that their products infringe the subject patents, and brought counterclaims against Plaintiff. (See generally Docs. 38, 39.) Plaintiff moved for claim construction of certain disputed terms in the subject patents, (Doc. 91), and the parties submitted a consent motion for a claim construction, or Markman, hearing. (See Doc. 90.) This court held a Markman hearing on August 14, 2019. (See Minute Entry 08/14/2019.) This court issued a Memorandum Opinion and Order construing the disputed terms on September 26, 2019. (Doc. 124.) Plaintiff filed a Motion for Summary Judgment on April 9, 2020. (Doc. 134.) Defendants filed their own Motion for Summary Judgment on the same day. (Doc.142.) Motions to Seal have also been filed by Plaintiff, (Docs. 137, 156, 164), and Defendants, (Docs. 145, 168) due to the inclusion of financial and business information in the parties' briefs. The court granted the motions to seal on March 22, 2021, (Doc. 173).
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A factual dispute is genuine when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289-90 (1968) (). This court's summary judgment inquiry is whether the evidence "is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 252. The moving party bears the initial burden of demonstrating "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp., 477 U.S. at 325. If the "moving partydischarges its burden . . . , the nonmoving party must come forward with specific facts showing that there is a genuine issue for trial." McLean v. Patten Cmtys., Inc., 332 F.3d 714, 718-19 (4th Cir. 2003) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). Summary judgment should be granted "unless a reasonable jury could return a verdict in favor of the nonmovant on the evidence presented." McLean, 332 F.3d at 719 (citing Liberty Lobby, 477 U.S. at 247-48).
In addition, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Liberty Lobby, 477 U.S. at 247-48. "[T]he non-moving party must do more than present a scintilla of evidence in its favor." Sylvia Dev. Corp. v. Calvert Cnty., 48 F.3d 810, 818 (4th Cir. 1995). Ultimately, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Liberty Lobby, 477 U.S. at 249.
When facing cross-motions for summary judgement, this court reviews "each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (citations and internal quotation marks omitted). "Whenconsidering each individual motion, the court must take care to resolve all factual disputes and any competing, rational inferences in the light most favorable to the party opposing that motion." Id. (citation and internal quotation marks omitted).
Plaintiff moves for summary judgment on (1) UFI's Third and Fourth Counterclaims of Invalidity and First through Sixth Affirmative Defenses; (2) Oiseys' Third and Fourth Counterclaims of Invalidity and First through Sixth Affirmative Defenses; and (3) TZ Vehicle, Man Wah (USA), Man Wah Holdings, RMT, and Jiangsu's Third and Fourth Counterclaims of Invalidity and First and Second Affirmative Defenses. (Doc. 134 at 1-2 n.1.) Plaintiff's motion for summary judgment centers around whether claim preclusion applies in this case. A prior action involving the same patents, Ultra-Mek, Inc. v. Man Wah (USA), Inc., No. 1:16-cv-00041-NCT-JLW (M.D.N.C. Jan. 15, 2016) (hereinafter "Man Wah I"), yielded a settlement agreement, a stipulation of dismissal, and Permanent Injunction, (Doc. 54-1), prohibiting certain Man Wah parties from producing any "seating units and mechanisms that perform substantially the same function in substantially the same way to yield substantially the sameresult." (Pl.'s Br. in Supp. of Summ. J. ("Pl.'s Br.") (Doc. 135) at 7.) Plaintiff alleges that Defendants in this case are all subject to claim preclusion regarding invalidity and these affirmative defenses.
Before assessing the merits of Plaintiff's argument for claim preclusion, this court will first address Defendants' contention that Plaintiff has waived any claim preclusion defense. (Defs.' Opp'n to Pl.'s Mot. for Summ. J. ( ) (Doc. 152) at 11-12.) Defendants argue that under Fed. R. Civ. P. 8(c), claim preclusion has not been timely pleaded and therefore has been waived and cannot be argued at this stage. (Id. at 11.) Defendants contend that Plaintiff could have raised the argument "in its answers to any of Defendants' counterclaims of invalidity", or "in any of its interrogatory responses," rather than waiting until the summary judgment stage. (Id.)
The Fourth Circuit has not laid out a precise rule for when a preclusion defense must be raised, however, a party must at minimum "raise its preclusion defenses 'at the first reasonable opportunity.'" Ga. Pac. Consumer Prods., LP v. Von Drehle Corp., 710 F.3d 527, 533-34 (4th Cir. 2013) (quoting Aetna Cas. & Sur. Co. v. Gen. Dynamics Corp., 968 F.2d 707, 711 (8th Cir. 1992)).Though few courts have more specifically interpreted Georgia Pacific's "first reasonable opportunity," at least one court in this Circuit has interpreted this language as asking whether the party making a preclusion argument acted "in good faith and with due diligence" to determine if preclusion was raised "within a reasonable period." HSBC Bank USA, Nat'l Ass'n v. Resh, Civil Action No. 3:12-cv-00668, 2013 WL 6230670, at *5 (S.D. W. Va. Dec. 2, 2013).
This court agrees with Plaintiff that the full account of the facts and scope of this case, and therefore the full argument that this claim has already been adjudicated, came to light "only after" this court's Markman Order. (Pl.'s Br. in Reply to Defs.' Opp'n to Pl.'s Mot. for Summ. J. ("Pl.'s Reply") (Doc. 162) at 5.) Moreover, in Georgia Pacific, the claim preclusion argument at issue was first brought not only after the judgment was entered, but after appeal. 710 F.3d at 528. Those facts are hardly comparable to the present case, in which Plaintiff raised its claim preclusion argument in April 2020, (Doc. 134), in its first substantive filing after the Markman Order was issued on September 26, 2019, (Doc. 124). No evidence of bad faith on the part of Plaintiff has been presented, and the argument was raised within a reasonable time after this court's Markman Order.
Separately, regardless of timeliness, Plaintiff maintains...
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