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Meridian Manufacturing Inc. v. C&B Manufacturing Inc.

United States District Court, N.D. Iowa, Western Division

October 5, 2018





         This patent case is before me on: (1) a motion (Doc. No. 90) for summary judgment on invalidity filed by defendant C&B Manufacturing, Inc. (HitchDoc), (2) a motion (Doc. No. 92) for summary judgment as to HitchDoc's affirmative defenses, filed by plaintiff Meridian Manufacturing Inc. (Meridian) and (3) a motion (Doc. No. 88) for summary judgment to limit damages filed by HitchDoc. Meridian filed resistances (Doc. Nos. 101, 107) to both of HitchDoc's motions and HitchDoc filed replies (Doc. Nos. 108, 109). HitchDoc filed a resistance (Doc. No. 99) to Meridian's motion for summary judgment but Meridian did not file a reply.[1]

         Meridian holds United States Patent No. 6, 964, 551 B1 (‘551 Patent), which involves component claims for an agricultural trailer. In its complaint (Doc. No. 2), Meridian alleges that HitchDoc is a competitor that makes agricultural equipment, including trailers that infringe on the ‘551 Patent. On June 9, 2017, after conducting a Markman hearing, I filed an order (Doc. No. 52) in which I construed certain claims contained in the ‘551 patent (the Markman order). The parties then filed motions (Doc. Nos. 55, 56) for summary judgment on infringement. On October 27, 2017, I entered an order (Doc. No. 75) granting Meridian's motion for summary judgment and finding, as a matter of law, that HitchDoc's trailer infringes on claims 1, 2, 3, 9, 10 and 11 of the ‘551 Patent. The parties then filed the present motions addressing invalidity and damages.

         Trial is scheduled to begin on November 5, 2018. The motions are fully briefed and ready for decision. I find that oral argument is not necessary.


         The following facts are undisputed, except where noted otherwise:

         A. The ‘551 Patent

         The ‘551 Patent, entitled “Trailer for Transporting Bulk Seed Boxes, ” is an invention designed to help farmers transport large seed bags or boxes to planters in the fields. The following embodiment is depicted in Figure 1:

         (Image Omitted)

         Meridian filed its complaint of patent infringement on November 23, 2015. Of the 19 claims contained in the ‘551 patent, Meridian alleged that HitchDoc's product, the Travis Seed Cart, infringes claims 1, 2, 3, 9, 10 and 11. These claims are:

1. An improved trailer for transporting a bulk seed box, the box having first and second sidewalls, a bottom, a top, and a flange extending along the sidewalls adjacent the bottom of the box, the trailer comprising:
a wheeled bed for supporting a bulk seed box, the bed having a perimeter edge;
a hopper extending below the bed for receiving seed from the bulk seed box;
a conveyor operatively connected to the hopper for unloading seed from the hopper; and
the bed having guide plates inclining upwardly and outwardly from the perimeter edge of the bed to facilitate centering of the box on the bed.
2. The improved trailer of claim 1 wherein the bed has four corners and the guide plates are located at the corners of the bed.
3. The improved trailer of claim 1 further comprising lock bars on the bed to overlappingly engage the flange of the seed box to secure the seed box to the bed.
9. The improved trailer of claim 1 wherein the conveyor is an auger including a first inner section and a second outer section pivotally attached to the first section for movement between transport and discharge positions, and including a gas cylinder to facilitate movement of the second section between the transport and discharge positions.
10. The improved trailer of claim 1 wherein each guide plate extends outwardly at an obtuse angle from the bed.
11. The improved trailer of claim 1 wherein the guide plates define an enlarged box entrance sloping downwardly and inwardly toward the bed so that the box will automatically center on the bed when loaded onto the bed.

Doc. No. 31 at 7-8.

         Claim 1 is the only independent claim at issue. The bulk of the parties' arguments focus on the guide plates “inclining upwardly and outwardly from the perimeter edge of the bed.” An example of a Meridian guide plate is circled in Figure 2:

         (Image Omitted)

         B. History of the ‘551 Patent

         Garry Friesen, the inventor of the ‘551 Patent, has no engineering degree and had never observed a seed tender before he worked on the project that resulted in the ‘551 Patent. He believed there was an issue with loading and positioning seed boxes on a seed cart. Friesen initially used perpendicular guide plates and straps to secure the boxes. To improve the design, he decided to provide a bigger target for the forklift operator to hit and allow the seed box to slide into position. He then switched to plates that extend upwardly and outwardly from the bed of the cart and exchanged the straps for lock bars.

         Friesen filed his application for the ‘551 Patent on December 12, 2001. At that time, Claim 1 described the guide plates as “extending upwardly and outwardly to facilitate centering the box on the bed.” Doc. No. 107-1 at 4. The patent examiner rejected the application because of Patent No. 6, 092, 974 (the Roth Patent). The Roth Patent had guide plates around the perimeter extending straight upwardly, as depicted in Figure 3.

         (Image Omitted)

         To overcome the Roth patent, Friesen amended Claim 1 to state, in relevant part, that the guide plates incline upwardly and outwardly from the bed. The patent examiner rejected this second attempt because of the Roth patent and Patent No. 1, 675, 701 (the Fitch patent). The Fitch Patent is depicted in Figure 4:

         (Image Omitted)

         While difficult to see in this depiction, the interior surfaces of the plates incline upwardly and outwardly from the bed. The Fitch patent is not directed toward an agriculture-specific device, but to trucks used to transport general containers.

         Friesen then amended Claim 1 to its present form, stating the guide plates inclined “upwardly and outwardly from the perimeter edge of the bed” (emphasis added) The patent examiner rejected Friesen's application for a third time. On appeal, however, the Board of Patent Appeals and Interferences (the Board) overturned the examiner's rejection, noting that the Fitch brackets had inclined walls that were within the perimeter edge of the bed. The ‘551 Patent issued on November 15, 2005. Meridian is the current owner.

         C. Infringement

         In late 2001 or early 2002, before the ‘551 Patent issued, Friesen began selling his seed tenders with the patented features and showing them at farm shows under the “Seed Titan” name. Wyman Travis, creator of the Travis Seed Cart now sold by HitchDoc, often attended the same farm shows. He designed the Travis Seed Cart in late 2004 or early 2005. The guide plates of the Travis Seed Cart are depicted in Figure 5.

         (Image Omitted)

         HitchDoc acquired the right to sell the Travis Seed Cart in 2009. HitchDoc has known about the ‘551 Patent since at least July 1, 2011, when it submitted the ‘551 Patent to the United States Patent and Trademark Office (USPTO) as part of an information disclosure statement.

         Between November 20, 2005, and September 24, 2008, Meridian purchased 1, 000 patent decals for its tenders.[2] Between 2005 and 2009, Meridian sold 2, 283 box seed tenders. The parties dispute how many of the tenders sold had patent decals. On September 17, 2015, Meridian gave HitchDoc actual notice of infringement by sending HitchDoc a cease and desist letter.[3] HitchDoc continued selling the Travis Seed Cart after receiving the cease and desist letter and did not seek counsel's opinion regarding infringement of the ‘551 Patent before Meridian filed its complaint. At no time has Meridian affirmatively consented to HitchDoc's infringement.

         Meridian filed its complaint for patent infringement on November 23, 2015. At the Markman stage, I found that “perimeter edge of the bed” meant the planar boundary around the bed, rather than the physical point where the side and top surfaces of the bed intersect. With that understanding, I found that HitchDoc's seed tenders literally infringed on Claim 1 (and by extension claims 2, 9, 10 and 11) of the ‘551 Patent. Doc. No. 75 at 16. I also found that Claim 3, which describes lock bars that “overlappingly engage the flange of the seed box, ” was infringed. Id. at 18-19. After my ruling that the Travis Seed Cart infringed the '551 patent, HitchDoc started a redesign of its seed cart.[4]

         Additional facts will be discussed below as necessary.


         Any party may move for summary judgment regarding all or any part of the claims asserted in a case. Fed.R.Civ.P. 56(a). Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         A material fact is one that “‘might affect the outcome of the suit under the governing law.'” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, “the substantive law will identify which facts are material.” Id. Facts that are “critical” under the substantive law are material, while facts that are “irrelevant or unnecessary” are not. Id.

         An issue of material fact is genuine if it has a real basis in the record, Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)), or when “‘a reasonable jury could return a verdict for the nonmoving party' on the question.” Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (quoting Anderson, 477 U.S. at 248). Evidence that only provides “some metaphysical doubt as to the material facts, ” Matsushita, 475 U.S. at 586, or evidence that is “merely colorable” or “not significantly probative, ” Anderson, 477 U.S. at 249-50, does not make an issue of material fact genuine.

         As such, a genuine issue of material fact requires “sufficient evidence supporting the claimed factual dispute” so as to “require a jury or judge to resolve the parties' differing versions of the truth at trial.” Anderson, 477 U.S. at 248-49. The party moving for entry of summary judgment bears “the initial responsibility of informing the court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue.” Hartnagel, 953 F.2d at 395 (citing Celotex, 477 U.S. at 323). Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or otherwise, designate specific facts showing that there is a genuine issue for trial. Mosley v. City of Northwoods, 415 F.3d 908, 910 (8th Cir. 2005). The nonmovant must show an alleged issue of fact is genuine and material as it relates to the substantive law. If a party fails to make a sufficient showing of an essential element of a claim or defense with respect to which that party has the burden of proof, then the opposing party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322.

         In determining if a genuine issue of material fact is present, I must view the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88. Further, I must give the nonmoving party the benefit of all reasonable inferences that can be drawn from the facts. Id. However, “because we view the facts in the light most favorable to the nonmoving party, we do not weigh the evidence or attempt to determine the credibility of the witnesses.” Kammueller v. Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004). Instead, “the court's function is to determine whether a dispute about a material fact is genuine.” Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376-77 (8th Cir. 1996).

         On cross motions for summary judgment, the “court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard.” 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (3d ed. 1998). Because the parties seek summary judgment on the same issue, I will consider all the parties' arguments, keeping in mind the separate inferences that are to be drawn from each motion. See Wright v. Keokuk Cnty. Health Ctr., 399 F.Supp.2d 938, 946 (S.D. Iowa 2005).


         A. Invalidity Under Section 103

         HitchDoc argues that all infringed claims (1, 2, 3, 9, 10 and 11) are invalid as obvious pursuant to 35 U.S.C. § 103.[5] Doc. No. 91-1 at 4. HitchDoc argues that the standard the Board used to determine that the patent is valid is no longer appropriate under current law, and the current standard for obviousness is much lower. Id. at 23- 25. Under the new standard, HitchDoc claims the '551 Patent is clearly an obvious combination of well-known elements from other patents. Id. at 19.

         35 U.S.C. § 103 states:

A patent for a claimed invention may not be obtained . . . if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.

         “Once issued, a patent is presumed valid . . . and the challenging party has the heavy burden of proving invalidity by substantial evidence.” Saturn Mfg., Inc. v. Williams Patent Crusher & Pulverizer Co., 713 F.2d 1347, 1350 (8th Cir. 1983). A patent already obtained can be subsequently found invalid if it is obvious under this section. Motorola, Inc. v. Alexander Mfg. Co., 786 F.Supp. 808, 813 (N.D. Iowa 1991). A patent is obvious if a “combination of familiar elements according to known methods . . . does no more than yield predictable results.” KSR Int'l Co. v. Telelex Inc., 550 U.S. 398, 416 (2007). A party seeking to invalidate a patent as obvious must also show that “a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention and . . . would have had a reasonable expectation of success.” Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc., 752 F.3d 967, 973 (Fed. Cir. 2014).

         Whether an invention is obvious under § 103 is a legal conclusion based on the underlying facts of record. Velander v. Garner, 348 F.3d 1359, 1363 (Fed. Cir. 2003). The factual inquiries are “(1) the scope and content of the prior art; (2) the level of ordinary skill in the prior art; and (3) the differences between the claimed invention and the prior art, ” as well as any additional “objective indicia of nonobviousness.” PAR Pharm., Inc. v. TWI Pharms., Inc., 773 F.3d 1186, 1193 (Fed. Cir. 2003). These secondary characteristics of nonobviousness include commercial success, long felt but unsolved needs, and failure of others. Saturn Mg., 713 F.2d at 1351.

         Before I can address the parties' arguments on invalidity, I must determine the applicable record. Two of the four contested expert witnesses, James Heise and John Hamilton, have provided opinions regarding certain elements of the obviousness analysis. Meridian filed a motion (Doc. No. 118) to exclude Heise, to which HitchDoc resisted (Doc. No. 127). Meridian filed a reply (Doc. No. 132). HitchDoc filed a motion (Doc. No. 111) to exclude Hamilton, which Meridian resisted (Doc. No. 123). HitchDoc filed a reply (Doc. No. 134).

         1. The Daubert Analysis

         Federal Rule of Evidence 702 governs the admission of expert testimony. The rule states that a qualified expert may testify “in the form of an opinion or otherwise” if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case

Fed. R. Evid. 702. To be admissible, expert testimony must be both relevant and reliable. Weisgram v. Marley Co., 169 F.3d 514, 517 (8th Cir. 1999), aff'd, 528 U.S. 440 (2000). Evidence is relevant if it tends to make a fact more or less probable and is of consequence in determining the action. Fed.R.Evid. 401. To satisfy the relevancy requirement, “‘the proponent must show that the expert's reasoning or methodology was applied properly to the facts at issue.'” Smith v. Bubak, 643 F.3d 1137, 1138 (8th Cir. 2011) (quoting Barrett v. Rhodia, Inc., 606 F.3d 975, 980 (8th Cir. 2010)).

         Evidence is reliable if it is useful to the finder of fact in deciding an ultimate issue of fact, the expert is qualified and the evidence used by the expert is reliable. Peters v. Woodbury Cty., Iowa, 979 F.Supp.2d 909, 919 (N.D. Iowa 2013), aff'd sub nom. Peters v. Risdal, 786 F.3d 1095 (8th Cir. 2015). The trial court has broad discretion when determining the reliability of expert testimony. United States v. Vesey, 338 F.3d 912, 916 (8th Cir. 2003). Doubts on whether the testimony will be helpful should be resolved in favor of admissibility. Peters, 979 F.Supp.2d at 919 (quoting Larabee v. MM&L Int'l Corp., 896 F.2d 1112, 1116 n.6 (8th Cir. 1990)). Testimony is useful if it will provide information “beyond the common knowledge of the trier of fact.” Langenbau v. Med-trans Corp., 167 F.Supp.3d 983, 996 (N.D. Iowa 2016). “An expert's testimony may be excluded on ‘reliability' grounds if it is ‘so fundamentally unsupported that it can offer no assistance to the jury.'” Peters, 979 F.Supp.2d at 920 (quoting Polski v. Quigley Corp., 538 F.3d 836, 839 (8th Cir. 2008)). An expert may rely on experience-based testimony if the expert also explains how that experience lead to his conclusion, why it is a sufficient basis for the opinion and “how that experience is reliably applied to the facts.” Vesey, 338 F.3d at 917.

         Federal Rule of Evidence 704 provides that expert evidence is admissible even if it embraces an ultimate issue in the case. Fed.R.Evid. 704(a). Thus, to the extent an expert lays proper foundation by demonstrating an adequate basis for an opinion, the opinion may be admissible. Langenbau, 167 F.Supp.3d at 995. However, opinions that merely tell the trier of fact what result to reach are not admissible. Id.; Lee v. Andersen, 616 F.3d 803, 808-09 (8th Cir. 2010).

         Under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), the district court must perform a “gatekeeping function” to ensure that irrelevant or unreliable expert testimony is not introduced into evidence. See, e.g., In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2001). More specifically:

The objective of the Daubert inquiry “is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). [T]his is a flexible, case-specific inquiry. “The trial court ha[s] to decide whether this particular expert had sufficient specialized knowledge to assist the jurors in deciding the particular issues in the case.” Id. at 156, 119 S.Ct. 1167 (quotation omitted); see Fed. R. Evid. 702 and Advisory Committee Notes.

American Auto. Ins. Co. v. Omega Flex, Inc., 783 F.3d 720, 722-23 (8th Cir. 2015). This “gatekeeper” function requires me to “make a ‘preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.' ” Kudabeck v. Kroger Co., 338 F.3d 856, 860 (8th Cir.2003) (quoting Daubert, 509 U.S. at 592-93).

         2. James Heise

         a. Opinion

         James Heise's testimony consists of an expert report (Doc. No. 91-21) as well as deposition testimony (Doc. No. 117-14). A summary of his opinions are as follows:

. All the claims of the ‘551 Patent are invalid as obvious under prior art. Doc. No. 91-21 at 8, 38.
. He declines to provide an opinion on any “secondary considerations” because Meridian did not provide sufficient evidence of those considerations. Id.
. A person of ordinary skill in the art is “a person who has designed seed carts or similar devices . . . as would a mechanical designer or engineer with 2 to 4 years of formal technical/engineering education or 5 to 7 years of on-the-job training in product design and/or a person with equivalent training and experience in the field of invention.” Id. at 9.
. Prior art does include products other than “mobile seed carts for transporting bulk seed containers, ” because using guide plates is a common practice in many industrial and agricultural settings. Id. at 11.
. The problem the ‘551 Patent attempts to solve is placing a box or container safely, efficiently and accurately onto an elevated platform, or a “defined ...

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