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Chapco, Inc. v. Woodway USA, Inc.

United States District Court, D. Connecticut

September 26, 2017

CHAPCO, INC. and SAMSARA FITNESS, LLC, Plaintiffs,
v.
WOODWAY USA, INC., Defendant.

         RULING RE: CHAPCO AND SAMARA'S MOTION FOR SUMMARY JUDGMENT (DOC. NO. 88), WOODWAY'S MOTION FOR SUMMARY JUDGMENT (DOC. NO. 94), WOODWAY'S MOTION TO STRIKE PORTIONS OF THE OPENING EXPERT REPORT OF DR. ROBERT GIACHETTI (DOC. NO 89), AND WOODWAY'S MOTION TO STRIKE PORTIONS OF THE DECLARATION OF ROBERT GIACHETTI (DOC. NO. 102)

          Janet C. Hall, United States District Judge.

         TABLE OF CONTENTS

         I. INTRODUCTION ............................................................................................. 2

         II. FACTS ............................................................................................................ 3

         III. LEGAL STANDARD ........................................................................................ 4

         IV. DISCUSSION .................................................................................................. 5

         A. Infringement by Chapco .................................................................................. 6

1. Direct Infringement .................................................................................. 6
2. Indirect Infringement ................................................................................ 8
3. Alter-Ego Theory ................................................................................... 10

         B. Infringement of the ‘580 Patent ..................................................................... 13

         C. Non-Infringement of the ‘169 Patent ............................................................. 19

         D. Invalidity of the ‘169 and ‘580 Patents ........................................................... 22

1. Motion to Strike Portions of Dr. Giachetti's Opening Expert Report ...... 22
2. Motion to Strike Portions of Dr. Giachetti's Declaration ......................... 30
3. Obviousness .......................................................................................... 35
4. Anticipation ............................................................................................ 39
5. Indefiniteness, Written Description, and Enablement ............................ 40

         E. Non-Infringement of the ‘866 Patent ............................................................. 41

         F. Lanham Act and CUTPA Violation ................................................................ 43

         V. CONCLUSION .............................................................................................. 43

         I. INTRODUCTION

         Plaintiffs Chapco, Inc. (“Chapco”) and Samsara Fitness, LLC (“Samsara”), (collectively, “plaintiffs”) brought this action seeking a declaratory judgment against defendant Woodway USA, Inc. (“Woodway”). The plaintiffs ask the court to declare that the plaintiffs' “TrueForm Runner” treadmill products do not infringe Woodway's U.S. Patent Nos. 8, 986, 169 and 9, 039, 580 and to declare that those two patents are invalid. See Am. Compl. (Doc. No. 27). Woodway counterclaimed, alleging infringement of the two patents at issue, as well as infringement of U.S. Design Patent Nos. D736, 866 and D753, 776.[1] See Answer to Am. Compl. and Countercls. (Doc. No. 54). Plaintiffs filed their Answer to Woodway's counterclaims. See Pls.' Answer (Doc. No. 58).

         After briefing and oral argument, the court issued its Claim Construction Ruling on December 8, 2016. See Claim Construction Ruling (Doc. No. 76). The court then permitted Woodway to supplement its counterclaims with an additional claim of Copyright Infringement. See Order granting Mot. for Leave to File (Doc. No. 84); Woodway's Supplemental Counterclaims (“Woodway's Suppl. Countcls.”) (Doc. No. 85); Pls.' Answer to Def.'s Suppl. Counterclaims (Doc. No. 87).

         The parties have now both filed cross Motions for Summary Judgment. See Mot. for Summ. J. on Counts I, II, III, IV, VI, and VII of Woodway's Counterclaims (“Pls.' MFSJ”) (Doc. No. 88); Mot. for Summ. J. of Infringement of U.S. patent No. 9, 039, 580 and Partial Summ. J. of No Invalidity of U.S. Patent Nos. 8, 986, 169 and 9, 039, 580 (“Woodway's MFSJ”) (Doc. No. 94). Additionally, Woodway has moved to strike portions of both the opening expert report and the declaration of the plaintiffs' expert, Dr. Robert Giachetti (“Dr. Giachetti”). See Mot. to Strike Portions of the Opening Expert Report of Dr. Robert Giachetti (“Mot. to Strike Report”) (Doc. No. 88); Mot. to Strike Portions of the Declaration of Robert Giachetti (“Mot. to Strike Decl.”) (Doc. No. 89). Woodway, in footnote 12 of its Response to the plaintiffs' Motion for Summary Judgment, has withdrawn its allegations of infringement of the D753, 776 Patent (Count IV of Woodway's Counterclaims), which the court so orders. See Woodway's Mem. in Resp. to Pls.' Mot. for Summ. J. on Counts I, II, III, IV, VI, and VII of Woodway's Suppl. Countercls. (“Woodway's MFSJ Resp.”) (Doc. No. 112) at 19 n.12.

         II. FACTS

         The facts below are drawn from the parties' undisputed statements of fact, as presented in their Rule 56 statements.[2]

         U.S. Patent No. 8, 986, 169 (the “‘169 Patent”), entitled “Manual Treadmill and Methods of Operating the Same, ” was issued on March 24, 2015. See Pls.' L.R. 56(a)2 Statement (“Pls.' L.R. 56(a)2 Stmt.”) (Doc. No. 101) at ¶ 1. U.S. Patent No. 9, 039, 580 (the “‘580 Patent”), entitled “Manual Treadmill and Methods of Operating the Same, ” was issued on May 26, 2015. See id. at ¶ 2. Both patents are assigned to Woodway. See id. at ¶¶ 5-6. U.S. Design Patent No. D736, 866 (the “‘866 Patent”) issued on August 18, 2015. See Woodway's L.R. 56(a)2 Statement of Facts in Resp. to Pls.' Mot. for Summ. J. (“Woodway's L.R. 56(a)2 Stmt.”) (Doc. No. 108) at ¶ 32. Woodway asserts that the plaintiffs infringe multiple claims of both utility patents (the “Asserted Claims”), as well as the single claim of the ‘866 patent. See Am. Countercls. at ¶¶ 14, 23, 32.

         Samsara sells three models of the TrueForm Runner Treadmill: the Low Rider, the Enduro and the Performance (the “Accused Products”). See Pls.' L.R. 56(a)2 Stmt. at ¶ 9. Chapco makes and sources at least some of the components of the Accused Products for Samsara. See Woodway's L.R. 56(a)2 Stmt. at ¶ 18. The original base of the TrueForm Runner included a one-way bearing safety mechanism on the rear shaft of the treadmill (the “Original TrueForm Runner”). See Pls.' L.R. 56(a)2 Stmt. at ¶ 11. After plaintiffs were informed of the issuance of the ‘169 patent, the safety mechanism on the TrueForm Runner was moved to the front shaft of the treadmill (the “Redesigned TrueForm Runner”). See id. at ¶ 12. This product is still offered for sale by Samsara. See id. at ¶ 13.

         III. LEGAL STANDARD

         On a motion for summary judgment, “[t]he moving party bears the burden of establishing the absence of any genuine issue of material fact.” Zalaski v. City of Bridgeport Police Dep't, 613 F.3d 336, 340 (2d Cir. 2010). If the moving party satisfies that burden, “the party opposing summary judgment . . . must set forth ‘specific facts' demonstrating that there is ‘a genuine issue for trial.'” Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (quoting Fed.R.Civ.P. 56(e)). “For summary judgment purposes, a ‘genuine issue' exists where the evidence is such that a reasonable jury could decide in the non-moving party's favor.” Cambridge Realty Co., LLC v. St. Paul Fire & Marine Ins. Co., 421 F.App'x 52, 53 (2d Cir.2011); see also Rojas v. Roman Catholic Diocese of Rochester, 660 F.3d 98, 104 (2d Cir. 2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, (1986)) (holding that the non-moving party must demonstrate more than a mere “scintilla” of evidence in its favor). “[U]nsupported allegations do not create a material issue of fact.” Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000).

         The court's role in resolving motions for summary judgment “is to determine whether genuine issues of material fact exist for trial, not to make findings of fact.” O'Hara v. Nat. Union Fire Ins. Co. of Pittsburgh, 642 F.3d 110, 116 (2d Cir. 2011). In making this determination, the court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Garcia v. Hartford Police Dep't, 706 F.3d 120, 127 (2d Cir. 2013).

         IV. DISCUSSION

         The court will proceed to discuss the issues raised by the parties in the following order: first, the court will consider the plaintiffs' argument that Chapco does not commit any infringing acts. Then the court will proceed to consider whether to grant either parties' Motion for Summary Judgment as to infringement of the claims of the ‘580 Patent. Next, the court turns to the plaintiffs' Motion for Summary Judgment of noninfringement of the ‘169 Patent. The court then will proceed to consider the parties' Motions for Summary Judgment as to validity or invalidity of the utility patents, as well as consider the Motions to Strike in that context. The court will then turn to the plaintiffs' Motion for non-infringement of the ‘866 Patent. This Ruling concludes by addressing Woodway's withdrawal of its Counterclaims VI and VII under the Lanham Act and Connecticut Unfair Trade Practices Act (CUTPA).

         A. Infringement by Chapco

         1. Direct Infringement

         The plaintiffs have moved for summary judgment of non-infringement by Chapco because they claim that there is no evidence that Chapco, “without authority makes, uses, offers to sell, or sells any patented invention . . . .” 35 U.S.C. § 271(a). In order to prove direct infringement, Woodway must establish by a preponderance of the evidence that the Accused Products practice each limitation contained in one or more claims of the asserted patents. See Cross Medical Products, Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1310 (Fed. Cir. 2005). Direct infringement occurs where all of the infringing acts “are performed by or attributable to a single entity.” See Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (discussing infringing acts in the context of a methods patent.

         The plaintiffs argue that Chapco does not make, use, offer to sell, or sell any of the Accused Products, and therefore it is not a direct infringer. See Pls.' Mem. in Supp. of Mot. for Summ. J. (“Pls.' MFSJ Mem.”) (Doc. No. 88-1) at 4-8. Citing to the Affidavit of Brian Weinstein (“Weinstein”), the President of Chapco, the plaintiffs argue that Chapco has never made or assembled the Accused Products, but rather machines and sources some components of the Accused Products, as well as leasing Chapco employees to Samsara, who then assembles the components into the Accused Products. See id. at 5. Additionally, the plaintiffs argue that there is no evidence that Chapco has ever used, offered for sale, sold, or imported any Accused Product, but instead that any customer looking to purchase the Accused Product would do so from Samsara. See id. at 6; Woodway's L.R. 56(a)2 Stmt. at ¶ 22 (admitting that Chapco has never sold or offered for sale any Accused Product).

         Woodway responds by pointing out that Weinstein testified that Chapco did, at one point, assemble the Accused Products. See Woodway's L.R. 56(a)2 Stmt. at ¶ 17 (citing Weinstein Dep. (Doc. No. 106-29) at 182:30-183:12). This statement alone, however, cannot prove that Chapco makes the Accused Products, because at the time that Chapco employees assembled the products in 2014, the patents had not yet issued. See id. at ¶¶ 28, 30, 32 (indicating that all remaining patents-in-suit issued in 2015).

         Woodway also argues that it is Chapco employees who assemble the final product, even if they are leased to Samsara for the purpose of assembling the final products. See Woodway's Mem. of Law in Resp. to Pls.' Mot. for Summ. J (“Woodway's MFSJ Resp.”) (Doc. No. 112) at 13 (citing Chapco's 30(b)(6) Dep. (Doc. No. 106-20) at 37:6-20). Woodway claims that a Chapco employee sources every component not made by Chapco. See id. Weinstein, as Chapco's 30(b)(6) designee, testified that a Chapco employee sources the components that Chapco does not make on behalf of Samsara. See Chapco's 30(b)(6) Dep. at 133:9-134:24.

         Woodway's final argument that Chapco directly infringes the Accused Products rests on the deposition testimony of Jeremiah Rabe, a Chapco engineer who testified that he has worked on the design of the control board display, the pulley's attachment to the shaft, and the one-way bearing. See Woodway's MFSJ Resp. at 14. Rabe testified that he had spent a week on redesigning the control board, and about four hours redesigning the pulley attachment. See Dep. of Rabe (Doc. No. 106-1) at 27:16-29:20.

         Chapco admits that its employees assemble the Accused Products, but argues that those are not Chapco employees acting on behalf of Chapco, but rather are Chapco employees leased to Samsara in an arm's length transaction wherein Samsara is charged by Chapco for its employee's labor. See Pls.' MFSJ Mem. at 5. However, this arrangement does not insulate Chapco from a claim that its employees infringe the patents-in-suit while making the Accused Products on behalf of Samsara, because there is a genuine issue of material fact as to whether Chapco, whose employees are being used to assemble the ...


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