United States District Court, D. Connecticut
MEMORANDUM OF DECISION AND ORDER
VICTOR
A. BOLDEN UNITED STATES DISTRICT JUDGE
TABLE
OF CONTENTS
I.
PROCEDURAL HISTORY
....................................................................................................
4
II.
FINDINGS OF FACT: THE PARTIES AND THE PRODUCTS
.......................................... 8
A. The
Parties
......................................................................................................................
8
B.
Robert Haddock's Background in the Metal Roofing Industry
..................................... 9
C.
Robert Haddock's Inventions
.......................................................................................
10
D. The
‘629 Patent
............................................................................................................
16
E. PMC
..............................................................................................................................
17
F.
Interactions Between Brad Wasley and Robert Haddock
............................................ 19
G.
PMC's Development of ColorSnap
..............................................................................
20
III.
FINDINGS OF FACT: THE ISSUE OF INFRINGEMENT
................................................ 26
A.
Claim 15
.......................................................................................................................
26
1.
First and Second Mounting Clamps
......................................................................
27
2.
First and Second Mounting Adaptors
...................................................................
28
a.
Generally Rectangular Shaped Bodies
.......................................................... 28
b. Two
Distinct Areas/Mounting Adaptor Portions
.......................................... 30
c.
First Mounting Adaptor Portion Interfaces with the Mounting
Clamp ......... 30
d.
Second Mounting Adaptor Portion Interfaces with the Cross
Member ........ 31
3.
First and Second Fasteners
....................................................................................
31
4.
Cross Member
.......................................................................................................
32
5.
First and Second Means
........................................................................................
34
B.
Claim 16
.......................................................................................................................
35
IV.
FINDINGS OF FACT: THE ISSUE OF IRREPARABLE HARM
...................................... 35
A.
Market Share & Lost Sales
...........................................................................................
36
B.
Reputational Harm
.......................................................................................................
37
V.
CONCLUSIONS OF LAW
...................................................................................................
40
A.
Expert Dispute
..............................................................................................................
40
1.
Qualifications
........................................................................................................
41
2.
Reliable Methodology
...........................................................................................
42
B. The
Alleged Violation of the Sequestration Order
....................................................... 42
1.
Legal Standard
......................................................................................................
43
2.
Analysis
.................................................................................................................
44
C.
Direct Infringement
......................................................................................................
45
1.
Legal Standard
......................................................................................................
45
2.
Literal Infringement
..............................................................................................
46
D.
Non-Infringement Counterclaim
..................................................................................
46
E.
Remedy: Permanent Injunction
....................................................................................
46
1.
Irreparable Harm
...................................................................................................
47
a.
Legal Standard Post-eBay
.............................................................................
47
b.
Application of the Standard
...........................................................................
50
2.
Inadequate Remedy at Law
...................................................................................
55
3.
Balance of Hardships
............................................................................................
56
4.
Public Interest
.......................................................................................................
57
F.
Exceptionality and Attorney's Fees
.............................................................................
58
1.
Legal Standard
......................................................................................................
58
2.
Willfulness....................................................................................................................
59
3.
Litigation Conduct
....................................................................................................................
60
VI.
CONCLUSION
.....................................................................................................................
62
RMH
Tech, LLC (“RMH”) and Metal Roof Innovations,
Ltd. (“MRI”) (collectively,
“Plaintiffs”) have sued PMC Industries, Inc.
(“PMC”), alleging patent infringement. PMC
asserts one counterclaim seeking a declaratory judgment of
non-infringement. canceled Following a four-day bench trial
and post-trial oral argument, the Court now sets forth its
findings of fact and conclusions of law under Federal Rule of
Civil Procedure 52(a)(1).
As
explained below, the Court finds that PMC's manufacture,
sale, and distribution of the ColorSnap system has directly
infringed U.S. Patent No. 6, 470, 629 (the “‘629
Patent”), and that Plaintiffs have established that
they are entitled to a permanent injunction to address
PMC's ongoing infringement.
Accordingly,
the Court ORDERS that PMC be enjoined
permanently from making, using, offering for sale, or selling
in the United States the ColorSnap system, replacement parts
to repair previously sold ColorSnap systems, or any colorable
imitations thereof, until the expiration of the ‘629
Patent.
The
Court does not find, however, that this case is exceptional
and does not award attorney's fees and costs to
Plaintiffs.
I.
PROCEDURAL HISTORY
On July
11, 2016, Plaintiffs sued PMC in the United States District
Court for the District of Colorado (“District of
Colorado”), alleging that PMC is infringing on the
design and novel function of the ‘629 Patent through
the marketing and sale of the ColorSnap system, and seeking
both monetary damages as well as an injunction. See
Complaint, dated July 11, 2016 (“Compl.”), ECF
No. 1.
On
September 7, 2016, PMC answered and brought counterclaims
against Plaintiffs, seeking a declaratory judgment of
non-infringement and of the ‘629 Patent's
invalidity. Answer and Counterclaim, dated Sept. 7, 2016, ECF
No. 17; see also Amended Answer, dated Feb. 10,
2017, ECF No. 43.
On May
11, 2017, the Honorable Christine Arguello of the District of
Colorado held a hearing consistent with Markman v.
Westview Instruments, Inc., 517 U.S. 370 (1996), to
determine the construction of the patent claims in question.
Minute Entry, dated May 11, 2017, ECF No. 52.
On
October 2, 2017, Judge Arguello issued an order constructing
the disputed claims of the ‘629 Patent. Claim
Construction Order, dated Oct. 2, 2017 (“Claim Const.
Order”), ECF No. 66. Judge Arguello subsequently denied
PMC's motion for reconsideration of the claim
construction order. Order Denying Defendant's Motion for
Partial Reconsideration of Order on Claim Construction, dated
Jan. 8, 2018, ECF No. 74.
On
December 6, 2017, PMC moved to stay the case for ninety days
pending settlement discussions, a motion Plaintiffs opposed
and that Judge Arguello ultimately denied. See
Motion to Stay, dated Dec. 6, 2017, ECF No. 78; Brief in
Opposition to Motion to Stay, dated Dec. 27, 2017, ECF No.
82; Order Denying Motion to Stay, dated Jan. 10, 2018, ECF
No. 87.
On
January 8, 2018, PMC moved to dismiss for improper venue or,
in the alternative, for the case to be transferred to the
District of Connecticut, on the basis that venue in a patent
action, under 28 U.S.C. § 1400(b), properly lies in
those jurisdictions in which the defendant resides or has a
regular and established place of business. Motion to Dismiss
for Improper Venue or, in the Alternative, to Transfer Venue,
dated Jan. 8, 2018, ECF No. 86.
On
March 30, 2018, Judge Arguello granted the motion to transfer
venue. Order Granting Defendant's Motion to Transfer
Venue, dated Mar. 30, 2018, ECF No. 95. That same day, the
case was transferred to the District of Connecticut,
see Docket Entry, dated Mar. 30, 2018, ECF No. 96,
and assigned to this Court on April 16, 2018. See
Order of Transfer, dated Apr. 16, 2018, ECF No. 110.
On May
11, 2018, the parties jointly stipulated that neither party
was entitled to a jury trial, as Plaintiffs had withdrawn its
claim for monetary damages and sought only equitable relief,
and PMC sought only declaratory relief. Joint Stipulation,
dated May 11, 2018, ECF No. 129. As a result, the parties
jointly stipulated to a bench trial. Id.
On May
14, 2018, the Court held a telephonic status conference with
the parties and set a schedule for proceeding to a bench
trial. Minute Entry, dated May 14, 2018, ECF No. 130. The
schedule was modified on May 22, 2018. Amended Scheduling
Order, dated May 22, 2018, ECF No. 135.
On May
25, 2018, PMC moved for summary judgment on several grounds.
Motion for Summary Judgment, dated May 25, 2018, ECF No. 137.
On July 24, 2018, the Court held oral argument on the motion.
Transcript of Motion Hearing, dated July 24, 2018, ECF No.
157.
On
August 6, 2018, the Court denied PMC's motion for summary
judgment. Order Denying PMC Motion for Summary Judgment,
dated Aug. 6, 2018 (“SJ Order”), ECF No. 158.
On
September 14, 2018, the parties filed their joint trial
memorandum and proposed findings of fact and conclusions of
law. See Joint Trial Memorandum, dated Sept. 14,
2018 (“JTM”), ECF No. 162. Proposed Findings of
Fact and Conclusions of Law, filed Sept. 14, 2018, ECF Nos.
164 (PMC) and 165 (Plaintiffs).
That
same day, Plaintiffs also filed one motion in
limine, seeking to sequester all fact witnesses during
the trial pursuant to Federal Rule of Evidence 615. Pls.'
Mot. in Limine, dated Sept. 14, 2018, ECF No. 163.
PMC filed three motions in limine, seeking to
exclude references to the Kovacs Patent, to preclude evidence
or arguments as to the Doctrine of Equivalents, and to
preclude evidence or arguments as to the issue of willful
infringement. See Defs.' Mots. in
Limine, dated Sept. 14, 2018, ECF Nos. 159, 160, &
161.
On
October 5, 2018, the parties filed their responses to the
motions in limine. See PMC's Response
to Pls.' Mot. in Limine, dated Oct. 5, 2018, ECF
No. 171; Pls.' Oppositions to Defs.' Mots. in
Limine, ECF No. 169, 170, & 172.
On
October 11, 2018, the Court held a final pre-trial conference
with the parties. Minute Entry, dated Oct. 11, 2018, ECF No.
175; Transcript of Proceedings, filed Oct. 18, 2018, ECF No.
177.
On
October 19, 2018, the Court issued a ruling and order
granting Plaintiffs' motion in limine and
denying Defendants' three motions in limine.
Ruling and Order on Motions in Limine, dated Oct. 19, 2018
(“In Limine Order”), ECF No. 179.
From
October 29, 2018 through November 1, 2019, the Court held a
bench trial. During the trial, seven witnesses appeared in
court to testify: Robert Haddock, Bradford Wasley, Alan
Wasley, Robert Mercier, Tamas Kovacs, Damian Wasserbauer, and
James Bailey. Another witness, Carroll Marston, unavailable
for the trial, testified through a previously videotaped
deposition. One hundred and eighty-six exhibits were admitted
into evidence. See Transcripts of Proceedings, filed
Nov. 6, 2018 (“Tr.”), ECF Nos. 190-93.
On
November 30, 2018, the parties submitted revised, post-trial
findings of fact and conclusions of law. See
Post-Trial Findings of Fact and Conclusions of Law, filed
Nov. 30, 2018, ECF Nos. 208 (“Pls.' Post-Trial
Brief”) and 209 (“Def.'s Post-Trial
Brief”).
On
December 7, 2018, the Court held a final post-trial oral
argument. Minute Entry, dated Dec. 7, 2018, ECF No. 215;
Transcript of Post-Trial Oral Argument, filed Dec. 17, 2018
(“Post Trial Arg. Tr.”), ECF No. 221.
II.
FINDINGS OF FACT: THE PARTIES AND THE PRODUCTS
A.
The Parties
RMH, a
Colorado limited liability company, has its principal place
of business in Colorado Springs, Colorado. JTM ¶ 5(a).
It is jointly owned by Robert Haddock and his three children.
Tr. 19:24-25. Mr. Haddock created RMH and assigned to it his
patents, including the ‘629 Patent-the patent at issue
in this case. Tr. 19:17-19.
MRI, a
Colorado corporation, also has its principal place of
business in Colorado Springs, Colorado. JTM ¶ 5(A)(c).
Mr. Haddock created MRI in order to market his inventions.
Tr. 20:16-17. He is currently MRI's President and Chief
Executive Officer, and several of his family members,
including his two sons, work for MRI. Tr. 21:5-14. MRI is
responsible for testing, marketing, conducting market
research, and otherwise marketing his patents, including the
distribution of products based on those patents. Tr.
20:17-21. Mr. Haddock owns roughly 98% of the business; the
remainder is held by an equity partner in charge of all
manufacturing. Tr. 20:25-21:4.
MRI
also does business under the name S-5! and is primarily known
under this name on the market. Tr. 21:15-22. S-5! sells a
variety of metal products that make it easy to attach
ancillary structures or systems to metal rooftops. Tr.
21:23-22:2. MRI is the exclusive licensee of the ‘629
Patent. JTM ¶ 5(A)(c).
PMC, a
Connecticut corporation, has its principal place of business
in Plainville, Connecticut. JTM ¶ 5(A)(d). Alan Wasley
is the Chief Executive Officer (“CEO”) of PMC.
Tr. 264:15-19.
B.
Robert Haddock's Background in the Metal Roofing
Industry
Mr.
Haddock's father, who owned a construction company in
Colorado Springs, introduced Mr. Haddock to the steel
building construction industry.[1] Tr. 14:14-17. After working for
his father for several of his high school years, Mr. Haddock
enrolled in college, but left after the first semester. Tr.
14:15-19, 14:2-7. He then held a variety of positions,
including working in a machine shop, in construction, on a
ranch, and competing at professional rodeos. Tr. 14:9-11.
In
1977, Mr. Haddock founded a wholly-owned company, a
subcontractor specializing in erecting pre-engineered metal
buildings. Tr. 15:5-16. Over time, the business expanded into
other areas, including the development of architectural
metals, metal cladding[2] and coverings for composite wall systems,
and other metal components for building construction. Tr.
15:14-16. Mr. Haddock estimates that company, which he
wrapped up in 1990, worked on hundreds of metal commercial
and industrial buildings on more than five hundred job sites.
Tr. 16:2-21. The types of structures included distribution
facilities for shipping companies such as United Parcel
Service and Federal Express. Tr. 16:13-19.
In the
1980s, Mr. Haddock began independent consulting under Metal
Roof Advisory Group, a new wholly-owned company, which
continues to operate today. Tr. 16:24-17:18, 18:17-21. In
that role, Mr. Haddock has done a significant amount of
teaching, training, and technical writing for trade
associations and trade publications. Tr. 17:22-24. He has
also regularly been hired as an expert witness in cases
involving metal building defects, specifically roofing
construction defects. Tr. 17:25-18:5. By his estimation, his
consulting practice has resulted in work on several hundred
roofs. Tr. 18:22-19:10.
Mr.
Haddock's knowledge of the engineering, technical, and
scientific challenges involved with metal roofing and
construction were primarily gained through work experience
and interactions with other industry professionals. Tr.
54:20-55:16. He has received multiple awards and recognitions
within the metal construction roofing industry. Tr.
55:17-57:2; Pls.' Ex. SSS.
C.
Robert Haddock's Inventions
During
Mr. Haddock's time in the metal roofing industry, he
encountered many products that were available on the market
for mounting snow guards and snow retention systems on metal
roofs. Tr. 22:20-23:2, 57:23-58:16. Such systems are
frequently mounted on pitched metal roofs by contractors like
Mr. Haddock because these roofs are particularly prone to a
phenomenon called “rooftop avalanche.” Tr.
23:3-5. Pitched metal roofs with snow piled on them are very
likely to suddenly experience melts that cause significant
amounts of snow to fall off the roofs and onto people in the
immediate vicinity of the building. Tr. 52:6-54:8, 66:25-5;
Pls.' Ex. Z. The image below depicts the phenomenon:
(Image
Omitted)
Pls.' Ex. Z at 4, fig. 5.
As a
result, buildings with metal roofs will often be outfitted
with snow retention systems. These systems are designed to
hold the snow in place on the roof so that even if the snow
melts, large amounts of snow will not come down at once. Tr.
52:6-54:8.
There
are two major types of snow retention systems currently in
use on metal roofs. Tr. 51:21-52:5. “Fence” type
snow retention systems use a series of continuous horizontal
components, assembled laterally along either the eaves of the
roof or in parallel rows up the slope of the roof in the
style of a fence, to resist the sliding force, as seen below:
(Image
Omitted)
Pls.' Ex. Z at 8, fig. 8A. “Cleat” type snow
retention systems consist of small individual units used as
“cleats” spot located at or near the eaves of the
roof, as seen below:
(Image
Omitted)
Pls.' Ex. Z at 8, fig. 8B. Both systems restrain or slow
the movement of a bank of snow by restraining its base.
Id. at 9.
In Mr.
Haddock's experience, however, many of the snow retention
systems on the market were not particularly well-adapted to
metal roofs, Tr. 22:22-23:2, specifically standing seam metal
roofs. Tr. 58:3-11.
There
are many different types of metal roofs currently
manufactured with a variety of “seam
profiles”-that is, differences in how metal roof panels
are connected at their seams. Tr. 35:2-10. The following
image highlights several different standing seam profiles
currently in use:
(Image
Omitted)
Pls.' Ex. Y at 37.
“Standing
seam” profiles allow the roof's metal panels to
move appropriately in response to temperature changes that
cause expansion and contraction of roofing materials. Tr.
38:20- 41:1. This is important because a metal roof's
panels, while attached to the underlying structure, are
attached to each other with metal clips or fasteners. Tr.
37:5-38:23; 42:1-43:1. If the panels are not able to move
independently, as standing seam metal roofs permit, the
movement caused by thermal expansion and contraction can wear
down those clips, damaging the integrity of the roofs. Tr.
39:20-40:1.
Mr.
Haddock determined that the snow guards on the marketplace in
the mid-1980s were either attached with penetrating
methods-i.e., screw-fastened or bolted through the roof
itself- or glued to the roof. Tr. 58:3-16. The former could
jeopardize the weatherproofing of the roof; the latter would
simply have a very limited lifespan before falling off.
Id.
Mr.
Haddock sought a more permanent solution when he built his
own home. Tr. 58:18- 20. This led to the invention of his own
snow retention system. Id. Mr. Haddock created metal
clamps that sit over the metal roof seam “like a saddle
would sit on a horse, ” and which are then tightened
onto the seam with screws without penetrating or damaging the
underlying roofing material. Tr. 59:4-60:7. This basic
technology allowed for a very strong connection to be made
between the roof and whatever was being mounted on it. Tr.
60:5-7.
Mr.
Haddock faced resistance from the roofing industry when he
initially introduced his mounting clamps, as there was
significant concern that mounting anything to a roof would
ultimately damage it. Tr. 60:10-61:14. Over time, however,
Mr. Haddock's innovations were recognized and adopted
into wider use, in part due to his commitment to conducting
extensive load testing to demonstrate the holding strength of
his clamps. Tr. 61:15-62:4. Mr. Haddock conducted more than
3, 000 load tests on a combination of different materials and
seam profiles, as the holding strength of the clamps varies
based on the shape of the profile and the type of metal used.
Tr. 62:5-63:2. The data from this load testing was ultimately
compiled into a load test chart that Mr. Haddock used in
making the case for his products to others in the roofing
industry.[3] Tr. 63:3-14.
The
mounting clamps' uses are not limited to snow-retention
systems. Tr. 23:14-24:3. They can be used to attach a variety
of devices to standing seam roofs, including satellite
dishes, HVAC systems, and solar panels, as seen in these
images:
(Image
Omitted)
Pls.' Ex. Y at 52, 51.
Once he
had developed the mounting clamp, Mr. Haddock began to
develop a snow retention system that used the clamps to mount
rails, or cross-members, onto standing seam metal roofs. Tr.
63:15-64:12. His first system, SnoFence, is still on the
market. Tr. 66:8-11. He eventually developed, however, a new
system: ColorGard. Tr. 66:12-19.
One of
ColorGard's innovations-the one that gave it its name-was
that it created an easy way to match the snow retention
system to the color of the roof. Tr. 69:9-70:24. Over the
years, customers had used a variety of methods to paint their
snow guards to match their roofs, but those methods did not
last as long as the color of the roof itself; roofing
materials are typically warrantied for color for several
decades. Tr. 69:12-17, 70:11-21. The ColorGard system
features a channel-similar to an office door's
nameplate-into which a roof installer could insert a strip of
the actual roof material, creating a perfect match that would
last for the life of the roof because it was the same exact
material. Tr. 69:21-70:8.
The
first-generation ColorGard system was patented under a patent
that expired in 2012. See Tr. 66:18-25. Mr. Haddock
realized, however, that a specific feature of the
ColorGard-the fact that the cross-members contained
pre-punched holes-was preventing wider adoption of the system
for roofs whose seams were spaced in non-standard ways, and
thus needed more flexibility in determining where clamps
would be installed. Tr. 68:15-69:8. This led to the
development of the design for the second-generation ColorGard
system in the late 1990s. Tr. 70:25-71:13. That system, while
very similar to the original system, utilizes an unpunched
cross-member. The images below illustrate the differences
between the two types of cross-members:
(Image
Omitted)
Ex. BB at 1.
Mr.
Haddock also developed an adaptor clip, which he called the
VersaClip, which slides onto the unpunched cross-member and
is then connected to the mounting clamps. Tr. 71:4-19. This
product allows the installer to position the adapter anywhere
along the unpunched cross member and then bolt it to a
mounting clamp. Id. The image below depicts the
VersaClip:
(Image
Omitted)
Ex. BB at 1.
The
diagram below indicates how the components that make up the
...