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RMH Tech LLC v. PMC Industries, Inc.

United States District Court, D. Connecticut

December 18, 2018

RMH TECH LLC and METAL ROOF INNOVATIONS, LTD., Plaintiffs,
v.
PMC INDUSTRIES, INC., Defendant.

          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 ...


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