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John Bean Technologies Corp. v. Morris & Associates, Inc.

United States District Court, W.D. Arkansas, Fort Smith Division

June 19, 2018

JOHN BEAN TECHNOLOGIES CORPORATION PLAINTIFF
v.
MORRIS & ASSOCIATES, INC. DEFENDANT

          OPINION AND ORDER

          P.K. HOLMES, III CHIEF U.S. DISTRICT JUDGE

         Before the Court is a motion (Doc. 84)[1] for partial summary judgment filed by Defendant Morris & Associates, Inc. (“Morris”). Morris has also filed a brief in support (Doc. 85) and a statement of facts (Doc. 86). Plaintiff John Bean Technologies Corporation (“JBT”) has filed a response in opposition (Doc. 95) and responsive statement of facts (Doc. 96). Morris has filed a reply (Doc. 99). This motion requests partial summary judgment on JBT's “false marking and false advertising claims associated with Morris's advertising of its IntraGrill auger chiller as patented under United States Patent No. 6, 308, 529 (‘the ‘529 patent').” (Doc. 84, p. 1).

         Also before the Court is a separate motion (Doc. 91)[2] for partial summary judgment, a brief in support (Doc. 92) and a statement of facts (Doc. 93) filed by Morris. JBT has filed a response in opposition (Doc. 101) and responsive statement of facts (Doc. 102). Morris has filed a reply (Doc. 105), and JBT has filed a surreply (Doc. 109) with leave of Court. This motion requests partial summary judgment on JBT's “false advertising claims associated with Morris's IntraGrill auger chiller webpage.” (Doc. 91, p. 1).

         Also before the Court is JBT's motion (Doc. 78)[3] for reconsideration of a protective order (Doc. 77) entered by the Court. JBT has filed a brief in support (Doc. 80) and Morris has filed a response (Doc. 88).

         Because JBT cannot show a genuine dispute of material fact with respect to the issue of causation and injury, the motions for partial summary judgment will be granted. Because JBT cannot show that the discovery it seeks is relevant or proportional, the motion for reconsideration will be denied.

         I. Procedural Posture

         This action was filed in 2015 by Cooling & Applied Technology, Inc. (“CAT”).[4] CAT asserted Patent Act false marking claims pursuant to 35 U.S.C. § 292(b), Lanham Act false advertising claims pursuant to 15 U.S.C. § 1125, and various North Carolina and Arkansas State law claims against Morris. CAT's claims involved Morris's IntraGrill auger chiller, marked as patented under the ‘529 patent, and Morris's COPE product, marked as patented under United States Patent No. 7, 470, 173 (“the ‘173 patent”) and United States Patent No. 7, 588, 483 (“the ‘489 patent”). Morris filed a motion to dismiss the false marking claims and any associated Lanham Act and state law claims. CAT's business was acquired by JBT, and CAT assigned its claims in this lawsuit to JBT without opposition from Morris.

         The Court substituted JBT for CAT and denied the motion to dismiss. (Doc. 42). In its opinion and order denying that motion to dismiss, the Court addressed the issue of causation and injury. With respect to the false marking claims related to the ‘529 patent, the Court explained that JBT would be required to show a competitive injury caused by Morris to succeed on its false marking claim, and noted that JBT alleged that “[u]pon information and belief . . . customers have been reluctant to purchase and, in some instances, have declined to purchase, CAT's chillers or certain parts of CAT's chillers as a result of Morris's false marketing.” (Doc. 42, p. 9 (quoting Doc. 1, ¶ 102)).

         Following entry of this order, the parties filed a second joint Rule 26(f) report. (Doc. 45). JBT proposed that the parties engage in full discovery on all claims and defenses. Morris proposed that discovery be bifurcated, and first be limited to discovery regarding intent to deceive and Morris's advice-of-counsel defense. The Court entered an interim scheduling order (Doc. 46) declining to limit discovery as Morris proposed, thereby allowing JBT to seek discovery regarding all claims and defenses. The Court also set a claim construction hearing, which was held on July 19, 2017. JBT then amended its complaint (Doc. 64), primarily adding additional factual allegations in support of its willfulness claims, and maintaining its nonspecific allegations that it had been or was likely to be injured by Morris's false marking and false advertising. An unredacted copy (Doc. 65) of the amended complaint was filed under seal.

         Thereafter, Morris moved for a protective order (Doc. 69). Morris argued that despite ample opportunity in the course of discovery, JBT had not met its obligation to articulate or provide evidence of a single injury caused by Morris's alleged false marking and false advertising of the IntraGrill auger chiller. Referencing the proportionality principle in Federal Rule of Civil Procedure 26, Morris requested that the Court protect Morris from JBT's requests for detailed disclosure of Morris's sales and financial information related to the IntraGrill auger chiller until JBT showed evidence that it had suffered an injury. JBT's response argued that it had been injured by Morris's false marking and false advertising, but the responses to Morris's discovery requests and the evidence cited in support of that response indicated otherwise. JBT's failure to provide evidence of injury not only led the Court to determine that JBT's discovery requests were disproportionate to the needs of the lawsuit, but that summary judgment against JBT may be appropriate at the very least on claims related to the IntraGrill auger chiller marked with the ‘529 patent. The Court granted the motion for protective order, and further ordered Morris to file a motion for partial summary judgment.

         The parties then filed the motions under consideration.

         II. Standard of Review

         A. Summary Judgment

          “The court shall grant summary judgment if the movant shows that 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). The moving party bears the burden of showing the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). It may meet this burden by citing to affidavits, pleadings, depositions, answers to interrogatories, and admissions on file. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). When the moving party has met its burden, the nonmoving party must “come forward with ‘specific facts showing that there is a genuine issue for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting old Fed.R.Civ.P. 56(c)). “The nonmoving party must do more than rely on allegations or denials in the pleadings, and the court should grant summary judgment if any essential element of the prima facie case is not supported by specific facts sufficient to raise a genuine issue for trial.” Register v. Honeywell Fed. Mfg. & Techs., LLC, 397 F.3d 1130, 1136 (8th Cir. 2005) (citing Celotex Corp., 477 U.S. at 324).

         In analyzing whether there is a genuine dispute of material fact, the Court draws all reasonable inferences in the nonmoving party's favor. Matsushita Elec. Indus. Co., 475 U.S. at 587-88. “[T]he non-moving party must be able to show sufficient probative evidence that would permit a finding in his favor on more than mere speculation, conjecture, or fantasy.” Binkley v. Entergy Operations, Inc., 602 F.3d 928, 931 (8th Cir. 2010). “A party may not rely solely on inadmissible hearsay in opposing a motion for summary judgment, but instead must show that admissible evidence will be available at trial to establish a genuine issue of material fact.” Fin. Timing Publ'ns, Inc. v. Compugraphic Corp., 893 F.2d 936, 942 (8th Cir. 1990). “[S]ummary judgment is appropriate when there is ‘adequate time' for discovery and not solely when discovery is complete. The district court has discretion to determine when there has been adequate time for discovery . . . .” Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chemical Co., 165 F.3d 602, 606 (8th Cir. 1999) (citation omitted). A party who seeks additional discovery in response to a motion for summary judgment must do more than speculate that additional discovery would be useful-it must show, without conclusory statements that some evidence might possibly be found, how additional discovery would alter the evidence before the court. Nat'l Bank of Commerce of El Dorado, Ark., 165 F.3d at 606 (8th Cir. 1999).

         B. Controlling Substantive Federal Law

         As a general matter, the Court applies Federal Circuit precedent to patent law issues, but otherwise applies the precedent of the Eighth Circuit. Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant part), abrogation on other grounds recognized by Amgen Inc. v. Sandoz Inc., 877 F.3d 1315, 1325-26 (Fed. Cir. 2017). The Court applies Federal Circuit precedent to JBT's Patent Act false marking claims. Panduit Corp. v. All States Plastic Mfg. Co., Inc., 744 F.2d 1564, 1573 (Fed. Cir. 1984), overruled on other grounds by Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985). The Court applies Eighth Circuit precedent to JBT's Lanham Act false advertising claims. Syngenta Seeds, Inc. v. Delta Cotton Coop, Inc., 457 F.3d 1269, 1273 (Fed. Cir. 2006). The Court applies state law to those claims over which it is exercising supplemental jurisdiction under 28 U.S.C. § 1367. Felder v. Casey, 487 U.S. 131, 151 (1988) (“[W]hen a federal court exercises diversity or pendent jurisdiction over state-law claims, ‘the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.'” (quoting Guar. Tr. Co. v. York, 326 U.S. 99, 109 (1945))).

         C. Protective Orders

         “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). For good cause, the Court may enter a protective order to protect a party from undue burden. Fed.R.Civ.P. 26(c)(1).

         III. Facts

         JBT and Morris are manufacturers and distributors of auger chillers to poultry processors in the United States. JBT and Morris sell other poultry processing equipment, as well. For purposes of these motions, it is agreed that JBT and Morris are the only two distributors of auger chillers in the relevant market. An auger chiller is a piece of equipment in a processing line which receives chicken carcasses in the middle stages of the butchering process and cools them to prevent contamination. Auger chillers vary in the details of their design, but the general form of an auger chiller is a long, open-topped tank mostly encompassing an auger running the length of the tank. Cold water is run in a current from the far end of the tank to the receiving end to cool the chickens, and the auger slowly rotates on a shaft, driving the chickens against this current to the far end of the tank. Unless another opening in the auger blades, or flights, is present, the water in the tank flows through the small space between the edge of the auger blades and the interior wall of the tank. The flow of water in the center of the tank near the auger shaft is generally slowed by the auger blades, and tends to heat more quickly and cool less effectively than the flowing water at the edge of the blades. When they reach the end of the tank, the chilled chickens are then received by the next stage of the processing line.

         Auger chillers are expensive, heavy-duty pieces of equipment that are manufactured to last for many years. Consequently, sales to customers-various processors around the country-are relatively few, highly competitive, and worth a substantial amount of money. Salespeople for JBT and Morris attempt to keep a close relationship with their customers and potential customers to maintain a good reputation in the market and increase the chance of future sales. JBT and Morris also maintain websites, publish brochures for distribution to customers, and attend trade shows in order to improve their reputations with customers and make additional sales.

         Morris sells an auger chiller called IntraGrill. In an effort to increase the flow of water throughout the auger chiller tank, Morris has manufactured vertical openings in the auger blades of the IntraGrill auger chiller. These openings run from the shaft to the edge of the blade. Morris calls these openings “water passages.”[5] Morris has marked the IntraGrill auger chiller with the ‘529 patent. Morris advertises its auger chiller as patented on its website, in brochures, on signs at trade shows, and in communication with customers and potential customers. JBT believes Morris has falsely marked its IntraGrill auger chiller as patented and is falsely advertising its IntraGrill auger chiller as patented.

         JBT also sells an auger chiller, called FATCAT. FATCAT was manufactured and sold by CAT prior to CAT's purchase by JBT. In 2013, CAT began including openings for water in the blades of its own auger chillers. JBT calls these openings “flow reliefs.” JBT's flow reliefs do not run from the shaft to the edge of the blade, but are located only near the shaft. ...


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