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Marine Travelift, Inc v. ASCOM SpA

United States District Court, E.D. Wisconsin

September 30, 2016



          William C. Griesbach, Chief Judge United States District Court

         On August 25, 2014, this court denied the Plaintiff's motion for a preliminary injunction to enjoin the Defendants (“ASCOM”) from selling gantry cranes alleged to infringe on a number of patents owned by the Plaintiff. In so ruling, I found serious questions of validity and found no showing of irreparable harm. Following discovery, the Defendants have filed a motion seeking summary judgment on invalidity and non-infringement. Given the length of the Defendants' reply brief and the potential that it unfairly prejudiced the Plaintiff by raising new arguments, a sur-reply brief was allowed. The matter is now fully briefed. For the reasons given below, the motion for summary judgment will be granted in part, and denied in part.

         I. Background

         As described in more detail in this court's August 25, 2014 ruling, the parties are in the business of building gantry cranes designed for a number of commercial applications, including the lifting and moving of large boats around a shipyard. MTI owns a number of patents disclosing features of gantry crane steering systems that allow a crane to rotate around its own axis, in what the parties refer to as carousel or circle steering. The feature is desirable in that it allows a large and bulky gantry crane to maneuver around a ship yard more easily.

         But MTI's patents do not disclose the concept of carousel steering itself, which had already been present in the prior art. Instead, the patents describe a carousel steering system that allows the wheels to reach their desired position by having two of the wheels rotate counterclockwise and then reversing the drive direction of those wheels. “The steering system is configured to cause the first front wheel and the second rear wheel to rotate counterclockwise to move into position for a selected carousel steering mode, and to cause the second front wheel and the first rear wheel to rotate clockwise to move into position for the carousel steering mode. The system then reverses the drive direction of the second front wheel and the second rear wheel.” (ECF No. 98-1 at 3:3-9.) This feature was intended to address a problem in existing gantry cranes, whereby two of the wheels would need to be rotated 90 degrees or more further than the other wheels. That is, if all the wheels maintained the same forward-drive, then they could not spin in a circle until two of the wheels had traversed about 134 degrees. (Id. at 10:25-60.) By reversing the drive in two wheels, the patented invention allows for a “shortcut” for two of the wheels.

         The asserted claims also disclose features involving safety, such as stopping movement of the crane if the wheels are out of position, and monitoring wheel position and other factors through use of a controller. I address these features in more detail below.

         II. Analysis

         The Defendants argue that most of the asserted claims are anticipated by prior art. “Anticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim.” Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed.Cir. 1983). “[U]nless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102.” Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008).

         A. Mi-Jack Prior Art

         A centerpiece of the Defendants' invalidity defense is a crane made by a company called Mi-Jack Products, which was sold to the Huntsville Airport in Alabama in 2002. A few years earlier, airport officials retained the services of Joe Cadile, of Crane Services, Inc., a mechanical and design engineering firm, to assist the airport in designing and acquiring a gantry crane to operate at the airport. With input from airport officials, Cadile drew up specifications to suit their needs, the end result of which was an eight-wheeled gantry crane having the ability to turn in a circle, the so-called “carousel” feature at issue in this case. The winning bid came from Mi-Jack, which ultimately produced a crane it called the 850P model.

         According to ASCOM, the Mi-Jack 850P crane meets all the limitations of the claims at issue here. The machine comprises a frame structure with wheels proximate the various sides of the structure; a lifting apparatus; a user interface; and a controller capable of reversing the drive direction and rotating a ll the wheels either clockwise or counterclockwise. All of these features allowed the 850P to perform the key novelty of the Plaintiff's invention, which is the ability to rotate in a carousel fashion by having two of the wheels reverse direction. In addition, the 850P incorporates hydraulic drive motors on two of the four corners of the machine, and its controller was configured to slow down the machine's movement before carousel steering mode could be initiated (to prevent damage). These are the central elements of the claims of the ‘362 patent, which means (if ASCOM is right) that the 850P anticipated those claims by several years.

         1. Expert Testimony

         MTI first argues that much of the evidence about the Mi-Jack 850P comes by way of improper expert testimony from Joe Cadile and Jeffrey Tiller, a Mi-Jack subcontractor who programmed the controller of the 850P. Neither witness was disclosed as an expert and neither provided an expert report, as required by Fed.R.Civ.P. 26. MTI argues that much of their testimony is opinion evidence of the sort normally offered by experts, because their opinions involve engineering issues regarding the design of the Mi-Jack crane. For example, Tiller opined in a declaration that controllers of gantry cranes must prevent the operator from driving the crane before the wheels were in the correct position, or else it could cause undue stress on the crane. (ECF No. 154 at ¶ 11.) Tiller, by his own admission, is not a mechanical engineer, and so MTI argues he should not be heard to give opinions about how gantry cranes might be damaged. Cadile, who created the specifications for the 850P on behalf of the Huntsville Airport, opined that “you have got to reverse the drive direction” to make a circle with the crane, and before entering carousel mode you must make sure the drive wheels come to a stop so as to avoid “structurally tearing things up.” (ECF No. 152-6 at 85:7-8 and 67:17-23.) Cadile's opinions, MTI believes, stray too far into matters that are technical, and thus he should have been disclosed as an expert and a report should have been filed.

         The line between expert and lay testimony can be difficult to judge, and in fact many kinds of opinions-for example, the opinion of a treating physician- will exhibit features of both lay and expert evidence. Here, neither witness is offering abstract testimony about scientific or technical matters that they have been retained to study. The testimony they have given is based on their own pre-existing experience designing and working on the very machine that is at issue here. Even if Tiller is not an engineer, he is not forbidden from explaining the reason for a feature of the program that drives the machine. Someone who installed brakes on a car could testify that their purpose was to stop the car and prevent accidents even if the installer was not an expert in physics or mechanical engineering. Moreover, there does not appear to be any reason to dispute the reason the 850P's controller was programmed the way it was. In an anticipation analysis, it does not much matter why something was the programmed the way it was. The question is simply whether the feature existed and performed the same function.

         Similarly, although Cadile's opinions naturally reflect his experience working on cranes in general, the complained-of statements were really testimony about the 850P crane in particular. When discussing reversing the drive direction, for example, he was not offering some kind of expert testimony about technology he was asked to review for this litigation, but instead was describing how the 850P machine actually was designed, which was a process in which he personally played a role. (ECF No. 152-6 at 84-85.) The 850P, he said, reversed the drive and also required the wheels to come to a stop before going into carousel steering mode. This line of testimony is much more akin to percipient fact witness testimony than it is to expert testimony. Accordingly, I conclude the testimony is admissible, at least to the extent that it simply recounts their own activities in the design of the 850P, their personal observations of how the 850P operated and performed, and their recollection of when these activities and observations occurred.

         2. Expert Testimony and Corroboration of Carousel Steering

         Joe Cadile was asked in his deposition, “if you want to turn in a circular manner with this machine back in June of 2002 . . . what, if anything, d id you have to do with the drive direction of the wheels?” (ECF No. 152-6 at 84:16-17.) He answered, “Oh, they're reversed.” (Id. at 84:21.)

         He explained further:

In the program 1logic, as you know, is [sic] we flip the circle steer. The program logic in the PLC [programmable logic controller] says, once I've made my position, the 12 ½ degrees, okay, then I am changing the hydraulic flow to the drive motors. Okay. Still the same hydraulic pressure. So on what I call the F1, that's going to be driving one direction, and the F2 . . . in the rear, it will start to drive in the other direction. . . . I mean, to make a circle, you have got to reverse the drive direction.

(Id. at 84:23 - 85:8.)

         In other words, according to Cadile, the Mi-Jack crane not only had the carousel steering feature in 2002, it achieved that function by reversing the drive direction of the wheels. In addition, Cadile testified that the machine had to be in “stop position until we achieve circle steer” or else “the angles would be wrong and you'd start structurally tearing things up” due to “overstressing.” (Id. at 85-86.) Mi-Jack engineering vice-president Daniel Zakula also testified to the same effect. When circle steering mode is engaged by the user, “the drive direction on one of the drive wheels has to be reversed so that when the machine does begin to drive, it rotates . . . in the correct direction to perform the drive function.” (ECF No. 236-1 at 45:12-19.) This happens automatically: “When he selects the circle mode and presses the actuator button, the wheels will begin to transition from their current mode to the circle mode. And once they get to their circle mode, everything is in the circle mode.” (Id. at 43:8-12.) In short, if credited, this testimony would demonstrate that the Mi-Jack machine possessed certain of the key attributes of the asserted claims of the ‘362 patent.

         MTI argues that the testimony is not sufficiently corroborated to justify entry of judgment in ASCOM's favor. MTI argues that even if the 850P crane currently has the functionality described above, at issue in this case is whether it possessed those features the crane had in 2002, when it was delivered to the Huntsville airport. Specifically, MTI argues that the oral testimony of Cadile and Tiller is not enough to substantiate ASCOM's allegations that the crane possessed the ability to achieve carousel mode by reversing the drive direction of the wheels when it was first placed in use. Absent any corroboration, their testimony does not suffice, particularly because Cadile is being paid for his testimony and because both witnesses “can be expected to derive a sense of professional or personnel [sic] accomplishment in being the first in the field, ” which makes the witnesses biased. Finnigan Corp. v. Int'l Trade Comm'n, 180 F.3d 1354, 1368 (Fed. Cir. 1999).

         “[C]orroboration is required of any witness whose testimony alone is asserted to invalidate a patent, regardless of his or her level of interest.” Id. at 1369; Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1351 (Fed. Cir. 2001) (discussing indicia of reliability for corroboration). The Federal Circuit has looked with “disfavor” on attempts to show anticipation with only oral testimony. Juicy Whip v. Orange Bang, 292 F.3d 728, 740 (Fed. Cir. 2002).

         ASCOM responds that it is not relying solely on oral testimony and cites what it describes as ample written corroboration. For example, there is a great deal of paperwork, including invoices, manuals, specifications, regarding the development and delivery of the crane in 2002. Although MTI does not dispute that the crane was operational in 2002, it disputes the fact that the crane, in 2002, had the feature of carousel steering through reversing the wheel drive-the key teaching of MTI's patent. Instead, MTI argues that the crane did not have this feature until around the year 2006, when the crane was updated with an expensive GPS-drive system. For support, it notes that preliminary schematics from 2001 do not contain circle steer components, and some of the hydraulic schematics were not approved until 2007.

         ASCOM has produced a drawing of the user interface-a “control box” for operating the crane-which shows a steering selector knob with settings for 0 degrees (front-rear drive), 90 degrees (sideways, or transverse drive), and “circle” steering. The drawing is marked “Copyright 2002 Mi-Jack Products, Inc.” (ECF No. 187-3 at 18.) The same rendering shows an indicator light marked “Wheels Ready, ” which activates only when the wheels are in the correct position. These features are explained in a contemporaneous Mi-Jack user manual, which explains that the steering mode selector switch “is used to select the desired steering mode. . . . ‘CIRCLE' position is used to allow the machine to rotate about its center.” (Id. at 25.) There are also a number of schematics from 2002 depicting a “hydraulic gantry w/ circle steer.” (Id. at 63.) Finally, Joseph Cadile has submitted punch lists from June 2002 that indicate “circle steer is now functional.” (ECF No. 183-2 at 2.)

         That the crane had the circle steering function upon delivery in 2002 (or immediately after) seems beyond question. Cadile, who was intimately involved in the project, testified that it did, and states that he personally witnessed it operating in carousel mode in 2002. (ECF No. 183, ¶ 3.) Zakula echoed that testimony. The manual, schematics, control interface, and punch lists all point to the existence of a gantry crane with circular steering function operable in 2002.

         MTI's arguments to the contrary are all based essentially in speculation. As noted earlier, its primary argument is founded on the fact that the crane received a “GPS” upgrade in 2006. MTI notes that the upgrade cost some $200, 000, which it views as suspiciously expensive-evidence that the GPS addition was not a minor one but must have included a substantial overhaul of the steering system to include circle steering. MTI's speculation aside, there is no reason to believe that Mi-Jack added circle steering in 2006. First of all, there is nothing about the addition of a GPS-based feature that would lead one to imagine that such a feature would have anything to do with rotational steering. Global positioning systems by their very nature involve a longitude-latitude framework for establishing the location of something. If a machine is operating in a circular mode (i.e., around its own axis), then its coordinates will stay the same and the machine's position with respect to longitude and latitude will not change at all. GPS, in short, does not have much to do with circular steering, and so in the abstract one would not expect circle steering to be part of a GPS-related upgrade.

         Second, MTI cites no documentary evidence nor any testimony suggesting that circular steering was added to the crane in 2006 rather than 2002. Its argument stands in contrast to the documents cited above, as well as Cadile's testimony, which indicates that the crane did have such a function in 2002 and that the GPS unit added in 2006 had “nothing whatsoever to do with ‘circle steer, '” (ECF No. 183, ¶ 6.) Daniel Zakula echoed that conclusion, explaining that GPS steering is a feature “only for tracking the machine up and down straight lines.” (ECF No. 236-1 at 52:5-6.) Asked point-blank whether the GPS steering system had anything to do with circle steering, he replied, “no.” (Id. at 52:3.) And, as Bruce Farber has explained, the 2006 schematics relating to the GPS feature show no modifications to the steering functions, nor to the hydraulic system, which means “nothing was modified on the 850 P with respect to the steering modes that were originally installed on the machine in 2002.” (ECF No. 188 at ¶ 11.) MTI's argument is thus contradicted at every step, by testimony of disinterested parties as well as by documentary evidence.

         MTI's fallback argument is that even if the Mi-Jack crane did have circular steering in 2002, that does not mean it was same kind of steering as the patented technology. There are a number of different ways to achieve circular or carousel steering, it notes, and it is just as likely that the Mi-Jack machine used some other method to achieve that mode. But again, this is simply speculation. As described above, Cadile and Zakula testified that carousel mode was achieved by reversing the wheel direction, just as in the asserted claims. This testimony is supported by the 2014 video Cadile filmed, which clearly shows that functionality-each wheel turning only 22 or 23 degrees, rather than turning much more. (ECF No. 152-8.) The mere fact that the crane happened to receive an unrelated upgrade in 2006 is not enough to overcome the testimony and documentary evidence that the crane possessed the relevant features in 2002.

         In a related vein, MTI suggests that some of the documents produced by Mi-Jack, such as the user manual dated October 2002, were not related to the 850P crane sold to the Huntsville airport. But again, this is purely speculative. The user manual discussed above, which describes the circle steering mode, is titled “Operator's Manual . . . Travelift Crane 850P, ” which is the same model of crane delivered to Huntsville, and is dated contemporaneously with the in-service date of that machine. Mi-Jack engineer Myron Glickman authenticated the document, and indicated that it was the correct manual. (ECF No. 152-4 at 49-50.)

         3. Controller

         It is clear, then, that the Mi-Jack crane possessed circle steering, including the kind of circle steering taught by the asserted claims, which involves reversing the drive direction of some of the wheels. Even if that is true, MTI argues, ASCOM has not shown that the machine possessed a “controller” configured to reverse drive direction, as taught in several of the claims of the ‘362 patent. That is, even if the Mi-Jack crane had the theoretical mechanical ability to carry out carousel steering, ASCOM has not shown that it actually carried out that function through a controller.

         MTI's argument is not convincing. At the outset, I note that MTI's argument does not suggest any reason why a machine would possess a mechanical ability to function a certain way but lack a means for a user to get it to function that way. In short, why would Mi-Jack have created a crane with circle steering functionality but then not create any way for a user to control the machine to effectuate that function? Of course it is theoretically possible that a machine would have more abilities than are reflected in its control units, but one expects that is the exception rather than the rule. More importantly, there is the testimony of Joseph Cadile, who stated quite clearly that he had witnessed the machine operating in circle steering mode in 2002, and that the function, which is described in the manual and schematics, was part of the crane's original design. The punch list indicated in June 2002 that “circle steer is now functional.” (ECF No. 183-2 at 2.) It is not simply that the crane had the mechanical or theoretical abilit y to function in circle steering mode, then-the crane actually did function in that mode when the user selected the right setting on the selector switch, which is one of the “controls” described in the manual. This is shown in the hydraulic schematic dating to 2002, wherein a “circle steer valve solenoid” operates to reverse the wheel drive direction. (ECF No. 187-3 at 41.) Finally, Daniel Zakula testified that the 850P had a programmable logic controller (PLC), which was purchased from a company called Rexroth. The PLC communicates with a steer controller to activate steering valves to drive each wheel to its position. (ECF No. 236-1 at 46-47.) Ultimately, MTI has not suggested any way that a crane with circle steering functionality could function that way without having a “controller, ” and the contemporary evidence and corroborated testimony demonstrate that the Mi-Jack crane did possess one.

         In a final effort, MTI suggests that even if there was a controller, it did not necessarily perform the function of slowing down and stopping movement before the crane enters carousel mode, a limitation disclosed in several asserted claims apparently designed to prevent damage to the crane. For example, claim 6 of the ‘362 patent indicates that the “controller is programmed to slow down movement of the frame structure before effecting the carousel steering mode.” (ECF No. 98-1 at 12:12-14.) The specification explains: “One safety feature is invoked when a new steering mode is selected by the operator. In this instance, the prior mode running at the time of the new selection will not change until the control system determines it is safe to change steering modes. This helps prevent damage to the crane or items attached to or carried by the crane, or an inadvertent change to the steering mode.” (Id. at 9:6-12.) In addition, the specification further explains: “the control system will not allow a change to certain steering modes unless the crane is stopped. Specifically, in the case of changing to the carousel steering mode, the control system will not allow the new steering mode until the crane is stopped.” (Id. at 9:18-23.)

         MTI argues that there is no evidence that the controller is programmed to slow down or stop the machine before effectuating carousel steering mode. That is not true. Cadile testified, for example, that the Mi-Jack machine had to be in a stopped position or else “the processor won't let the crane move.” (ECF No. 152-6 at 67-68.) In other words, it was part of the programmed operation that the crane must be in a stopped position “before effecting the carousel steering mode, ” as the asserted claims teach. Similarly, Daniel Zakula testified quite clearly that the controller automatically prevented the user from switching modes while the crane was in motion. “The operator cannot cause the machine to go from one mode to another mode while it is in motion . . . Because the control code in the MDC [controller] is designed such that the machine has to be stopped before it will allow the transition.” (ECF No. 236-1 at 63.) Their testimony is corroborated by the video of the Mi-Jack 850P in action. In short, the Mi-Jack crane had, as part of its programmed functionality, a feature requiring that the crane had to be stopped before carousel mode could be activated.

         4. Public Use

         A person is not entitled to a patent if the invention disclosed therein was in public use in this country more than one year before the application date for the patent. 35 U.S.C. § 102(b). The statutory phrase “public use” does not necessarily mean open and visible in the ordinary sense; it includes any use of the claimed invention by a person other than the inventor who is under no limitation, restriction, or obligation of secrecy to the inventor. New Railhead Mfg., L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290, 1297 (Fed. Cir. 2002). MTI argues that the Mi-Jack crane was not a “public” use because it was a one-off custom product that operated in non-public areas of an airport.

Public use includes “any use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor.” “The public use bar serves the policies of the patent system, for it encourages prompt filing of patent applications after inventions have been completed and publicly used, and sets an outer limit to the term of exclusivity.”

Netscape Commc'ns Corp. v. Konrad, 295 F.3d 1315, 1320 (Fed. Cir. 2002) (citations omitted).

         “[W]hen an asserted prior use is not that of the applicant, § 102(b) is not a bar when that prior use or knowledge is not available to the public.” Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998). That is, if a third party uses the invention in a manner that prevents the public from accessing it, the use might not be considered public. In W.L. Gore & Associates, Inc. v. Garlock, Inc., for example, the court found no public use when the claimed invention was used by third parties pursuant to a confidentiality agreement. 721 F.2d 1540, 1550 (Fed. Cir. 1983) (“It was error to hold that Budd's activity with the Cropper machine . . . was a ‘public' use of the processes claimed in the '566 patent, that activity having been secret, not public.”) And in Baxter Int'l, Inc. v. COBE Labs., Inc., the court did find a public use due largely to the lack of confidentiality surrounding the technology. 88 F.3d 1054, 1059 (Fed. Cir. 1996) (“Suaudeau's lack of effort to maintain the centrifuge as confidential coupled with the free flow into his laboratory of people . . . who observed the centrifuge in operation and who were under no duty of confidentiality supports only one conclusion: that the centrifuge was in public use.”) The court went on to find that, “[a]s between a prior inventor who benefits from a process by selling its product but suppresses, conceals, or otherwise keeps the process from the public, and a later inventor who promptly files a patent application from which the public will gain a disclosure of the process, the law favors the latter.” Id.

         MTI argues that the use here cannot be a public one because it occurred in restricted areas of an airport, a facility surrounded by fences. But the cases do not make the public/private distinction simply by reference to whether an invention was out in the open. One reason is that some inventions are, by their nature, devices or processes that are out of sight by design. Nanotechnology, for example, could be all but invisible to the public, but that does not mean the entire field of nanotechnology is rendered “non-public” for purposes of patent law. The question of public versus private turns not on the physical characteristics of the use (under ground, hidden inside a computer, etc.) but on whether the use is theoretically available to the public, and that question depends largely on the degree of confidentiality surrounding the use. Dey, L.P. v. Sunovion Pharm., Inc., 715 F.3d 1351, 1355 (Fed. Cir. 2013). Accordingly, the mere fact that the alleged public use took place in restricted areas of an airport does not mean the use was non-public.

         The question, then, is whether Mi-Jack or the Huntsville Airport took steps to keep the invention confidential, not merely whether the entire crane was kept out of public sight due to the fact that it was used at an airport. Id. (“we have applied section 102(b) to invalidate a patent based on third-party use when the third party ‘made no attempt to maintain confidentiality or to deliberately evade disclosure, ' made no ‘discernible effort to maintain the [invention] as confidential, ' or ‘made no efforts to conceal the device or keep anything about it secret.'” (citations omitted)).

         To support its public use defense, ASCOM notes that the Port of Huntsville-a public entity-owns the facility where the crane is operated. The crane is operated near a public roadway adjacent to the airport, where passers-by can view the crane. The crane itself is heavily used by numerous employees, none of whom are under any obligation of confidentiality. In fact, the airport's gantry cranes were the subject of a 2004 story in the Huntsville Times, which included an interview with one of ...

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