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DANA CORP. v. AMERICAN PRECISION CO.

September 18, 1985

DANA CORPORATION, PLAINTIFF,
v.
AMERICAN PRECISION COMPANY (DIVISION OF AVNET, INC.), CENTURY CLUTCH AND BRAKE SUPPLY, INC., CENTURY PARTS, INC., AND ILLINOIS AUTO TRUCK CO., INC., DEFENDANTS.



The opinion of the court was delivered by: Holderman, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff Dana Corporation ("Dana") brought this action against defendants Century Clutch and Brake Supply, Inc. and Century Parts, Inc. (collectively "Century"),*fn1 American Precision Company (division of Avnet) and American Precision Company, Inc. ("APC"),*fn2 and Illinois Auto Truck Co., Inc. ("IAT") for patent infringement and unfair competition.

PROCEDURAL BACKGROUND

The first count of the two-count amended complaint claims infringement of the following four patents allegedly held by Dana:

  1. "Spring Loaded Clutch," United States Patent No.
  3,394,788, issued July 30, 1968 ("788 Patent");
  2. "Self-Adjusting Clutch," United States Patent No.
  3,752,286, issued August 14, 1973 ("286 Patent");
  3. "Clutch with Friction Reducing Lever Assembly,"
  United States Patent No. 4,034,836 issued July 12,
  1977 ("836 Patent"); and
  4. "Coaxial Spring Damper Drive," United States
  Patent No. 4,254,855, issued March 10, 1981 ("855
  Patent").

(Amended Complaint ¶ 4.) Dana alleges that within six years of the commencement of this action, APC infringed the 788, 286, and 836 patents. IAT and Century are alleged to have infringed all the patents named in paragraph 4 of the amended complaint within six years of the commencement of the action. (Amended Complaint, ¶¶ 5, 6.)

Although the nature of the defendants' allegedly infringing conduct is not specified in the amended complaint, it is now clear from the briefs of the parties that Century is accused of direct infringement by "reconstructing" Dana clutches and Coaxial Spring Driven Discs when it rebuilds them using one or more non-Dana "key" new parts. Dana has identified these "key" parts as follows:

Patent                             Description of Part
 788                               Pressure Springs
                                   Release Sleeve Retainer
                                   Flywheel Cover
                                   Spring Pivot
 286                               Adjusting Ring
                                   Release Sleeve Retainer
                                   Self-Adjusting Assembly
 836                               Adjusting Ring
                                   K/e Levers
 855                               C/A Assemblies
                                   Inner Cover
                                   Hubs

IAT and APC are accused of contributory infringement by selling these "key" parts to Century and other rebuilders for use in the allegedly impermissible reconstruction of clutches. IAT is also charged with directly infringing the Coaxial Spring Driven Disc patent.

The second count's federal unfair competition claim is directed only against APC. It alleges that within three years of the commencement of this action, APC advertised, offered for sale, and sold in interstate commerce "disc assemblies as replacements for [Dana's] patented Spicer Coaxial Spring Driven Disc, and replacement parts therefor," (Id. at ¶ 13.) These assemblies and parts allegedly compete with Dana's "patented disc assembly" but differ in structure, function, and quality from Dana's product. (Id. at ¶¶ 13, 14.) However, APC represented to the purchasing public that its disc assemblies were equivalent to Dana's Spicer Coaxial Spring Driven Disc, according to Dana, with the intent that the public rely on such representations. The public was allegedly misled and confused by these violations. Dana concludes that APC's conduct violated federal trademark laws, specifically 15 U.S.C. § 1125(a).

The defendants responded to Dana's amended complaint with motions for summary judgment, all raising the equitable defenses of laches and estoppel. On April 24, 1984, Judge Getzendanner, who originally presided over this matter, issued a 33-page opinion denying defendants' motions based upon her understanding, gleaned from somewhat contradictory statements contained in Dana's briefs, of the nature of the allegedly infringing conduct challenged by Dana. As Judge Getzendanner explained in a subsequent October 31, 1984 order:

    The court's original opinion concerning defendants'
  assertion of the equitable defenses of laches and
  estoppel was based on a misunderstanding of Dana's
  theory of infringement. In briefing the first motion
  for summary judgment, no party addressed the methods
  of clutch rebuilding and the differences between
  repair and return and production rebuilding. In
  defense of the previously filed motions for summary
  judgment, Dana argued that laches and estoppel could
  not be established because it had only recent
  knowledge of the infringing activities. Dana
  contended that even if evidence shows it knew of
  APC's and IAT's manufacture of component parts to its
  patented clutch assemblies and of Century Clutch's
  rebuilding, that knowledge alone would not put it on
  notice that use of the parts was direct infringement.
  Attempting to reconcile these two claims, the court
  interpreted Dana's claim of direct infringement as
  requiring a showing of rebuilding involving two or
  more key parts. When Dana finally explained that it
  sought to distinguish production rebuilding
  (infringing) and repair and return (noninfringing),
  the court granted Century Clutch leave to file a
  motion to reconsider.
    The court considers Century Clutch's motion to
  reconsider the laches and estoppel rulings based on
  the new theory of infringement and the new evidence
  in their supporting memorandum a serious motion, at
  the very least with respect to the two earlier
  patents. Several documents tend to show that Dana had
  early knowledge of the production rebuilding industry
  and of Century Clutch's business as a production
  rebuilder. The seriousness of the motion has
  persuaded the court that a hasty ruling on the motion
  would be ill-advised. Moreover, Dana has intimated
  that production rebuilding even using only
  Dana-manufactured parts might constitute
  infringement. The court would have to consider this
  issue seriously and make a ...

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