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NEOPOST INDUSTRIE B.V. NEOPOST v. PFE INTERNATIONAL

December 5, 2005.

NEOPOST INDUSTRIE B.V., NEOPOST, INC., NEOPOST S.A., and HASLER, INC. Plaintiffs,
v.
PFE INTERNATIONAL, INC. and PFE INTERNATIONAL LIMITED, Defendants.



The opinion of the court was delivered by: RUBEN CASTILLO, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Neopost Industrie B.V., Neopost, Inc., Neopost S.A., and Hasler, Inc. (collectively, "Neopost") sued PFE International, Inc., and PFE International Limited (collectively, "PFE") alleging that PFE's production and marketing of certain mail assembly and processing products violate certain of Neopost's Patents and trademarks. Neopost alleges that two PFE machines — the Minimailer 4 Plus and the Maximailer — violate U.S. Patent numbers 5,339,603 ("the `603 Patent") and 6,481,704 ("the `704 Patent"). On September 12, 2005, this Court held a bench trial at which Neopost presented its case-in-chief on all issues of liability under its Second Amended Complaint ("Complaint"). At the conclusion of Neopost's case-in-chief, PFE moved for judgment as a matter of law under Federal Rule of Civil Procedure 52(e) on Neopost's trademark and patent claims. The Court gave the parties the opportunity to fully brief the motions. After carefully considering those briefs and the evidence presented at trial, the Court makes the following findings of facts and conclusions of law in accordance with Rule 52(c), granting both of PFE's motions in their entirety, and thus completely dismissing Neopost's trademark and patent claims.

Pursuant to Rule 52, the Court hereby enters the following written Findings of Fact and Conclusions of Law which are based upon consideration of all the admissible evidence as well as this Court's own assessment of the credibility of the trial witnesses. To the extent, if any, that Findings of Fact, as stated, may be considered Conclusions of Law, they shall be deemed Conclusions of Law. Similarly, to the extent that matters expressed as Conclusions of Law may be considered Findings of Fact, they shall also be deemed Findings of Fact.

  PATENT ISSUES

  FINDINGS OF FACT

  The Court's Findings of Fact are based on the Court's independent review of the evidence presented in Neopost's case-in-chief.*fn1 The Court will not consider extraneous evidence such as the summary charts Neopost submitted after the close of its case-in-chief, which are not evidence in this case.

  I. Parties

  1. The Plaintiffs in this action include: Neopost S.A., a corporation based in France, (Id. ¶ 5); Neopost Industrie, B.V., a Netherlands corporation, (Jt. Pretrial Order ("Pretrial"), Sch. A ¶ 4); Neopost, Inc., a Delaware corporation (Id. ¶ 6); and Hasler, Inc., a Connecticut corporation, (Id. ¶ 7).

  2. Neopost is a United States licensee of the `603 Patent, which the United States Patent and Trademark Office ("USPTO") issued on August 23, 1994, and assigned to Hadewe, B.V., of Drachten, Netherlands. (`603 Patent; R. 157, Manbeck Decl. ¶ 13.) The `603 Patent is entitled "Method for Setting a Folding Station Included in an Apparatus for Preparing Items to be Mailed, and Apparatus for Preparing Items to be Mailed and Folding Station Adapted for Carrying out Such Method."

  3. On November 19, 2002, the USPTO issued the `704 Patent, entitled "Setting an Apparatus for Assembling Mail Items." (Pretrial, Sch. A ¶ 11.) Neopost B.V. is the named assignee of the `704 Patent, and Neopost, Inc. and Hasler, Inc. are its exclusive co-licensees. (`704 Patent; R. 157, Manbeck Decl. ¶ 24.)

  4. The Defendants are PFE International, Inc., an Illinois corporation, and PFE International Limited, a company organized under the laws of England. (Pretrial, Sch. A ¶¶ 8-9.)

  5. PFE has sold and continues to sell a product known as the "Minimailer 4 Plus" and a product known as the "Maximailer" within Illinois. (Id. ¶ 12.)

  II. Credibility of the Evidence

  6. Neopost did not offer any expert testimony at trial on the issue of patent infringement.

  7. Neopost offered as evidence of its patent infringement claims: (1) a declaration of Jan Remijnse (R. 160, Remijnse Decl.); (2) portions of the transcripts of deposition testimony by David Dronsfield, Raymond George, and David Odhams (R. 155, Dep. Designations); and (3) certain deposition exhibits that were admitted as trial exhibits by agreement of the parties. (Trial Transcript ("Tr.") at 154.)

  8. Neopost does not identify Dronsfield and Odhams, or provide any description of the scope of these individuals' roles at Neopost or their knowledge of the allegedly infringed patents.*fn2

  9. George was the project leader and mechanical design engineer for certain unidentified projects "D117" and "D114." (R. 155, George Dep. at 154.)

  10. Remijnse, a witness who testified at trial, has worked for Neopost for ten years and currently is a mechanical engineer in Neopost Technologies B.V.'s research and development department. (R. 160, Remijnse Decl. ¶¶ 2-3.)

  11. Remijnse did not read this Court's claim construction in its entirety, and those portions he did read he reviewed three months prior to his testimony. (Tr. at 154.)

  12. The last time Remijnse read the `704 Patent was "a few weeks" before his testimony, and he never read its file history. (Tr. at 154-55.)

  13. Remijnse did not know whether he had ever read the `603 Patent in its entirety, and he had not read its complete file history. (Tr. at 155-56.)

  III. The Accused Devices

  A. Facts Common to the Minimailer 4 Plus and the Maximailer

  14. The function of the Minimailer 4 Plus and Maximailer "is to feed forms from a hopper, fold them in either `C', `Z', `V' or double forward fold and insert them into an envelope which is then sealed and ejected." (Plaintiffs' Trial Exhibit ("PTX") 179, Minimailer Plus Launch Guide at PFE 000271; PTX 74, Minimailer Op. Instr. at LTD 00010; PTX 75, Maximailer Op. Instr. at LTD 0043; Pretrial, Sch. A ¶ 16.)

  15. The Minimailer 4 Plus and Maximailer are devices for assembling mail items from mail components. (PTX 74, Op. Instr. at LTD 0010; PTX 75, Op. Instr. at LTD 0043.)

  16. The accused devices include a number of feeder stations. (PTX 74, Op. Instr. at LTD 0012, LTD 0021; PTX 75, Op. Instr. at LTD 0043, 0045, 0046).

  17. The Minimailer 4 Plus and the Maximailer require the user to input the fold type; thus this aspect of the setting is not "determined by the apparatus." (Dronsfield Dep. Ex. 18, Software Change Mem. at LTD 0259; Tr. at 175; PTX 179, Launch Guide at PFE 00271.)

  18. Both machines incorporate document hoppers, folding stations, and envelope hoppers. (Pretrial, Sch. A ¶ 16; PTX 74, Op. Instr. at LTD 0026, 0031 PTX 75, Op. Instr. at LTD 0045).

  19. The Minimailer 4 Plus and Maximailer contain a data processing means that stores programs which set the folding machine. (PTX 74, Op. Instr. at LTD 0010; PTX 75, Op. Instr. at LTD 0043.)

  20. The operating instructions for both devices state that the display screens indicate which hoppers are active. (PTX 74, Op. Instr. at LTD 0031; PTX 75, Op. Instr. at LTD 0049.)

  B. The Minimailer 4 Plus

  21. The Minimailer "allows the operator to simply load the envelopes and documents into the hoppers, select the fold type, and press start." (PTX 179, Minimailer Plus Series Launch Guide at PFE 00271.)

  22. The Minimailer is available with two, three, or four station options. (Id. at PFE 00275.)

  23. The operator can . . . load short or long forms into whichever station desired and the machine will automatically configure that application." (Id. at PFE 000279.)

  24. There are two distinct versions of the Minimailer 4 Plus: the "original" Minimailer 4 Plus and the "modified" Minimailer 4 Plus. 25. The Minimailer 4 Plus's Operating Instructions contain graphics showing that the machine includes both document supply hopper and envelope inserter hoppers. (PTX 74, Minimailer Op. Instr. at LTD 0026.)

  26. At or around January 2004, PFE created a modified version of the software used in the Minimailer 4 Plus which included a "[n]ew folding algorithm that does not use the envelope length, the folded length calculation" to determine fold height, but instead bases the fold height on the length of the paper. (Dronsfield Dep. Ex. 16, Software Code Desc. at LTD 0322.) After this change, the fold height determination for folding documents is based on the length of the paper rather than the length of the envelope. (R. 155, Dep. Desig., Odhams Dep. at 134.)

  27. The modified Minimailer 4 Plus requires the machine's user to define a fold type before the machine performs its function.*fn3 (Dronsfield Dep. Ex. 18, Software Change Mem. at LTD 0259; PTX 179, Launch Guide at PFE 00271.)

  28. After selecting the fold type, the user presses a "go" button, and the machine measures the envelope and the paper in the hopper on its way into the machine. (R. 155, Odhams Dep. at 132.)

  29. If the user selects a fold type that is the wrong size for the height of the envelope being used, the machine indicates that the user should either use another envelope or select another type of fold. (Tr. at 198.)

  30. If a hopper becomes empty during processing, depending on the mode of operation, the Minimailer 4 Plus may recognize that and automatically take documents from one of the other hoppers, or pause and wait for user input. (R. 155, Odhams Dep. at 136.)

  31. There must be something in the first hopper in order for operations to proceed. (Tr. at 171.)

  C. The Maximailer

  32. The Maximailer does not measure the height of the envelope; rather, that data is input by the operator when programming a job. (Tr. at 174-76.)

  33. In response to detecting the presence of a document in at least one of the feeder stations, the Maximailer determines that at least one of the feeder stations is in an operating condition. (Id. at 187.) 34. If a tray is loaded, the Maximailer determines that the tray is operable. (Id. at 194.)

  35. The Operating Instructions for the Maximailer show that it has insert feeders or feed trays that are separate from the envelope hopper. (PTX 75, Maximailer Op. Instr. at LTD 0045.)

  CONCLUSIONS OF LAW

  I. Legal Standard

  1. "If during a trial without a jury a party has been fully heard on an issue and the court finds against the party on that issue, the court may enter judgment as a matter of law against that party[.]" Fed.R.Civ.P. 52(c); Fillmore v. Page, 358 F.3d 496, 503 (7th Cir. 2004).

  2. Whether to grant judgment as a matter of law is a procedural issue that is reviewed under the law of the regional circuit in which an appeal from the district court would typically lie; in this case, the regional circuit is Seventh Circuit. Summit Tech., Inc. v. Nidek Co., 363 F.3d 1219, 1223 (Fed. Cir. 2004).

  3. Rule 52(c) "allows the district court to weigh the evidence to determine whether the plaintiff has proven his case." Ortloff v. United States, 335 F.3d 652, 660 (7th Cir. 2003). In making a determination under Rule 52(c), "the court is within its prerogative `to weigh the evidence, resolve any conflicts in it, and decide for itself where the preponderance lies.'" Van Zuckerstein v. Argonne Nat'l Lab., 984 F.2d 1467, 1475 (7th Cir. 1993) (quoting Sanders v. Gen. Serv. Admin., 707 F.2d 969, 971 (7th Cir. 1983)).

  4. Whether or not an accused device infringes a patent is a question of fact. Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

  II. Burden of Proof

  5. In order to determine whether a patent is infringed, the Court must first determine "the scope and meaning of the patent claims asserted," and then compare the claims to the allegedly infringing device. Golden Blount. Inc. v. Robert II. Peterson Co., 365 F.3d 1054, 1059 (Fed. Cir. 2004). This Court construed all of the disputed claim terms in its April 26, 2005 claim construction ruling. (Apr. 26, 2005 Op. & Order.)

  6. In order to establish that a patent has been infringed, a patentee must demonstrate that every limitation of the allegedly infringed patent claims exists in the accused device. Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1339 (Fed. Cir. 2003); Amazon.com. Inc. v. BarnesandNoble.com. Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). The failure to meet even a single limitation of an allegedly infringed patent claim defeats a claim of infringement. Rohm & Hass Co. v. Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997); Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991).

  7. Neopost had the burden to prove at trial, by a preponderance of the evidence, that PFE's Minimailer 4 Plus and Maximailer infringe the `603 and `704 Patents. Centricut, LLC v. Esab Group. Inc., 390 F.3d 1361, 1367 (Fed. Cir. 2004); Rohm & Hass Co. v. Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997). Under the preponderance of the evidence standard, Neopost was required to establish that infringement "was more likely than not to have occurred." Warner-Lambert Co. v. Teva Pharm. USA, Inc., 418 F.3d 1326, 1341 n. 15 (Fed. Cir. 2005). Neopost was required to meet this burden by presenting "more than a mere scintilla of evidence." Summit Tech., Inc. v. Nidek Co., Ltd., 363 F.3d 1219, 1223 (Fed. Cir. 2004); see also James v. Milw. County, 956 F.2d 696, 698 (7th Cir. 1992).

  8. A plaintiff in a patent infringement case cannot meet its burden of proof by resting on a witness's summary testimony. Thus, a witness' general opinion that an accused device infringes a patent, standing alone, is insufficient to establish infringement. Rohm & Hass, 127 F.3d at 1092 (noting that a district court is not required to accept the unsupported assertions of a witness); see also Techsearch, LLC v. Intel Corp., 286 F.3d 1360, 1372 (Fed. Cir. 2002) (stating that "general assertions of facts, general denials, and conclusory statements are insufficient" to support a showing of patent infringement on summary judgment).

  9. In this case, the direct testimony of Remijnse, Neopost's main witness on its patent infringement claims, is almost entirely conclusory in nature. (R. 187, Remijnse Decl.) Instead of describing how the accused devices infringe each claim of PFE's patents. Remijnse simply recites the patent claim language and states that the accused devices incorporate those claim criteria, without explaining how, why, or in what way. (Id.) These general and conclusory statements, standing alone, do not establish patent infringement by a preponderance of the evidence. Given Remijnse's limited exposure to the patents in dispute and his conclusory testimony, his testimony on the meaning or scope and infringement of the patents is entitled to limited weight.

  10. At trial, the Court sustained PFE's objection to Remijnse's reference to his September 6 and 7, 2005 inspection of the Minimailer 4 Plus and Maximailer because that testimony was ...


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