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GSI Group, Inc. v. Sukup Manufacturing Co.

October 29, 2008

THE GSI GROUP, INC., PLAINTIFF,
v.
SUKUP MANUFACTURING CO., DEFENDANT.



The opinion of the court was delivered by: Jeanne E. Scott United States District Judge

OPINION

JEANNE E. SCOTT, U.S. District Judge

This matter comes before the Court on Plaintiff GSI Group, Inc.'s (GSI) Motion for Partial Summary Judgment Against Sukup's Third Affirmative Defense of Laches (d/e 411) (Motion 411). GSI has alleged that Defendant Sukup Manufacturing Co. (Sukup) infringed on the following patents held by GSI: U.S. Patent No. 6,076,276 (276 Patent), U.S. Patent No. 6,073,367 (367 Patent), U.S. Patent No. 6,073,364 (364 Patent), and U.S. Patent No. 6,233,843 (843 Patent) (collectively the Tower Dryer Patents) covering various aspects of a sweep grain unloading device used in GSI's tower grain dryers (Count I); U.S. Patent 5,135,271 (271 Patent) covering a latching device with an improved pin design for grain bin doors Count II); and U.S. Patent 5,400,525 (525 Patent) covering a flame cone in a grain bin heater (Count III). GSI also alleges that Sukup engaged in unfair competition in violation of the Lanham Act, the Illinois Uniform Deceptive Practices Act and Illinois common law. Third Amended Complaint for Patent Infringement and Unfair Competition (d/e 129) (Third Amended Complaint), Counts IV, V, VI, and VII.

Sukup's Third Affirmative

Defense alleges the defense of laches. Defendant Sukup Manufacturing Co.'s First Amended Answer, Affirmative Defenses and Counterclaims and Demand for Jury Trial in Response to Plaintiff's Third Amended Complaint (d/e 161). GSI now seeks summary judgment on this defense. For the reasons set forth below, Motion 411 is ALLOWED in part. Motion 411 is allowed as to the laches affirmative defense to the patent infringement claim of the 271 Patent in Count II and to the unfair competition claims in Counts IV, VI, and VII. Motion 411 is denied as moot as to the claims of infringement of the Tower Dryer Patents and the 525 Patent in Counts I and III because GSI is precluded from seeking damages for past infringement of those patents. Motion 411 is also denied as moot as to the deceptive practices' claim in Count V because the Court already entered partial summary judgment in favor of Sukup on this claim. Opinion entered October 28, 2008 (d/e 745), at 21-22.

TOWER DRYER PATENTS AND 525 PATENT

The Court has already entered partial summary judgment in favor of Sukup and against GSI to the extent that GSI is not entitled to recover damages for past infringement of the Tower Dryer Patents and the 525 Patent in Counts I and III. Text Order entered July 19, 2006. The defense of laches is only available against claims for damages for past infringement. Advanced Hydraulics, Inc. v. Otis Elevator Co., 525 F.2d 477, 479 (7th Cir. 1975). Motion 411 is, therefore, denied as moot with respect to Counts I and III because GSI is already precluded from recovering any damages for past infringement alleged in these Counts.

STATEMENT OF FACTS

The 271 Patent covers the latching mechanism and improved pin design for grain bin doors (GSI Bin Door). GSI filed its patent application for the 271 Patent to the Patent and Trademark Office (PTO) on June 14, 1991. See Opinion entered September 11, 2008 (d/e 667) (Opinion 667), at 2-14 (a detailed discussion of the invention covered by the 271 Patent and the history of the patent application).

In 2001, Sukup started marketing its grain bin door with the accused latching device and pin (Sukup Bin Door). Id., at 15. In August 2001, Sukup publically displayed the Sukup Bin Door at the Farm Fest Show in Redwood Falls, Minnesota. Sukup Supplemental Unsealed Exhibits (d/e 547), Exhibit 251, Declaration of Charles Sukup dated February 6, 2006, ¶ 29. Representatives of GSI consistently attended such farm shows. Id., ¶ 30. GSI's General Manager Burl Shuler became aware of the Sukup Bin Door shortly after its introduction to the marketplace because Sukup began showing the Sukup Bin Door at trade shows. Sukup Supplemental Sealed Exhibits (d/e 543), Exhibit 177, Deposition of Burl Shuler dated October 27, 2005, at 108. Shuler was aware of comments that the Sukup Bin Door was extremely similar to the GSI Bin Door. Id.

Shuler states that GSI suspected that the Sukup Bin Door infringed on the 271 Patent, but was not able to gain access to the Sukup Bin Door until mid 2003. According to Shuler, GSI did not determine that the Sukup Bin Door infringed on the 271 Patent until October 2003. Motion 411, Exhibit 1, Declaration of Burl Shuler, ¶ 11-13. GSI stated in its discovery responses that it did not file suit against Sukup in 2003 because of the high cost of litigation. GSI stated that once it determined that Sukup was also infringing on the Tower Dryer Patents in late 2004, it decided that the cost of litigation could be justified. Sukup Supplemental Unsealed Exhibits, Exhibit 229, The GSI Group, Inc.'s Third Response to Sukup Manufacturing Co.'s Interrogatory No. 7.

GSI filed suit on January 19, 2005. Shortly thereafter, Sukup twice redesigned its pins in the Sukup Grain Bin Door. The designs changed the pin from a two-piece design, in which the pin was attached to the wall of the grain bin by a separate bolt, to a one-piece design that incorporated a threaded shaft at the end of the pin. See Opinion 667, at 15-16, and Appendices H, I, and J, for a discussion and depiction of the changes.

Beginning in January 2005, Sukup started distributing materials containing specifications for its tower dryers. In February 2005, GSI sales representative Gary Kinder received a copy of the Sukup specification materials. Sukup Supplemental Sealed Exhibits, Exhibit 181, Deposition of Gary Kinder, at 142. By October 2005, GSI personnel believed that most of the specifications had been copied from GSI brochures. Sukup Supplemental Sealed Exhibits, Exhibit 246, Email dated October 27, 2005, from David Morrison to Gary Kinder. On July 27, 2006, GSI took the deposition of Randy Coffee. Coffee at that time confirmed that Sukup had copied the specifications from GSI material and placed those figures on Sukup sales material as estimates of the specifications for Sukup tower dryers. Plaintiff's Opposition to Defendant's Motion for Reconsideration of the Court's September 25, 2006 and November 27, 2006 Text Orders Allowing GSI to File Second and Third Amended Complaints (d/e 270) (d/e 285), Exhibit 1 (d/e 286), Deposition of Randy Eugene Coffee dated July 27, 2006, at 60-61.

On August 2, 2006, GSI's counsel announced in open court at the Markman hearing that GSI had learned in discovery that Sukup copied the Zimmerman Grid and would be filing an amended complaint alleging unfair competition. Sukup Supplemental Unsealed Exhibits, Exhibit 244, Transcript of Hearing on August 2, 2006, at 165-66. On September 5, 2006, GSI filed a Motion for leave to file a second amended complaint to add these counts. Motion for Leave to File Second Amended Complaint (d/e 95). The Second Amended Complaint was filed on September 26, 2006. Second Amended Complaint (d/e 97). The Second Amended Complaint added the unfair competition claims in Counts IV-VII. GSI ...


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