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Magnetar Technologies Corp. v. SIX Flags Theme Parks Inc.

United States District Court, D. Delaware

February 7, 2014

MAGNETAR TECHNOLOGIES CORP. and G&T CONVEYER CO., Plaintiffs,
v.
SIX FLAGS THEME PARKS INC., et al., Defendants.

REPORT AND RECOMMENDATION

MARY PAT THYNGE, Magistrate Judge.

I. INTRODUCTION

In this patent infringement case, plaintiffs Magnetar Technologies Corp. ("Magnetar") and G&T Conveyor Co. ("G&T") (collectively, "plaintiffs") sued the defendant theme park operators ("defendants") on March 1, 2007, alleging infringement of U.S. Patent Nos. 5, 277, 125 ("the '125 patent") and 6, 659, 237 ("the '237 patent").[1] Plaintiffs claim numerous roller coasters and other amusement park rides infringe claim 3 of the '125 patent and/or claims 1 and 10 of the '237 patent. Fact discovery closed April 2, 2012. The parties submitted opening expert reports on June 1, 2012 and rebuttal reports on July 1, 2012. Expert discovery closed August 10, 2012.

Presently before the court is defendants' motion for summary judgment, pursuant to FED. R. CIV. P. 56, on the doctrine of laches and patent marking.[2] For the reasons discussed herein, defendants' motion will be denied.

II. FACTUAL BACKGROUND

The extensive procedural and factual background in this case is detailed in the record. For the purpose of this motion for summary judgment, the court will briefly describe the facts pertinent to patent marking and the doctrine of laches.

The application that led to the '125 patent was filed on October 28, 1992 and the patent issued on January 11, 1994.[3] At that time, BAE Automated Systems, Inc. ("BAE") was the original patentee of the '125 patent.[4] An affiliate of G&T, Elite Line, was assigned the patent in 2002.[5] Subsequently, in 2003, G&T, whose primary business is baggage-handling equipment for airports, was assigned the patent.[6] Magnetar, whose business includes design and sale of magnetic brake systems for vehicles-principally amusement rides and roller coasters, received a field-limited exclusive license to the '125 patent from G&T on August 18, 2006.[7]

Claims 1-3 of the '125 patent include: a track assembly of U-shaped rails with opposed linear motors and opposed permanent magnets (claim 1); a car and track assembly of cars with fins, a track with two rails, opposed linear motors and opposed permanent magnets (claim 2); or a car and track assembly of cars with fins, a track with two rails, and opposed magnet assemblies (claim 3).[8]

For the purpose of this motion, the parties do not dispute the system BAE sold to the City of Denver practices the '125 patent, and the system was not marked with the '125 patent number.[9] The parties also agree the Denver Airport system was the only relevant product sold by BAE or G&T in the United States.[10] The system described in the patent was first sold to United Airlines for use in Denver, and then to the City of Denver for use throughout the airport.[11] BAE and Denver had a preliminary agreement dated December 13, 1991 to immediately begin the design and manufacture of $20 million of track, with installation to commence in early 1992.[12] A final agreement ("1992 agreement") dated May 3, 1992 was to provide an entire Integrated Airport Baggage Handling System ("IABHS") for the Denver International Airport ("DIA") for more than $195 million.[13] The 1992 Agreement provided that BAE design, fabricate, manufacture, install, construct, conduct training and demonstrate/test the IABHS for DIA, [14] with substantial completion of the system by October 29, 1993 and final completion no later than 90 days after the date of substantial completion.[15] The City was required to make its final payment to BAE in October 1993.[16]

Former BAE and current G&T engineer Dan Pockrus testified BAE began installing the IABHS in 1992, and Concourse A was completed first and tested in 1993.[17] The entire system was mechanically complete prior to the testing in March 1994.[18] Inventor Joel Staehs testified BAE began manufacturing the system in 1991 or 1992.[19] He stated some equipment had to be installed by January 11, 1994 in order to be ready for a test of the system in March 1994.[20] The original complaint in this matter was filed March 1, 2007.[21]

III. LEGAL STANDARD

A. Summary Judgment

A grant of summary judgment pursuant to FED. R. CIV. P 56 (c) is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."[22] This standard is applicable to all types of cases, including patent cases.[23] The movant bears the burden of establishing the lack of a genuinely disputed material fact by demonstrating "that there is an absence of evidence to support the nonmoving party's case."[24] "Facts that could alter the outcome are aterial, ' and disputes are nuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct."[25] "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial."[26]

The nonmovant must be given the benefit of all justifiable inferences and the court must resolve any disputed issue of fact in favor of the nonmovant.[27] The mere existence of some evidence in support of the nonmoving party, however, is not sufficient to deny a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that issue.[28] If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law.[29]

IV. ANALYSIS

A. Patent Marking

Generally, a patentee is "entitled to damages from the time when it either began marking its products in compliance with 35 U.S. C.§ 287(a) or when it actually notified [the infringer] of its infringement, whichever was earlier."[30] Section 287(a) ("the marking statute") provides, in relevant part, that:

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.[31]

The purpose of the statute is threefold: it incentivizes patentees to mark their product and, thus, place the world on notice of the existence of a patent, avoids innocent infringement, and aids the public in identifying patented articles.[32] Consequently, a patentee is entitled to damages from the time when it either began marking products in compliance with§ 287(a), or when it notified the infringer through actual notice, whichever is earlier.[33] Section 287(a) permits either constructive notice, where the patentee marks the article or product with the patent number, or actual notice.[34] Actual notice is an affirmative communication by the patentee of a specific charge of infringement against an accused product, device or process.[35]

As outlined by the Federal Circuit, "[a]ny products entering the market prior to issuance of the patent will not be marked."[36] Section 287(a) "preclude[s] recovery of damages only for infringement for any time prior to compliance with the marking or actual notice requirements of the statute."[37] "Therefore, a delay between issuance of the patent and compliance with the marking provisions of section 287(a) will not prevent recovery of damages after the date that marking has begun."[38] Once marking has begun, though, "it must be ...


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