Opinion
Civil File No. 98-2294 (MJD/JGL).
January 2, 2003
Douglas J. Williams and Matthew J. Goggin, Merchant Gould, for and on behalf of Plaintiff Ecolab, Inc. ("Ecolab").
Russell J. Barron and Joan L. Eads, Foley Lardner, and James T. Nikolai, Nikolai Mersereau, P.A., for and on behalf of Defendant Gardner Manufacturing Co., Inc., ("Gardner").
MEMORANDUM OPINION AND ORDER
1. Gardner's Motion to Follow the Stipulation of the Parties to Enter Judgment on Liability, Submit Issue of Damages to Binding Arbitration and Stay the Damages Phase until Appeal is Taken.
Gardner argues that the parties entered into a binding contract to submit the damages portion of the trial to binding arbitration, and that pursuant to such contract, the Court ordered the trial bifurcated, and that damages would be submitted to binding arbitration after entry of final judgment or after appeal. Gardner argues that the contract, which appears in the record as a "Stipulated Motion for Bifurcated Trial for Trial Date Certain", is binding on the parties and should be enforced by the Court. Gardner further argues that the Federal Arbitration Act, the Wisconsin Arbitration Act and the Minnesota Arbitration Act require that the Court submit the issue of damages to arbitration based on the parties' contract.
The Court finds, however, that there is no contract. Through the stipulated motion, the parties informed the Court that it had reached certain stipulations "conditioned upon grant of the instant Motion"; one such stipulation being that the issue of damages would be submitted to binding arbitration. Because it was within the Court's discretion to grant or deny the stipulated motion, the Court is not bound by the stipulation of the parties. See, Gander v. Livoti, 250 F.3d 606, 609 (8th Cir. 2001) (stipulations of law, unlike stipulations of fact, not binding on the court).
In its discretion, the Court determined that damages should be submitted to the jury. Accordingly, trial will recommence on January 13, 2003 with respect to damages.
With respect to Gardner's contention that the article that appeared in the Star Tribune will prejudice Gardner during the damages phase of the trial, the Court finds that any prejudice that may arise from such article can be sufficiently addressed through proper jury instructions.
2. Gardner's Motion in Limine #8 to Preclude Ecolab from Asserting a Claim for Lost Profits.
As a preliminary matter, Defendant has filed four motions in limine. Ecolab argues that these motions should be stricken because the deadline for motions in limine was August 26, 2002. That deadline applied to issues tried in the liability phase. There was no specific order setting a deadline for issues concerning damages. Accordingly, the Court will consider the motions in limine.
Gardner argues that Ecolab should not be able to assert a claim for lost profits because Ecolab cannot show that "but for" Gardner's infringement, Ecolab would have made those sales. Gardner argues this showing cannot be made because Gardner and Ecolab do not sell in the same market segment — Ecolab is a pest control company that offers the Stealth trap in a lease program that includes servicing, while Gardner is a metal fabrication company that sells the WS-50 and WS-75 units outright to distributors, end-users and competitive pest control companies.
The parties agree that one method to satisfy the "but for" test is to prove the factors set forth in Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1162 (6th Cir. 1978). These factors are: 1) demand for the patented product; 2) the absence of acceptable, noninfringing substitutes; 3) the manufacturing and marketing capacity to make the sales by the infringer; and 4) the amount of profit it would have made had the infringement not occurred. Id. at 1156. Gardner argues that these factors weigh against a finding that Ecolab is entitled to lost profits damages.
The Court finds that this motion is premature. Whether or not Ecolab is entitled to lost profits damages should be determined after Ecolab has had the opportunity to present evidence. Accordingly, the Court will reserve ruling on this motion until after the parties have had the opportunity to present their case as to lost profits damages.
3. Gardner's Motion in Limine # 9 — Motion to Exclude Evidence relating to Damages on the WS-75.
Gardner argues that based on the fact that the jury only found that the WS-75 infringed claim 26 the `690 patent with the lid up, and that the jury found that Gardner did not induce its customers to use the WS-75 with the lid up, there is no basis upon which Ecolab is entitled to damages with respect to the WS-75. Further, although the jury found Gardner liable for contributory infringement, this finding cannot be based on the WS-75. To show contributory infringement, the jury must find that the accused product was not capable of a substantial noninfringing use. The evidence clearly showed that the WS-75 can be used with the lid down, and that such use was not infringing.
Ecolab argues that the WS-75 is not capable of a substantial noninfringing use because the cover plate overlaps the holes for mounting on the wall. Thus, when mounted, the lid cannot be closed without causing substantial damage to the wall, if it can be closed at all.
The Court finds, however, that the evidence at trial clearly showed that the WS-75 is sold with a lid, and when the lid is down, there is no infringement. Based on this evidence, a reasonable jury could not find that the WS-75 was not capable of a substantial noninfringing use. Accordingly, Ecolab is not entitled to damages for contributory infringement with regard to the WS-75.
The jury did find, however, that the WS-75 directly infringed claim 26 when the lid was raised. Damages are therefore appropriate with respect to this aspect of the verdict.
4. Gardner's Motion in Limine #10 — Motion to Totally Exclude Evidence of Contributory Infringement.
By this motion, Gardner argues that Ecolab is not entitled to damages based on contributory infringement with respect to the WS-50 unit as well because there is no evidence that Gardner knew the combination of components in this unit was patented and infringing. Gardner points out that its instructions sold with the WS-50 direct the customer to mount the WS-50 between three and six feet, and at this height, an observer could directly view the light source; either through the slots or through the top.
Ecolab argues that evidence was submitted at trial to support the jury's finding of contributory infringement. With respect to the WS-50, Ecolab argues the relevant inquiry is whether Gardner knew the unit was mounted at a height which would establish infringement, not how Gardner instructed customers to mount the unit. The Court agrees. As evidence was presented that the WS-50 was mounted by customers at a height to prevent an observer from directly viewing the source, such evidence support a finding of contributory infringement with respect to the WS-50.
5. Gardner's Motion in Limine #11 — Motion to Limit Evidence to Gardner's WS-50 Product Sales after Contributory Infringement of Claim 18 Started.
By this motion, Gardner seeks to limit damages to those units sold and mounted on a wall at or above eye level. As it was clearly foreseeable that end users would mount the WS-50 at or above eye level, there is no basis upon which to require Ecolab to provide evidence as to the height of each WS-50 sold. See, Canon Computer Sys., Inc. v. Nu-Kote, Int'l, Inc., 134 F.3d 1085, 1089 (Fed. Cir. 1998). See also, Preemption Devices, Inc. v. Minn. Mining Mfg Co., 803 F.2d 1170, 1174 (Fed. Cir. 1986) (concerning contributory infringement). Thus, this motion will be denied.
6. Gardner's Motion to Exclude Expert Testimony of Donald Gorowsky.
Mr. Gorowsky was retained by Ecolab to provide an expert opinion as to Ecolab's damages caused by Gardner's alleged infringement. Ecolab argues the motion should be denied because Gardner challenges only the underlying factual assumptions upon which Mr. Gorowsky's opinions are based, not the methodology he used to reach his conclusions. The Court agrees, and will deny the motion to exclude Mr. Gorowsky's testimony.
IT IS HEREBY ORDERED that:
1. Gardner's Motion to Follow the Stipulation of the Parties to Enter Judgment on Liability, Submit Issue of Damages to Binding Arbitration and Stay the Damages Phase until Appeal is Taken is DENIED;
2. Gardner's Motion in Limine #8 to Preclude Ecolab from Asserting a Claim for Lost Profits is RESERVED;
3. Gardner's Motion in Limine # 9 — Motion to Exclude Evidence relating to Damages on the WS-75 is GRANTED in part and DENIED in part. Damages relating to the WS-75 are limited to the jury's finding of direct infringement of claim 26 when the lid is up.
4. Gardner's Motion in Limine #10 — to Totally Exclude Evidence of Contributory Infringement is GRANTED with respect to the WS-75 and DENIED with respect to the WS-50;
5. Gardner's Motion in Limine #11 — Motion to Limit Evidence to Gardner's WS-50 Product Sales after Contributory Infringement of Claim 18 Started and to those Units Sold at or above Eye Level is DENIED;
6. Gardner's Motion to Exclude Expert Testimony of Donald Gorowsky is DENIED.