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Hutchinson Industries, Inc. v. Accuride Corp.

March 30, 2010

HUTCHINSON INDUSTRIES INC., AND HUTCHINSON S.A., PLAINTIFFS,
v.
ACCURIDE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Wolfson, United States District Judge

OPINION

Plaintiffs Hutchinson Industries, Inc. and Hutchinson S.A. (collectively, "Plaintiffs") are holders of U.S. Patent No. 6,474,383 (the "'383 patent"), which describes an automotive wheel with an internal valve system. In the instant suit, Plaintiffs allege that Defendant Accuride Corp. ("Defendant") infringed on their '383 patent. Specifically, Plaintiffs allege that Defendant has made or had others make the allegedly infringing wheel, and that Defendant has offered for sale or sold the wheel within the United States. Defendant moves to dismiss, or in the alternative for summary judgment on, all counts of Plaintiffs' complaint. Defendant submits that its wheel was manufactured solely for the United States Government ("Government") with its authorization and consent, placing the alleged infringing conduct within the scope of 28 U.S.C. § 1498, and that Defendant is thereby immune from suit in this patent infringement action. After reviewing the submissions in connection with this action, and having heard counsel's arguments, the Court finds that § 1498 applies and thus, Defendant's motion for summary judgment is GRANTED.

I.Background

The facts are undisputed unless otherwise noted. Defendant has manufactured an automotive wheel with an internal valve system designed to operate in conjunction with a "central tire inflation system" ("CTIS"). Eaton Decl.*fn1 at ¶ 3. A CTIS equipped vehicle allows the driver of the vehicle to adjust the tire pressure in all tires while driving, in order to select a tire pressure best suited for the terrain. Young Decl.*fn2 at ¶ 2. A vehicle's CTIS can connect to CTIS-compatible wheels and tires through the wheel to the tire either externally or internally. Id. at ¶¶ 5-6. Defendant has supplied its wheels to three private companies: BAE Systems Ground Systems, Navistar Defense, and Oshkosh Corp. (collectively, the "Companies").*fn3 Eaton Decl. at ¶ 11. The Companies have used these wheels in conjunction with a CTIS in the manufacture of mine-resistant ambush-protected all-terrain vehicles ("M-ATVs"), which were built to bid on a Government contract (the "Solicitation").*fn4 Id. at ¶¶ 7, 11-13. The Solicitation requires any bidding party to provide prototype M-ATVs in order to remain eligible to be awarded the contract. Solicitation at 3. The Solicitation also lists specifications the Government requires or prefers to be included as part of the M-ATVs. One of these specifications is a CTIS. Eaton Decl. at ¶ 7; Solicitation Specs.*fn5 at 77 ("The vehicle shall be equipped with a Central Tire Inflation System (CTIS) which will allow the driver to adjust all vehicle tires to any one of four preset tire pressures, from a single control, corresponding to Emergency, Mud/Snow/Sand, Cross-Country, and Highway operation.").

Two of the Companies used Defendant's wheel in their M-ATVs delivered as prototype vehicles, and the Government ordered three more vehicles from BAE Systems Ground Systems with Defendant's wheels.*fn6 Defendant's Motion To Dismiss at Ex. 6.

Plaintiffs hold a patent for an automotive wheel designed to operate in conjunction with a CTIS. Young Decl. at ¶ 2. Specifically, Plaintiffs' '383 patent describes a wheel equipped with an internal valve system that connects a CTIS through the wheel rim to the tire. Pleune Decl.*fn7 at Ex. 1. In addition to holding the patent, Plaintiffs manufacture and sell the wheel. Id. at ¶ 3.

Plaintiffs became aware of Defendant's wheel at some point during the Companies' delivery of prototype M-ATVs to the Government. Plaintiffs informed Defendant that its wheel with an internal valve system was similar or identical to that encompassed by the '383 patent, and thus infringed on the patent. Eaton Decl. at ¶ 19; Defendant's Motion To Dismiss at Ex. 11. Defendant disputed this assertion. Eaton Decl. at ¶ 20. Shortly thereafter, Plaintiffs filed a complaint in this Court alleging that Defendant infringed on the '383 patent. At all times relevant to Plaintiffs' complaint, Defendant's allegedly infringing activities occurred solely in the bidding context.*fn8

Defendant moves to dismiss, or alternatively for summary judgment on, Plaintiffs' complaint on the basis that Defendant's wheel falls within the scope and protection of 28 U.S.C. § 1498. Specifically, Defendant argues that because the alleged infringing wheel was made in response to bids on a Government contract, § 1498 applies to shield Defendant from liability for patent infringement. Defendant further argues that under § 1498, Plaintiffs' sole recourse for any alleged infringement is a claim against the United States Government in the United States Court of Federal Claims. For the purposes of this motion, Defendant neither responds to nor concedes the merits of Plaintiffs' allegations of infringement. Defendant's Reply In Supp. at 3 n.1. On March 4, 2010, the Court held oral argument on the motion.

The Court, having considered matters outside the pleadings, converts Defendant's motion from a motion to dismiss under Fed. R. Civ. P. 12(b)(6) into a motion for summary judgment under Fed. R. Civ. P. 56. See Fed. R. Civ. P. 12(d);*fn9 Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1382-83 (Fed. Cir. 2002) (holding that where a private party asserted § 1498 as an affirmative defense, the district court was "justified in treating the [Rule 12(b)(6)] dismissal as a [Rule 56] summary judgment since the Federal Rules of Civil Procedure permitted that approach and the parties did not dispute any issue of material fact").

II.Standard of Review

Summary judgment is appropriate where the Court is satisfied 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." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A factual dispute is genuine only if there is "a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party," and it is material only if it has the ability to "affect the outcome of the suit under governing law." Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Anderson, 477 U.S. at 248.

The burden of establishing that no "genuine issue" exists is on the party moving for summary judgment. Celotex, 477 U.S. at 330. "A nonmoving party has created a genuine issue of material fact if it has provided sufficient evidence to allow a jury to find in its favor at trial." Gleason v. Norwest Mortg., Inc., 243 F.3d 130, 138 (3d Cir. 2001). There can be "no genuine issue as to any material fact," however, if a party fails "to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322-23. "[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 323; Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 n.5 (3d Cir. 1992).

III. Discussion

This dispute turns solely on the nature and applicability of 28 U.S.C. § 1498(a), which states:

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture. . . .

For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States. 28 U.S.C.A. § 1498(a).*fn10 In order for § 1498(a) to shield a contractor or subcontractor from liability for patent infringement, the alleged infringing party must show that its conduct is both (1) "for the United States [Government];" and (2) "with the authorization or consent of the Government." 28 U.S.C. § 1498(a). Thus, the sole issue before ...


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