Soilworks LLC v Midwest Industrial Supply Inc

Filing 88

RESPONSE in Opposition re 79 MOTION for Summary Judgment by Soilworks, LLC filed by Midwest Industrial Supply Inc. (Attachments: # 1 Responsive Statement of Facts, # 2 Exhibit Exhibit A - Excerpts from Vitale Deposition Vol II, # 3 Exhibit Exhibit B - Excerpts from Vitale Deposition Vol. I, # 4 Exhibit Exhibit C - Excerpts from Keven Hurst Deposition, # 5 Exhibit Exhibit D(1) - Excerpts from Chad Falkenberg Deposition Vol. I, # 6 Exhibit Exhibit D(2) - Excerpts from Chad Falkenberg Deposition Vol. I (w/Exhibits 8 and 41), # 7 Exhibit Exhibit E - Soilworks' Expert Disclosure, # 8 Exhibit Exhibit F - Declaration of Robert Vitale, # 9 Exhibit Exhibit G - Excerpts of Steve Hickman Deposition, # 10 Exhibit Exhibit H - Excerpts of Steve Gordner Deposition)(Skeriotis, John)

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Craig A. Marvinney, 0004951 (OH) John M. Skeriotis, 0069263 (OH) Jill A. Bautista, 0075560 (OH) BROUSE MCDOWELL 388 S. Main Street, Suite 500 Akron, Ohio 44311-4407 Telephone: [phone] Facsimile: 330-253-8601 Email: [e-mail], [e-mail], [e-mail] Admitted pro hac vice Donald L. Myles, Jr., 007464 (AZ) JONES, SKELTON & HOCHULI, P.L.C. 2901 N. Central Ave., Suite 800 Phoenix, Arizona 85012 Telephone: [phone] Facsimile: 602-263-1784 Email: [e-mail] Attorneys for Defendant/Counterclaimant Midwest Industrial Supply, Inc. UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA

SOILWORKS, LLC, an Arizona corporation, Plaintiff / Counterdefendant / Counterclaimant, v. MIDWEST INDUSTRIAL SUPPLY, INC., an Ohio corporation authorized to do business in Arizona, Defendant / Counterclaimant / Counterdefendant.

NO.: 2:06-CV-2141-DGC

MIDWEST INDUSTRIAL SUPPLY, INC.'S LOCAL RULE 56.1 RESPONSE TO SOILWORKS, LLC'S STATEMENT OF MATERIAL FACTS

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Pursuant to Local Rule 56.1 of the United States District Court for the District of Arizona, Midwest Industrial Supply, Inc. ("Midwest") submits the following responses to the statement of material facts submitted by Soilworks, LLC ("Soilworks") in support of its Motion for Partial Summary Judgment. Responsive Facts to Soilworks' Statement of Facts: 1. 2. 3. 4. Undisputed. Undisputed. Undisputed. Undisputed. This fact is irrelevant for purposes of Soilworks' motion for

summary judgment on Midwest's counterclaims. 5. Disputed. Soilworks' Statement of Fact ¶5 misconstrues the cited portion

of Mr. Vitale's deposition testimony. See February 20, 2008 Deposition of Robert Vitale ("Vitale Dep. II") at 36:5-41:9, attached hereto as Exhibit A. At Mr. Vitale's deposition, Midwest's counsel asserted work product protection and attorney client privilege as to the issue of whether or not Midwest undertook any testing of Soilworks' Durasoil® product for infringement purposes. See id. This subject matter is protected by, and not subject to disclosure, pursuant to work product protection and attorney client privilege. Further, Midwest's preliminary evaluation of Soilworks' Durasoil product is irrelevant for purposes of Soilworks' motion for summary judgment on Midwest's counterclaims. Also, as explained in Midwest's counsel's June 8, 2006 and August 8, 2006 letters to Soilworks' counsel, testing could not be performed to determine whether Soilworks' Durasoil product infringed the claims in Midwest's patents because of
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Soilworks' refusal to Midwest with a list of its Durasoil product's ingredients. See Midwest's Statement of Facts (ECF #80) at ¶¶66-69, which are incorporated herein by reference.1 Based on Midwest's evaluation of the publicly available information for Soilworks' Durasoil product, Midwest felt that the Durasoil product could infringe at least some of the claims in Midwest's two patent applications and sought more information from Soilworks, who then filed the instant suit. See id. 6. Disputed. Soilworks' Statement of Fact ¶6 misconstrues the cited portion

of Mr. Vitale's deposition testimony. See Vitale Dep. II at 36:5-41:9 (Ex. A). Mr. Vitale's deposition, Midwest's counsel asserted work product protection and attorney client privilege as to the issue of whether or not Midwest undertook any testing of Soilworks' Durasoil product for infringement purposes. See id. This subject matter is protected by, and not subject to disclosure, pursuant to work product protection and attorney client privilege. Further, Midwest's preliminary evaluation of Soilworks' Durasoil product is irrelevant for purposes of Soilworks' motion for summary judgment on Midwest's counterclaims. Also, as explained in Midwest's counsel's June 8, 2006 and August 8, 2006 letters to Soilworks' counsel, testing could not be performed to determine whether Soilworks' Durasoil product infringed the claims in Midwest's patents because of Soilworks' refusal to Midwest with a list of its Durasoil product's ingredients. See Midwest's Statement of Facts (ECF #80) at ¶¶66-69. Based on Midwest's evaluation of the publicly available information for Soilworks' Durasoil product, Midwest felt that the In accordance with Local Rule 7.1(d)(2), Midwest incorporates by reference the portions of its Statement of Facts (ECF #80) as cited herein.
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product infringed at least some of the claims in Midwest's two patent applications. See id. 7. Undisputed. This fact is irrelevant for purposes of Soilworks' Motion for

Summary Judgment on Midwest's counterclaims. Midwest admits it sent a letter to a potential infringer of the Midwest Patents, the Polar Supply Company, Inc., pursuant to its rights under the Patent Laws of the United States, since it was selling the Durasoil product. See, 35 U.S.C. § 271(a). 8. Disputed. Soilworks' Statement of Fact ¶8 misconstrues the cited portion

of Mr. Vitale's deposition testimony. See Vitale Dep. II at 36:5-41:9 (Ex. A). At Mr. Vitale's deposition, Midwest's counsel asserted work product protection and attorney client privilege as to the issue of whether or not Midwest undertook any testing of Soilworks' Durasoil product for infringement purposes. See id. This subject matter is protected by, and not subject to disclosure, pursuant to work product protection and attorney client privilege. In fact, Chad Falkenberg, President and creator of Durasoil, admits that Soilworks' Durasoil product may infringe the Midwest Patents based upon how the claims are construed. See Chad Falkenberg Dep. at (Ex. D) at 174:6-175:19, 175:20-25, 176:1-21, 177:15-179:12, 182:5-19, 255:11-256:3-17; see also Midwest's Responsive Statement of Facts at ¶¶46, 48, 50, 52 below. Further, Midwest's preliminary evaluation of Soilworks' Durasoil product is irrelevant for purposes of Soilworks' motion for summary judgment on Midwest's counterclaims. Also, as explained in Midwest's counsel's June 8, 2006 and August 8,
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2006 letters to Soilworks' counsel, testing could not be performed to determine whether Soilworks' Durasoil product infringed the claims in Midwest's patents because of Soilworks' refusal to Midwest with a list of its Durasoil product's ingredients. See Midwest's Statement of Facts (ECF #80) at ¶¶66-69. Based on Midwest's evaluation of the publicly available information for Soilworks' Durasoil product, Midwest felt that the product infringed at least some of the claims in Midwest's two patent applications. See id. 9. Undisputed. While the Polar Supply Letters are irrelevant for purposes of

Soilworks' motion for summary judgment on Midwest's counterclaims, this is an accurate statement of U.S. Patent Laws and the rights of a patent holder. See 35 U.S.C. § 271(a). 10. Disputed. Soilworks' statement that Midwest "specifically referred to

Soilworks' allegedly infringing conduct" reflects a mischaracterization of the Polar Supply Letters. See Midwest's Statement of Facts at ¶71. Also, the Polar Supply Letters are irrelevant for purposes of Soilworks' motion for summary judgment on Midwest's counterclaims. 11. Disputed. Soilworks' reference to "direct threats" and "general claims to

the trade of Soilworks' infringement" reflects a mischaracterization of the cited "Marketing Materials" (as labeled by Soilworks). See Exhibit 7 to Soilworks' Statement of Facts. Also, the "Marketing Materials" are irrelevant for purposes of Soilworks' Motion for Summary Judgment on Midwest's counterclaims.

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Further, Midwest's statement that "others claiming to offer products similar to EnviroKleen and EK35 are either not supplying Synthetic Organic Dust Control or are infringing Midwest Industrial Supply's patents" is a correct factual statement. At the time of the cited promotional materials, one of Soilworks' distributors (Polar Supply Company) had submitted a bid to supply Soilworks' Durasoil product for a project for which the express specifications were Midwest's EK35 and had submitted other bids (or quotes to general contractors be incorporated into bids) for projects for which the express specifications were for dust palliative products with ingredients covered by Midwest's Patents (e.g., a binder and a synthetic isoalkane). See May 8, 2008 Declaration of Robert Vitale, submitted in support of Midwest's Statement of Facts (ECF #80-4) and June 11, 2008 Declaration of Robert Vitale, attached hereto as Exhibit F; Deposition Testimony of Steve Hickman at 87:15-90:14, 100:5-101:6, 149:8-18, 153:9-154:9, 154:23-156:3, attached hereto as Exhibit G. Thus, in doing so, Polar Supply Company was either not supplying a Synthetic Organic Dust Control (which is covered by Midwest's patents) or it was infringing Midwest's patents. 12. Undisputed. The cited "Marketing Materials" are irrelevant for purposes of

Soilworks' motion for summary judgment on Midwest's counterclaims. 13. Undisputed. The cited "Marketing Materials" are irrelevant for purposes of

Soilworks' motion for summary judgment on Midwest's counterclaims. 14. Undisputed. The cited "Marketing Materials" are irrelevant for purposes of Further,

Soilworks' motion for summary judgment on Midwest's counterclaims.

Midwest's statement that "others claiming to offer products similar to EnviroKleen and
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EK35 are either not supplying Synthetic Organic Dust Control or are infringing Midwest Industrial Supply's patents" is a correct factual statement. At the time of the cited promotional materials, one of Soilworks' distributors (Polar Supply Company) had submitted a bid to supply Soilworks' Durasoil product for a project for which the express specifications were Midwest's EK35 and had submitted other bids (or quotes to general contractors be incorporated into bids) for projects for which the express specifications were for dust palliative products with ingredients covered by Midwest's Patents (e.g., a binder and a synthetic isoalkane). See May 8, 2008 Declaration of Robert Vitale,

submitted in support of Midwest's Statement of Facts (ECF #80-4) and June 11, 2008 Declaration of Robert Vitale, attached hereto as Exhibit F; Deposition Testimony of Steve Hickman at 87:15-90:14, 100:5-101:6, 149:8-18, 153:9-154:9, 154:23-156:3, attached hereto as Exhibit G. Thus, in doing so, Polar Supply Company was either not supplying a Synthetic Organic Dust Control (which is covered by Midwest's patents) or it was infringing Midwest's patents. 15. Disputed. Soilworks does not manufacture or blend Durasoil. See

Deposition Testimony of Keven Hurst at 11:13-14:11, 20:5-7, attached hereto as Exhibit C; Deposition Testimony of Chad Falkenberg at 235:2-4, 238:9-23 and Exhibit 8 thereto, attached hereto as Exhibit D. In Soilworks' patent claim construction charts, which were prepared by Chad Falkenberg (President and creator of Durasoil), Soilworks states that "Durasoil is not a blend." See Exhibit 8 of Chad Falkenberg Depo. (Ex. D). Keven Hurst, Soilworks' general foreman and field technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert,
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Arizona facility, and that no blending has taken place in the two years since he has been employed at Soilworks. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). Then in Soilworks' 30(b)(6) deposition, Chad Falkenberg stated that Durasoil "can be a blend;" however, he could provide no information as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). He also confirmed that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 234:16-23, 237:25-238:8 (Ex. D). Soilworks has produced no

documents during discovery supporting the claim that Soilworks blends or mixes ingredients together to make Durasoil at its Gilbert, Arizona facility. Soilworks altered its position as to blending of Durasoil only after the Midwest depositions regarding Midwest's testimony as to what is a "manufacturer." 16. Disputed. Soilworks has no evidence whatsoever that Durasoil has ever

been blended to mix ingredients to create varying levels of viscosities and mixture ratios. Soilworks does not manufacture or blend Durasoil. See Deposition Testimony of Kevin Hurst at 11:13-14:11, 20:5-7, attached hereto as Exhibit C; Deposition Testimony of Chad Falkenberg at 235:2-4, 238:9-23 and Exhibit 8 thereto, attached hereto as Exhibit D. In Soilworks' patent claim construction charts, which were prepared by Chad

Falkenberg (President and creator of Durasoil), Soilworks states that "Durasoil is not a blend." See Exhibit 8 of Chad Falkenberg Depo. (Ex. D). Kevin Hurst, Soilworks' general foreman and field technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert, Arizona facility, and that no blending has taken place in the two years since he has been employed at
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Soilworks. See Kevin Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). Then in Soilworks' 30(b)(6) deposition, Chad Falkenberg stated that Durasoil "can be a blend;" however, he could provide no information as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). He also confirmed that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 237:25-238:8 (Ex. D). Soilworks has produced no documents during discovery

supporting the claim that Soilworks blends or mixes ingredients together to make Durasoil at its Gilbert, Arizona facility. Soilworks altered its position as to blending of Durasoil only after the Midwest depositions regarding Midwest's testimony as to what is a "manufacturer." 17. 18. 19. 20. 21. 22. 23. Undisputed. Undisputed. Undisputed. Undisputed. Undisputed. Undisputed. Disputed by Midwest. See Midwest's Motion for Order, ECF Docket No.

67 and the Court's Order, ECF Docket No. 86. 24. 25. Undisputed. Disputed. For purposes of its Lanham Act claim for false advertising by

Soilworks, Midwest also states that Soilworks falsely asserts that its Durasoil product

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consists of "proprietary ingredients" and is a "revolutionary state-of-the-art innovation." See Midwest's Statement of Facts at ¶¶44-61. 26. Disputed. The record evidence establishes that Soilworks has used

Midwest's Soil-Sement® mark in commerce. See Midwest's Statement of Facts at ¶¶6-9, 30, 38-43. 27. Disputed. Soilworks mischaracterizes the cited portion of the record. See

February 19, 2008 Deposition Testimony of Robert Vitale ("Vitale Dep. I") at 79:11-24, attached hereto as Exhibit B; Vitale Dep. II at 64:7-67:8, 86:1-87:18, 120:1-12 (Ex. A). In his deposition, Mr. Vitale expressly confirmed that Midwest maintains that Soilworks' use of Midwest's Soil-Sement® mark for purposes of Soilworks' internet advertising practices, including its websites' metatags, constitutes trademark infringement. See id. 28. Disputed. Soilworks' Statement of Fact ¶28 that "[i]ndeed, it admits no

confusion exists" is entirely ambiguous and argumentative, rather than factual. Also, Soilworks mischaracterizes the cited portion of the record, which does not constitute an admission by Midwest that no confusion exists within the meaning of Midwest's Lanham Act claims for trademark infringement, false designation of origin, and unfair competition. See Vitale Dep. II at 66:10-23 (Ex. A). In this passage of his deposition, Mr. Vitale only stated that consumers do not buy a product from Soilworks thinking that they are buying it from Midwest. See id. 29. Disputed. One of Midwest's many false advertising claims is based on

Soilworks' statement that it is a manufacturer, but Midwest's Lanham Act claim for false advertising encompasses other false advertisements by Soilworks, including Soilworks'
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statements that its Durasoil product is "synthetic," "oil-sheen free," made of "proprietary ingredients," and a "revolutionary state-of-the-art innovation" and that Soilworks is an "innovator." See Midwest's Responsive Statement of Facts at ¶25 above and Statement of Facts at ¶¶44-61. 30. Disputed. Midwest's claim that Soilworks is not a manufacturer is based

on Soilworks' failure to put forth any evidence that it manufactures its Durasoil product. Soilworks does not manufacture or blend Durasoil. See Deposition Testimony of Kevin Hurst at 11:13-14:11, 20:5-7, attached hereto as Exhibit C; Deposition Testimony of Chad Falkenberg at 235:2-4, 238:9-23 and Exhibit 8 thereto, attached hereto as Exhibit D. In Soilworks' patent claim construction charts, which were prepared by Chad

Falkenberg (President and creator of Durasoil), Soilworks states that "Durasoil is not a blend." See Exhibit 8 of Chad Falkenberg Depo. (Ex. D). Kevin Hurst, Soilworks' general foreman and field technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert, Arizona facility, and that no blending has taken place in the two years since he has been employed at Soilworks. See Kevin Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). Then in Soilworks' 30(b)(6) deposition, Chad Falkenberg stated that Durasoil "can be a blend;" however, he could provide no information as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). He also confirmed that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 234:16-23, 237:25-238:8 (Ex. D). Soilworks altered its position as to blending of

Durasoil only after the Midwest depositions regarding Midwest's testimony as to what is
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a "manufacturer." Soilworks has produced no documents during discovery that indicate that Soilworks blends or mixes ingredients together to make Durasoil at its Gilbert, Arizona facility, or that its suppliers blend or mix ingredients together to make Durasoil for Soilworks pursuant to the formula or specifications provided to the supplier by Soilworks. 31. Disputed. The self-serving statement by Mr. Falkenberg that he "believes"

Soilworks to be a manufacturer does not establish that Soilworks is, in fact a manufacturer. See Soilworks' Statement of Facts at ¶31. Further, to the extent that Soilworks claims to be a manufacturer because it allegedly "blends" its Durasoil product, the record evidence does not demonstrate that Soilworks is a manufacturer based on its assertion that it "blends" its Durasoil product. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C); Chad Falkenberg Testimony at 235:2-4, 238:9-23 and Ex. 8 thereto (Ex. D). In its patent claims chart, Soilworks states that "Durasoil is not a blend." See Exhibit 8 of Chad Falkenberg Depo. (Ex. D). Keven Hurst, Soilworks' general foreman and field technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert, Arizona facility, and that no blending has taken place in the two years since he has been employed at Soilworks. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). While Chad Falkenberg stated in his

deposition that Durasoil "can be a blend," he could provide no information during his deposition as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). He also confirmed that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 234:16-23,
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237:25-238:8 (Ex. D). Soilworks has produced no documents during discovery that indicate that Soilworks blends or mixes ingredients together to make Durasoil at its Gilbert, Arizona facility, or that its suppliers blend or mix ingredients together to make Durasoil for Soilworks pursuant to the formula or specifications provided to the supplier by Soilworks. 32. Disputed. First, Soilworks cites no portion of the record to support its

assertion in ¶32 of its Statement of Facts that "by Midwest's own definition of `manufacture,' Soilworks manufacturers the Durasoil, Surtac, Soiltac and Gorilla-Snot products. Second, the record evidence does not demonstrate that Soilworks blends or mixes ingredients together pursuant to a formula to make its Durasoil, Surtac, Soiltac, or Gorilla-Snot product. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C); Chad Falkenberg Testimony at 235:2-4, 238:9-23 and Ex. 8 thereto (Ex. D). In its patent claims chart, Soilworks states that "Durasoil is not a blend." See Exhibit 8 of Chad Falkenberg Depo. (Ex. D). Keven Hurst, Soilworks' general foreman and field

technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert, Arizona facility, and that no blending has taken place in the two years since he has been employed at Soilworks. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). While Chad Falkenberg stated in his

deposition that Durasoil "can be a blend," he could provide no information during his deposition as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). He also confirmed that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 234:16-23,
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237:25-238:8 (Ex. D). Soilworks has produced no documents during discovery that indicate that Soilworks blends or mixes ingredients together to make Durasoil at its Gilbert, Arizona facility, or that its suppliers blend or mix ingredients together to make Durasoil for Soilworks pursuant to the formula or specifications provided to the supplier by Soilworks. 33. 34. Undisputed. Disputed. Soilworks mischaracterizes the cited portion of the record. See

Vitale Depo. II at 69:20-70:5 (Ex. A). In his deposition, Mr. Vitale stated that if a company provides a supplier with a product specification and the supplier toll blends ingredients to together to a specific formula in order to meet the product specification, the company providing the specifications could be considered a manufacturer. See id. He also said that, if the product provided by the supplier is a product that the supplier has off-the-shelf or sells for other purposes and product is just being relabeled and shipped to the company, the company providing the specifications could not be considered a manufacturer. See id. 35. Disputed. Soilworks mischaracterizes the cited portion of the record. See

Midwest's Responsive Statement of Fact at ¶35 above and Vitale Depo. II at 69:4-70:5 (Ex. A). 36. Disputed. Soilworks does not mix and blend its Durasoil, Surtac, Soiltac

and Gorilla-Snot products. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C); Chad Falkenberg Depo. at 235:2-4, 238:9-23 and Ex. 8 thereto (Ex. D). In its patent claim construction charts, Soilworks states that "Durasoil is not a blend." See Exhibit 8 of
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Chad Falkenberg Depo. (Ex. D). Keven Hurst, Soilworks' general foreman and field technician testified during his deposition that he would be the person in charge of blending if it were conducted at Soilworks' Gilbert, Arizona facility, and that no blending has taken place in the two years since he has been employed at Soilworks. See Keven Hurst Depo. at 11:13-14:11, 20:5-7 (Ex. C). Chad Falkenberg stated in his deposition that Durasoil "can be a blend," he could provide no information during his deposition as to when or how often blending by Soilworks supposedly occurs. See Chad Falkenberg Depo. at 235:2-4, 238:9-23 (Ex. D). Soilworks has produced no documents during discovery supporting the claim that Soilworks blends or mixes ingredients together to make the cited products at its Gilbert, Arizona facility. 37. Disputed. Soilworks has produced no evidence of any product

specifications that it provides to its suppliers. See Deposition Testimony of Dorian Falkenberg at 31:12-32:24, attached as Ex. 13 to Soilworks' Statement of Facts. Also, Chad Falkenberg confirmed during his deposition that Soilworks' suppliers do not blend products for Soilworks. Chad Falkenberg Depo. at 234:16-23, 237:25-238:8 (Ex. D) 38. Disputed. Soilworks' Statement of Fact ¶38 that "Midwest admits no

deception has occurred" is entirely ambiguous and argumentative, rather than factual. Also, Soilworks mischaracterizes the cited portion of the record, which does not constitute an admission by Midwest that no deception exists within the meaning of Midwest's Lanham Act claims for false advertising. See Vitale Dep. II at 66:10-23 (Ex. A). In this passage of his deposition, Mr. Vitale only stated that consumers do not buy a product from Soilworks thinking that they are buying it from Midwest. See id.
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39.

Disputed. Soilworks' Statement of Fact ¶29 that "Midwest makes only

conclusory and unsupported allegations . . ." is entirely ambiguous and argumentative, rather than factual. Also, Soilworks mischaracterizes the cited portion of the record, in which Mr. Vitale stated that Soilworks' conduct has, among other injuries, caused Midwest to lose customers and potential sales, including projects for the Alaskan Department of Transportation and purchase orders for the U.S. military. See Vitale Depo. II at 60:21-61:18 (Ex. A); see also Midwest's Statement of Additional Responsive Facts at ¶¶54-67 below. 40. 41. 42. 43. Undisputed. Undisputed. Undisputed. Undisputed. See also Midwest's Statement of Additional Responsive Facts

at ¶¶54-67 below. 44. Disputed, with respect to the statement that "Midwest has not presented any

evidence of a likelihood of confusion" and undisputed with respect to the statement that "Midwest makes no claims of ownership to the terms "oil-sheen free." With respect to Soilworks' statement regarding likelihood of confusion, this statement is a legal conclusion, not a factual statement, and Soilworks cites to no portion of the record that supports this assertion. A likelihood of confusion is created as a result of Soilworks' infringement of Midwest's Soil-Sement® mark. See Midwest's Statement of Facts at ¶¶69, 30, 38-43. Likelihood of confusion is not an element of Midwest's Lanham Act claim for false advertising. See 15 U.S.C. 1125(a)(1)(B). With respect to Soilworks' statement
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regarding the term "oil-sheen free," ownership of the term "oil-sheen free" is also irrelevant to Midwest's Lanham Act claim for false advertising. See id. 45. Disputed. Midwest's Patents require a compound with a composition

consisting of: (a) a binder consisting of a carboxylic acid, an ester, or a thermoplastic polyolefin and (b) a synthetic isoalkane. See Midwest's `266 and `270 Patents, which were submitted to the Court as Attachments 1 and 2 to Robert Vitale's May 8, 2008 Declaration (ECF #80-4); Ex. 8 of Chad Falkenberg Depo. (Ex. D). Midwest's Motion to Strike Funk Report:2 The sole evidentiary support

offered by Soilworks in support of Statement of Facts ¶¶42-53 is a two-page letter report prepared by Soilworks' expert, Edward Funk, dated May 7, 2008. This report is entirely untimely, and it was filed by Soilworks in violation of Federal Rule of Civil Procedure 26(A)(2)(B) and this Court's May 7, 2007 Case Management Order (ECF #28). Mr. Funk's report should be stricken from the record and disregarded by the Court. Pursuant to the Case Management Ordered, both parties were required to provide full and complete expert disclosures with respect to any issue on which the party bears the burden of proof at trial no later than December 14, 2007. See CMO at ¶5(a). The CMO further provided that rebuttal expert disclosures were required to be made no later than February 29, 2008 and all expert depositions were to commence no later than April 28, 2008. See CMO at ¶5(b-c).

2

In accordance with Local Rule 7.2(m), Midwest has explained herein the multiple reasons why the cited report of Soilworks' expert, Mr. Edward Funk, must be stricken and disregarded by the Court, as opposed to filing a separate motion to strike.
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1 2 3 4 case.

On March 7, 2008, Soilworks identified Edward Funk as its expert witness in this See Soilworks' Rule 26 Expert Disclosures, attached hereto as Exhibit E.

Soilworks stated in its "disclosure" that that Mr. Funk was expected to testify that

5 Midwest's `266 and `270 Patents were not validly issued based on prior art in the filed 6 and in the industry. 7 8 9 Soilworks did not provide any indication that Mr. Funk was

expected to opine that Soilworks' Durasoil product did not infringe Midwest's patents. Further, Soilworks' "disclosure" of Mr. Funk was not accompanied by an expert report

10 prepared and signed by Mr. Funk, as required by Rule 26(A)(2)(B). 11 12 13 14 Mr. Funk's 2-page letter report of May 7, 2008 opines Durasoil product lacks essential elements covered by Midwest's Patents. Soilworks did not obtain the leave of the Court to either amend the scope of Mr. Funk's opinions in this case or to disclose Mr.

15 Funk's expert report beyond the expert disclosure deadlines in this case. Soilworks never 16 delivered a copy of Mr. Funk's letter to Midwest in advance of Soilworks' filing of the 17 18 19 letter in support of its summary judgment motion. Soilworks never amended its March 7, 2008 disclosure of Mr. Funk's opinions, nor did it otherwise inform Midwest that Mr.

20 Funk would offer an opinion as to whether Durasoil infringed the claims in Midwest's 21 Patents. 22 23 24 Because Mr. Funk's current opinions of non-infringement and his expert report were never timely disclosed to Midwest, Midwest had no opportunity within the

25 discovery period to depose Mr. Funk and obtain an expert to provide a rebuttal report and 26 testimony on the issue of non-infringement. Soilworks' act of filing the Funk report in 27 support of its summary judgment motion amounts to improper and unfair tactics of 28
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1 surprise and ambush. Permitting Soilworks to utilize Mr. Funk's non-compliant expert 2 3 4 5 26(A)(2)(B) and the Court's CMO. For all of these reasons, the Court must strike Mr. Funk's expert report and report in these summary judgment proceedings would permit Soilworks to violate Rule

6 exclude Mr. Funk from testifying on behalf of Soilworks at trial. If the Court does not 7 8 9 strike this improper report and preclude Mr. Funk from testifying at trial, Court should expressly authorize Midwest to depose Mr. Funk and retain an expert to provide rebuttal

10 testimony on the issue of patent infringement before resolving the parties' claims related 11 to patent infringement. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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46.

Disputed. The sole evidentiary support offered by Soilworks in support of

this allegation is Mr. Funk's May 7, 2008 letter report, which must be stricken and disregarded by the Court. See Midwest's Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Further, Soilworks' own testimony confirms that Soilworks does not know whether or not its Durasoil product contains a carboxylic acid. See Chad Falkenberg Depo. at 174:6-175:19 (Ex. D). 47. Disputed. The sole evidentiary support offered by Soilworks in support of

this allegation is Mr. Funk's May 7, 2008 letter report, which must be stricken and disregarded by the Court. See Midwest's Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Furthermore, claims 1-8 and 10-16 of the `270 Patent do not include an "emulsifier." (`270 Patent, col. 9, ll. 33 ­ col. 10, ll. 51, which was submitted to the Court as Attachment 2 to Robert Vitale's May 8, 2008 Declaration (ECF #80-4).) Only claim 9 requires an "emulsifier." (Id., at col. 10, l. 11.) Claims 1-5,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

7-13 and 15 do not include an "emulsifier." (`266 Patent, col. 9, ll. 32 ­ col. 10, ll. 34, which was submitted to the Court as Attachment 1 to Robert Vitale's May 8, 2008 Declaration (ECF #80-4).) Only claims 6 and 14 require an "emulsifier." (Id., at col. 10, ll. 9-10; col. 10, ll. 31-32.) 48. Disputed. The sole evidentiary support offered by Soilworks in support of

this allegation is Mr. Funk's May 7, 2008 letter report, which must be stricken and disregarded by the Court. See Midwest's Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Further, nothing in the record establishes Soilworks' claim that its Durasoil product does not contain an emulsifier. 49. 50. Undisputed. Disputed. The sole evidentiary support offered by Soilworks in support of

this allegation is Mr. Funk's May 7, 2008 letter report, which must be stricken and disregarded by the Court. See Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Further, Soilworks' own testimony confirms that

Soilworks does not know whether or not its Durasoil product contains a synthetic isoalkane. See Chad Falkenberg Depo. at 176:11-21, 177:15-179:12, and 255:11-256:3 (Ex. D). Also, at least one of Soilworks' distributors (Polar Supply Company) has submitted several bids (or portions thereof) to supply Soilworks' Durasoil product for public projects for which the project specifications expressly required a dust control product that had a "synthetic isoalkane." See May 8, 2008 Declaration of Robert Vitale, submitted in support of Midwest's Statement of Facts (ECF #80-4) and June 11, 2008
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Declaration of Robert Vitale (Ex. F).

Representatives of Polar Supply Company

confirmed that Polar Supply Company submitted bids in response to these specifications. See Steve Hickman Deposition Testimony at 87:15-25, 100:5-101:6, 149:8-18, 153:9154:9, 154:23-156:3 (Ex. G). They also confirmed that, if Polar Supply Company had any questions as to whether Durasoil could meet the specifications for the project, Polar Supply Company's practice would have been to confirm with Chad Falkenberg of Soilworks that Durasoil could meet the specification before submitting the bid. See Hickman Dep. at 39:10-16, 154:23-155:12 (Ex. G); Deposition Testimony of Steve Gordner at 49:5-50:5, 54:14-55:6, 55:23-25, attached hereto as Exhibit H. 51. Disputed. The sole evidentiary support offered by Soilworks in support of

this allegation is Mr. Funk's May 7, 2008 letter report, which must be stricken and disregarded by the Court. See Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Further, Midwest's Patents require a compound with a composition consisting of: (a) a binder consisting of a carboxylic acid, an ester, or a thermoplastic polyolefin and (b) a synthetic isoalkane. (See Ex. 8 of Chad Falkenberg Depo. (Ex. D). In fact, only claims 10, 11 of the `266 Patent require a "polyolefin." (`266 Patent, col. 10, ll. 20-24.) Only claims 4 and 5 of the `270 Patent require a "polyolefin." (`270 Patent, col. 9, ll. 45-49.) 52. Disputed. Mr. Funk's May 7, 2008 letter report must be stricken and

disregarded by the Court. See Responsive Statement of Facts at ¶45 above, which is incorporated herein by reference. Further, Soilworks' own testimony confirms that

Soilworks does not know whether or not its Durasoil product contains a polyolefin or
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binder. See Chad Falkenberg Depo. at 175:20-25, 176:1-10, 182:5-19, and 256:3-17 (Ex. D). Also, at least one of Soilworks' distributors (Polar Supply Company) has submitted several bids (or portions thereof) to supply Soilworks' Durasoil product for public projects for which the project specifications expressly required a dust control product that had a "reworkable binder." See May 8, 2008 Declaration of Robert Vitale, submitted in support of Midwest's Statement of Facts (ECF #80-4) and June 11, 2008 Declaration of Robert Vitale (Ex. F). Representatives of Polar Supply Company

confirmed that Polar Supply Company submitted bids in response to these specifications. See Steve Hickman Depo. at 87:15-25, 100:5-101:6, 149:8-17, 153:9-154:9, 154:23156:3 (Ex. G). They also confirmed that, if Polar Supply Company had any questions as to whether Durasoil could meet the specifications for the project, Polar Supply Company's practice would have been to confirm with Chad Falkenberg of Soilworks that Durasoil could meet the specifications before submitting the bid. See Steve Hickman Dep. at 39:10-16, 154:23-155:12 (Ex. G); Steve Gordner Testimony at 49:5-50:5, 54:1455:6, 55:23-25 (Ex. H). 53. Disputed. See Midwest's Responsive Statement of Facts at ¶¶45-52 above

and ¶¶62-64 below. Additional Material Facts: Pursuant to Local Rule 56.1, Midwest submits the following additional facts that are material to the issues raised in Soilworks' summary judgment motion and associated statement of facts:
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54.

The dust control and soil stabilization industry is an industry in which there

are a very limited number of entities competing to provide their products to potential consumers and distributors. See June 11, 2008 Declaration of Robert Vitale (Ex. F). 55. Internet advertising and marketing/promotional materials are heavily used

and relied upon by both consumers and distributors in selecting the dust control and/or soil stabilization products for their projects and making purchasing decisions. See June 11, 2008 Declaration of Robert Vitale (Ex. F); Steve Hickman Depo. at 45:24-46:23, 67:25-70:11, 79:1-80:19, 96:6-25 (Ex. G). Consumers and distributors rely on internet advertisements and marketing/promotional materials to, among other purposes, determination of various products' claims regards environmental impact, product chemistry, and performance, which claims are used in making purchasing decisions. See June 11, 2008 Declaration of Robert Vitale (Ex. F). 56. For example, in his deposition, Mr. Hickman confirmed that Polar Supply

Company (a distributor of Soilworks' products) relies upon the brochures and other literature, as well as the information on Soilworks' website, for information regarding the Soilworks' products that Polar Supply Company sells and promotes. See Steve Hickman Depo. at 45:24-46:23, 67:25-70:11, 79:1-80:19, 96:6-25 (Ex. G). This information

includes Soilworks' representations that its products are "synthetic" and "oil-sheen free." See id. 57. Distributors like Polar Supply Company pass along this product

information and materials to their existing and potential customers. See id.

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58.

In many cases, Midwest and Soilworks' distributors, such as Polar Supply

Company, are the only entities competing with one another to provide and sell their respective dust control products to a particular potential consumer. See June 11, 2008 Declaration of Robert Vitale (Ex. F). 59. For example, the Army Corps of Engineers' Dust Control Field Handbook

indicates that a "synthetic organic fluid" should be used as the dust control product for various military applications. See id. In this handbook, the Corp expressly recognizes that Midwest and Soilworks are the two vendors that offer synthetic organic fluids. See id. The handbook states that the procedure for selecting an appropriate product for military dust control applications is to identify the recommended product category and then select a product and its vendor from the list provided for that recommended product category. See id. 60. When a military project calls for the application of "synthetic organic fluid"

for dust control purposes, the Corps' handbook directs that military to select either Soilworks or Midwest to be the vendor. See id. If Soilworks did not represent that its Durasoil product was a "synthetic organic fluid," Midwest would be the only recommended vendor identified in the handbook for these applications. See id. 61. Other examples of Midwest's direct competition with Soilworks (or its

distributors) for sales of dust control products include the public projects for which the bid requests that were discussed in Paragraphs 21-23 of the May 8, 2008 Robert Vitale Declaration (ECF #80-4). These bid requests included express specifications for

synthetic and/or non-petroleum distillate (i.e., oil-sheen free) dust control products. See
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Paragraphs of 21-23 of May 8, 2008 Vitale Dec. and June 11, 2008 Declaration of Robert Vitale (Ex. F). 62. In response to these bid requests, Midwest and Soilworks' distributor

submitted bids (or quotes to general contractors for their bid submissions) and competed with one another to supply the consumer with the dust control product for the project. See Paragraphs of 21-23 of May 8, 2008 Vitale Dec. and June 11, 2008 Declaration of Robert Vitale (Ex. F). 63. For example, in 2006, Midwest competed with Soilworks' distributor, Polar

Supply Company, to supply Midwest's and Soilworks' respective dust control products for an airport construction project for the Alaskan Department of Transportation with dust palliative specifications that included express requirements that "the product shall be a high viscosity synthetic isoalkane," have a binder, and the "material shall not be a petroleum distillate" (the "Chevak airport project"). See Paragraph 21 of May 8, 2008 Vitale Dec. and Attachment 6 thereto; June 11, 2008 Declaration of Robert Vitale (Ex. F). 64. As another example, in 2006, Midwest competed with Polar Supply

Company to supply Midwest's and Soilworks' respective dust control products for another airport construction project for the Alaskan Department of Transportation with dust palliative specifications that included express requirements that "the product shall be a high viscosity synthetic isoalkane," have a binder, and the "material shall not be a petroleum distillate" (the "Kokhanok airport project"). See Paragraph 22 of May 8, 2008

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Vitale Dec. and Attachment 7 thereto; June 11, 2008 Declaration of Robert Vitale (Ex. F). 65. In some of these instances, Soilworks' distributors' bids have obtained the

contracts to supply Soilworks' dust control product for the projects based upon Soilworks' representations that its Durasoil project is synthetic and not a petroleum distillate (oil-sheen free), thereby causing Midwest to lose the project and the associated sale of Midwest's dust control product. June 11, 2008 Declaration of Robert Vitale (Ex. F). This situation occurred in the case of the Kokhanok airport project. See id. The general contractor was awarded the contract for the project and selected Polar Supply Company's quote for Soilworks' Durasoil product in order to fulfill the ADOT dust palliative requirement for the Kokhanok airport project, and the contractor purchased the required dust palliative for the project from Polar Supply Company instead of Midwest. See id.; Hickman Dep. at 87:15-25, 100:5-101:6, 149:8-17, 153:9-154:9, 154:23-156:3 (Ex. G). 66. Because Midwest and Polar Supply Company were the only two entities

competing to supply the needed dust control palliative for the Kokhanok airport project, Midwest would have obtained the contract for the project (i.e., the sale of the dust control product for the project) if it were not for Soilworks' representations that its Durasoil product is a synthetic isoalkane and not a petroleum distillate. See id. 67. Mr. Hickman of Polar Supply Company confirmed that when asked why

certain specifications for dust control products are included in the specifications as opposed to other specifications, the Alaskan Department of Transportation informed him
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that it is because the Department has "used it before and it works." See Steve Hickman Depo. at 108:2-10 (Ex. G).

By:

/s/ John M. Skeriotis Craig A. Marvinney, 0004951 (OH) John M. Skeriotis, 0069263 (OH) Jill A. Bautista, 0075560 (OH) BROUSE MCDOWELL 388 S. Main Street, Suite 500 Akron, Ohio 44311-4407 Telephone: [phone] Facsimile: 330-253-8601 Email: [e-mail], [e-mail], [e-mail] Admitted pro hac vice Donald L. Myles, Jr., 007464 (AZ) JONES, SKELTON & HOCHULI, P.L.C. 2901 N. Central Ave., Suite 800 Phoenix, Arizona 85012 Telephone: [phone] Facsimile: 602-263-1784 Email: [e-mail] Attorneys for Defendant/Counterclaimant Midwest Industrial Supply, Inc.

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Doc. No. 717917.5

CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing MIDWEST INDUSTRIAL SUPPLY, INC.'S RESPONSE TO SOILWORK'S LOCAL RULE 56.1 STATEMENT OF MATERIAL FACTS has been electronically filed on this 11th day of June, 2008. Notice of this filing will be sent to all parties by operation of the Court's electronic filing system. system. Parties may access this filing through the Court's

/s/ John M. Skeriotis John Skeriotis

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