ArcelorMittal France et al v. AK Steel Corporation
Filing
85
MEMORANDUM ORDER granting 68 MOTION for Summary Judgment filed by AK Steel Corporation. Signed by Judge Sue L. Robinson on 1/19/2017. (nmfn)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ARCELORMITTAL and
ARCELORMITTAL ATLANTIQUE ET
LORRAINE,
Plaintiffs,
v.
AK STEEL CORPORATION,
Defendant.
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Civ. No. 13-685-SLR
MEMORANDUM ORDER
At Wilmington this \~day of January, 2017, having reviewed the papers filed in
connection with defendant's motion for summary judgment;
IT IS ORDERED that the motion (D.I. 68) is granted, for the following reasons:
1. Procedural background. 1 Plaintiffs filed the present action for patent
infringement on April 16, 2013 for infringement of U.S. Patent No. RE44,153E ("the
RE153 patent"). 2 Such patent was obtained during the pendency of the appeal of Civ.
No. 10-050, 3 in which action plaintiffs asserted U.S. Patent No. 6,296,805 ("the '805
patent") against defendant4 by complaint filed in January 2010. The litigation proceeded
1
A fuller recitation of the procedural background may be found in the court's previous
orders. (D.1.41,58)
2
On December 4, 2015, the court granted defendant's motion for summary judgment in
Civ. No. 10-050, and entered judgment of no infringement and invalidity of the RE153
patent. (D.I. 19, 20)
3
The procedural history of which is only recounted to the extent needed for the
resolution of this motion.
4
In addition to AK Steel Corporation, Severstal Dearborn, Inc. and WheelingNisshin,
Inc.
to claim construction and trial, ending in a jury verdict in defendant's favor. On appeal,
the Federal Circuit upheld the claim construction in part and reversed in part. 5 See
ArcelorMittal France v. AK Steel Corp., 700 F.3d 1314 (Fed. Cir. 2012) ("ArcelorMittal
/"). On December 4, 2015, the court granted plaintiffs' motion to file a first amended
complaint, substituting U.S. Patent No. RE44,940 ("the RE940 patent") (another reissue
of the '805 patent) forthe RE153 patent. (D.I. 19, 20) On April 19, 2016, the court
denied defendant's motion to dismiss, allowing plaintiffs focused discovery to determine
whether (as plaintiffs allege) defendant's accused steel sheet products have changed.
(D.I. 58) The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).
2. Standard of Review. "The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the
burden of demonstrating the absence of a genuine issue of material fact. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 415 U.S. 475, 586 n. 10 (1986). A party
asserting that a fact cannot be-or, alternatively, is-genuinely disputed must be
supported either by citing to "particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or declarations,
stipulations (including those made for the purposes of the motions only), admissions,
interrogatory answers, or other materials," or by "showing that the materials cited do not
establish the absence or presence of a genuine dispute, or that an adverse party cannot
5
Specifically, the Federal Circuit reversed the construction for "hot-rolled steel sheet"
and upheld the construction for "very high mechanical resistance," that is, "the flat-rolled
steel has been subjected, after rolling, to additional controlled heating and cooling and
has an ultimate tensile strength of 1500 MPa or greater."
2
produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1 )(A) & (B). If
the moving party has carried its burden, the nonmovant must then "come forward with
specific facts showing that there is a genuine issue for trial." Matsushita, 415 U.S. at
587 (internal quotation marks omitted). The Court will "draw all reasonable inferences in
favor of the nonmoving party, and it may not make credibility determinations or weigh
the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
3. To defeat a motion for summary judgment, the non-moving party must "do
more than simply show that there is some metaphysical doubt as to the material facts."
Matsushita, 475 U.S. at 586-87; see also Podohnik v. U.S. Postal Service, 409 F.3d
584, 594 (3d Cir. 2005) (stating party opposing summary judgment "must present more
than just bare assertions, conclusory allegations or suspicions to show the existence of
a genuine issue") (internal quotation marks omitted). Although the "mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment," a factual dispute is genuine where "the
evidence is such that a reasonable jury could return a verdict for the nonmoving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). "If the evidence is merely
colorable, or is not significantly probative, summary judgment may be granted." Id. at
249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (stating entry of summary judgment is mandated "against a party who 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").
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4. Defendant's product. At the time of Civ. No 10-050, defendant
manufactured steel sheets (called "AXN"). 6 Plaintiffs alleged that such steel sheets,
when subjected to hot stamping, would infringe the asserted claims. Plaintiffs' expert
testified that defendant had a third party hot stamp the steel sheets. (D.I. 70 at DA97,
102-07, 116-177, 138; D.I. 82 at DA232) Plaintiffs' expert tested a sample of the steel
sheets (tensile strength 605 MPa) by having a third party hot stamp the steel sheets and
then measuring the tensile strength (tensile strength 1442 +/- 34 MPa). (D.I. 70 at
DA91; D.I. 74 at PA 18, 24-25) Plaintiffs' expert testified that defendant's AXN steel
sheets satisfied the required tensile strength after hot stamping, in part because a
tensile strength of 1442 MPa "is going to be equivalent to something that's a little bit
over 1500." (D. I. 70 at DA 138) Plaintiffs presented certain automotive specifications for
hot-stamped automotive parts, requiring tensile strengths from below 1500 MPa to
above 1500 MPa. (D.I. 70 at DA138, 190-215) Plaintiffs introduced invoices from Ford
Motor Company ("Ford"), showing that Ford sought to purchase the steel sheets, which
were to be delivered to a specified commercial hot stamper (Magna Eagle Bend) for hot
stamping and making into automotive pillar assemblies. (D.I. 74 at PA12-15) The
orders were ultimately not fulfilled. (D.I. 74 at PA4)
5. Defendant's deponent testified that the chemistry of the steel sheets has not
changed since 2009 and the only revisions to the AXN manufacturing specification have
been to narrow the acceptable ranges of certain constituents to make the product more
6
Defendant's deponent was deposed on June 14, 2016 for the purpose of focused
discovery after the court's denial of defendant's motion to dismiss. (D.I. 58) He
explained that "AXN" used "X" to mean an "experimental grade as [defendant]
introduce[s] a new product." (D.I. 70 at DA 18)
4
consistent. (D.I. 70 at DA17-21, 42, 53-54) The manufacturing specifications show that
the AXN product (at issue in Civ. No. 10-050) uses the same "aims" (target amounts) for
certain constituents of the chemical composition as the AQN product (renamed in 2012)
and the Ultralume product (currently manufactured). (D.I. 70 at DA66-70) The sample
of the steel sheets (made according to defendant's AXN manufacturing specification)
hot stamped and tested in Civ. No. 10-050 meets the current Ultralume manufacturing
specification. (D.I. 70 at DA66-69, 83, 90) The Ultralume brochure describes that it
may be hot stamped, which "increases the tensile strength of the steel from
approximately 600mPa to 1,400 MPa and higher." The brochure depicts automotive
parts. (D.I. 74atPA29-41)
6. Collateral estoppel. In Blonder-Tongue Laboratories, Inc. v. University of
Illinois Foundation, 402 U.S. 313 (1971 ), the Supreme Court held that, in the patent
context, defensive collateral estoppel may be used if the accused infringer shows: "(1)
that a patent was found invalid in a prior case that had proceeded through final
judgment and in which all procedural opportunities were available to the patentee; (2)
that the issues litigated were identical; and (3) that the party against whom estoppel is
applied had a full and fair opportunity to litigate." Abbott Labs. v. Andrx Pharma., Inc.,
473 F.3d 1196, 1203 (Fed. Cir. 2007). Regional Circuit law controls the determination
of whether prior findings invoke collateral estoppel pursuant to these guidelines. Id. at
1202-03.
7. In this regard, the Third Circuit has held that collateral estoppel applies when
"(1) the issue sought to be precluded [is] the same as that involved in the prior action;
(2) that issue [was] actually litigated; (3) it [was] determined by a final and valid
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judgment; and (4) the determination [was] essential to the prior judgment." Anderson v.
C.l.R., 698 F.3d 160, 164 (3d Cir. 2012) (quoting In re Graham, 973 F.2d 1089, 1097
(3d Cir. 1992)). In determining "whether a patentee has had a full and fair chance to
litigate the validity of his patent," the court should consider "whether without fault of his
own the patentee was deprived of crucial evidence or witnesses in the first litigation."
Blonder-Tongue, 402 U.S. at 333, 91 S.Ct. 1434. Collateral estoppel may also operate
to bar relitigation of common issues in actions involving different but related patents.
Mycogen Plant Sci., Inc. v. Monsanto Co., 252 F.3d 1306, 1310 (Fed. Cir. 2001).
"[P]roof of [non]-infringement by collateral estoppel is only appropriate in limited
circumstances, where it is shown that a close identity exists between the relevant
features of the accused device and the device previously determined to be [non]infringing." Yingbin-Nature (Guangdong) Wood Indus. Co. v. Int'/ Trade Comm'n, 535
F.3d 1322, 1333 (Fed. Cir. 2008); see also Brain Life, LLC v. Elekta Inc., 746 F.3d
1045, 1055 (Fed. Cir. 2014) ("[T]he trial court's findings that [defendant's] products ...
were not materially different from the products at issue in the [prior litigation] would bar
plaintiff from asserting those claims."); Acumed LLC v. Stryker Corp., 525 F.3d 1319,
1324 (Fed. Cir. 2008) (noting that claim preclusion does not apply with respect to
infringement unless the accused device and the device previously held infringing are
"essentially the same," meaning that the differences between them are merely
"colorable" or "unrelated to the limitations in the claim of the patent") (citations omitted);
Del Mar Avionics, Inc. v. Quinton Instrument Co., 836 F.2d 1320, 1324 (Fed. Cir. 1987)
(holding that claim preclusion did not apply because a "device not previously before the
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court, and shown to differ from those structures previously litigated, requires a
determination on its own facts").
8. Direct infringement. Defendant moves for summary judgment on plaintiffs'
direct infringement claim as barred by collateral estoppel. Plaintiffs argue that "the 2010
product" (at issue in Civ. No. 10-050) was the AXN "experimental" product, which was
not commercially hot stamped to form a production automotive part. In contrast, "the
post-2010 product" (presently accused) is the Ultralume steel sheets, which are
commercially hot stamped to form production automotive parts. Relying on expert
reports from Civ. No. 10-050, plaintiffs again allege that the different equipment and
processes used by the commercial hot stampers result in new and different products
that reach the claimed tensile strength of 1,500 MPa. (D.I. 73 at 10-12) In sum,
plaintiffs argue that "each post-2010 product differs when made by a different
commercial hot stamper and the stamped post-2010 products necessarily differ from the
unstamped 2010 product." 7 (D.I. 73 at 6)
9. Plaintiffs' arguments regarding the differences between the 2010 product and
the post-2010 product ring hollow. Plaintiffs accuse the same product and conduct of
infringement at bar as it did in Civ. No. 10-050 - defendant's provision of steel sheets to
third parties for hot stamping, which hot-stamped product may have a tensile strength
above 1500 MPa. Defendant currently provides steel sheets (which have the same
composition as the steel sheets at issue in Civ. No. 10-050) to third parties. The court
7
Thereby comparing apples (stamped post-2010 products) to oranges (unstamped
2010 product), contrary to the arguments actually made in Civ. No. 10-050.
7
concludes that the product at issue is the same and cannot - prior to hot stamping - be
infringing as the steel sheets have a tensile strength of about 600 MPa.
10. Plaintiffs in Civ. No. 10-050 accused the same conduct (hot stamping of
steel sheets) of infringement. The issue was litigated to a verdict of non-infringement
under the doctrine of equivalence, in part based on the lack of evidence of the hotstamped steel sheet meeting the limitation requiring a tensile strength of 1500 MPa.
Subsequently, plaintiffs did not point to (and the court concluded that there was no)
record evidence that the 2010 products have an ultimate tensile strength above 1500
MPa. 8 (D.I. 41 at 6) At bar, defendant is not itself hot stamping the steel sheet or
paying to have it hot stamped. That defendant may ship the steel sheets to a third party
hot stamper on behalf of its purchaser is of no consequence to the infringement
analysis. 9 There is no material factual dispute regarding the chemistry of the steel
sheets, nor of the tensile strength of the steel sheets as manufactured and shipped
(about 600 MPa) by defendant. 10 This forecloses the allegations of direct infringement.
8
The court listened to the oral argument related to the appeal in ArcelorMittal I.
Contrary to the Federal Circuit's observation, defendant's counsel did not concede that
the accused steel sheet products had an ultimate tensile strength of 1500 MPa or
greater. (Contrast 700 F.3d at 1322 and the argument commencing at 32:08)
9
Plaintiffs seek to confuse this issue by arguing that further discovery of the relationship
between defendant and the commercial hot stampers is needed to determine whether
defendant sells or offers for sale the stamped post-2010 product that meets all the
limitations of the claims. (D.I. 73 at 13) However, the evidence relied on by plaintiffs
confirms that the automakers are buying the steel sheets from defendant and shipping
them (or having defendant ship them on their behalf) to the hot stampers.
10
Plaintiffs point out that defendant's deponent was unable to confirm that no changes
have occurred with regard to the aluminum-silicon coating, including the thickness
(weight) of the coating. Plaintiffs allege such changes (if any) would impact the tensile
strength of the "stamped product." (D.I. 73 at 6-7)
8
11. Plaintiffs argue that defendant might use "some type of theory of divided
infringement" to "isolate itself from the actions of the hot stampers or the automakers,"
and request discovery as to whether defendant directs or controls the performance of
the hot stampers or is in a joint enterprise. (D.I. 73 at 13-14) Plaintiffs' request for
discovery is unnecessary given that divided infringement applies to method claims in
particular circumstances, not to the product by process claims at bar. Akamai Techs.,
Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) ("We will hold an
entity responsible for others' performance of method steps in two sets of circumstances:
(1) where that entity directs or controls others' performance, and (2) where the actors
form a joint enterprise."). 11
12. Without direct infringement, there can be no indirect infringement. See
Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111, 2115 (2014); Fujitsu
Ltd. v. Netgearlnc., 620 F.3d 1321, 1326 (Fed. Cir. 2010). Nevertheless, the court
makes the following observations regarding indirect infringement. Plaintiffs argue that,
after further discovery, they may allege induced and/or contributory infringement based
upon defendant's "actions in the design and preparation of the post-2010 stamped
product, and the nature of [defendant's] commercial relationships with the hot stampers
and the automakers." (D.I. 73 at 14) Plaintiffs litigated both induced and contributory
infringement in Civ. No. 10-050, arguing that defendant designed the steel sheets to
meet the automaker specifications and should be liable based on encouraging its
customers to hot stamp the steel sheets. (D.I. 70 at DA102-04, 126-27, 139-40)
11
Moreover, given that the record indicates third party hot stamping in 2010, the
requested discovery should have been pursued in Civ. No. 10-050, but apparently was
not. (D. I. 70 at 126-27)
9
13. As to contributory infringement, plaintiffs would be required to establish, inter
alia, that the steel sheets have no substantial non-infringing uses. Fujitsu, 620 F.3d at
1326. Plaintiffs allege that discovery is needed to determine whether the post-2010
products meet the tensile strength limitation after hot stamping by certain commercial
hot stampers. As was the case in Civ. No. 10-050, some of the automaker's
specifications use hot-stamped steel sheets with tensile strengths lower than 1500 MPa.
Plaintiffs' argument that there are no "substantial non-infringing uses" falls short.
14. The litigation in Civ. No. 10-050 involved the same parties, the same
products, the same conduct, and the same issues. Defendant's steel sheets were
adjudged to be non-infringing with respect to the asserted claims in Civ. No. 10-050.
Defendant, therefore, should be "free to continue engaging in the accused commercial
activity as a non-infringer." Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056, 1058
(2014) ("allowing an adjudged non-infringer to avoid repeated harassment for continuing
its business as usual post-final judgment in a patent action where circumstances justify
that result."). Although defendant has ramped up its production and updated its
brochure, it is "continuing its business as usual post-final judgment." Id. at 1056.
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15. Conclusion. For the aforementioned reasons, defendant's motion for
summary judgment (D.I. 68) of non-infringement is granted. 12 • 13 The Clerk of Court is
directed to enter judgment in favor of defendant and against plaintiffs.
12
The court declines to reach defendant's argument regarding the obviousness of
claims 27-29 of the RE940 patent.
13
Plaintiffs request that the court postpone resolution of this motion pending the
resolution of the appeal in Civ. No. 10-050. United States v. 5 Unlabeled Boxes, 572
F.3d 169, 175 (3d Cir. 2009) (Finding that "early application of res judicata, though
technically permissible, can create later problems if a first judgment, relied on in a
second proceeding, is reversed on appeal."). In Civ. No. 10-050, the court granted
defendant's motions for summary judgment and entered judgment of no infringement
and invalidity of the RE153 patent. As noted in that opinion, the instant quandary is one
of plaintiffs' own making. (Civ. No. 10-050, D.I. 338) Regardless of the outcome of the
appeal, it remains unclear how plaintiffs could circumvent the lack of direct infringement
on the facts at bar. The court declines to penalize defendant for plaintiffs' litigation
strategies.
11
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