Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-00748/USCOURTS-cand-5_05-cv-00748-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Marathon Coach, Inc.,

Plaintiff,

 v.

Phase Four Industries, Inc., et al.,

Defendants.

 /

NO. C 05-00748 JW

Related Case No.: C 04-04801 JW

Related Case No.: C 04-05105 JW

ORDER GRANTING

MARATHON’S MOTION TO

CONSOLIDATE CASES

I. BACKGROUND

This action involves one patent, three related matters, and three companies in the recreational

vehicle business.

Marathon Coach Inc. (“Marathon”) is an Oregon corporation with its principal place of business in

Coburg, Oregon. Marathon is involved in the business of producing hand built, high-end recreational

vehicles (“RVs”). Marathon is the owner-by-assignment of the U.S. Patent No. 6,607,009 (“‘009"),

entitled “Sewage Systems for Vehicles.” The patent was issued on August 19, 2003.

Phase Four Inc. (“Phase Four”) is a California corporation with its principal place of business in

Hollister, California. Phase Four is also involved in the RV industry. In October 2002, Phase Four filed a

provisional application for an automatic sewer hose. 

Case 5:05-cv-00748-JW Document 26 Filed 11/01/05 Page 1 of 5
United States District Court

For the Northern District of California

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Monaco Inc. (“Monaco”) is an Oregon corporation with its principal place of business in Oregon. 

Monaco is a developer and manufacturer of RVs. Pursuant to a business relationship with Phase Four,

Monaco purchases RV parts from Phase Four and incorporates them into its RVs. 

The three related matters essentially involve the technology development of the RV waste disposal

system. RV waste disposal is typically done manually, through the manipulation of valves and a sewer hose.

Both Marathon and Phase Four have developed and claim inventorship to automated waste disposal systems

that use a pre-attached sewer hose that extends and retracts without the need for manual manipulation of the

hose. A full description of this technology is described in the Court’s October 20, 2005, Order granting

Marathon’s partial summary judgment dismissing Phase Four’s affirmative defenses. (See Docket Item No.

65, C 04-04801-JW.) 

In this case, Marathon contends that Phase Four and Monaco’s manufacture, use, sell and or offer to

sell the “Waste Master” sewage systeminfringe on Marathon’s ‘009 patent. On October 29, 2004, Marathon

sent a “cease and desist” letter to Monaco. The letter informed Monaco that the “Waste Master” product

infringed on Marathon’s patents and requested an accounting ofsales. Anticipating that Marathon would sue

it for patent infringement, on November 12, 2004, Phase Four filed a preemptive action against Marathon in

the Northern District ofCalifornia,seeking a declaratory judgment that it does not infringe the ‘009 patent and

that the ‘009 patent is invalid. (See Docket Item No. 1; C 04-04801-JW, hereafter the “4801 case.”) 

On November 15, 2004, Phase Four filed a second complaint against Marathon in State Court, with

claims oftrade secret misappropriation, and breachofconfidentialityagreement and fiduciary duties. Marathon

removed the state case to the Northern District ofCalifornia. (See DocketItemNo. 1; C 04-05105, hereafter

the “5105 case.”) 

On November 19, 2004, Marathon filed a patent infringement action against Phase Four and Monaco

(collectively “Defendants”) in the District of Oregon. On February 18, 2005, the case was transferred to the

Northen District of California. (See Docket Item No. 1; C 05-00748, hereafter the “0748 case.”)

OnDecember 21, 2004, this Court ordered the 4801 and 5105 cases “related” pursuant to Civil Local

Rule 3-12(b). Likewise, on March 23, 2005, this Court related 0748 to 4801, and 5105. (See Docket Item

Case 5:05-cv-00748-JW Document 26 Filed 11/01/05 Page 2 of 5
United States District Court

For the Northern District of California

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No. 31; C 04-4801.) Currently before this Court is Marathon’s motion to consolidate the two related cases

with the 0748 case. The Court held a hearing on Monday, October 31, 2005. Based on the briefs filed to date

and oral arguments, this Court GRANTS Marathon’s Motion Consolidate Cases. 

II. DISCUSSION

Federal Rule of Civil Procedure 42(a) provides for consolidation "[w] hen actions involving a

common question of law or fact are pending before the court...." Fed. R. Civ. P. 42(a). To determine

whether to consolidate, a court weighs the interest of judicial convenience against the potential for delay,

confusion and prejudice caused by consolidation." Southwest Marine, Inc. v. Triple A Mach. Shop, Inc.,

720 F. Supp. 805, 807 ( N.D. Cal. 1989). "Consolidation is within the broad discretion of the district

court." In re Adams Apple, Inc., 829 F.2d 1484, 1487 (9th Cir.1987).

Under these standards, it is clear to the Court that at least two of the related actions involve a

number of common questions of law and fact. In the 4801 action, Phase Four seeks declaratory judgment

that it does not infringe and that the ‘009 patent is invalid. In the 0748 action, Marathon contends that

Phase Four and Monaco, through their manufacture and sales of the “Waste Master” infringe Marathon’s

‘009 patent. There is no question that these lawsuits will require the Court to construe the terms of the

‘009 patent. Both suits will require the Court to address the validity of the “Sewage Systems for Vehicles”

patent. Each lawsuit will require a jury to understand the same underlying technology and the same claim

terms in order to determine if the products at issue infringe.

With respect to consolidation of the 5105 action, Phase Four contends that it would cause jury

confusion because the trade secrets claims go beyond the technology in the ‘009 patent, encompassing

numerous ideas that have no relationship to the ‘009 patent. (Phase Four Opp’n at 3.) 

In reviewing Phase Four’s Complaint in the 5105 action, the Court finds that the issues raised by Phase

Four’s trade secrets claims are closely related to its claims that the ‘009 patent is invalid. Each of the

causes of action refers to the alleged “Confidentiality Agreement” signed between Phase Four’s owner,

Douglas Swarts and Marathon’s Head of Research and Development, Mark Bryan. This same

“Confidentiality Agreement” is at issue in the infringement and declaratory lawsuits. 

Case 5:05-cv-00748-JW Document 26 Filed 11/01/05 Page 3 of 5
United States District Court

For the Northern District of California

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In addition, the Court’s recent decisions, granting partial summary judgment in favor of Marathon

on the affirmative defenses of invalidity based on priority of inventorship and derivation in the 4801 action,

and dismissing Phase Four and Monaco’s counterclaims in the 0748 action, have substantially narrowed the

focus of the cases and therefore, will eliminate any potential confusion between the business tort claims and

those underlying the trade secret claims. (See Docket Item No. 65; C 04-4801-JW; Docket Item No.

22.)

Since there are significant similarities the three related actions, the Court believes that judicial

efficiency will be served by consolidating these actions. Therefore, the Court GRANTS Marathon’s

motion to consolidate the cases.

III. CONCLUSION

For the reasons set forth above, the Court GRANTS Marathon’s Motion to Consolidate the cases. 

Pursuant to the Civil Local Rules, the lead case is the case that was first filed in this Court. Therefore, C

04-5105-JW and C 05-00748-JW shall consolidate into C 04-480-JW.

Dated: October 31, 2005 /s/ James Ware 

JAMES WARE

United States District Judge

Case 5:05-cv-00748-JW Document 26 Filed 11/01/05 Page 4 of 5
United States District Court

For the Northern District of California

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THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Alan Heimlich alanheimlich@heimlichlaw.com

Brenna Legaard brenna@chernofflaw.com

William O. Geny bill@chernofflaw.com

Connie L. Speck

Arnold Gallagher Saydack Percell Roberts & Potter

Suite 800

800 Willamette Street

Eugene, OR 97401

Dated: October 31, 2005 Richard W. Wieking, Clerk

By: /s/ JW Chambers 

Ronald L. Davis

Courtroom Deputy

Case 5:05-cv-00748-JW Document 26 Filed 11/01/05 Page 5 of 5