Opinion ID: 3066527
Heading Depth: 3
Heading Rank: 1

Heading: Plaintiffs’ suit for patent infringement

Text: The original defendants in this action were CAT, Inliner U.S.A., Inc. (“Inliner”), MSC, and KS. Inliner subsequently changed its name to Firstliner U.S.A., Inc., and we refer to this defendant as Firstliner throughout. Firstliner and CAT are in the business of rehabilitating and restructuring various types of pipes, including sanitary, storm sewer, water main, conduit, and industrial pipe. District Court Opinion, slip op. at 5. Firstliner oversees the marketing of its trenchless procedure for pipe rehabilitation to potential licensees. Id. In addition, Firstliner manufactures pipeliners and related materials, which it sells to CAT and its licensees. Id. CAT is responsible for marketing, bidding for, and negotiating contracts with customers and managing its pipeline rehabilitation contracts. Id. Giulio Catallo, who was subsequently added as a defendant, is the individual principal of both CAT and Firstliner. MSC is also in the pipe rehabilitation business. CAT was involved in a joint venture with MSC for performing the accused processes. KS is a German sewer rehabilitation company owned by Hans Mueller. After reading about KS’s proprietary sewer rehabilitation technology in a trade magazine, Giulio Catallo contacted KS to obtain a license for that technology. Id. Catallo subsequently acquired the rights to use the accused processes from Kanal Mueller Gruppe International GmbH & Co. (“Gruppe”), a German export licensing company also owned by Hans Mueller. Although KS stated in a letter written on November 10, 1989, that CAT was a “qualified Licensee for our KM-INLINER sewer relining process for the territories of the USA,” there was no formal license agreement executed by the parties. Id. at 6. An actual license agreement, however, was later executed between Gruppe and Firstliner, permitting CAT’s use of the accused process. Id. This license agreement stated that “[t]he licensee has been informed of a threat of a possible claim for infringing the INSITUFORM method.” Id. The original accused process used by defendants—referred to as the “Multiple Cup Process” or “Process 1”—was a method of tube liner impregnation involving the serial application of vacuum cups. In Process 1, from four to six cups were used to draw a vacuum from a corresponding number of slits in the tube liner. As a result, when the cup closest to the advancing resin was removed, and its slit was sealed, the remaining downstream cups continued to draw a vacuum in the tube liner. At some point in either 1991 or early 1992, on the advice of counsel, defendants switched to an alternate process. In the alternate process—referred to as the “Multiple Needle Process” or “Process 2”—the multiple cups were replaced with multiple metal tubes, known as needles. In Process 2, the needles are inserted through the layers of the impregnated tube liner, rather than merely placed over holes in the wall of the liner. Defendants did not develop Process 2 until after the first phase of the case had already been tried to a jury. The original action for infringement of the ‘012 patent was brought in February 1990. The original plaintiffs were Insituform of North America, Inc.; Insituform Licensees, B.V.; and Insituform Gulf. Insituform Licensees, B.V. was the owner of the ‘012 patent at the commencement of the suit. As explained more fully below, Insituform Licensees, B.V. subsequently assigned the ‘012 patent to Insituform Netherlands, along with the right to sue for past infringement. Insituform Netherlands was thus eventually substituted for Insituform Licensees, B.V. as a plaintiff. Insituform Technologies, Inc. (“ITI”) is the parent company and administrative headquarters for the Insituform organization, including Insituform Gulf. Id. at 4. Insituform Gulf is authorized to do business in Louisiana, Mississippi, and Texas and licensed to perform Insituform technology in designated regions throughout the United States.[1] Id. at 5. Insituform of North America, Inc. is no longer a party to the suit. Only claim 1 of the ‘012 patent was asserted at trial. It recites 1. A method of impregnating with a curable resin an inner layer of resin absorbent material disposed in an elongate flexible tube having an outer layer formed by an impermeable film, the method comprising the steps of (1) introducing into one end of the elongate tube a mass of the curable resin sufficient to impregnate the entire resin absorbent inner layer of the tube, (2) forming a window in the impermeable outer layer of the tube at a distance from said one end of the tube, (3) drawing through the window a vacuum in the interior of the tube downstream of said one end by disposing over the window a cup connected by a flexible hose to a vacuum source which cup prevents ingress of air into the interior of the tube while the tube is being evacuated, the outer layer of the tube being substantially impermeable to air, (4) beginning at or near the end at which the curable resin mass was introduced, passing the tube between squeezing members which force the resin to flow towards the region of vacuum application as the tube progresses through the squeezing members, (5) when the resin reaches the vicinity of the region of vacuum application, removing the cup and sealing the window, (6) providing another window in the impermeable layer of the tube downstream of the previously formed window, (7) drawing through the new window a vacuum in the interior of the tube while progressively moving the tube through the squeezing members to force the resin to flow toward the new region of vacuum application, and (8) repeating steps 5, 6, and 7, where necessary to impregnate the entire resin absorbent inner layer of the flexible tube. ‘012 patent, col. 6, l. 37 – col. 7, l. 6. The case was first tried to a jury in June 1991. The jury returned a verdict that the ‘012 patent was not invalid and was infringed, both literally and via equivalents, by Process 1, the only accused process then at issue. The district court granted defendants’ motion for judgment notwithstanding the verdict (“JNOV”) with respect to literal infringement and ordered a new trial as to infringement under the doctrine of equivalents. In June 1994, the case was reassigned to a different judge. A bench trial was held in February 1995, and in November of that year the court held that Process 1 and Process 2 (which had been introduced after the 1991 trial) infringed the ‘012 patent under the doctrine of equivalents. The court held defendants CAT, Firstliner, and MSC liable for direct infringement. The court also found CAT and Firstliner liable for induced infringement. Additionally, the court found that KS also had induced infringement of the ‘012 patent. Defendants appealed.