Opinion ID: 2929114
Heading Depth: 3
Heading Rank: 2

Heading: The “Hellevator”

Text: On September 14, 1994, Intamin entered into a written “Ride Manufacture/User Agreement” with Kentucky MAGNETAR TECHS. V. INTAMIN 5 Kingdom, an amusement park located in Kentucky, concerning a ride named the “Hellevator.” The agreement described the braking system to be installed on the ride as “fin brakes,” a type of mechanical braking system. On October 11, 1994, Intamin entered into a written “Letter Agreement” with Kentucky Kingdom that augmented the September 1994 sales contract. The October 11 agreement required that Intamin deliver the Hellevator to Kentucky Kingdom during the 1995 amusement park season. The agreement also prohibited Intamin from selling the ride to regional competitors of Kentucky Kingdom until 1997. On October 19, 1994, Intamin sent a fax to Kentucky Kingdom providing details about the braking system to be installed on the Hellevator: “INTAMIN is planning to have the braking executed by a newly developed magnetic brake unit which does not physically enter in contact with the vehicles.” Kentucky Kingdom subsequently issued a press release stating that the Hellevator would use “an innovating braking system . . . and does not include the traditional ‘runout’ found in existing free-fall rides.” Unlike mechanical braking systems, “[m]agnetic brakes create ‘eddy currents’ when a conductor passes through a gap between two sets of magnets. These eddy currents, in turn, create a magnetic friction that slows and stops the car attached to the conductor.” Intamin, Ltd. v. Magnetar Techs., Corp., 483 F.3d 1328, 1330 (Fed. Cir. 2007) (Intamin II).1 1 The district court entered the judgment at issue in Intamin II on July 19, 2005. Intamin, Ltd. v. Magnetar Techs., Corp., No. 04-0511 GAF (C.D. Cal.) (Intamin I). 6 MAGNETAR TECHS. V. INTAMIN After the execution of the October 11, 1994 contract, Intamin began work on the Hellevator. Intamin also continued researching and testing the magnetic braking system mentioned in its October 19 fax. In his affidavit, Sandor Kernacs, President of Intamin, stated that Intamin did not deliver the Hellevator to Kentucky Kingdom on time “due to the extensive testing that the magnetic brake technology required. For this reason, Intamin was forced to pay Kentucky Kingdom a substantial penalty.” In March of 1995, Intamin published a report suggesting that it was still in the early stages of testing the magnetic braking system, and that the system was not yet ready for use on the Hellevator. At several points, the report noted that experiments were ongoing, and that the final parameters were not yet known. One witness testified that the magnetic braking system was ready as early as October of 1994. In his affidavit, Ronald H. Berni, General Manager of Operations at Kentucky Kingdom, stated that “it was never contemplated that the braking system for the ride would be anything other than an eddy current magnetic braking system. The braking system shown on all technical drawings for the Giant Drop Ride will verify this statement. No details on the technical drawings ever indicated an intent to install, or a means for installing mechanical brakes.” On the other hand, Kentucky Kingdom’s former CEO, Ed Hart, testified that it was possible for the braking mechanism on the Hellevator to have been either magnetic brakes or mechanical brakes. In October of 1995, Intamin completed construction on the Hellevator, using the magnetic braking system. MAGNETAR TECHS. V. INTAMIN 7