Opinion ID: 211774
Heading Depth: 2
Heading Rank: 2

Heading: Events Involving the New Compressor Bearings

Text: 8 In the late 1980s, EMD developed a new compressor bearing for use in diesel locomotive turbochargers. On July 17, 1989, James L. Blase, an EMD employee and one of the named inventors on the two asserted patents, reported during an internal meeting that he had tested the new compressor bearings for approximately 3000 hours in a twelve-cylinder multiple unit locomotive engine. The minutes of that meeting document that the in-house program had been completed. Thus, EMD decided to proceed with the field program by substituting the new compressor bearings into locomotive orders previously placed by Norfolk Southern, Go Transit, and LXO railroads. 1 9 EMD contacted Norfolk Southern, Go Transit, and LXO for permission to substitute the prior art bearings, originally to be used in the purchased locomotives, with the new compressor bearings. According to Mr. Blase, the three railroads agreed to accept the new bearings. None of the three companies, however, signed a confidentiality agreement or any other contract consenting to participate in the field program. They likewise were not given any design details or other documentation regarding the new compressor bearings. Further, Norfolk Southern, Go Transit, and LXO were not restricted or supervised in their use of the new compressor bearings and were not under any obligation to collect data, keep progress records, or even operate the subject locomotives during the time of the field program. 10 After arranging for the substitution, EMD prepared internal memos documenting the change to be made in the Norfolk Southern, Go Transit, and LXO orders. For example, a July 19, 1989 internal memo stated: Orders 887007 [for Norfolk Southern], C484 [for Go Transit], and 899110 [for LXO] are to have Turbocharger 40014638 replaced by Turbocharger 40021524. . . . The turbocharger and EMD make component schedules must be revised to reflect this change. A different July 19, 1989 memo stated that [t]he drawings and bills of material for these orders must be changed to include this new bearing. This will be accomplished with an expedited RFC. Jim Korenchan will write this RFC and get it to the drafting room by 7-19-89. Similarly, a July 25, 1989 internal memo stated: This new bearing addresses all known failure modes and MUST be included in upcoming 12-710GA engines. The orders affected are the [Norfolk Southern] GP59 order No. 887007, Go Transit order no. C484, and LXO no. 899110. 11 On August 28, 1989, EMD modified its original specification of February 1, 1989 for the Norfolk Southern order, agreeing to supply more new compressor bearings to Norfolk Southern than originally planned for in its prior locomotive order. In particular, EMD noted that it will provide spare parts for [Norfolk Southern]'s GP59 locomotives, including the Turbo of part number 40021531. The specified Turbo included the new compressor bearings. 12 Between January 1989 and November 1989, EMD purchased a total of 303 new compressor bearings from Allison Gas & Turbine (Allison), another division of General Motors Corporation, for a price of $298.80 each. Allison manufactured these bearings according to specifications provided by EMD. After receiving the new compressor bearings from Allison, EMD substituted them into locomotives previously sold to Norfolk Southern, Go Transit, and LXO. Thereafter, EMD shipped the subject locomotives to the three railroads. 13 On November 27, 1990, EMD filed a patent application for its new compressor bearings. Based upon this filing date, the critical date for applying the on-sale bar for the '242 patent is November 27, 1989. The '242 patent issued on December 8, 1992. Claims 1 through 7 of the '242 patent are directed to a turbocharger assembly, and claims 8 through 18 are directed to the new compressor bearings. 14 On August 19, 1991, EMD released the new compressor bearings for production. All locomotive sales involving diesel engines after August 1991 included the new compressor bearings. Before this release, however, EMD employed prior art bearings in all customer orders, except the Norfolk Southern, Go Transit, and LXO orders discussed above. EMD likewise did not advertise, market, or create promotional materials for the new compressor bearings prior to the August 1991 release. 15