Opinion ID: 782315
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 Fike designs, manufactures, and installs fire suppression systems. Great Lakes manufactures specialty chemical solutions, including a fire retardant known as 1,1,1,2,3,3,3-Heptafluoropropane, or HFC-227ea, its generic designation. Although both Great Lakes and E.I. du Pont De Nemours and Company (DuPont) apparently hold patents for HFC-227ea originating in 1992, 2 DuPont did not begin manufacturing the chemical until 2000. Thus, Great Lakes was the sole manufacturer and supplier of HFC-227ea from 1992 until 2000. 3 Great Lakes markets HFC-227ea under the brand name FM-200 TM  and has submitted affidavits supporting its contention that, because FM-200 was the only HFC-227ea product on the market for so long, people in the fire suppression industry now frequently use the term FM-200 as a generic moniker for all HFC-227ea marketed. 3 Although Fike disputes this fact, it has not provided any affidavits or exhibits to refute it. 4 In the early 1990s, Fike developed fire suppression systems using Great Lakes's FM-200. Great Lakes supplied Fike with between 20,000 and 50,000 pounds of the chemical at no cost to be used in system testing and also provided valuable technical assistance. Fike began selling fire suppression systems using FM-200 in 1993 and entered a supply agreement with Great Lakes in order to secure a source of the chemical for all of its customers, both in the United States 4 and in other countries. The agreement provided that Fike would purchase, and Great Lakes would supply, Fike's requirements for FM-200, and also that Fike would use its reasonable best efforts to promote the sale and use of FM-200 TM . 5 Fike purchased FM-200 pursuant to the agreement from 1993 until October 2001. During that time Fike promoted FM-200 by providing brochures and literature to its distributors, holding seminars, and using most of its trade-show booth space to showcase the product. Great Lakes maintained production capacity in its manufacturing plant and continued to secure the raw materials needed to meet Fike's requirements. Then, in 2000, DuPont announced that it was entering the market with its own brand of HFC-227ea known as FE-227. 6 DuPont contacted Fike about distributing FE-227, and the two companies eventually executed a Letter of Intent in November of 2000 in which Fike committed to purchasing 100% of its requirements for HFC-227ea from DuPont for the markets where DuPont has applicable patent rights. Fike and Great Lakes disagreed over whether their agreement precluded Fike's proposed arrangement with DuPont. According to Great Lakes, both parties originally understood the agreement's use of FM-200 TM  to mean HFC-227ea; that is, Fike was required to purchase all of its requirements for HFC-227ea from Great Lakes. Fike, however, adopted a new interpretation in early 2000, arguing that the agreement governed only Fike's requirements for Great Lakes's brand of HFC-227ea, FM-200. Fike filed this lawsuit in January 2001, seeking a declaratory judgment in support of its position. 7 Then in April 2001, while the litigation was pending, Fike paid for a shipment of DuPont's FE-227 and continued to place new orders thereafter. As Fike's orders for FE-227 increased, its orders for FM-200 declined. Fike began splitting its trade-show booth space between the two products and even made a banner informing distributors that FE-227 was identical to the more-familiar FM-200. It is also undisputed that Fike gave DuPont a list of the distributors through whom Fike had previously sold FM-200 exclusively. 8 Based on these facts, Great Lakes filed a counterclaim alleging that Fike breached its contractual obligation to purchase FM-200 from Great Lakes and to use its reasonable best efforts to promote FM-200, and claiming damages. But in July 2001, Great Lakes mooted Fike's claims for declaratory relief by electing to terminate the agreement pursuant to the termination provisions in the contract. However, Great Lakes's counterclaim for damages remained at issue and the district court granted summary judgment for Great Lakes and awarded lost profits and overhead damages in excess of $3 million. Fike appeals.