Goss v . MAN Roland, et a l . 03-CV-513-SM 05/02/06 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Goss International Americas, Inc., Plaintiff

v. MAN Roland, Inc. and MAN Roland Druckmaschinen AG, Defendants Civil N o . 03-cv-513-SM Opinion N o .

MAN Roland, Inc. and MAN Roland Druckmaschinen AG, Counterclaim Plaintiffs

v. Goss International Americas, Inc. and Heidelberger Druckmaschinen AG, Counterclaim Defendants

O R D E R

Before the court are fifteen motions for summary judgment

filed by Goss International Americas, Inc. (“Goss”), MAN Roland,

Inc. and MAN Roland Druckmaschinen AG (collectively “MAN

Roland”), and Heidelberger Druckmaschinen AG (“Heidelberger”).

Three of those motions, presented in document nos. 7 5 , 9 9 , and

117, are denied; one, presented in document n o . 153 is granted;

one, presented in document n o . 155, is granted in part; and one,

presented in document n o . 146, is moot. In document n o . 7 5 , MAN Roland moves for partial summary

judgment, asserting that the ’734 and ’100 patents are

unenforceable for a period running from November 1 8 , 2003,

through August 6, 2004, and that the ’251 patent is unenforceable

for a period running from May 2 5 , 2004, through August 6, 2004,

because, during those periods, the patents-in-suit were not

commonly owned with certain other patents, the existence of which

created an obviousness-type double-patenting problem that

Heidelberger overcame by filing terminal disclaimers. MAN

Roland’s motion for summary judgment presents what appears to be

a question of first impression: whether a patent owned by a

parent company and a patent owned by a wholly owned subsidiary

are “commonly owned” for purpose of a terminal disclaimer filed

to overcome an obviousness-type double- patenting rejection.

MAN Roland’s strongest support comes from Schreiber Foods,

Inc. v . Beatrice Cheese, Inc.,

(E.D. Wis.

2004). In that case, the court granted the defendants’ Rule

60(b)(3) motion to vacate the judgment, based upon the

plaintiff’s failure to disclose that it had assigned a particular

patent (the ’860) to a wholly owned passive investment

corporation (while taking back a non-exclusive license).

. In the Schreiber court’s view, the plaintiff’s

2 affirmative misrepresentation that it owned the ’860 patent was

material because, among other things, the “[d]efendants would

have had a compelling argument that the ’724 patent was

unenforceable because it was not commonly owned with the ’860.”

at 960 (citing Merck & C o . v . U.S. Int’l Trade Comm’n,

(Fed. Cir. 1985)). Accordingly, “[i]f defendants

had known about the assignment of the ’860, it is unlikely that

the issue of whether the ’724 was infringed would have even

gotten to the jury.”

Goss’s strongest support comes from the Manual of Patent

Examining Procedure (“MPEP”). The section of the MPEP discussing

the requirements of terminal disclaimers refers readers to MPEP §

706.02(1)(2) “for examples of common ownership, or lack thereof.”

MPEP at 1400-79. According to Example 1 in § 706.02(1)(2),

“Parent Company owns 100% of Subsidiaries A and B – inventions of

A and B are commonly owned by the Parent Company.” While that

example does not precisely describe the situation presented in

this case, it would seem to follow that if the parent company in

the MPEP example commonly owned the inventions of both of its

wholly owned subsidiaries, its own inventions would also be

commonly owned along with the inventions of its wholly owned

3 subsidiaries. The court so concludes, and MAN Roland’s motion

for summary judgment (document n o . 75) is denied.

In document n o . 9 7 , MAN Roland moves for partial summary

judgment, asserting that the ’100 patent is limited to an

effective filing date of April 7 , 1992, while in document n o .

117, Goss moves for partial summary judgment that the ’100 patent

is entitled to an effective filing date of October 5 , 1989.

According to MAN Roland, one of the continuing applications

through which Goss claims the earlier priority date fails to

disclose an essential feature of the invention that was disclosed

in previous and subsequent applications (the so-called “sidewall

feature”), and that the absence of the sidewall feature from the

intermediate application creates a hiatus in disclosure that

precludes Goss from gaining the benefit of the earlier filing

date.1 Goss counters that the sidewall feature is inherent in

1 The ’100 patent claims an offset printing press. The first and third applications in the chain of applications also claimed printing presses, while the second one (the intermediate application) claimed only a printing blanket for use in an offset printing press. The alleged hiatus in disclosure does not involve the printing blanket per s e , but, instead, involves the sidewall feature, which i s , in essence, a door-like opening in the sidewall of an offset printing press that allows the printing blanket to be telescopically installed on and removed from the blanket cylinder. The first application, the third application, and the ’100 patent all explicitly disclose the sidewall feature while the second application, which claimed only a printing

4 the intermediate application, meaning that there is no hiatus in

disclosure and, thus, that it is entitled to the earlier date.

“In order to gain the benefit of the filing date of an

earlier application under

2 0 , each application in

the chain leading back to the earlier application must comply

with the written description requirement of

.”

Lockwood v . Am. Airlines, Inc.,

(Fed. Cir.

1997) (citing In re Hogan,

(C.C.P.A. 1977)).

“Whether a specification complies with the written description

requirement of section 1 1 2 , first paragraph, is a question of

fact . . .” Lampi Corp. v . Am. Power Prods., Inc.,

(Fed. Cir. 2000) (citing Vas-Cath Inc. v . Mahurkar,

(Fed. Cir. 1991)). Here, there is a factual

dispute over whether the specification in the intermediate

application complies with section 112; all parties agree that the

intermediate application does not describe the sidewall feature,

but Goss contends that such a feature is inherent in that

application. Because there appears to be a material fact in

blanket, does not. Despite the fact that the second application claimed only a printing blanket, the examiner allowed it to be included in the chain of continuation applications listed on the face of the ’100 patent.

5 dispute, and the record is not fully developed, both motions for

summary judgment (documents nos. 97 and 117) are denied.

In document n o . 146, MAN Roland moves for summary judgment

on grounds of invalidity under

and 1 1 2 , “in the

event . . . that the claims [of the patents-in-suit] are not

construed to require ‘gapless’ printing blankets.” Because the

court has construed the claims to include a “gapless” limitation,

in a separate claim construction order, MAN Roland’s motion for

summary judgment (document n o . 146) is moot.

In document n o . 153, Goss moves for partial summary

judgment, asserting that Canadian Patent Application Serial N o .

2,026,954 is not “prior art” to the patents-in-suit. The issue

arises because MAN Roland asserts that the effective filing date

for at least one of the patents-in-suit should be April 7 , 1992,

and that the Canadian patent application became a “printed

publication,” and thus constituted potentially invalidating prior

art, see

(b), on April 6, 1991. Goss counters

that because April 6, 1991, fell on a Saturday, a day on which

the Canadian Patent Office was not open to the public, the

Canadian application was not available to the public until the

6 following Monday, April 8 , bringing its publication within the

one year allowed by

(b). Goss is correct.

A person is not entitled to a patent if “the invention was

. . . described in a printed publication in this or a foreign

country . . . more than one year prior to the date of the

application for patent in the United States.”

(b). “The determination of whether a reference is a ‘printed

publication’ under

(b) involves a case-by-case

inquiry into the facts and circumstances surrounding the

reference’s disclosure to members of the public.” In re

Klopfenstein,

(Fed. Cir. 2004) (citing In re

Cronyn,

(Fed. Cir. 1989); In re Hall,

9 7 , 899 (Fed. Cir. 1986)). “[T]hroughout [the Federal

Circuit’s] case law, public accessibility has been the criterion

by which a prior art reference will be judged for the purposes of

§ 102(b).” Klopfenstein,

. More specifically,

“[t]he statutory phrase ‘printed publication’ has been

interpreted to mean that before the critical date the reference

must have been sufficiently accessible to the public interested

in the art; dissemination and public accessibility are the keys

to the legal determination whether a prior art reference was

‘published.’” In re Cronyn,

(quoting Constant v .

7 Advanced Micro-Devices, Inc.,

(Fed. Cir.

1988)).

Here, it is undisputed that: (1) the “[d]ate on which the

application was made available for public inspection” listed on

the front page of the Canadian patent is April 6, 1991; (2) April

6, 1991, was a Saturday; (3) the Canadian Patent Office was

closed on Saturdays and Sundays in 1991; and (4) in 1991, the

only way the public could gain access to Canadian patent

applications was by physical inspection at the Canadian Patent

Office. Goss argues that the application did not become

available to the public until Monday, April 8 , 1991, when the

Canadian Patent Office opened for business. MAN Roland counters

that “[m]embers of the public accompanied by an authorized CPO

employee could have inspected the Application on Saturday, April

6, 1991,” and that “a sufficiently motivated member of the public

could have inspected the Application on April 6, 1991 in the

company of an authorized CPO employee.” MAN Roland supports that

position by citing the following deposition testimony given by

Goss’s expert witness on Canadian Patent Office procedure:

Q . You are absolutely positive that the public has never been in the Canadian Patent Office on a Saturday? MR. REITBOECK: Objection. Argumentative.

8 A . If I have to say absolutely positive, I cannot say that, because I might have gone in on a Saturday myself and taken my children i n . Q . All right. How did you get in? A . How do I get in? I go to the security guard, I speak to the security guard, I show him my pass, I give him my son’s name and we both sign in and then we go i n . Q . So an examiner can come in on a Saturday; right? A . He could. Q . An examiner can take a friend with him; correct? A . In theory. Q . Can take a family member with him? A . He could.

(DeGrave Decl. (document n o . 1 7 1 ) , Ex. 1 (Davies Dep.) at p . 1 3 ,

l.23 - p . 1 4 , l.20). That deposition testimony does not create a

genuine issue of material fact concerning public access to the

Canadian patent application at issue. As a matter of law, the

application was not generally accessible to the public until

Monday, April 8 , 1991. That special arrangements to examine the

application might have been made by a highly motivated member of

the public is hardly the test. Accordingly, Goss’s motion for

partial summary judgment on this issue (document n o . 153) is

granted.

In document n o . 155, Goss moves for summary judgment on MAN

Roland’s fourth, fifth, and sixth counterclaims. Goss is

9 entitled to summary judgment on the fourth and sixth

counterclaims.

MAN Roland’s sixth counterclaim asserts a Clayton Act

violation. The Clayton Act prohibits certain acquisitions and,

of course, Goss is not alleged to have acquired anything; Goss

was the entity acquired by Goss International Corp. Accordingly,

Goss is entitled to summary judgment on MAN Roland’s sixth

counterclaim.

Goss is also entitled to summary judgment on MAN Roland’s

fourth counterclaim, in which MAN Roland asserts that

Heidelberger and Goss conspired in restraint of trade,

, and conspired to monopolize,

, by agreeing to

enforce, through litigation and otherwise, the fraudulently

procured ’734, ’100, and ’251 patents. As set out in MAN

Roland’s counterclaim, the contours of the alleged conspiracy are

sketchy at best – MAN Roland does not even hazard a guess as to

who agreed to do what in exchange for what. Some focus is

provided in MAN Roland’s objection to Heidelberger’s motion for

summary judgment on Count 4 , which MAN Roland incorporates by

reference into its objection to Goss’s summary judgment motion:

10 MAN Roland alleges that a component of the transaction between HDAG [“Heidelberger”] was not only the transfer of the fraudulently obtained patents, but also an unlawful agreement to continue to enforce them against MAN Roland in sham litigation to drive MAN Roland out of the market and ensure Goss’s position as the market leader – indeed the entrenched monopolist.

(MAN Roland’s O b j . to Summ. J. (document n o . 205) at 6.) MAN

Roland elaborates, suggesting:

It is not hard to imagine HDAG’s motive for entering into such a conspiracy. Pursuant to the transaction between HDAG and Goss, HDAG maintained a fifteen percent ownership in the resulting company. Thus, HDAG very much stood to gain from the parties’ agreement.

(Id.)

MAN Roland’s attempt at clarification does not help its

case. For one thing, there was no transaction between HDAG and

Goss. In its own memorandum, MAN Roland identifies “Goss” as

“Goss International Americas, Inc.” Goss International Americas,

Inc. is the former Heidelberg Web Systems (“HWS”), which

Heidelberger sold to Goss International Corp. Thus, there was a

transaction between Heidelberger and Goss International Corp.,

but Goss – i.e., Goss International Americas, Inc. – was not a

party to that transaction; it was the subject matter. Moreover,

MAN Roland is incorrect in asserting that Heildelberger, as a

11 part of the transaction with Goss International Corp., retained a

fifteen-percent stake in Goss. To the contrary, as a part of the

purchase price, Heidelberger received “such number of newly

issued shares of Common Stock of Purchaser [i.e., Goss

International Corp.] equal to approximately fifteen percent (15%)

of the Fully Diluted Common Stock of Purchaser immediately

following the consummation of the transactions contemplated by

this agreement.” (MAN Roland’s O b j . to Summ. J. (document n o .

2 0 5 ) , Ex. 1.) In other words, Heidelberger received stock in

Goss International Corp., not stock in Goss International

Americas, Inc. As a result of MAN Roland’s conflation of Goss

International Corp. and Goss International Americas, Inc., it is

all but impossible to make sense of the fourth counterclaim, and

on that basis alone, Goss is entitled to summary judgment. See

Bridges v . MacLean-Stevens Studios, Inc.,

(1st

Cir. 2000) (affirming summary judgment for defendant on section 1

conspiracy claim on grounds that plaintiff’s claim was illogical)

(citing Matsushita Elec. Indus. v . Zenith Radio Corp.,

(1986)).

Moreover, even if it were possible to construct a logical

conspiracy claim for MAN Roland, it would still fail due to MAN

12 Roland’s failure to allege facts from which concerted action

could reasonably be inferred.

Section 1 of the Sherman Act prohibits “[e]very contract, combination . . . or conspiracy, in restraint of trade or commerce.”

. There are two prerequisites for a successful section 1 claim. First, there must be concerted action. Monsanto C o . v . Spray- Rite Serv. Corp.,

5 2 , 761 (1984); Podiatrist Ass’n, [Inc. v . La Cruz Azul de P.R., Inc.,] 332 F.3d [6,] 12 [(1st Cir. 2003)]. Second, the actors’ agreement must involve either restrictions that are per se illegal or restraints of trade that fail scrutiny under the rule of reason. Monsanto, 465 U.S. at 761; Podiatrist Ass’n, 332 F.3d at 1 2 .

Euromodas, Inc. v . Zanella, Ltd.,

1 , 16 (1st Cir. 2004)

(parallel citations omitted). Regarding the first prong of the

test, the court of appeals for this circuit has held, in the

context of a section 1 claim involving a vertical restraint of

trade:

To satisfy that requirement, there “must be evidence that tends to exclude the possibility of independent action by the manufacturer and distributor.” Monsanto, 465 U.S. at 764. Phrased another way, there must be “direct or circumstantial evidence that reasonably tends to prove that the manufacturer and others had a conscious commitment to a common scheme designed to achieve an unlawful objective.” Id. (citation and internal quotation marks omitted). . . . Thus, absent a showing of concerted action, a section 1 claim fails as a matter of law.

13 Euromodas,

(parallel citations omitted).

Moreover, “conduct that is ‘as consistent with permissible

competition as with illegal conspiracy does not, standing alone,

support an inference of antitrust conspiracy.’”

at 17

(quoting Matsushita Elec. Indus. C o . v . Zenith Radio Corp.,

7 4 , 588 (1986)). 2

Here, Goss’s attempt to enforce the patents-in-suit is at

least as consistent with independent action as it is with

concerted action with Heildelberger. Goss is the assignee of

three seemingly valuable patents, two of which were already being

enforced through litigation, by HWS, at the time Goss

International Corp. acquired HWS from Heidelberger. HWS, and

then Goss, hardly needed encouragement from Heidelberger to

continue pursuing that ongoing infringement action. Moreover,

MAN Roland does not even hint at the possible particulars of an

agreement between Heidelberger and Goss regarding Goss’s

enforcement of the patents-in-suit. Nor does MAN Roland suggest

how Goss’s pursuit of this litigation could possibly amount to

2 Because a conspiracy under section 1 of the Sherman Act is proved in the same way as a conspiracy under section 2 , see Jessup v . Am. Kennel Club, Inc.,

, 10 (S.D.N.Y. 1999), the following analysis applies to both conspiracy theories advanced in MAN Roland’s fourth counterclaim.

14 concerted action, given that Goss is the sole and exclusive

assignee of the patents-in-suit, leaving Heidelberger no role

whatever in any enforcement action. In short, Goss’s decision to

enforce its patents (or continue enforcement action already

initiated) is hardly sufficient to support a reasonable inference

of a conspiracy between Goss and Heidelberger, even in light of

Heidelberger’s fifteen-percent stake in Goss International Corp.

MAN Roland’s “bare bones” conspiracy claims are probably

insufficient to survive a Rule 12(b)(6) motion. See Estate

Construction C o . v . Miller & Smith Holding Co.,

, 221

(4th Cir. 1994) (“Dismissal of a ‘“bare bones” allegation of

antitrust conspiracy without any supporting facts is

appropriate.’”) (quoting Pennsylvania ex rel. Zimmerman v .

Pepsico, Inc.,

(3d Cir. 1988)). In any event,

MAN Roland has not produced or identified any evidence that would

tend to exclude the possibility of independent action by Goss,

which entitles Goss to summary judgment on MAN Roland’s fourth

counterclaim.

MAN Roland, seemingly acknowledging the lack of factual

support for its conspiracy claims, moves for relief under Rule

56(f). While Rule 56(f) is to be applied generously, see

15 Resolution Trust Corp. v . North Bridge Assocs., Inc.,

(1st Cir. 1994), a party seeking relief under Rule

56(f) “must ‘set forth a plausible basis for believing that

specified facts, susceptible of collection within a reasonable

time frame, probably exist’ and ‘indicate how the emergent facts,

if adduced, will influence the outcome of the pending summary

judgment motion.’” C.B. Trucking, Inc. v . Waste Mgmt., Inc.,

1 , 44 (1st Cir. 1998) (quoting Resolution Trust,

). In other words, “a plaintiff’s speculative assertions

that the defendant has unspecified facts in its possession

necessary for the plaintiff to develop its legal theories coupled

with conclusory statements that discovery should be commenced are

‘entirely inadequate to extract the balm of Rule 56(f).’” C.B.

Trucking,

(quoting Paterson-Leitch C o . v . Mass.

Mun. Wholesale Elec. Co.,

(1st Cir. 1988)).

Here, MAN Roland offers nothing more than speculative

assertions about possible evidence in the possession of

Heidelberger and/or Goss. Given the implausibility of its

unsupported theory that Goss conspired with Heidelberger to

enforce patents in which Heidelberger held no interest, and its

lack of a plausible basis to believe that facts “probably exist”

to support that theory, MAN Roland’s Rule 56(f) motion (document

16 n o . 201) is denied, and Goss’s motion for partial summary

judgment (document n o . 132) is granted with respect to the fourth

counterclaim.

Finally, Goss’s entitlement to summary judgment on the fifth

counterclaim will be discussed in a separate order, pertaining to

Heidelberger’s four motions for summary judgment (document nos.

130, 1 3 2 , 139, and 1 4 0 ) .

Conclusion

For the reasons given, the motions for summary judgment

presented in document nos. 7 5 , 9 7 , and 117 are all denied; the

motions for summary judgment presented in document n o . 153 is

granted; the motion for summary judgment presented in document

n o . 155 is granted in part (as to MAN Roland’s fourth and sixth

counterclaims), and the motion for summary judgment presented in

document n o . 146 is moot.

SO ORDERED.

____________ Steven J. McAuliffe 'Chief Judge

May 2 , 2006

17 cc: Daniel E . Will, Esq. Hugh T . Lee, Esq. Richard S . Gresalfi, Esq. Georg C . Reitboeck, Esq. Mark A . Hannemann, Esq. Michael J. Lennon, Esq. T . Cy Walker, Esq. Danielle L . Pacik, Esq. Jonathan M . Shirley, Esq. Alfred H . Hemingway, Jr., Esq. Irvin D. Gordon, Esq. Martin B . Pavane, Esq. Michael J. Songer, Esq. Shari R. Lahlou, Esq. Sidney R. Bresnick, Esq. Teodor J. Holmberg, Esq. Richard D. Margiano, Esq. John F. Sweeney, Esq. Steven F. Meyer, Esq. Tony V . Pezzano, Esq. Bruce W . Felmly, Esq. Seth J. Atlas, Esq. Anthony S . Augeri, Esq.

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