FieldTurf, Inc. v. Southwest Recreational Industries, Inc.

235 F. Supp. 2d 708, 2002 U.S. Dist. LEXIS 24806, 2002 WL 31898064
CourtDistrict Court, E.D. Kentucky
DecidedNovember 21, 2002
DocketCIV.A. 00-12-JMH
StatusPublished
Cited by6 cases

This text of 235 F. Supp. 2d 708 (FieldTurf, Inc. v. Southwest Recreational Industries, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FieldTurf, Inc. v. Southwest Recreational Industries, Inc., 235 F. Supp. 2d 708, 2002 U.S. Dist. LEXIS 24806, 2002 WL 31898064 (E.D. Ky. 2002).

Opinion

*713 MEMORANDUM OPINION AND ORDER

HOOD, District Judge.

This action is before the Court on Defendant’s motions. First, the Court will consider the defendant’s Renewed Motion for Partial Summary Judgment Regarding Claims Accruing Before May 20, 1999 [Record No. 342], Plaintiffs have responded [Record No. 363], to which Defendant has replied [Record No. 365]. The Court will also consider Defendant’s Motion for Summary Judgment [Record No. 350]. Plaintiffs have responded [Record No. 363] and Defendant has replied [Record No. 365]. These matters are now ripe for decision.

FACTUAL BACKGROUND

Plaintiffs FieldTurf, Inc. and FieldTurf International, Inc. (“FieldTurf”) and Defendant Southwest Recreational Industries, Inc. (“Southwest”) are competitors in the artificial turf market. The artificial, carpet-like surfaces made by these parties and other competitors have shown themselves to be useful alternatives to natural grass surfaces and include both “conventional” (knitted nylon surfaces) and “filled” turf systems (tufted polyolefin surfaces with granular top-dressing). These systems are used in a variety of settings in the sporting world, including golf, soccer, football, and baseball facilities.

Plaintiffs manufacture a product called FieldTurf®. 1 Defendant Southwest Recreational Industries, Inc. (“Southwest”) manufactures, sells, and installs several artificial turf systems, including AstroPlay®. 2 Both of these products are filled turf systems.

1. United States Patent No. 4,337,283

In the early 1970s, a professional golfer-turned-inventor, Frederick T. Haas, developed a product he called “Mod-Sod,” a “filled” turf system using an infill of sand and cork and a pile fabric available in the market at that time. This combination of goods was later patented as U.S. Patent No. 4,337,283 (the “ ’283 Patent”).

The patent application for the invention that would eventually be embodied in the ’283 Patent was filed on September 11, 1980, by Haas, for a “synthetic turf playing surface with [a] resilient top-dressing.” 3 *714 On December 29, 1980, Haas assigned the patent to “Mod-Sod Sports Surfaces, a partnership consisting of Frederick T. Haas, Jr., Rebecca Ann Bain[,] Haas Cloudman, Frederck T. Haas, III, and Michael Howard Haas” (“Mod-Sod”). The assignment was recorded at the U.S. Patent and Trademark Office (“USPTO”) on January 2, 1981. From December 29, 1980, until the expiration of the ’283 Patent on September 11, 2000, there were no further conveyances recorded in the USPTO to any person or entity of any rights in the ’283 Patent. Specifically, there are no records of any rights conveyed back to Haas as an individual or to the corporation called Mod-Sod Sports Surfaces, Inc. (“Mod-Sod Corp.”), formed on April 4, 1982.

However, Haas has stated in deposition testimony in an action in the Covington Division of this District (discussed below) that he assigned the title and rights to the ’283 patent to Mod-Sod Corp. Plaintiffs refer to an exhibit to that deposition entitled “Patents Issued to MSSS, Inc.” and listing the ’283 Patent along with Haas’s testimony to demonstrate a binding and legal conveyance rights to that patent. Haas, reviewing the document contained in that exhibit, stated:

These [the patents] were issued, I think first to me and I assigned them at a later date to Mud-Sod [sic ] Sports Surfaces, Inc.

[Haas Covington Depo. at 13:12-14:6.] In response to a question about whether the “form of business had gone from [himself] individually to the Mud-Sod [sic] Sports Surfaces partnership all of the way to Mod-Sod Sports Surfaces the corporation. ..,” Haas replied, “Yes.” [/d]

The preamble to the 1994 “Exclusive License Agreement” signed by SynTenni-Co, Prevost, Mod-Sod, Inc., and Haas, as a representative of Mod-Sod Corp., provided that the:

Licensor has the sole right to grant for the United States its territories and possessions and for the entire World (collectively, the “Territory”), licenses under the Inventions, of the scope hereinafter granted...

[Exclusive License Agreement at Preamble.] Further, the agreement provided that “[Licensor hereby grants to Licensee the exclusive and irrevocable (except as otherwise reserved and provided for herein) right and license to make, have made, use sell and otherwise commercialize and exploit, through the Territory, products embodying the inventions...” [Id. at ¶ 1.] However, there exists a subsequent “letter agreement”, dated June 19, 1998 and apparently still in force, stating that it “cancels and replaces the exclusive license agreement” signed by the parties in 1994. The letter, written to Mod-Sod Sports Surfaces, Inc., and Haas, states that “[Syn-TenniCo] will continue to be the exclusive licensee of your U.S. patent, number 4,337,283 except for golf products.” [Letter Agreement at ¶ 3 (emphasis added).]

2. The Ascendancy of Filled Artificial Turf Systems in the Artificial Turf Market

When FieldTurfs predecessor-in-interest, SynTenniCo, began marketing its filled products in 1997, most artificial turf surfaces were the relatively more expensive conventional systems. The new filled turf systems would prove to be significantly less expensive than their conventional counterparts, including Defendant’s AstroTurf product, as a result of the less expensive raw materials and the lowered ex *715 pense associated with the manufacturing process. Additionally, the amount of raw material needed to produce similarly sized fields was significantly lower for the filled turf systems. 4

With the popularity of these filled systems, "the number of customers has risen dramatically every year since 1998 and the market has seen the ascendancy of the filled field over the traditional conventional systems. FieldTurfs sales increased significantly during that time, and the number of fields sold went from 22 in 1998 to 43 in 1999,118 in 2000, and a projected 135 (in 2001). That said, Plaintiffs allege that Defendant still holds a 90% market share for the artificial turf market when all conventional and filled systems are included. Defendant alleges and Plaintiffs do not dispute that if the filled system submarket is examined, the reality is that both parties have relatively equal market share. In any event, Gilman has boasted that Field-Turf became Southwest’s major competitor, taking substantial market share from Southwest in 2000, decreasing Southwest’s sales and reducing its profits.

3. History of Litigation Between the Parties and Their Predecessors-in-Interest With Regard to the ’283 Patent and Other Claims; the Parties’ Settlement Agreement

Over the years, the parties (or their predecessors-in-interest) have competed for contracts on hundreds of artificial turf fields. Some of those contracts have been awarded to Plaintiffs; some have been awarded to Defendant.

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Bluebook (online)
235 F. Supp. 2d 708, 2002 U.S. Dist. LEXIS 24806, 2002 WL 31898064, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fieldturf-inc-v-southwest-recreational-industries-inc-kyed-2002.