Krausz Industries Ltd. v. Smith-Blair, Inc.

188 F. Supp. 3d 545, 2016 U.S. Dist. LEXIS 61079, 2016 WL 2643000
CourtDistrict Court, E.D. North Carolina
DecidedMay 9, 2016
DocketNo. 5:12-CV-570-FL
StatusPublished
Cited by12 cases

This text of 188 F. Supp. 3d 545 (Krausz Industries Ltd. v. Smith-Blair, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Krausz Industries Ltd. v. Smith-Blair, Inc., 188 F. Supp. 3d 545, 2016 U.S. Dist. LEXIS 61079, 2016 WL 2643000 (E.D.N.C. 2016).

Opinion

ORDER

LOUISE W. FLANAGAN, United States District Judge

This matter is before the court on the motion by defendant Sensus Manufacturing Shanghai Limited (“Sensus Shanghai”) to dismiss for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). (DE 110). Plaintiff responded in opposition and defendant Sensus Shanghai replied. Also before the court is the motion by defendant Smith-Blair, Inc. (“Smith-Blair”) to seal an exhibit to plaintiffs response. (DE 125). In this posture, the issues raised are ripe for ruling. For the following reasons, the motions are granted.

BACKGROUND

Plaintiff filed suit in August 2012 alleging patent infringement by defendants, and plaintiff filed an amended complaint in March 2013. Plaintiff seeks a declaration of infringement, monetary damages, and in-junctive relief to prevent continuing infringement. Plaintiff claims that defendants make, sell, or offer to sell, a pipe coupling device (the “421 Top Bolt®”) that infringes a patent owned by plaintiff, U.S. Patent No. 6,293,556 (the “ ’556 Patent” or “the patent”). The ’556 Patent issued in 2001, and was reconfirmed in 2012.

By way of summary, the patent describes in its abstract a “Coupling and Connecting Means for pipes of the same or different diameters and a seal to be used with such connecting means.” (’556 Patent, Abstract (DE 24-1 at 2)).1 The three claims of the patent are as follows:

1. A sealing ring for pipe connector means made of resilient material, the [549]*549sealing ring comprising a first sleeve-like ring the cross section of which defines a [sic] inner space therein, and a second ring overriding said first sleeve-like ring and being loosely connected to said first ring, said second ring being adapted to be torn off said first ring at a predetermined location so as to adapt the sealing ring to interconnect pipes of substantially different diameters.
2. A sealing ring as claimed in claim 1 where said second ring is integral with said first ring.
3. A sealing ring as claimed in claim 1 where said seal is incorporated with connecting means provided with a U shape ring and placed within said U shaped ring.

(Id. Col. 2, lines 42-54). Plaintiff alleges infringement of claim 1 and claim 3 of the patent.

Defendants Sensus USA, Inc. (“Sensus USA”) and Smith-Blair filed answers and counterclaims of invalidity and non-infringement, on May 6, 2013; Defendant Sensus Shanghai filed its answer and counterclaims of invalidity and non-infringement, on December 3, 2013. The court entered its case management order on January 15, 2014. In accordance with the deadlines therein , and in the local patent rules, plaintiff served initial infringement contentions in February, 2014, and defendants served initial non-infringement and invalidity contentions in April 2014, supplemented in September 2014.

The court entered its order on claim construction on August 31, 2015. On September 2, 2015, plaintiff disclosed final infringement contentions, pursuant to Local Patent Rule 303.6(a). On September 28, 2015, defendants disclosed final non-infringement and invalidity contentions, pursuant to Local Patent Rule 303.6(b).

On October 13, 2015, defendant Sensus Shanghai filed the instant motion to dismiss. In support of the motion, defendant Sensus Shanghai filed declarations by Mike Wan, plant manager at Sensus Shanghai;. Colin Flannery, executive vice president, secretary and general counsel of defendant Sensus USA; and Gerry Larsen, director of manufacturing and operations at defendant Smith-Blair.

Attached to its response in opposition, plaintiff filed the following exhibits: contentions served by defendant Sensus Shanghai; printouts from Smith-Blair website; printouts from HD Supply Waterworks website; and two proposed sealed exhibits comprising Smith-Blair internal emails and Smith-Blair responses to interrogatories. Defendant Smith-Blair filed the instant motion to seal the first such exhibit, Exhibit D, but not the second, Exhibit I.

In its reply in support of the motion to dismiss, defendant Sensus Shanghai filed exhibits comprising its discovery responses and requests, as well as contentions and disclosures served on plaintiff in this case.

In the meantime, upon motion by the parties, this court has extended the deadline for fact discovery several times. Most recently, the court extended the fact discovery deadline to May 27, 2016. In accordance with the case management order, expert discovery is due to be completed 135 days thereafter, or October 9, 2016. Dispositive motions are due 30 days thereafter, or November 8,2016.

STATEMENT OF FACTS

The facts bearing on the issue of personal jurisdiction, with all reasonable inferences and factual disputes drawn in favor of plaintiff, may be summarized as follows.

Defendant Smith-Blair is a Delaware corporation with its principal place of business in Arkansas, engaged in the business of manufacturing and selling pipe fittings and tools for the waterworks industry. Defendant Sensus USA is a Delaware corpo[550]*550ration with its principal place of business in North Carolina, engaged in the business of utility infrastructure systems. Defendant Sensus Shanghai is a corporation organized and existing under the laws of the People’s Republic of China, with its sole place of business in Shanghai, China, engaged in the business of manufacturing and selling pipe fittings and tools for the waterworks industry.

Defendant Smith-Blair was first incorporated in California in the 1940s, and it established a manufacturing facility in Arkansas in the 1950s. (DE 120-6 at 2). Sometime between 1989 and' 2005, defendant Smith-Blair was acquired by “the Sensus family of companies, who offer world-class clean technology solutions including smart metering, communications systems, software, and services for electric, gas and water industries.” (DE 113 ¶ 7; see 114 ¶ 4; see DE 120-6 at 2). Defendant Smith-Blair describes itself in the 421 Top Bolt® product brochure as “a Sensus company.” (DE 24-3).

According to its financial disclosure statement, defendant Smith-Blair is a wholly-owned subsidiary of Sensus Spectrum, LLC; which is a wholly-owned subsidiary of defendant Sensus USA; which is a wholly-owned subsidiary of Sensus (Bermuda) 2, Ltd. (a Bermuda corporation); which is a wholly-owned subsidiary of Sen-sus (Bermuda) 1, Ltd. (a Bermuda corporation). (DE 16 at 1). In addition, “Entities affiliated with and partially owned by Goldman Sachs Group Inc. own approximately 33% of the stock of Sensus (Bermuda) 1, Ltd.” (Id. at 2).

Defendant Smith-Blair “continues to operate from its 261,000 square foot plant ... in Texarkana, Arkansas, in which it builds thousands of products that ship around the world each day.” (DE 120-6 at 3). “To help keep pace with global growth, [defendant] Smith-Blair opened an additional 50,000 square foot manufacturing plant in 2005 in Shanghai, China” (hereinafter the “Shanghai facility”). (Id.) Products manufactured at the Shanghai facility include the 421 Top Bolt® product. (DE 113 ¶ 5; DE 112 ¶ 8). Products manufactured at the Shanghai facility “are made by [defendant] Smith-Blair employees to the same quality control and inspection standards as those in Texarkana.” (DE 120-6 at 3).

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188 F. Supp. 3d 545, 2016 U.S. Dist. LEXIS 61079, 2016 WL 2643000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krausz-industries-ltd-v-smith-blair-inc-nced-2016.