LTJ Enterprises, Inc. v. Custom Marketing Co.

168 F. Supp. 3d 1202, 2016 U.S. Dist. LEXIS 31661, 2016 WL 916368
CourtDistrict Court, D. Minnesota
DecidedMarch 10, 2016
DocketCivil No. 13-2224 ADM/LIB
StatusPublished
Cited by2 cases

This text of 168 F. Supp. 3d 1202 (LTJ Enterprises, Inc. v. Custom Marketing Co.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LTJ Enterprises, Inc. v. Custom Marketing Co., 168 F. Supp. 3d 1202, 2016 U.S. Dist. LEXIS 31661, 2016 WL 916368 (mnd 2016).

Opinion

MEMORANDUM OPINION AND ORDER

ANN D. MONTGOMERY, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

On January 5, 2016, the undersigned United States District Judge heard oral argument on Plaintiff LTJ Enterprises, Inc.’s (“LTJ”) Motion for Summary Judgment [Docket No. 61], Defendant Custom Marketing Co., LLC’s (“CMC”) Motion for Summary Judgment [Docket No. 75], CMC’s Motion to Exclude Expert Testimony [Docket No. 78], and LTJ’s Motion to Exclude Expert Testimony [Docket No. 87], For the reasons set forth below, LTJ’s Motion for Summary Judgment is granted in part and denied in part, CMC’s Motion for Summary Judgment is granted, and the parties’ motions to exclude expert testimony are both denied.

II. BACKGROUND

LTJ, a Minnesota corporation, has its principal place of business in Roseau, Minnesota. Compl. [Docket No. 1] ¶ 1. CMC, located in Fargo, North Dakota, supplies grain and bin equipment for the agricultural industry. Id. ¶ 2; Halland Decl. [Docket No. 72] ¶ 2. LTJ owns by assignment United States Patent No. 6,067,927 (“the “’927 Patent”), which was issued on May 30, 2000. Compl. ¶ 8; Mezera Aff. [Docket No. 47] Ex. A (“’927 Patent”). In basic terms, the invention is a “bin level indicator used to provide a person with information as to the level of bulk material in a bin.” Compl. ¶ 6.

In 1996, LTJ began selling a product called the LevAlert utilizing the invention in the ’927 Patent. To determine the level of material in a grain bin or other opaque container, a hole is drilled through the bin wall. One end of the device is placed into the bin through the hole, while the other end remains outside. The outside end is affixed to the side of the bin with screws. The end of the device inside of the bin includes an actuator, which is engaged by the bulk material in the bin. When the actuator is engaged, the visual indicator on the external end of the device rotates from black to yellow. This provides a quick assessment of how much material is inside the bin. Prior to LevAlert, the level of material in the bin was primarily deter[1206]*1206mined by climbing a ladder and peering into the bin.

In 1997, CMC began selling LevAIert as part of its much larger line of products. Halland Decl. ¶ 3. At that time, CMC was unable to purchase LevAIert directly from LTJ. Niles Decl. [Docket No. 74] Ex. 19 49:22-50:1. Instead, CMC purchased Le-vAIert from Farm Products Direct, LTJ’s Minnesota based distributor. Id. CMC would then, in turn, sell LevAIert to its retail and end-use customers.

CMC sought to purchase LevAIert directly from LTJ. Id. 52:2-11. LTJ initially declined to extend CMC this ability. Id. 52:15-18. However, when Farm Products Direct went out of business, CMC was able to purchase LevAIert directly from LTJ. Id. 31:23-32:4; Halland Decl. ¶ 4.

In addition to direct purchasing, CMC received preferred pricing and assumed some advertising and warranty claim responsibilities for LevAIert from LTJ. Id. ¶¶4-8. CMC, in exchange, received virtually all United States customer referrals and was the only company in the United States eligible to purchase LevAIert at the preferred price level. Id. Customers who contacted LTJ and expressed interest in Le-vAIert were directed to speak with Jason Sjostrom (“Sjostrom”), a CMC employee. Niles Decl. Ex. 3.

This arrangement continued ■ until late 2011. On November 15, 2011, Sjostrom was laid off from his employment at CMC. Leverington Decl. [Docket No. 73] ¶ 3. Less than a month later, Sjostrom agreed to work for LTJ. Niles Decl. Ex. 20 14:1-15:6. Around this time, CMC was told that Sjostrom and his new company, Ideal Systems, had been appointed “National Manager” of LTJ’s accounts. Leverington Decl. ¶4. LTJ then discontinued CMC’s preferred pricing, raising the price CMC paid for a LevAIert device from $49.50 to $69.50. Id. ¶ 5; compare Niles Decl. Ex. 13 (showing December 7, 2011 LevAIert price of $49.50), with id. Ex. 9 (showing February 22, 2012 LevAIert price of $69.50). LTJ, aided by Sjostrom’s knowledge, began directly soliciting CMC’s major customers. Leverington Decl. Ex. 5.

Prior to Sjostrom joining LTJ, CMC experienced a steady increase in annual LevAIert sales, peaking in 2011 with 6,501 units sold. Niles Decl. Ex. 11. However, 2012 saw a dramatic plunge; sales fell to 1,698 units, fewer than CMC sold in 2003. Id. In 2012, CMC began developing a competing product, Grain Gauge, which CMC started selling in January 2013. Levering-ton Decl. ¶¶ 9, 10. Grain Gauge functions similarly to LevAIert. As with LevAIert, Grain Gauge is affixed to the side of a bin and features an actuator that is adapted to respond to the presence or absence of material in the bin. When bin material engages the actuator, the Grain Gauge, like LevAIert, rotates an outward facing indicator from black to yellow, signaling to an individual on the ground that the bin is filled with material up to the level where the' Grain Gauge is located.

Although similar, CMC claims Grain Gauge features design and performance advantages that make it superior to LevA-Iert. Id. ¶ 14. LTJ filed this lawsuit on August 15, 2013, asserting that Grain Gauge infringes on the ’927 Patent. See CompL In addition, LTJ alleges trade dress and trademark infringement, unfair competition, tortious interference, and deceptive trade practice claims.1 Id. ¶¶ 18-43. CMC denies the allegations and asserts counterclaims that LTJ tortiously interfered with CMC’s business relationships and violated the Minnesota Agricultural Equipment Farm Dealership Act by unilaterally terminating the preferred LevA-[1207]*1207lert pricing. See Answer Compl. Counterel. [Docket No. 6].

LTJ has moved for summary judgment on its patent infringement claim and for dismissal of CMC’s counterclaims. CMC has moved for summary judgment of non-infringement and for dismissal of LTJ’s remaining claims.

III. DISCUSSION

A. Legal Standard

Summary judgment is appropriate if there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the suit, and a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences to be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is appropriate if the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

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168 F. Supp. 3d 1202, 2016 U.S. Dist. LEXIS 31661, 2016 WL 916368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ltj-enterprises-inc-v-custom-marketing-co-mnd-2016.