Malibu Boats, LLC v. Skier's Choice, Inc.

CourtDistrict Court, E.D. Tennessee
DecidedAugust 25, 2020
Docket3:18-cv-00015
StatusUnknown

This text of Malibu Boats, LLC v. Skier's Choice, Inc. (Malibu Boats, LLC v. Skier's Choice, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malibu Boats, LLC v. Skier's Choice, Inc., (E.D. Tenn. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE NORTHERN DIVISION

MALIBU BOATS, LLC, ) ) Plaintiff, ) ) vs. ) No. 3:18-cv-15-JPM ) SKIER’S CHOICE, INC., ) ) Defendant. )

CLAIM CONSTRUCTION ORDER AS TO THE ’777 PATENT

ORDER ADOPTING IN PART THE REPORT AND RECCOMENDATIONS AS TO CLAIM CONSTRUCTIONS FOR THE ’161, ’873 AND ’695 PATENTS

ORDER SETTING STATUS CONFERENCE

Before the Court is the Parties’ request for claim construction pursuant to Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995), aff'd, 517 U.S. 370, (1996). The Court held a telephonic claim construction hearing as to the US Patent No. 10,322,777 on April 13, 2020. (ECF No. 93.)1 Also before the Court is Magistrate Judge Guyton’s Report and Recommendations as to Claim Constructions for the ’161, ’873 and ’695 Patents (“R & R”). (ECF No. 58.) Both parties have filed objections to the R & R. (ECF Nos. 61, 62.) The Court hereby construes the relevant terms as to the ’777 Patent and ADOPTS IN PART the R & R. I. BACKGROUND

1 The Court typically conducts claim construction hearing in-person. Due to the COVID-19 pandemic, this was not possible. (See ECF Nos. 89, 92) This is a consolidated civil action for patent infringement, and corresponding counterclaims for noninfringement, invalidity, and unenforceability of the subject patents. Plaintiff Malibu Boats (“Malibu”) seeks a judgment finding that U.S. Patent Nos. 9,260,161, 8,578,873, 9,199,695, and 10,322,777 (“asserted patents) have been infringed by Defendant

Skier’s Choice, Inc. (“Skier’s Choice”). (3:18-cv-15 ECF No. 1 at PageID 39–40; 3:19-cv-225 at ECF No. 1.)2 Plaintiff also seeks “[p]reliminary and permanent[]” injunctive relief enjoining Skier’s Choice from infringing the subject patents, willful infringement damages, attorney’s fees, and interest. (Id.) Defendant/Counterclaimant Skier’s Choice denies Malibu’s allegations, essentially asserting that “Malibu did not invent wake surfing or boats used for wake surfing,” and counterclaiming for declaratory judgment that Patents ’161, ’873, ’695, and ’777 are not infringed by Skier’s Choice, are invalid, and are unenforceable. (3:18-cv-15 ECF No. 19 at PageID 195–215; 3:19-cv-225 at ECF No. 18 at PageID 191–207.)

Factual Background Plaintiff Malibu is a Delaware corporation with its principal place of business in Loudon,

Tennessee. (ECF No. 1 at PageID 5.) Defendant Skier’s Choice is an Oklahoma corporation with its principal place of business in Marysville, Tennessee. (Id.) Jurisdiction is not disputed. (ECF No. 19 at PageID 198.) Malibu makes “inboard sport boat[s].” (ECF No. 1 at PageID 1.) Malibu has patented critical aspects of a technology that allows the driver of a boat to displace water in the wake of a

boat “at the push of a button” in order to create a surf wake on either side of the boat, for the

2 3:18-cv-15 is the lead case post-consolidation. For pre-consolidation filings, both case numbers are listed. Where no case number is listed, the citation is to the lead case. purposes of wake surfing. (Id. at PageID 2.) Malibu calls this technology “SURF GATE®.” (Id.) Malibu alleges that Skier’s Choice “Moomba” and “Supra’’? lines of boats equipped with surf systems infringe these patents. (Id.)

On a normal boat, there are pneumatic devices that extend flaps into the water to prevent a boat from tilting, or listing, to one side or another due to the position of the individuals or materials within the boat. These flaps are called trim tabs. By extending downward from the vessel, these trim tabs displace water. This allows the boat to stay balanced regardless of the arrangement of weight in the vessel.

In one embodiment, Malibu’s claimed invention gi Hat employs a mechanical device similar to traditional trim tabs. I □ Malibu sells boats that have additional pneumatic flaps on the rr back, or stern, of the boat: one to the left, or port, one to the SS Sy right, or starboard, and one in the center, as depicted in the | patent drawing in Figure 1. These flaps operate to displace 1: Second Drawing from the water in order to make the boat’s wake suitable for wake patent showing the wake creation surfing. Malibu asserts that, prior to the inventions protected by patents ’161, °873, and ’695, in order to generate a suitable wake for wake surfing, the ballast, or weight carried by the boat would need to be arranged in a certain way so that the boat would displace enough water in a linear fashion. (Id.)

3 These appear to be categories of Skier’s Choice boats, which include the sub-categories of “Moomba Flow” and “Supra Swell” systems. (ECF | at PageID 1.)

Malibu asserts four patents in the litigation. (See supra; 3:18-cv-15 ECF No. 1 at PageID 1; 3:19-cv-225 at ECF No. 1 at PageID 1.) These patents are all titled “Surf wake system for a watercraft.” (Id.)

Malibu contends that the proprietary SURF GATE® system has given it a significant commercial advantage, and that Skier’s Choice saw that advantage and copied Malibu’s system. (See, e.g. ECF No. 1 at PageID 12.) For instance, Malibu maps the ’161 Patent onto a specific model of 2017 Skier’s Choice Supra Boat, featuring an image from the owner’s manual. (Id. at PageID 12-22.)

Skier’s Choice contends that “Malibu did not invent wake surfing or boats used for wake surfing. Malibu did not invent the diversion of water.” (ECF No. 19 at PageID 195.) Skier’s Choice denies that its Moomba and Supra lines “were copied from or developed as result of systems or purported inventions of Malibu” and instead asserts that Skier’s Choice is the owner of “numerous patents, patent applications and proprietary systems, methods and developments.” (Id. at PageID 196.) Skier’s Choice denies that it needs a patent license from Malibu in order “to

use trim tabs or surf tabs to divert water on one side of a boat.” (Id. at PageID 198.) Procedural Background

On January 12, 2018, Plaintiff Malibu filed the Complaint as to patents US 9,260,161, US 8,578,873, and US 9,199,695. (ECF No. 1.) On March 9, 2018, Defendant filed its Answer and Counterclaims. (ECF No. 19.) In the Answer, Skier’s Choice raised the following defenses: (1) the claims are invalid and/or unenforceable, (2) injunctive relief for Malibu is barred on the grounds that there has not been and will not be irreparable harm to Malibu, (3) failure to state a claim, (4) estoppel/laches/waiver, (5) recovery for speculative injury is impermissible, (6) Malibu cannot show the requisite mental state for willful infringement, (6) Malibu cannot establish “but-for” causation for lost profits, (7) unclean hands due to inequitable conduct during patent prosecution,4 (8) insufficient patent labelling, (9) inconsistent positions/judicial estoppel/collateral estoppel, and (10) more than one person is required to operate the ski boat

under the claims at a time, and therefore Skier’s Choice cannot directly infringe. (Id. at PageID 211-14.) Skier’s Choice also asserts a counterclaim for declaratory judgment, seeking a judgment of “non-infringement, invalidity, and unenforceability” for the patents-in-suit. (Id. at PageID 214.) On April 3, 2018, Malibu filed its Answer to Skier’s Choice’s Counterclaim. (ECF No.

25.) On October 5, 2018, Malibu filed its Opening Claim Construction Brief. (ECF No. 35.) On October 26, 2018, Skier’s Choice filed its Responsive Claim Construction Brief. (ECF No. 36- 37.) On November 9, Malibu filed its Reply Claim Construction Brief. (ECF No. 39.) On November 30, 2018, these motions were referred to the Magistrate Judge. (ECF No.

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