Petter Investments, Inc. v. Hydro Engineering, Inc.

828 F. Supp. 2d 924, 2011 U.S. Dist. LEXIS 126908, 2011 WL 5276887
CourtDistrict Court, W.D. Michigan
DecidedNovember 2, 2011
DocketCase No. 1:11-CV-207
StatusPublished
Cited by1 cases

This text of 828 F. Supp. 2d 924 (Petter Investments, Inc. v. Hydro Engineering, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petter Investments, Inc. v. Hydro Engineering, Inc., 828 F. Supp. 2d 924, 2011 U.S. Dist. LEXIS 126908, 2011 WL 5276887 (W.D. Mich. 2011).

Opinion

OPINION

GORDON J. QUIST, District Judge.

I. Background

This case is the latest chapter in the parties’ battle for sales over wash fluid containment systems. Plaintiff, Petter Investments, Inc. (“Petter”), and Defendants, Hydro Engineering, Inc. and Hydro Engineering Equipment & Supply Co. (collectively “Hydro”), are competitors in the design, manufacture, installation, and sale of wash fluid containment systems for pressure washing large vehicles such as automobiles, bulldozers, and semi-trucks. These systems incorporate a pad upon which the vehicle is placed for washing.

The dispute dates back to at least 1998, when Petter first accused Hydro of selling products that infringed its pending patent application, later issued as U.S. Patent No. 6,021,792 (the “'792 Patent”). A round of correspondence and investigation ensued, but the accusations subsided. All was quiet for several years, but in 2007, the dispute resurfaced when Hydro notified Petter that Petter’s wash pads infringed Hydro’s patents, U.S. Patent Nos. 6,779,-591 and 7,258,749 (respectively, the “'591” and “'749” Patents). Things soon came to a head when Petter sued Hydro in this Court in Case No. 1:07-CV-1033 (the “2007 Case”), in which Petter alleged that Hydro infringed the '792 Patent and sought a declaration that it was not infringing the '591 and '749 Patents. Hydro filed counterclaims for infringement of the '591 and '749 Patents.

The Court first addressed Petter’s patent and granted Hydro summary judgment of noninfringement of the '792 Patent. Thereafter, the Court addressed Hydro’s infringement claims and Petter’s defenses. After construing the disputed claim terms of Hydro’s patents, the Court granted Hydro summary judgment on all of Petter’s invalidity defenses in an Opinion and Order entered on September 8, 2009, 2009 WL 2922303 (W.D.Mich, Sep. 08, 2009). Subsequently, on October 6, 2009, 664 F.Supp.2d 816 (W.D.Mich.2011), the Court granted Hydro summary judgment, concluding that Petter’s water channel side trough wash pads directly infringed claim 15 of the '591 Patent and that Petter contributorily infringed claims 2 and 3 of the '749 Patent through its sales of such wash pads. Shortly before trial, the parties settled Hydro’s damage claims. The Settlement Agreement, which was referenced in the Settlement Order, called for a monetary payment by Petter and the entry of a permanent injunction. It also contained the following provision:

9. HYDRO’S PATENT VALIDITY
9.1 Neither Petter nor its attorneys shall take any action to aid, induce, assign, or participate in, directly or indirectly, any action contesting the validity or enforceability of any of the Hydro patents in suit (U.S. Patents Nos. 6,799,-591 and 7,258,749) in any court or other tribunal including without limitation any litigation, declaratory judgment action, or requesting the United States Patent and Trademark Office (“PTO”) for the reexamination or cancellation of any of Hydro’s patents in suit.

(Settlement Agreement § 9.1.)

Peace was short-lived. On July 24, 2010, Hydro filed a motion for contempt [927]*927and discovery, alleging that Petter had violated several provisions of the permanent injunction. Hydro also alleged that Petter was selling a “pervious” wash pad that infringed Hydro’s patents. After a hearing, Magistrate Judge Brenneman issued an order, without a finding of contempt, directing Petter to take certain actions, including providing Hydro discovery pertaining to the wash pads Petter was then building and had sold or installed since the permanent injunction was entered. In a separate filing in August 2010, Hydro requested entry of a stipulated consent judgment doubling the amount Petter was required to pay under the Settlement Agreement after Petter defaulted. This Court denied Hydro’s request and subsequently awarded Petter attorneys’ fees as the prevailing party on the consent judgment issue, in accordance with § 10.6 of the Settlement Agreement. Then, on January 31, 2011, Hydro filed a second motion for contempt alleging that Petter’s redesigned “pervious” wash pads continue to infringe Hydro’s patents and violate the permanent injunction. On July 18, 2011, following a contempt hearing, the Court issued an Opinion and Order denying Hydro’s motion for contempt, including a finding that Petter’s “pervious” wash pads do not infringe the '591 and '749 Patents. Subsequently, on September 29, 2011, the Court issued a Memorandum Order granting Hydro’s motion for reconsideration and vacating that portion of its July 18, 2011, Opinion concluding that Petter’s redesigned wash pads do not infringe the '591 and '749 Patents.

Petter filed the instant case on March 2, 2011, in response to Hydro’s second motion for contempt, seeking declaratory judgments of noninfringement of the '591 and '749 Patents in Counts I and III, respectively, with regard to its “pervious” top wash pads having centrally-located troughs.1 Petter also alleged claims for declarations of invalidity of the '591 and '749 Patents in Counts II and IV. Finally, in Counts V and VI Petter alleged claims for declarations of noninfringement and invalidity of another Hydro Patent, U.S. Patent 7,540,295 (the “'295” Patent). After serving Hydro, Petter amended its complaint to add two additional claims, Counts VII and VIII, for declaratory judgments of noninfringement and invalidity of yet another Hydro patent, U.S. Patent 7,530,362 (the “'362” Patent).

Hydro has moved to dismiss Counts II and IV of the First Amended Complaint as barred by the parties’ Settlement Agreement in the 2007 Case. Hydro also moves to dismiss Counts V-VIII of the First Amended Complaint for lack of an actual case or controversy.

For the reasons set forth below, the Court will grant Hydro’s motion to dismiss Counts II and IV and will grant in part and deny in part Hydro’s motions to dismiss Counts V-VIII of the First Amended Complaint.

II. Discussion

A. Motion To Dismiss Or Alternatively For Summary Judgment On Counts II And IV Of The First Amended Complaint2

Hydro contends that Counts II and TV of the First Amended Complaint, which [928]*928seek declarations of invalidity with regard to the '591 and '749 Patents, respectively, should be dismissed because they are barred by § 9.1 of the Settlement Agreement. As an initial matter, the Court must decide whether to treat Hydro’s motion as a motion to dismiss under Rule 12(b)(6) or as a motion for summary judgment under Rule 56. In deciding a motion to dismiss, a court is limited to considering only the pleadings. See Rondigo, L.L. C. v. Twp. of Richmond, 641 F.3d 673, 682 (6th Cir.2011) (noting that “Rule 12(b)(6) scrutiny is limited to the pleadings”). Where matters outside the pleadings are presented in support of a motion and not excluded by the court, the court must treat the motion as a motion for summary judgment, giving all parties a reasonable opportunity to present all the material that is pertinent to the motion. Fed.R.Civ.P. 12(d); see also Himes v. United States, 645 F.3d 771

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Bluebook (online)
828 F. Supp. 2d 924, 2011 U.S. Dist. LEXIS 126908, 2011 WL 5276887, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petter-investments-inc-v-hydro-engineering-inc-miwd-2011.