ZUP, LLC v. Nash Manufacturing, Inc.

229 F. Supp. 3d 430, 2017 U.S. Dist. LEXIS 5477, 2017 WL 150248
CourtDistrict Court, E.D. Virginia
DecidedJanuary 13, 2017
DocketCivil Action No. 3:16-CV-125-HEH
StatusPublished
Cited by3 cases

This text of 229 F. Supp. 3d 430 (ZUP, LLC v. Nash Manufacturing, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ZUP, LLC v. Nash Manufacturing, Inc., 229 F. Supp. 3d 430, 2017 U.S. Dist. LEXIS 5477, 2017 WL 150248 (E.D. Va. 2017).

Opinion

MEMORANDUM OPINION

(Granting Defendant’s Motion for Summary Judgment)

Henry E. Hudson, United States District Judge

Plaintiff ZUP, LLC (“ZUP” or “Plaintiff’) brings suit against Defendant Nash Manufacturing, Inc. (“Nash” or “Defendant”) after a proposed business deal for a joint manufacturing venture turned sour. Both ZUP and Nash manufacture water recreational devices, with the former being a relative newcomer to the industry and the latter having worked in the area for over fifty years.

ZUP entered the market in 2012 with the introduction of its “ZUP Board,” patented as U.S. Patent No. 8,292,681 (the “ ’681 Patent”). A year later, ZUP and Nash began discussions about a potential partnership, which eventually dissipated. Soon thereafter, Nash brought its “Versa Board” to market.

In response to Nash’s new product, ZUP filed the present suit alleging four counts: contributory infringement of the ’681 Patent (Count I); inducement of infringement of the ’681 Patent (Count II); trade secret misappropriation (Count III); and breach of contract (Count IV). Nash brought two counterclaims against ZUP, seeking declaratory relief regarding non-infringement (Counterclaim I) and declaratory relief regarding invalidity of the apparatus and method claims—Claims 1 and 9 respectively—of the ’681 Patent (Counterclaim II).

This matter is currently before the Court on Nash’s Motion for Summary Judgment, filed on September 14, 2016. (ECF No. 35.) Both parties filed memoran-da supporting their respective positions. Oral argument followed on November 16, 2016.

For the reasons discussed herein, the Court will grant the Motion as to Defendant’s Counterclaim II—rendering Counts I and II of Plaintiffs Complaint and Defendant’s Counterclaim I moot—and as to Counts III and IV of Plaintiffs Complaint. Consequently, this case will be dismissed with prejudice.

I. BACKGROUND

As required, the Court resolves all genuine disputes of material fact in favor of the [434]*434non-moving party and disregards those factual assertions that are immaterial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Applying this standard, the Court concludes that the following narrative represents the facts for purposes of resolving the Motion for Summary Judgment.

In or around 2008, Glen Duff, ZUP’s Chief Innovative Officer, and his wife bought a boat and joined a local water skiing club. (Compl. ¶ 12; ECF No. 1.) Through their volunteer activities with their church, the Duffs took groups of kids on their boat to teach them how to water ski and wakeboard. (Id. ¶ 13.) During these outings, Glen Duff noticed how difficult it was for many of the children to fully engage the water recreational devices. (Id.) As a result, he decided to develop a new product that would “allow any kind of rider, regardless of athleticism or amount of upper body strength, to get up and achieve a full standing and riding position.” (Id.) Over the next four years, Duff and others tested various board designs until they developed a working prototype of the ZUP Board. (Id. ¶ 15.) This new board allows riders “to transfer easily from a prone position, to a kneeling position, to a full upright standing position,” thereby permitting “the widest spectrum of riders the most opportunity of experience.” (Id. ¶¶ 14,16.)

The ZUP Board has a top surface and a bottom surface, two side-by-side foot bindings located on the middle section of the board, two side-by-side handles on the front section of the board, and a retractable tow hook attached to the front section of the board. See generally U.S. Patent No. 8,292,681. Riders are instructed to grasp the handles and lie flat on the board in a prone position. The retractable tow hook is attached to a tow rope, which is in turn pulled by a boat. As the boat picks up speed, riders pull themselves up on the board and assume a kneeling position. Then riders crouch on the board, still grasping the handles for stability, and eventually place both feet in the side-by-side foot bindings displaced on the middle section of the board. Riders finally release their grip from the handles and then grasp the tow rope bar and disengage it from the retractable tow hook on the board as they assume a full upright standing position.

While developing a working prototype of the new device, Duff arduously fought to secure a patent for his new design, which he finally obtained on October 23, 2012. Id. The ’681 Patent includes twelve (12) total Claims, with Claim 1 covering the apparatus and Claim 9 covering the method for using the ZUP Board. Id. at Claims 1, 9.

In September 2012, one month prior to the issuance of the ’681 Patent, ZUP formally introduced its new product at the Surf Expo, a trade show for the water sports industry. (Compl. ¶ 17.) At some point during the spring of 2013, Nash became aware that ZUP had entered the industry and saw the ZUP Board for the first time. (App. 255 ¶ 4.)1

Nash has been in the water recreational device industry for over fifty years and “has designed and manufactured ... water skis, knee boards, wake boards and other similar devices, and has sold these products to a variety of sporting goods retailers, including Bass Pro Shop, Academy Sporting Goods, Dick’s Sporting Goods, Big Five Sporting Goods and others.” (Mem. in Supp. of Mot. for Summ. J. 2.) [435]*435Nash’s president, Keith Parten, is the named inventor for several patents, including an aquatic recreational system with a retractable tow hook (U.S. Patent No. 7,530,872 B2), a retractable tow hook (U.S. Patent No. 7,537,502), a water recreation board with a pass-through tow rope (U.S. Patent No. 6,042,439), a towing harness for water recreational boards (U.S. Patent No. 6,306,000), a design of a wake ski (U.S. Design Patent No. D557,635), a design of a towed inflatable device (U.S. Design Patent No. D650,462), and a method for manufacturing a skate board (U.S. Patent No. 921,513).

An initial round of conversations between the two parties concerning a potential manufacturing deal took place in the fall of 2013. (See App. 271.) Before engaging in serious discussions, it appears that ZUP requested that the parties enter into a confidentiality agreement. (See id.) Par-ten questioned the necessity of such a contract on September 18, 2013, noting that “[w]e just need a sample so we can quote you a price to build your item. I assume we could just order one .... ” (Id. (ellipses in original).) Without signing the agreement, Nash obtained a sample of the board. (See id. at 272.) On December 10, 2013, Parten determined that Nash would “[njever do this item” and sent the board back to ZUP. (Id.)

Nevertheless, a little more than one month later, Parten reached out to Duff on January 31, 2014, “to talk ... regarding production and distribution of [the] ZUP board.” (Id. at 451.) Before meeting with Nash to discuss the possibility of entering into a manufacturing and distribution partnership or potential sale of the company, ZUP again required Nash to execute a confidentiality agreement, which it did on February 5, 2014. (Id.

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Related

Zup, LLC v. Nash Manufacturing, Inc.
896 F.3d 1365 (Federal Circuit, 2018)

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229 F. Supp. 3d 430, 2017 U.S. Dist. LEXIS 5477, 2017 WL 150248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zup-llc-v-nash-manufacturing-inc-vaed-2017.