Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

PERGO, INC. v. ALLOC

May 3, 2003

PERGO, INC., AND PERGO (EUROPE) AB, PLAINTIFFS AGAINST ALLOC, INC., ARMSTRONG WORLD INDUSTRIES; BERRY FINANCE NV; SHAW INDUSTRIES, INC.; AND WITEX USA, INC. DEFENDANTS


The opinion of the court was delivered by: John G. Koeltl, United States District Judge

OPINION AND ORDER

These are two actions brought by Pergo, Inc. and Pergo (Europe) AB (collectively "Pergo" or "the plaintiffs") alleging the infringement of two patents for mechanically-locking laminate flooring panels and the methods of installing such panels, U.S. Pat. No. 6,397,547, B1 (the "`547 patent") and U.S. Pat. No. 6,421,970 (the "`970 patent").*fn1 Laminate flooring panels are flooring panels or tiles that can be assembled without the use of glue. The plaintiffs brought actions alleging infringement of both the `547 patent ("the 4840 action") and the `970 patent (the "6408 action") against Alloc, Inc, ("Alloc"), Armstrong World Industries ("Armstrong"), and Berry Finance NV ("Berry Finance") (collectively "the Berry defendants"), as well as against Shaw Industries, Inc. ("Shaw"), and Witex USA, Inc.*fn2 ("Witex"). After the two cases were consolidated for pre-trial purposes, the defendants brought a series of motions.

The Berry defendants brought a motion pursuant to Fed.R.Civ.P. 20(a) to sever the claims brought against them from the claims of the remaining defendants, and to transfer the claims against them to the Eastern District of Wisconsin. In this motion, Alloc also moved, in the alternative, to dismiss or stay the action against it on the grounds that it had first filed an action concerning the same factual issues in the Eastern District of Wisconsin.

Shaw brought a similar motion, moving pursuant to Fed.R.Civ.P. 20(a) to sever the claims brought against Shaw and Witex from the claims brought against the Berry defendants, and to transfer the case against Shaw and Witex to the Northern District of Georgia.*fn3

The Berry defendants also moved to dismiss the action alleging infringement of the `970 patent for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1), arguing that Pergo lacks standing to sue for infringement of the `970 patent because it is only a licensee of the `970 patent. Alternatively, the Berry defendants have moved to dismiss pursuant to Fed.R. Civ. 12(b)(7) for failure to join an indispensable party, Perstrop Flooring AB, the actual owner of the `970 patent.

Berry Finance brought a separate motion to dismiss both infringement actions, pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction, arguing that it lacks sufficient contacts with this forum so as to permit the exercise of jurisdiction under either the New York long-arm statute or the due process clause.

Finally, Armstrong brought a separate motion to dismiss, or in the alternative a motion to stay the action, on the basis of the consumer suit exception, arguing that Armstrong is solely a customer and buyer of the laminate flooring panels at issue, who is indemnified for any alleged infringement by Berry Finance and its subsidiaries, who are Armstrong's suppliers of panels. Consequently, Armstrong argues that because all of the relevant litigation against Berry would effectively resolve the claims against Armstrong, both infringement actions against Armstrong should be either dismissed or stayed.

Because the motions to sever and transfer brought by the Berry defendants and by Shaw and Witex raise threshold issues that could make decisions on the remaining motions unnecessary or inappropriate for this Court, the Court will resolve those motions first and then address the other motions.

I.

A.

In order to resolve the motions to sever and transfer, it is necessary to review various facts concerning the parties and the claims of patent infringement.

On June 4, 2002, the U.S. Patent and Trademark Office issued the `547 patent, directed to mechanically-locking laminate flooring panels and the methods of installing such panels. (See Exh. A attached to Am. Compl. in 02 Civ. 4840 ("4840 Am. Compl.").) On July 23, 2003, the U.S. Patent and Trademark Office issued the `970 patent, which is also directed to mechanically-locking laminate flooring panels. (See Exh. A attached to Compl. in 02 Civ. 6408 ("64@8 Compl.").)

Pergo (Europe) AB is alleged to be the sole owner and assignee of both the `547 and `970 patents. (4840 Am. Compl. ¶ 11; 6408 Compl. ¶ 11.) Pergo (Europe) AB is a Swedish Corporation with its principal place of business in Trelleborg, Sweden. (4840 Am. Compl. ¶ 2; 6408 Am. Compl. ¶ 2.) Both patents were allegedly licensed exclusively to Pergo, Inc., a Delaware Corporation with its principal place of business in Raleigh, North Carolina. (4840 Am. Compl. ¶ 1, 12; 6408 Compl. ¶ 1, 12.)

Both the 4840 Amended Complaint and the 6408 Complaint were filed in this Court on June 24, 2002 and August 13, 2002, respectively, and allege that the defendants, Alloc, Armstrong, Berry Finance, Shaw and Witex, infringed the `547 and `970 patents by "making, using offering for sale, and/or selling within the United States, and/or importing into the United States including within this District, flooring panels." (4840 Compl. ¶ 16-21, 24-27; 6408 Compl. ¶ 16-21, 24-27.)

Alloc is a Delaware corporation headquartered in Racine, Wisconsin that manufactures and sells laminate flooring products. (Decl. of Claes Wennerth dated Oct. 16, 2002 ("Wennerth Decl.") ¶ 1, 3.) Alloc is an indirect subsidiary of Berry Finance N.V. ("Berry Finance"), a holding company headquartered in Belgium that neither manufactures or sells any products. (Decl. of Luc De Clerk dated Dec. 21, 2002 ("Clerk Decl.") ¶ 2, 3; Wennerth Decl. ¶ 2.) Alloc's manufacturing facility is located at Alloc's headquarters in Racine, Wisconsin, and any documents and records relating to these activities are located there. (Wennerth Decl. ¶ 4.) Alloc's flooring products are sold throughout the United States, although all sales and marketing activities are run out of its headquarters, and all documents relating to those sales and marketing are located in Racine, Wisconsin. (Wennerth Decl. ¶ 5.) Similarly, testing of its products occurs in Racine and any documents related to those testing and evaluation activities are located in Racine. (Wennerth Decl. ¶ 6.) Alloc has no office or employees in New York. (Wennerth Decl. ¶ 8.)

One of Alloc's major customers is Armstrong World Industries ("Armstrong") a Pennsylvania corporation headquartered in Lancaster, Pennsylvania. (Wennerth Decl. ¶ 9; Aff. of Kevin M. Biedermann ("Biedermann Aff.") sworn to Jan. 13, 2003 ¶ 2.) Pursuant to a Supply and Distribution Agreement dated Oct. 31, 2000, Armstrong acts as a distributor of Alloc's mechanical locking-flooring products, including products under the name Swiftlock and ArmaLock. (Clerk Decl. ¶ 3; Wennerth Decl. ¶ 9; Biedermann Aff. ¶ 5.) The Supply and Distribution Agreement provides for Armstrong to purchase these products from Berry Floor NV and Berry Wood SA, both subsidiaries of Berry Finance, and from Alloc, for sale and distribution throughout the United States. (Biedermann Aff. ¶ 5, 7; Clerk Decl. ¶ 3-4.) Neither Berry Floor NV or Berry Wood SA have an office, employee or agent in New York and are not licensed to do business in New York. (Clerk Decl. ¶ 6.) The products that are made by Alloc and Berry Finance's subsidiaries for sale to Armstrong are manufactured abroad or in Wisconsin. (Wennerth Decl. ¶ 11; Clerk Decl. ¶ 6; Biedermann Aff. ¶ 6.) Armstrong sells these products it buys pursuant to the Supply and Distribution Agreement throughout the United States. (Biedermann Aff. ¶ 7.)

Shaw and Witex are competitors with the Berry defendants in the market for glueless mechanical-locking floor products and are not affiliated with each other. (Clerk Decl. ¶ 12; Biedermann Aff. ¶ 8; Wilkerson Decl. ¶ 9.)

On June 24, 2002 the plaintiffs filed their complaint in the 4840 action, alleging infringement of the `547 patent by Shaw, Witex and Armstrong. On July 29, 2002, Alloc and Berry Finance filed a declaratory judgment action in the Eastern District of Wisconsin against Pergo, seeking a declaration that the mechanically locking products that it manufactures and sells to Armstrong, and which were the subject of the 4840 action brought in New York against Armstrong, Witex and Shaw, did not infringe the `547 patent held by Pergo and that the `547 patent was invalid. (Declaratory J. Compl. ΒΆ 8, 9, 11-14.) Alloc and Berry Finance brought the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.