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.

CUNO, INC. v. HAYWARD INDUSTRIAL PRODUCTS

May 11, 2005.

CUNO, INC. and MOSHE GERSHENSON, Plaintiffs,
v.
HAYWARD INDUSTRIAL PRODUCTS, INC., Defendant.



The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge, District

OPINION AND ORDER

Plaintiffs Moshe Gershenson ("Gershenson") and Cuno Incorporated ("Cuno") sues Hayward Industrial Products, Inc. ("Hayward") for infringement of two patents allegedly owned by Gershenson and licensed to Cuno. Hayward moves to dismiss on the basis of a forum selection clause pursuant to Fed.R.Civ.P. 12(b) (3) or alternatively, to transfer the action to the United States District Court for the District of New Jersey pursuant to 28 U.S.C. § 1404(a) (2000).*fn1 For the reasons set forth below, the motion to transfer is granted.

  I.

  The following relevant facts are either undisputed or presented in the light most favorable to plaintiffs. From 1969 to 1977, Gershenson worked for GAF Corporation ("GAF") as a mechanical engineer. (Declaration of Moshe Gershenson ("Gershenson Decl.") ¶ 2) In that capacity, Gershenson was responsible for the design and development of, among other things, filters and filter products. (Id. ¶ 3) On January 31, 1997, GAF terminated Gershenson's employment. (Id. ¶ 5) Gershenson continued working on filter designs by himself and eventually developed a novel filter element assembly for use in liquid filtration systems. (Id. ¶ 6; Declaration of Robert Davis ("Davis Decl.") ¶ 4)

  Gershenson then approached Hayward's President, Robert Davis, about the possibility of performing consulting services for Hayward. (Id. ¶ 9) Hayward is a New Jersey corporation that manufactures and sells filtration devices in the United States. (Compl. ¶ 4) Hayward was eager to hire Gershenson as an employee, but Gershenson preferred to begin as a consultant. (Gershenson Decl. ¶ 9)

  Hayward's Director of Engineering, Walter Booth, asked Gershenson to sign a non-disclosure agreement in connection with his consulting work for the company. (Id. ¶ 10) In reviewing the agreement, Gershenson was concerned about language stating that he would be an employee of, rather than a consultant, to Hayward. (Id. ¶ 11) He thus wrote the words "Moshe Gershenson, consultant" in a blank field intended to designate his workplace. (Id.) Gershenson was concerned also about language in the agreement assigning his intellectual property rights to Hayward. (Id.) He claims that in particular, he wanted to protect his rights in the filter element assembly he had conceived before he tendered his consulting services. (Id.)

  On the other hand, Davis was concerned that the filter design "had been developed by [Gershenson] during the course of his employment with GAF ? and that GAF ? may have the rights to the invention." (Declaration of Robert Davis in Further Supp. of Hayward's Mot. to Dismiss ("Second Davis Decl.") ¶ 3) Gershenson replied that although he had conceived the design while he was employed at GAF, he developed it "on his own time." (Id. ¶ 4) "Having no reason to question the veracity of Mr. Gershenson's statement," Davis signed the agreement. (Id. ¶ 5)

  The executed copy of the non-disclosure agreement, dated February 10, 1997, provided, in relevant part:
3. [Gershenson] hereby agrees to assign to the Corporation the entire right, title and interest in and to any and all inventions, trade secrets, improvements, plans and specifications: (i) which he/she alone, or in conjunction with others, may make, conceive or develop; and (ii) which relate to or derive from any subject matter or problem with respect to which the undersigned shall have become informed by reason of his/her relations with the Corporation or any Affiliate, or to any product or process involved in the business of the Corporation or any Affiliate.
. . . 11. Any actions, claims or lawsuits (whether in law or equity) arising out of or relating to this contract, shall be brought only in courts located in the State of New Jersey and shall be governed and enforced by the laws of the State of New Jersey. New Jersey shall be the sole and exclusive forum for the resolution of all disputes arising under or relating to this Agreement. The employee hereby consents to the jurisdiction of the State and/or Federal District Courts of New Jersey.
(2/10/97 Non-disclosure Agreement, Gershenson Decl. Ex. 1 (hereinafter, the "Non-disclosure Agreement")) (emphasis in original) A separate rider, signed by Hayward and Gershenson and also dated February 10, 1997, provided as follows:
Paragraph 3 of the Non Disclosure Agreement is modified to add the following language:
However it is understood and agreed that, as to any ideas for inventions, trade secrets, improvements, plans and specifications which have been entirely conceived (though not yet reduced to prototype) prior to his employment with Hayward, [Gershenson] shall retain the right to any such inventions, trade secrets, improvements, plans and specifications.
(Rider to Non-disclosure Agreement ("Rider"), Gershenson Decl. Ex. 1)

  Gershenson worked as a consultant to Hayward until January 1, 1998, when he became a full-time employee of the company. (Gershenson Decl. ¶ 13)

  On September 2, 1997, while working as a consultant to Hayward and after signing the Non-disclosure Agreement, Gershenson filed a provisional patent application for the filter design. (Id. ¶ 14; Davis Decl. ¶ 7; Ex. A to Declaration of Sanjiv Chokshi ("Chokshi Decl.")) After filing the application, Gershenson discussed with Davis the possibility that Hayward would manufacture and sell the filter element assembly. (Gershenson Decl. ¶ 14) However, before disclosing the details of the design to Hayward, Gershenson asked the company to sign a letter agreement. (Id. ¶ 15) Davis signed the agreement and dated it September 5, 1997 (9/5/97 Letter Agreement, Gershenson Decl. Ex. 2 (hereinafter, the "September 1997 Agreement")). The September 1997 Agreement stated that Gershenson

 
would like to disclose the features and advantages of my invention to [Hayward] solely for [its] evaluation and consideration of a possible business arrangement between us that would provide [Hayward] the opportunity and rights to make and sell this filter element assembly.
(Id.) It further provided that, "as a condition of [Gershenson's] disclosing the confidential details of [his] invention to [Hayward], and in consideration of the opportunity for [Hayward] to make such evaluation, . . . the Information shall not be used by [Hayward] except for the purpose described above." (Id.) When Davis signed the September 1997 Letter Agreement, he stated that Hayward would evaluate the new filter design and inform Gershenson if the company wanted to acquire the right to market it. (Gershenson Decl. ¶ 18) In October 1999, Hayward purchased all outstanding stock of GAF's subsidiaries involved in the business of "certain liquid filtration systems." (Second Davis Decl. ¶ 2)
  On February 29, 2000, the United States Patent and Trademark Office ("USPTO") awarded Gershenson Patent Number 6,030,531, entitled Filter Element Assembly (the "`531 Patent"). (Compl. ¶ 8; Gershenson Decl. ¶ 18) The `531 Patent evolved from the provisional patent application that Gershenson had filed on September 2, 1997. (Chokshi Decl. ¶ 2; U.S. Patent Number 6,030,531, Compl. Ex. A at 1) Gershenson gave Davis a copy of the `531 Patent and asked him whether Hayward had any interest in the new filter design. (Gershenson Decl. ¶ 19) Almost one year later, Davis sent Gershenson a letter agreement, dated January 29, 2001, which made reference to an earlier proposal by Hayward to "continue the financial support of completing the current in-process work for the development of your filter bag design U.S. Patent Number 6,030,531." (1/29/01 Letter Agreement, Gershenson Decl. Ex. 3 (hereinafter "January 2001 Agreement") at 1; Gershenson Decl. ¶ 20) The January 2001 Agreement contained various details about Hayward's efforts to help develop Gershenson's filter element assembly. (January 2001 Agreement at 1-2) It further stated:
On or about April 1, 2001, Hayward ? will have reached a conclusion of considering the pursuit of fully marketing this product as a Hayward ? product. Should Hayward ? decide to market this product as a Hayward product, a licensing agreement allowing Hayward to produce and sell this product will be submitted to you for your approval.
(Id.) Hayward and Gershenson never entered into "any agreement under which Hayward would be allowed to produce and sell [the] filter design." (Gershenson Decl. ¶ 22)

  On May 29, 2001, the USPTO awarded Gershenson Patent Number 6,238,560, entitled "Collapsible Filter Assembly" (the "`560 Patent"). The `560 Patent, like the `531 Patent, evolved from the provisional patent application that Gershenson filed on September 2, 1997. (Compl. ¶¶ 8, 9; Chokshi Decl. ¶ 2; U.S. Patent Number 6,238,560, Compl. Ex. B, at 1)

  Plaintiffs claim that Cuno, a Connecticut corporation that designs, manufactures, and markets filtration products, is the exclusive licensee of the disputed patents. (Compl. ¶¶ 2, 10) Gershenson believes "that Hayward has a manufacturing facility for ...


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.