Two companies in Alberta, Calgary, are appealing a court order to halt production and sales of their cross-linked polyethylene (PEX) pipe after a judge ruled that it infringes on a patent of Uponor AB related to the manufacturing process.
PexCor Manufacturing Co. Inc., which produces PEX pipe, and Heatlink Group Inc., which supplies it for potable water and hydronic radiant systems, also will have to pay yet-to-be-determined damages to Uponor AB.
The websites of both businesses were down as of March 23 with Heatlink posting a notice that it is “under maintenance” and will be back shortly. PexCor's digital presence was limited to only an address and phone number.
A judge with the Federal Court of Canada sided with Uponor March 16 after hearing about 10 days of testimony in the 5-year-old case. Judge Michael Manson ruled in favor of Uponor on five of its 30 claims against the two businesses, finding the handful of claims involving a 2002 Canadian patent about the “method for heating and/or cross linking of polymers and apparatus” to be valid and infringed.
The patent sets forth a process and an apparatus to make products from cross-linkable polymers at high speeds with a good finish using infrared (IR) radiation.
“We're pleased that the Federal Court of Canada deemed these claims to be valid and appreciate the considerable amount of time and effort the court expended to arrive at its ruling,” Uponor North America President Bill Gray said in a news release.
Uponor officials declined further comment.
Uponor is a subsidiary of Vantaa, Finland-based Uponor Corp. and an affiliate of Minnesota-based Uponor North America, which produces and sells products for PEX plumbing, radiant heating and cooling, hydronic piping, pre-insulated pipe and fire sprinkler systems. With sales of $265.2 million, the North American operation ranks No. 16 among pipe, profile and tubing extruders, according to Plastics News' latest rankings.
Two days after the ruling, Heatlink and PexCor filed an appeal, asking the Canadian appellate court to set aside part of the judgment and declare that the five claims pertaining to “vertical orientation” have not been infringed.
The patent describes that the IR radiation zones are oriented vertically to reduce deformation due to gravitational forces. However, Heatlink and PexCor point to expert testimony that a “skilled” person would know about the advantages that vertical orientation offers because it is “a straightforward, efficient and logical design choice.” In their appeal, the two businesses contend the trial judge erred when he said the vertical orientation claims were “not obvious.”
Heatlink and PexCor also contend that the trial judge erred when he granted an injunction prohibiting them from manufacturing, using and/or selling “the apparatus for heating polymer material” that was found to infringe on the patent as well as the PEX pipe made from it until the patent expires.
A third defendant, Crosslink Finland OY, supplied and serviced the IR ovens used by PexCor. Uponor alleged induced infringement of its patent by Crosslink — claiming that but-for Crosslink's activities, PexCor would not have infringed its patent. However, the judge noted the ovens were sold “freight on board” in Finland and he found no direct patent infringement in Canada.
In addition, the judge says in his opinion, “…I do not find the evidence is sufficient to prove that PexCor and Heatlink's direct infringement would not have taken place without Crosslink's influence. Partial responsibility is not enough.”
Uponor filed the lawsuit in March 2011. Two months prior, Uponor had warned PexCor it would enforce its patent rights “in an aggressive and fulsome manner” through litigation if PexCor did not immediately cease sales of its polymer pipe products, provide an accounting of the sales of those products, and deliver its pipe inventory to Uponor.
Pexcor and Heatlink denied any wrong doing and in their statement of defense said they “use distinctive technology separate from the technology contained in the plaintiff's patents to heat polymer materials.”
The case went to trial on Jan. 11 in Calgary with 10 days of witness testimony and exhibits admitted. The judge came back March 16 with his decision on the five infringed patent claims, which he said entitles Uponor to monetary damages but not “an accounting of profits” from Heatlink and PexCor. Uponor also will receive interest on the award of damages — not compounded — for “each year since the infringing activity began, defined as the date of Pexcor's first commercially successful manufacture of PEX pipe.”
PexCor started commercially manufacturing PEX pipe in 2003, according to the judge's 93-page ruling, which notes at the end that none of Uponor's North American facilities use the patent at issue “nor do they plan to.”
“This begs the question whether (the patent) is an improvement…such that it has resulted in any real commercial success,” the judge wrote. “The evidence demonstrates that (the patented) process and apparatus were not commercialized until well over 10 years following its development, and that other than limited use in two of Uponor's PEX manufacturing plants, in Sweden and in Poland, the Uponor Group of companies does not use (the patented) technology.
“Despite my finding that a few claims of (the patent) remain valid and are infringed, if anything the evidence shows that (the patent) was really only a slight improvement on the existing technology for polymer processing.”
Still, the judge said he can't dismiss any entitlement to damages for Uponor, which he will address at some point in the future. The judge gave all parties two weeks to provide written submission relevant to a monetary award.
In the meantime, similar litigation involving the parties has been on hold in the United States.
“At the very least, a decision in the Canadian matter likely will affect the parties' settlement positions. Allowing that case to take its course is far preferable to embarking on complex, time-consuming, and costly litigation here,” U.S. District Judge Rosemary Collyer of the District of Columbia said in a February 2013 opinion.