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LLC v. Black & Decker (U.S.), Inc.

United States District Court, E.D. Virginia, Alexandria Division

October 18, 2016

SD3, LLC, and SAWSTOP, LLC, Plaintiffs,
v.
BLACK & DECKER (U.S.), INC., et al., Defendants.

          MEMORANDUM OPINION

          CLAUDE M. HILTON UNITED STATES DISTRICT JUDGE.

         THIS CASE is before the Court on Defendants' Motion for Summary Judgment.

         Stephen Gass and David Fanning founded SD3, LLC and SawStop, LLC in August 2000. Both are attorneys. Mr. Fanning serves as a general counsel for SawStop. Dr. Gass began contacting saw manufacturers about AIMT in 1999. SawStop demonstrated a prototype saw at a trade show in August 2000, and SawStop began discussions with B&D, RBTC and Ryobi thereafter. SawStop first visited B&D on October 11, 2000. According to SawStop, B&D's Bill Taylor told Dr. Gass and Mr. Fanning that B&D would consider partnering with other power tool manufacturers regarding SawStop's AIMT.

         At the October 11, 2000 meeting, Mr. Taylor allegedly expressed concern that SawStop would try to get its AIMT mandated by the Consumer Product Safety Commission and, SawStop claims, told SawStop that the industry would get together and squish them if they tried to go to CPSC. Also in October 2000 Ryobi's in-house counsel said that Ryobi should adopt the technology as fast as they can.

         On November 10, 2000, SawStop demonstrated its AIMT to members of the Power Tool Institute. Defendants are members of the Power Tool Institute. After the demonstration, Dr. Gass told the audience the terms on which SawStop would be willing to license its AIMT and attendees asked questions. According to Dr. Gass, after SawStop's presentation at the November 10, 2000 meeting ended, PTI lawyer Arthur Herold told the group that they could not collude but have to make their own decisions. And they all got up and went to the other room.

         SawStop claims that it has at all times closely monitored industry activity. Publicly available information in 2000 indicated that Power Tool Institute members' combined share in portable electric tools was over 79%. SawStop claimed in 2003 that PTI members, including Defendants, make nearly all the table saws sold in the United States.

         In February 2001, Dr. Gass and Mr. Fanning attended a presentation made by Daniel Lanier. Lanier was B&D's national coordinating counsel for product liability litigation. Mr. Fanning's notes recorded his belief that Mr. Lanier was implying that he expects SawStop to be an issue in products liability cases and that once one company adopts it, all will have to. Mr. Fanning testified that the takeaway from Lanier's presentation was that if none of the manufacturers adopt something like the SawStop technology, then, in these product liability cases, saw makers can argue that the SawStop technology, or something like it, is not viable and can use as evidence the fact that nobody's adopted it. Dr. Gass reached a similar conclusion. SawStop claims that limiting product liability exposure was the motivation for the alleged conspiracy.

         On July 25, 2001, Dr. Gass spoke with Adan Ayala, an in-house patent attorney at B&D. According to SawStop, Mr. Ayala reported that former defendant Emerson Electric Company ("Emerson"), then a saw maker and PTI member, had approached B&D about a joint venture. Two days later, Dr. Gass spoke with John Remmers of RBTC. Mr. Remmers allegedly told Dr. Gass that RBTC had talked with Delta and Emerson, but that they had concerns about antitrust issues concerning SawStop. In September 2001, Mr. Remmers allegedly reported to Dr. Gass that RBTC had tried to feel people out on getting an industry deal but there was not much interest in joint development. On November 29, 2001, Dr. Gass was present at a UL meeting where, he claims, the Defendants' representatives in the working group voiced skepticism about the efficacy of AIMT, and argued against the adoption of any standard requiring the implementation of AIMT. According to Dr. Gass, on January 3, 2002, B&D's Mr. Ayala gave what Dr. Gass interpreted as a warning that SawStop should cooperate more with existing manufacturers or risk having the technology rejected by industry.

         In 2001 and 2002, B&D, RBTC, Ryobi and Emerson all engaged in licensing discussions with SawStop. SawStop contends that, in August 2001, Todd Huston from B&D told SawStop that B&D had decided to move forward with SawStop and that it was inevitable that they would reach an agreement. In September 2001, Mr. Remmers told SawStop that RBTC would go forward with the concept but needed more time. As of January 2002, a license agreement between Ryobi and SawStop was seemingly reached, and Ryobi sent SawStop a signed license agreement on January 18, 2002. Contacts with RBTC about SawStop ended suddenly after an October 18, 2001 telephone call with Mr. Remmers. In or around January 2002, negotiations with Ryobi and Emerson collapsed. Ryobi did not correct a minor ambiguity in the signed agreement and decided not to further discuss licensing with SawStop. In the same timeframe, Emerson cut off all license negotiations with SawStop. B&D made a disingenuous license offer between April and June 2002. Initial negotiations with Bosch, Ryobi, B&D and Emerson had ended by June 2002.

         Gass eventually realized that his technology would never be available on table saws unless he made and sold table saws himself, so in the summer of 2002, the SawStop co-founders decided to sell table saws. In February and April 2003, Dr. Gass publicly stated that saw manufacturers had done everything they could to avoid implementing the technology. In 2004, Dr. Gass was interviewed for an article in his hometown newspaper, The Oregonian. The article reported Dr. Gass's claim that Defendants were colluding to suppress his technology. It linked this alleged collusion to a desire to avoid the product liability claims that could result because they failed to adopt a technology that could have prevented hand injuries. The article also expressed Dr. Gass's belief that PTI's joint venture was designed to squelch his technology or get around his patents.

         Dr. Gass testified that he probably read The Oregonian article when it was published. He described The Oregonian article's reference to his belief that saw makers were colluding as consistent with his sense of what was going on at the time. In 2005, Inc. Magazine reported Dr. Gass's recollection of Mr. Lanier's 2001 presentation was this: If we all stick together and don't license this product, the industry can argue that everybody rejected it so it obviously wasn't viable, thereby limiting any legal liability the industry might face as a result of the new technology. Product liability, the article continued, is the main reason, Gass believes, that the big tool makers are refusing to deal with him. Dr. Gass testified that he is sure that he read the Inc. Magazine article when it was published. SawStop distributed the Inc. Magazine article to third parties, describing it as probably the best article that outlines the history of SawStop, especially in relation to the Power Tool Industry.

         In 2006, SawStop inquired of antitrust counsel regarding a potential antitrust claim against members of the Power Tool Institute based on suspicions of collusion. SawStop's suspicions were based on, among other things, actions by PTI members concerning SawStop technology, responses to SawStop's demonstrations, and actions in opposition to active injury mitigation technology standards by UL or the Consumer Product Safety Commission. Mr. Fanning explained that over time, you develop a suspicion because one company and then another company and then another company expressed sentiments like "[w]e usually can squish you guys." In that same year, SawStop had at least seventeen communications with outside counsel seeking or providing "legal advice concerning potential antitrust claims."

         Dr. Gass acted as an unpaid expert witness in at least fifteen products liability cases brought against table saw manufacturers, including Osorio v. One World Tech., Inc., No. 06-10725-NMG (D. Mass.), Kent v. Robert Bosch Tool Corp., 06-CV-11555-RWZ (D. Mass.) and Eddery v. Black & Decker Corp., No. 1:08-cv-10849 (D. Mass.). Dr. Gass initially hoped that these product liability lawsuits would motivate saw manufacturers to change their products to incorporate AIMT. In at least two of the cases in which Dr. Gass acted as an expert witness (Kent and Eddery), Boies Schiller, acting as counsel for personal injury plaintiffs, alleged that the plaintiff's injury could have been mitigated if saw manufacturers had not "colluded" against awStop. Boies Schiller remained one of SawStop's antitrust counsel from no later than September 2006 through the date of its complaint.

         In 2008, Dr. Gass submitted a report in a products liability case where he stated that he believed other manufacturers agreed amongst themselves not to license the technology in an attempt to avoid having to redesign their saws. In September 2008, Dr. Gass testified that he believed members of PTI colluded to drive SawStop out of business or to avoid licensing SawStop. On October 7, 2008, the plaintiff in Kent submitted a publicly-available pretrial memorandum to a federal district court in Massachusetts. Boies Schiller served as counsel for the plaintiff in Kent. In the pretrial memorandum's Statement of the Evidence, the plaintiff in Kent stated that the evidence demonstrated that ...


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