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Postal v. Pteris Global USA Inc.

United States District Court, W.D. North Carolina, Charlotte Division

November 20, 2019

SIEMENS POSTAL, PARCEL AND AIRPORT LOGISTICS LLC, Plaintiff,
v.
Pteris Global USA Inc. and Pteris Global Limited, Defendants.

          ORDER

          MAX O. COGBURN JR. UNITED STATES DISTRICT JUDGE

         THIS MATTER is before the Court on Siemens' Motion for Preliminary Injunction (Doc. No. 12) against Pteris Global (USA), Inc., and Pteris Global Limited (collectively, “Pteris”). After limited discovery, several rounds of briefing, and a hearing, this matter is ripe for review. For the following reasons, Siemens' motion is denied.

         I. FACTUAL BACKGROUND

         Siemens and Pteris compete to install, maintain, and operate baggage handling systems in the United States. They also sell components for those systems. This case is about the right to sell one specific component, a high-speed diverter (“HSD”), which efficiently processes customer baggage. Siemens alleges that Pteris is infringing upon its HSD patent, U.S. Reissue Patent No. RE41, 360 (“the ‘360 Patent”), and has thus moved for a preliminary injunction. (Doc. No. 12).

         Siemens patented its HSD in 2001 and began selling it shortly thereafter. (Doc. Nos. 13-1 ¶ 4). According to Chris Maness, a Siemens Consulting Product Engineer, the HSD quickly became “industry standard, ” as it “processed baggage and cargo much more quickly and with much less damage than other sorters.” (Id. ¶¶ 4, 7). Despite this success, the HSD is not a commodity; rather, its market “is limited to projects where airports or airlines refresh or reinstall baggage handling systems.” (Doc. No. 13-2 ¶ 11). On average, there are only “[twenty] projects per year seeking bids for new baggage handling systems.” (Id.). To increase sales, Siemens sells HSDs to competitors, who then incorporate them into their baggage handling systems. (Doc. No. 13-1 ¶ 9).

         Where Siemens successfully contracts to sell a baggage handling system to an airport, it typically installs the system and trains airline employees on how to perform general maintenance. (Id. ¶ 10). Maness averred that this process allows Siemens to “develop[] strong relationships with airline and airport representatives, ” which in turn “generate[s] future business.” (Id. ¶11).

         By 2005, Pteris developed its own HSD, which was first sold outside of the United States. (Doc. No. 30-5 ¶ 2). In February 2005, Siemens Dubai purchased a Pteris HSD to install at the Dubai International Airport. (Doc. No. 43-3 at 10). Pteris began domestically installing its HSD in 2010. (Doc. No. 30-5 ¶ 3). Since then, it has installed its HSD throughout the United States- including at the Charlotte Douglas International Airport. (Id. ¶ 6).

         In January 2015, Siemens contracted to maintenance the Charlotte Airport's baggage handling system, which was installed by Pteris and which included the Pteris HSD. (Doc. No. 35-1 ¶ 6). To prepare Siemens for this responsibility, Pteris trained the Siemens staff about its baggage handling system. (Id.). Even before the training, Siemens employees had access to the Charlotte Airport baggage handling system, which included the Pteris HSD. (Id.).

         Although Siemens has been responsible for maintaining the Charlotte Airport baggage handling system since 2015, Siemens declared “until approximately May 2017, [it] was unware of any sales or installations of the [Pteris] HSD within the United States.” (Doc. No. 43-3 at 13). Siemens admitted it was generally aware that Siemens Dubai purchased a Pteris HSD in 2005, but asserted it was not aware of any domestic sales before 2017. (Doc. No. 43-4 at 9). Siemens likewise acknowledged that its employees were trained to operate the Pteris system in 2015, but maintained those employees were contract laborers “that do not generally have knowledge about Siemens intellectual property.” (Id. at 15).

         After Siemens realized that Pteris sold its HSDs domestically, it purportedly “worked to diligently, but thoroughly, investigate the accused HSD.” (Id. at 10). In July 2018, Siemens sent a letter demanding that Pteris cease and desist “marketing, selling, providing related servicing, and performing any other activities to violate [Siemens'] rights under [the] ‘360 Patent.” (Doc. No. 38-3). Siemens allegedly “attempt[ed] to resolve the matter without resorting to litigation, ” but finally filed suit after Pteris engaged in “months of stonewalling.” (Doc. No. 35 at 8). After the lawsuit was filed, the parties held a settlement conference, but those negotiations failed. (Id.). Siemens then filed this motion for a preliminary injunction. (Id.).

         II. DISCUSSION

         A preliminary injunction is an “extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief” and may never be awarded “as of right.” Winter v. Nat. Res. Def. Council, 555 U.S. 7, 22-24 (2008). To obtain a preliminary injunction, a plaintiff “must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that the injunction is in the public interest.” Id. at 20; see eBay v. MercExchange, 547 U.S. 388, 391 (2006). Where a plaintiff fails to establish one of these four elements, the Court may deny injunctive relief without considering the remaining factors. See Jack Guttman v. Kopykake Enter., 302 F.3d 1352, 1356 (Fed. Cir. 2002).

         For purposes of this motion, Siemens contends that Pteris directly and literally infringed on Claim 12 of the ‘360 Patent. (Doc. Nos. 13 at 6-10, 38 ¶ 36). As such, Siemens moves for the Court to preliminarily enjoin Pteris and its agents “from infringing, contributing to, and/or inducing infringement of ‘360 Patent, including but not limited to a prohibition of all making, using, selling, or importing of the Pteris HSD product or any similar product” until August 11, 2020. (Doc. No. 12 at 3). As discussed below, Siemens has failed to show it is likely to succeed at proving direct, literal infringement and has failed to demonstrate it will suffer irreparable harm in the absence of a preliminary injunction. Accordingly, the Court denies Siemens' motion.

         A. ...


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