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Carpenter Technology Corp. v. Allegheny Technologies

July 15, 2009

CARPENTER TECHNOLOGY CORP., PLAINTIFF
v.
ALLEGHENY TECHNOLOGIES, INC., ET AL., DEFENDANTS



The opinion of the court was delivered by: Stengel, J.

MEMORANDUM

This is a patent infringement case. Carpenter Technology Corporation (Carpenter) and Allegheny Technologies Incorporated (ATI) are competitors in the metallurgy industry. Carpenter brought the current suit to challenge certain patents held by ATI and its subsidiary, ATI Properties,*fn1 on the production of large-diameter ingots of nickel base superalloys. The complaint also includes an antitrust claim that ATI is monopolizing, attempting to monopolize, or has conspired to monopolize the market for these nickel base alloy ingots and a Lanham Act*fn2 claim that ATI engaged in unfair competition by advertising its fraudulent patents to Carpenter's existing and potential customers. ATI moved to dismiss the latter claims. (See Mot. to Dismiss (Document #33).) For the following reasons, I will grant the motion in part and deny it in part.

I. Background

Carpenter is "a global manufacturer and distributor of specialty alloys, powder alloys, titanium, and other materials that serve the automotive, aerospace, energy, industrial, medical, defense, and consumer products industries." (Am. Compl. ¶ 4 (Document #30).) It makes and sells ingots of nickel base 718 Alloy at its mill in Reading, Pennsylvania. (Id.) Before March 8, 2001, it had made substantial preparations to produce a nickel base 718 Alloy ingot with a diameter of at least thirty inches. (Id. ¶ 7.)

ATI is the holder of United States Patent Numbers 6,416,564 (the '564 Patent) and 6,719,858 (the '858 Patent). (Id. ¶¶ 8--9.) The '564 Patent was issued on July 9, 2002, and is entitled "Method for Producing Large Diameter Ingots of Nickel Base Alloys." (Id. ¶ 8.) The patent relates to "a [specific] method for producing ingots of nickel base superalloys, including Alloy 718 (UNS N07718) and other nickel base superalloys experiencing significant segregation during casting." U.S. Patent No. 6,416,564 col.1 ll.19--22 (filed Mar. 8, 2001). The '858 Patent was issued on April 13, 2004, and is entitled "Large Diameter Ingots of Nickel Base Alloys." (Am. Compl. ¶ 9.)

On November 14, 2003, ATI sent a letter to Carpenter. (Id. ¶ 10.) The letter stated, "It has come to our attention that [Carpenter] . . . may be considering either the manufacture, use, or sale of product using large diameter triple-melted 718 nickel alloy ingots greater than 30 inches in diameter, including up to 36 inches in diameter. You should be aware that [ATI] owns U.S. Patent 6,416,564 and related pending patent applications covering the manufacture, use, and sale of such large diameter nickel-base alloy ingots."*fn3 (Compl. Ex. C. (letter from Patrick Viccaro, Assistant General Counsel, ATI, to David Christiansen, General Counsel, Carpenter).) ATI also sent a copy of the '564 Patent. (Id.)

On March 9, 2005, ATI sent another letter to Carpenter.*fn4 (Am. Compl. ¶ 11.) The letter reaffirmed ATI's ownership of the '564 Patent for the manufacture, use, and sale of large diameter nickel-base alloy ingots. It stated that a pending application had since been issued into U.S. Patent 6,719,858. (Id. Ex. D (letter from Jon Walton, General Counsel, ATI, to David Christiansen, General Counsel, Carpenter).) Copies of both patents were sent as well. Carpenter was asked to review the patents and clarify how Carpenter's process differed from ATI's patented process. (Id.)

Following receipt of this second letter, Carpenter and ATI engaged in oral and written communications to discuss whether Carpenter's processes infringed upon ATI's patent rights and whether a licensing agreement might be possible. (Id. ¶¶ 12, 89.) The complaint further alleges that ATI sent similar letters to Carpenter's current and potential customers. (Id. ¶ 13.)

On June 23, 2008, Carpenter filed its initial complaint against ATI seeking to have the '564 and '858 Patents declared invalid, unenforceable, and not infringed by Carpenter's processes so that it may make, use, and sell large diameter 718 Alloy ingots. With ATI's consent, Carpenter filed an amended complaint (Document #30) on March 3, 2009, which included the claims in question.

The antitrust claim alleges a violation of Section 2 of the Sherman Act. The complaint contends ATI is "monopolizing, attempting to monopolize and conspiring to monopolize the market for nickel base superalloy ingots in sizes greater than 30 inches in diameter through exclusionary conduct-namely, through the enforcement of the '564 and '858 Patents that were obtained by fraud or fraudulent means." (Id. ¶ 65.) Using its market power, ATI is allegedly requiring its competitors to challenge its patents and is interfering with existing and potential business relationships. (Id. ¶ 69.)

The Lanham Act claim alleges ATI's communications with Carpenter's customers included "intentionally false and deliberately misleading representations" so as to "protect its production of Alloy 718 and Alloy 706 ingots" and "to disparage Carpenter and Carpenter's products." (Id. ¶ 97.)

On March 19, 2009, ATI filed the pending motion to dismiss these claims.

II. Standard of Review

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The factual allegations must be sufficient to make the claim for relief more than just speculative. Bell Atlantic Corp. v. Twombly, 550 US 544, 127 S.Ct. 1955, 1965 (2007). In determining whether to grant a motion to dismiss, a federal court must construe the complaint liberally, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. Id. See also D.P. Enters. v. Bucks County Cmty. Coll., 725 F.2d 943, 944 (3d Cir. 1984).

The Federal Rules of Civil Procedure do not require a plaintiff to plead in detail all of the facts upon which he bases his claim. Conley, 355 U.S. at 47. Rather, the Rules require a "short and plain statement" of the claim that will give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. Id. The "complaint must allege facts suggestive of [the proscribed] conduct." Twombly, 127 S.Ct. at 1969. Neither "bald assertions" nor "vague and conclusory allegations" are accepted as true. See Morse v. Lower Merion School Dist., 132 F.3d 902, 906 (3d Cir. 1997); Sterling v. Southeastern Pennsylvania Transp. Auth., 897 F. Supp. 893 (E.D. Pa. 1995). The claim must contain enough factual matters to suggest the required elements of the claim or ...


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