1:12-cv-01017-JBM-JAG # 55-1 Page 141 of 165
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF ILLINOIS
`PEORIA DIVISION
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`Case No. 12-cv-01017
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`Hon. Joe Billy McDade
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`DEMAND FOR JURY TRIAL
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`SECOND AMENDED COMPLAINT
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`CATERPILLAR INC.,
`CATERPILLAR MINING LLC, and
`CASHMAN EQUIPMENT COMPANY
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`Plaintiffs,
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`v.
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`ESCO CORPORATION and
`ESCO CANADA LTD.
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`
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`Defendants.
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`
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`Plaintiffs Caterpillar Inc. (“Caterpillar”), Caterpillar Global Mining LLC (“Caterpillar
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`Global”) and Cashman Equipment Company (“Cashman”) (collectively “Plaintiffs”) through its
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`counsel, Robert G. Abrams and Gregory J. Commins, Jr. of Baker & Hostetler LLP, and
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`Timothy L. Bertschy and John P. Heil, Jr. of Heyl, Royster, Voelker & Allen complains against
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`defendants ESCO Corporation (“ESCO Corporation”) and ESCO Canada, Ltd. (“ESCO
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`Canada”) (collectively “ESCO”) as follows:
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`NATURE OF THE ACTION
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`1.
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`Caterpillar developed, manufactures, and sells a ground engaging tool system
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`known as Caterpillar’s CapSure® retention system that is used in Caterpillar’s Ground Engaging
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`Tools systems (“the CapSure® system”). ESCO claims that the CapSure® system infringes
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`certain ESCO patents and specifically identifies exemplary claims in those patents that it
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`believes Caterpillar might infringe. Plaintiffs seek a declaration that they are not infringing any
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`valid claim of ESCO’s Patents.
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 1
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`1:12-cv-01017-JBM-JAG # 55-1 Page 142 of 165
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`2.
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`Caterpillar developed, manufactures, and sells a wear protection system known as
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`the Mechanically Attached Wear Plate System (“MAWPS”). ESCO claims that the MAWPS
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`system infringes an ESCO Corporation patent. Plaintiffs seek a declaration that they are not
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`infringing any valid claim of ESCO Corporation’s patent and that ESCO’s claims of patent
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`infringement are barred by the doctrine of laches and/or equitable estoppel.
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`JURISDICTION AND VENUE
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`3.
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`This Court has subject matter jurisdiction under the Federal Declaratory Judgment
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`Act, Title 28, United States Code §§ 2201 and 2202, and under Title 28, United States Code
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`§§ 1331 and 1338(a) because Caterpillar seeks a declaration that it does not and has not infringed
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`any valid claim of the ’274 Patent, the ’621 Patent, the ’765 Patent, the ’693 Reissue, and the
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`’684 Patent (identified below) literally, directly, contributorily, by way of inducement, and/or
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`under the doctrine of equivalents.
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`4.
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`Venue is proper under Title 28, United States Code §1391(b). This Court has
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`personal jurisdiction over ESCO because ESCO purposely availed itself of this forum by
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`entering into contracts for the supply of products with Caterpillar. Further, a substantial part of
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`the events or omissions giving rise to the claims asserted occurred here.
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`PARTIES
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`5.
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`Caterpillar is a Delaware corporation. Caterpillar’s principal place of business is
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`located at 100 N.E. Adams Street, Peoria, Illinois 61629. Among other things, Caterpillar
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`develops and manufactures heavy machinery for use in a host of applications throughout the
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`world.
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`6.
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`Cashman is a corporation organized and existing under the laws of Nevada and
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`having a principal place of business located at 3300 St. Rose Parkway, Henderson, Nevada
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`89052. Among other things, Cashman is a dealer of Caterpillar products.
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`2
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 2
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`1:12-cv-01017-JBM-JAG # 55-1 Page 143 of 165
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`7.
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`Caterpillar Global is a corporation organized under the laws of Delaware and
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`having a principal place of business located at 1 Bucyrus Way, Oak Creek, Wisconsin 53154.
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`Among other things, Caterpillar Global is a wholly owned subsidiary of Caterpillar principally
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`engaged in servicing the needs of Caterpillar’s mining customers.
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`8.
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`ESCO Corporation is an Oregon corporation that, among other things, specializes
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`in selling ground engaging tools. On information and belief, ESCO Corporation’s principal
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`place of business is 2141 NW 25th Avenue, Portland, Oregon 97210. The United States Patent
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`and Trademark Office assignment database reflects that ESCO Corporation is the assignee of
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`United States Patent No. 7,178,274 (“the ’274 Patent”), United States Patent No. 8,122,621 (“the
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`’621 Patent”), United States Patent No. 5,241,765 (“the ’765 Patent”), and United States Patent
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`No. RE43,693 (“the ’693 Reissue”). Copies of the ’274 Patent, the ’621 Patent, ’the ’765 Patent,
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`and the ’693 Reissue are attached hereto as Exhibits 1-4. The United States Patent and
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`Trademark Office assignment database reflects that ESCO Corporation is the assignee of United
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`States Patent No. U.S. Patent No. 7,640,684 (“the ’684 Patent”). A copy of the ’684 Patent is
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`attached hereto as Exhibit 5.
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`9.
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`On information and belief, ESCO Canada is an office of ESCO Corporation
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`located at 2323 Fourth Street, Nisku, Alberta, Canada, T9E7W7. In the alternative, on
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`information and belief, ESCO Canada is a corporation organized and existing under the laws of
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`Canada and having a principal place of business at 2323 Fourth Street, Nisku, Alberta, Canada,
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`T9E7W7. ESCO Corporation contends that ESCO Canada is the owner by assignment of the
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`’684 Patent. However, according to the PTO records, correspondence regarding the ’684 Patent
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`is directed to ESCO Corporation.
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`3
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 3
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`1:12-cv-01017-JBM-JAG # 55-1 Page 144 of 165
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`10.
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`ESCO Corporation is the party who has been communicating with Caterpillar and
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`this Court regarding the ’684 Patent to date. With respect to the ’684 Patent, ESCO Canada and
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`ESCO Corporation have been operating without distinction.
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`11.
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`The ’274 Patent, ’621 Patent, ’765 Patent, ’693 Reissue” and the ’684 Patent are
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`collectively referred to as the “ESCO Patents.”
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`ALLEGATIONS
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`12.
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`Caterpillar, among other things, is a manufacturer of heavy equipment for use in
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`construction, mining and other applications. ESCO is a manufacturer of, among other things,
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`ground engaging tools that can be incorporated into a variety of types of heavy equipment
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`manufactured by Caterpillar.
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`13.
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`In 2002, Caterpillar and ESCO executed a Master Purchase Agreement (the
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`“MPA”) in which ESCO agreed to provide exclusively to Caterpillar a ground engaging tool
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`system that ESCO called the K-System and later became known as the K-Series. ESCO
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`represents that it holds patents on these products.
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`14.
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`Over
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`the ensuing years, ESCO supplied Caterpillar with
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`its K-Series
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`requirements. The K-Series product was integrated into many of Caterpillar’s premier products,
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`such as excavators and loaders. It is essential to Caterpillar’s ongoing business concerns to have
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`a constant and reliable source of this integral product.
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`15.
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`In mid-2011, ESCO and Caterpillar were discussing ESCO’s future supply of K-
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`Series. ESCO wanted to reduce its supply of these products to Caterpillar and at the same time
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`Caterpillar wanted ESCO to continue to supply Caterpillar with its K-Series products.
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`16.
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`Around the same time, ESCO clearly and definitively informed Caterpillar that it
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`would not meet Caterpillar’s projected future requirements. Based upon Caterpillar’s upcoming
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`4
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 4
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`1:12-cv-01017-JBM-JAG # 55-1 Page 145 of 165
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`purchase orders and purchase order releases, ESCO knew what Caterpillar’s future requirements
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`would be.
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`17.
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`Also in mid-2011, ESCO took the dispute one step further and threatened patent
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`litigation if Caterpillar developed its own system. Specifically, ESCO threatened one component
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`of an alternative system known as Caterpillar’s CapSure® retention system.
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`18.
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`In July 2011, ESCO sent a letter to Caterpillar stating ESCO’s purported belief
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`that Caterpillar’s LM Series tooth system and other ground engaging tools using the CapSure®
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`system might infringe the ’274 Patent, the ’684 Patent, the ’685 Patent (reissued as the ’693
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`Reissue), and U.S. Patent Application Publication No. 2011/0107624 (now issued as the ’621
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`Patent). Specifically, the letter further wanted to draw Caterpillar’s attention to “claims 9 and 19
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`of US Patent No. 7,178,274, claim 22 of US Patent No. 7,640,684, and claim 22 in US Patent
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`No. 7,640,685,” and also to “claims that may ultimately be granted in pending US Patent
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`Application Publication No. 2011/0107624.” A copy of this letter is attached hereto as Exhibit 6.
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`ESCO also requested that Caterpillar provide ESCO with an explanation of why Caterpillar
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`believes it does not infringe the ’274 Patent, the ’684 Patent, the ’685 Patent (reissued as the
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`’693 Reissue), and U.S. Patent Application Publication No. 2011/0107624 (now issued as the
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`’621 Patent) and any grounds of invalidity known to Caterpillar. The ESCO letter also noted that
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`“[i]t is not our practice to permit others to infringe our patents or to license our technology for
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`others to use in their products.”
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`19.
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`On information and belief, ESCO Corporation (and not ESCO Canada) owns the
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`’684 Patent.
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`20.
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`In the alternative, ESCO Corporation is the agent of ESCO Canada for
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`enforcement of the ’684 Patent.
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`5
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 5
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`1:12-cv-01017-JBM-JAG # 55-1 Page 146 of 165
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`21.
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`In the further alternative, ESCO Corporation and ESCO Canada jointly sent the
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`July 2011 Letter.
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`22.
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`ESCO’s actions placed Caterpillar in the untenable position whereby ESCO was
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`both refusing to supply Caterpillar with its requirements for K Series GET while at the same time
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`threatening Caterpillar with patent infringement if Caterpillar developed its own, alternative
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`technology. Consequently, there is an actual and immediate controversy between Caterpillar and
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`ESCO, and Caterpillar has a reasonable apprehension that ESCO will sue (an now in fact has
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`sued) Caterpillar for infringement of the ’274 Patent, the ’684 Patent, the ’685 Patent (reissued as
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`the ’693 Reissue), and U.S. Patent Application Publication No. 2011/0107624 (now issued as the
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`’621 Patent) as Caterpillar implements its alternative technologies.
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`23.
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`On January 12, 2012, Caterpillar filed the present lawsuit seeking enforcement of
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`the MPA in Counts I and II of its complaint and seeking a declaratory judgment of non-
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`infringement of any valid claim of the ’274 Patent, the ’684 Patent, the ’685 Patent (reissued as
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`the ’693 Reissue) in Count III. The parties have since reached a partial settlement, and
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`Caterpillar voluntarily dismissed Counts I and II. However, ESCO refused to settle the patent
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`infringement issues. As such, Caterpillar filed its First Amended Complaint on February 17,
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`2012, seeking declaratory relief claimed in Count III. See Dkt. No. 28.
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`24.
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`On February 28, 2012, U.S. Patent Application Publication No. 2011/0107624
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`that was referenced in the July 2011 letter issued as the ’621 Patent to ESCO.
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`25.
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`On August 29, 2012, ESCO Corporation filed its Answer and Counterclaims to
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`Caterpillar Inc.’s First Amended Complaint (“Answer”).
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`26.
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`On the same day that ESCO Corporation filed its Answer in this Court, ESCO
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`filed suit for patent infringement in Nevada (“the Nevada Suit”) against Cashman, Caterpillar
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`6
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 6
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`1:12-cv-01017-JBM-JAG # 55-1 Page 147 of 165
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`Global, Caterpillar, and Raptor Mining Products Inc. (“Raptor”), alleging that certain Cashman,
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`Caterpillar Global, Caterpillar, and Raptor products infringe the ’274 Patent, the ’684 Patent, the
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`’685 Patent (reissued as the ’693 Reissue), the ’621 Patent, and the ’765 Patent. See 2:12-cv-
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`01545, Complaint, Dkt. No. 1, Aug. 29, 2012; amended 2:12-cv-01545, First Amended
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`Complaint, Dkt. No. 27, Oct. 5, 2012.
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`27.
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`Caterpillar was surprised that ESCO added the ’765 Patent to the dispute since it
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`purports to resurrect issues that Caterpillar believes were laid to rest over a decade ago.
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`28.
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`On May 5, 1999, ESCO Corporation sent a letter to Caterpillar (“May 1999
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`Letter”) notifying Caterpillar of ESCO Corporation’s recent awareness of Caterpillar’s
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`Mechanically Attached Wear Plate System (“MAWPS”) and requested that Caterpillar examine
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`the ’765 Patent “for a determination of the relationship, if any, of the ’765 patent to the
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`Caterpillar [system].” A copy of this letter is attached hereto as Exhibit 7.
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`29.
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`After reviewing the ’765 Patent, Caterpillar informed ESCO Corporation—
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`through August 25, 1999 and October 8, 2000 correspondence—of Caterpillar’s conclusion that
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`Caterpillar’s system did not infringe any valid, enforceable claim of the ’765 Patent. Copies of
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`this correspondence are attached hereto as Exhibits 8-9. The parties ceased communications on
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`this issue in 2000.
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`30.
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`In April 2003, Caterpillar unexpectedly received correspondence from ESCO
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`Corporation seeking “to follow up on [ESCO Corporation’s] letter to Mr. Pence of July 24,
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`2000.” A copy of this letter is attached hereto as Exhibit 10.
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`31.
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`In response, on May 7, 2003, Caterpillar expressed its surprise and reasonable
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`belief that “[d]ue to the passage of time” and the “extensive and amicable business dealings”
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`7
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 7
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`1:12-cv-01017-JBM-JAG # 55-1 Page 148 of 165
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`between the parties since 2000, Caterpillar viewed the issue as “not worth pursuing.” A copy of
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`this correspondence is attached hereto as Exhibit 11.
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`32.
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`Caterpillar heard nothing more from ESCO Corporation regarding the ’765 Patent
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`until ESCO filed the Nevada Suit (hereinafter defined). Caterpillar relied upon ESCO
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`Corporation’s silence as meaning ESCO Corporation was no longer pursuing its allegations.
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`33.
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`On October 2, 2012, the United States Patent and Trademark Office issued the
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`’693 Reissue reflecting a correction in the ’685 Patent’s priority date.
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`34.
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`On October 5, 2012, ESCO filed a First Amended Complaint in the Nevada Suit
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`replacing the ’685 Patent with the newly issued ’693 Reissue.
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`35.
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`Plaintiffs believe and assert that they do not infringe any valid claim of the ESCO
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`Patents.
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`CLAIMS FOR RELIEF
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`Count I
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`(Breach of Contract – Specific Performance)
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`On February 13, 2011, Caterpillar voluntarily dismissed Count I.
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`Count II
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`(Preliminary and Permanent Injunctive Relief)
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`
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`On February 13, 2011, Caterpillar voluntarily dismissed Count II.
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`Count III
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`(Request for Declaratory Judgment)
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`Plaintiffs re-allege Paragraphs 1-35.
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`By reason of the foregoing facts, a ripe and justiciable controversy exists between
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`36.
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`37.
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`the parties regarding whether Plaintiffs infringe any valid claim of the ESCO Patents. See Fed.
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`R. Civ. P. 57 and 28 U.S.C. §§ 2201, 2202.
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`8
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 8
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`1:12-cv-01017-JBM-JAG # 55-1 Page 149 of 165
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`38.
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`Declaratory relief is necessary and appropriate in this case because the Court’s
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`judgment on the issue of non-infringement will afford Plaintiffs relief from the uncertainty and
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`controversy surrounding ESCO’s threats. Caterpillar had a reasonable apprehension that ESCO
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`would file a patent infringement lawsuit based on the July 22, 2011 letter and on ESCO’s actions
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`surrounding the MPA dispute. In fact, ESCO filed suit against the Plaintiffs in Nevada on
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`August 29, 2012. See 2:12-cv-01545, Complaint, Dkt. No. 1, Aug. 29, 2012; amended 2:12-cv-
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`01545, First Amended Complaint, Dkt. No. 27, Oct. 5, 2012. Accordingly, Plaintiffs ask this
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`Court to declare that Plaintiffs do not infringe any valid claim of the ’274 Patent, the ’684 Patent,
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`the ’693 Reissue, ’691 Patent, and/or the ’765 Patent.
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`39.
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`By reason of the foregoing facts, a ripe and justiciable controversy exists between
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`the parties regarding whether ESCO Corporation’s claims of infringement towards Plaintiffs
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`concerning the ’765 Patent are barred by the doctrine of laches and/or equitable estoppel. See
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`Fed. R. Civ. P. 57 and 28 U.S.C. §§ 2201, 2202.
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`40.
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`Plaintiffs are entitled to an award of costs and expenses, including reasonable
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`attorney fees, to be assessed against ESCO in accordance with the provisions of 35 U.S.C. § 285
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`or other statutes.
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`WHEREFORE, Plaintiffs pray for judgment as follows:
`
`(a)
`
`(b)
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`(c)
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`A declaration that Plaintiffs do not infringe any valid claim of the ’274
`Patent, the ’684 Patent, the ’693 Reissue, the ’691 Patent, and/or the ’765
`Patent;
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`A declaration that ESCO Corporation’s claims on infringement towards
`Plaintiffs regarding the ’765 Patent are barred by the doctrine of laches
`and/or equitable estoppel;
`
`Find this case exceptional and award Plaintiffs costs and expenses,
`including reasonable attorney fees, in accordance with the provisions of 35
`U.S.C. § 285 or other statutes; and
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`(d)
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`Interest, costs, and such other relief as this Court deems appropriate.
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`9
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 9
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`1:12-cv-01017-JBM-JAG # 55-1 Page 150 of 165
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`DEMAND FOR JURY TRIAL
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`Plaintiffs, under Rule 38 of the Federal Rules of Civil Procedure, request a trial by jury of
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`any issues so triable by right.
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`October 24, 2012
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` Respectfully Submitted,
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`
`
`Caterpillar Inc.
`
`/s/ Gregory J. Commins, Jr.
`
`Robert G. Abrams
`Gregory J. Commins, Jr.
`Baker & Hostetler LLP
`1050 Connecticut Ave., N.W.
`Suite 1100
`Washington, DC 20036
`(202) 861-1500
`Timothy L. Bertschy (ARDC #199931)
`John P. Heil, Jr. (ARDC #6237286)
`Heyl, Royster, Voelker & Allen
`124 S.W. Adams Street
`Suite 600
`Peoria, Illinois 61602
`(309) 676-0400
`
`Attorneys for Caterpillar Inc.
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`
`
`
`
` By:
`
`
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`10
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 10
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`1:12-cv-01017-JBM-JAG # 55-1 Page 151 of 165
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`CERTIFICATE OF SERVICE
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`Gregory J. Commins, Jr., an attorney, certifies that on October 24, 2012 he caused the
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`foregoing SECOND AMENDED COMPLAINT to be served upon the following by the
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`Court’s ECF Notification System and by email:
`
`Charles W. Shifley
`Binal J. Patel
`Louis DiSanto
`Timothy J. Rechtien
`BANNER & WITCOFF, LTD.
`Ten South Wacker Drive, Suite 3000
`Chicago, Illinois 60606-7407
`Telephone: (312) 463-5000
`Facsimile: (312) 463-5001
`cshifley@bannerwitcoff.com
`bpatel@bannerwitcoff.com
`ldisanto@bannerwitcoff.com
`trechtien@bannerwitcoff.com
`
`
`
`
`
`
`/s/Gregory J. Commins, Jr.
`
`
`
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`Caterpillar v. ESCO IPR2015-00409
`ESCO Exhibit 2012 Page 11