DCT
1:18-cv-06911
Varex Imaging Corp v. Richardson Electronics Ltd
Key Events
Amended Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Varex Imaging Corporation (Delaware)
- Defendant: Richardson Electronics, Ltd. (Delaware)
- Plaintiff’s Counsel: Barack Ferrazzano Kirschbaum & Nagelberg LLP
- Case Identification: 1:18-cv-06911, N.D. Ill., 10/05/2020
- Venue Allegations: Venue is based on Defendant's corporate headquarters and physical office in La Fox, Illinois, which is alleged to be a regular and established place of business within the district.
- Core Dispute: Plaintiff alleges that Defendant’s ALTA750 replacement X-ray tube infringes two patents related to X-ray tube cooling technologies and component design, and further alleges misappropriation of trade secrets by Defendant and former Plaintiff-affiliated employees.
- Technical Context: The technology relates to high-power X-ray tubes used in medical imaging equipment, such as Computed Tomography (CT) scanners, where managing immense heat generation is critical for performance and longevity.
- Key Procedural History: The operative complaint is a Third Amended Complaint. It alleges that after the original complaint was filed, Defendant altered its website marketing for the accused product, removing terms like "newly manufactured" and "new" in what Plaintiff characterizes as an attempt to support a defense of patent exhaustion.
Case Timeline
| Date | Event |
|---|---|
| 2000-09-28 | Earliest Priority Date for ’692 Patent |
| 2001-04-09 | Earliest Priority Date for ’317 Patent |
| 2002-09-24 | ’692 Patent Issue Date |
| 2003-02-11 | ’317 Patent Issue Date |
| 2014-08-13 | Defendant allegedly began hiring key personnel from Plaintiff's predecessor |
| 2017-01-28 | Plaintiff Varex spun off from Varian Medical Systems |
| 2018-05-31 | Defendant allegedly began promotions for the accused ALTA750 product |
| 2018-10-15 | Plaintiff filed its original complaint in this action |
| 2020-10-05 | Plaintiff filed the operative Third Amended Complaint |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,456,692 - HIGH EMISSIVE COATINGS ON X-RAY TUBE COMPONENTS, issued September 24, 2002
The Invention Explained
- Problem Addressed: In high-power X-ray tubes, intense heat generated at the anode can conduct through the rotor assembly and damage sensitive components like ball bearings, reducing the tube's operational life and reliability (’692 Patent, col. 2:1-4, 40-48).
- The Patented Solution: The invention applies a coating with high thermal emissivity—such as a metal oxide mixture—to a component like the rotor. This specialized coating enhances the component's ability to radiate heat away to nearby cooling structures before the heat can conduct to and damage the bearings (’692 Patent, Abstract; col. 6:40-57; Fig. 1).
- Technical Importance: This method of thermal management allowed for more robust, higher-power X-ray tube designs by actively radiating heat away from critical internal pathways (’692 Patent, col. 2:32-48).
Key Claims at a Glance
- The complaint asserts independent claim 1 and dependent claims 3, 6, 7, and 12 (Compl. ¶223).
- The essential elements of independent claim 1 include:
- A vacuum enclosure having an electron source and an anode.
- A rotor at least partially received within the anode.
- A bearing assembly rotatably supporting the rotor.
- An emissive coating disposed on a portion of the rotor that is disposed within the anode, where the coating is comprised of a material that increases the emissivity of the rotor surface.
U.S. Patent No. 6,519,317 - DUAL FLUID COOLING SYSTEM FOR HIGH POWER X-RAY TUBES, issued February 11, 2003
The Invention Explained
- Problem Addressed: Conventional single-fluid cooling systems often use dielectric oil, which has a limited capacity to absorb the extreme heat generated in high-power X-ray tubes. This inadequacy can lead to coolant boiling, damage to the X-ray window, and overall system failure (’317 Patent, col. 2:22-26, 49-54).
- The Patented Solution: The patent describes a dual-fluid cooling system. A first coolant (e.g., dielectric oil) circulates in the main housing to cool general components. A second, independent coolant circuit circulates a different fluid (e.g., a pressurized water/glycol mix with higher heat capacity) through dedicated passageways within structures, like a shield, positioned very close to the primary heat sources. This allows for targeted, aggressive cooling where it is needed most (’317 Patent, Abstract; col. 4:12-29; Fig. 3).
- Technical Importance: This dual-coolant architecture enables the use of a more thermally effective coolant for the hottest parts of the tube without sacrificing the necessary electrical insulation that the first, dielectric coolant provides for other electronic components (’317 Patent, col. 8:52-67).
Key Claims at a Glance
- The complaint asserts independent claim 34 and dependent claims 35-37 (Compl. ¶236).
- The essential elements of independent claim 34 include:
- An x-ray tube substantially disposed within a housing.
- A cooling system that includes:
- A first coolant disposed in the housing to absorb a portion of the heat.
- At least one fluid passageway for a second coolant, where the passageway is at least partially defined in a shield structure located between the tube's target anode and electron source.
III. The Accused Instrumentality
Product Identification
The accused product is the ALTA750 X-ray tube, manufactured and sold by Defendant Richardson Electronics, Ltd. ("RELL") (Compl. ¶24).
Functionality and Market Context
The complaint alleges the ALTA750 is a "knock-off" replacement tube for Plaintiff's "Snowbird" X-ray tube, which is used in Canon Aquilion CT scanners (Compl. ¶¶118, 138). The complaint asserts that the ALTA750 is not a repaired or refurbished product, but a "new article" that RELL manufactures by combining some salvaged components from used Snowbird tubes (e.g., anode assembly) with newly manufactured, reverse-engineered components (e.g., vacuum enclosure, bearing assembly, shield structure) (Compl. ¶¶127, 129, 142). The complaint alleges RELL markets the ALTA750 as a direct competitor to Plaintiff's OEM product, targeting the same replacement market (Compl. ¶¶116, 118). A provided image shows an assembled ALTA750 tube placed within a used Varex-branded housing, but with a RELL sticker applied over the original branding (Compl. ¶133).
IV. Analysis of Infringement Allegations
’692 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a vacuum enclosure having an electron source and anode disposed therein... | The ALTA750 tube is allegedly manufactured with a new vacuum enclosure and a new electron source, combined with a salvaged target anode assembly. | ¶¶142, 144, 225 | col. 5:40-42 |
| a rotor at least partially received within said anode, and wherein the rotor is operably connected to the anode | The salvaged anode assembly allegedly includes a rotor that is operably connected to the anode. | ¶¶130, 225 | col. 6:17-19 |
| a bearing assembly rotatably supporting said rotor and at least partially received within said anode... | RELL allegedly manufactures and supplies a new bearing assembly that is disposed within the ALTA750 tube to rotatably support the rotor. | ¶¶129, 145, 225 | col. 6:27-31 |
| an emissive coating disposed on at least a portion of said rotor... the coating being comprised of a material that increases the emissivity of the rotor surface | The complaint alleges the ALTA750 tube, as a "blatant copy" of the Snowbird product which embodies the patent, includes all elements of claim 1. | ¶¶23, 149, 225 | col. 6:36-47 |
’317 Patent Infringement Allegations
| Claim Element (from Independent Claim 34) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| an x-ray tube substantially disposed within a housing | The ALTA750 X-ray tube is placed into a used Varex Snowbird X-ray tube housing. A photograph in the complaint shows the ALTA750 tube assembly inside such a housing. | ¶133 | col. 13:66-67 |
| a first coolant disposed in the housing so that at least a portion of heat dissipated by the x-ray tube is absorbed by the first coolant | The ALTA750 system allegedly includes dielectric oil within the housing that surrounds the X-ray tube. | ¶¶134, 146 | col. 14:29-34 |
| at least one fluid passageway capable of directing a flow of a second coolant proximate to at least a portion of the x-ray tube... | The ALTA750 allegedly incorporates a second coolant, a mixture of propylene glycol and water. | ¶135 | col. 14:35-41 |
| the at least one fluid passageway being at least partially defined in a shield structure disposed between a target anode and an electron source of said x-ray tube | RELL allegedly machines a new shield structure and assembles it between the tube's anode and electron source. The second coolant allegedly travels through this shield structure. | ¶¶135, 147, 238 | col. 13:26-34 |
Identified Points of Contention
- Repair vs. Reconstruction: A central dispute concerns whether RELL's actions constitute permissible "repair" of a spent product or impermissible "reconstruction" of a new, infringing article. The complaint argues for reconstruction by alleging that RELL creates a "wholly new vacuum-enclosed X-ray tube" and scraps significant original components regardless of their condition (Compl. ¶¶143, 155). This legal distinction is frequently dispositive in cases involving refurbished or remanufactured goods.
- Evidentiary Basis for Infringement: For the ’692 Patent, the complaint's infringement theory appears to rest heavily on the allegation that the ALTA750 is a "copy" of Varex's commercial product, which itself embodies the patent (Compl. ¶¶23, 149). A key technical question will be what evidence demonstrates that the accused ALTA750 actually has an "emissive coating" with the properties required by the claims. The complaint's side-by-side visual comparison of the Varex and RELL tube inserts is offered as evidence of copying (Compl. ¶148).
- Marketing and Intent: The complaint presents screenshots comparing RELL's website before and after the lawsuit was filed, alleging RELL "scrubbed" references to the ALTA750 being "new" or "newly manufactured" (Compl. ¶¶156-157). This evidence may be used to challenge RELL's potential patent exhaustion defense and to support allegations of willfulness.
V. Key Claim Terms for Construction
Term: "emissive coating" (’692 Patent, Claim 1)
Context and Importance
The existence and nature of this "coating" is the core of the ’692 Patent infringement allegation. Its construction will determine whether any surface treatment on the accused rotor falls within the claim scope. Practitioners may focus on this term because the complaint lacks specific allegations about the material composition or measured emissivity of the accused product's rotor surface.
Intrinsic Evidence for Interpretation
- Evidence for a Broader Interpretation: The claim language itself is functional, defining the term as "a material that increases the emissivity of the rotor surface" (’692 Patent, col. 9:46-48). This could be argued to encompass any material that performs this function.
- Evidence for a Narrower Interpretation: The specification repeatedly discusses a specific metal oxide mixture of titanium oxide and aluminum oxide (trade name "OT13") as the preferred embodiment (’692 Patent, col. 7:5-14). A party could argue the claims should be construed as limited to such specific metal oxide compositions, rather than any surface treatment that might incidentally increase emissivity.
Term: "shield structure" (’317 Patent, Claim 34)
Context and Importance
The path of the second, high-efficiency coolant is defined by this structure, making it essential to the dual-cooling invention. The complaint alleges RELL makes its own "new shield structure" but "omits the separately patented external fins on the shield structure that Varex employs" (Compl. ¶147). The dispute may turn on whether RELL's different design still falls within the claim's scope.
Intrinsic Evidence for Interpretation
- Evidence for a Broader Interpretation: Claim 34 requires only that the structure be "disposed between a target anode and an electron source" and that it "at least partially" defines the fluid passageway (’317 Patent, col. 18:31-34). This could support a reading that covers various geometries.
- Evidence for a Narrower Interpretation: The figures, such as Figure 2, depict a specific embodiment of the shield structure (206) with an aperture (206A) (’317 Patent, Fig. 2). A defendant might argue that the term should be interpreted in light of these specific disclosed structures, potentially excluding designs that differ significantly.
VI. Other Allegations
Indirect Infringement
The complaint alleges that RELL induces infringement of the ’317 patent by offering its customers training on system operation, calibration, and troubleshooting for the CT systems in which the accused tubes are installed. This training allegedly instructs users on performing the steps of the claimed cooling methods (Compl. ¶¶244-245).
Willful Infringement
Willfulness is alleged for both patents based on RELL having actual knowledge of the patents while continuing its infringing activity (Compl. ¶¶233, 248). The factual basis includes RELL's alleged reverse-engineering of Varex's commercial product and its hiring of former Varex/Varian employees with intimate knowledge of the technology (Compl. ¶165).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of legal classification: does RELL's process of manufacturing the ALTA750 tube—by combining salvaged parts with newly made, reverse-engineered components—constitute permissible "repair" of a spent product, or does it cross the line into impermissible "reconstruction" of a new, patented article, thereby negating a patent exhaustion defense?
- A key evidentiary question will be one of technical proof: for the ’692 patent, can the plaintiff demonstrate that the accused ALTA750 tube contains a distinct "emissive coating" that meets the functional requirements of the claim, or will the infringement allegation fail for lack of direct evidence beyond the assertion that the product is a "copy" of a commercial embodiment?
- A central theme of the case will be the interplay of patent and trade secret law: how will the extensive allegations of trade secret misappropriation, involving the same product and many of the same individuals, influence the court's view of the patent infringement claims, particularly regarding the issues of intent, copying, and willfulness?