1:18-cv-00500
Mitchell Repair Information Co LLC v. Noregon Systems Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Mitchell Repair Information Company, LLC (Delaware)
- Defendant: Noregon Systems, Inc. (North Carolina)
- Plaintiff’s Counsel: Brinks Gilson & Lione
- Case Identification: 1:18-cv-00500, M.D.N.C., 04/29/2019
- Venue Allegations: Venue is asserted on the basis that Defendant is a North Carolina corporation that resides, manufactures, and sells the accused products within the Middle District of North Carolina.
- Core Dispute: Plaintiff alleges that Defendant, its former partner, breached a contractual agreement by developing a competing vehicle diagnostic software system based on Plaintiff's proprietary technology and then deceptively substituted it for Plaintiff's system under the guise of a "software update."
- Technical Context: The dispute centers on internet-based software systems for the commercial trucking industry that link diagnostic trouble codes (DTCs) retrieved from a vehicle's computer to a remote library of detailed repair information.
- Key Procedural History: The parties operated under a Service Information Access (SIA) Agreement from 2012 until late 2017. Plaintiff alleges that prior to terminating the agreement, Defendant developed its own competing system. After learning of the system, Plaintiff sent a letter to Defendant on February 5, 2018, offering a license, which was declined. The complaint asserts claims for breach of contract, false advertising under the Lanham Act, and various state-law torts, but does not assert any claims for patent infringement.
Case Timeline
| Date | Event |
|---|---|
| 2008-12-03 | Earliest Priority Date for U.S. Patent 8,954,222 |
| 2012-01-01 | Plaintiff launches its REPAIR-CONNECT system |
| 2012-03-01 | Plaintiff and Defendant enter first Service Information Access Agreement (SIA I) |
| 2015-02-10 | U.S. Patent 8,954,222 Issues |
| 2015-07-20 | Parties extend relationship with SIA Agreement II |
| 2017-09-01 | Defendant informs Plaintiff of intent to cancel the SIA Agreement |
| 2017-10-01 | Defendant allegedly substitutes its "Next Step" system for Plaintiff's system |
| 2018-02-05 | Plaintiff sends letter to Defendant offering a license |
| 2019-04-29 | Plaintiff files Second Amended Complaint |
II. Technology and Patent(s)-in-Suit Analysis
The provided Second Amended Complaint does not assert any claims for patent infringement. The counts in the complaint are for breach of contract, violations of the Lanham Act, and other non-patent causes of action (Compl. ¶¶ 38-86). Consequently, no patents are identified as being "in-suit," and a patent-specific analysis is not applicable.
III. The Accused Instrumentality
Product Identification: The complaint identifies Defendant’s "NextStep Service and Repair system" and "NextStep Net Service and Repair system," collectively referred to as the "Next Step system" (Compl. ¶25).
Functionality and Market Context: The Next Step system is alleged to be functionally similar to Plaintiff's REPAIR-CONNECT system (Compl. ¶28). The complaint alleges that after a diagnostic tool retrieves a diagnostic trouble code (DTC) from a vehicle, the Next Step system requests corresponding diagnostic information from a remote electronic library and populates the display of a local computing device (Compl. ¶28). The complaint further alleges that the Next Step system's graphical user interface (GUI) includes many of the same features and navigation tabs as Plaintiff's system, such as buttons for "OVERVIEW", "WIRING", and "TROUBLESHOOTING TASKS" (Compl. ¶29). Defendant allegedly substituted this system for Plaintiff's system for approximately 3,000 customers, presenting the change as a "software update" rather than a switch to a new, competing product (Compl. ¶24, ¶26). No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
This section is not applicable as no patent infringement is alleged in the complaint.
V. Key Claim Terms for Construction
This section is not applicable as no patent claims are asserted in the complaint.
VI. Other Allegations
Breach of Contract: The central allegation is that Defendant's Next Step system is a "derivative work and an adaptation of Mitchell's REPAIR-CONNECT system," the creation of which was expressly forbidden by the parties' SIA Agreement (Compl. ¶17, ¶41). The complaint also alleges that Defendant breached the agreement by failing to submit royalty payments and Device Reports after October 2017 and by disclosing proprietary information (Compl. ¶34, ¶42-43).
False Advertising and Unfair Competition (Lanham Act): Plaintiff alleges that Defendant engaged in false advertising and unfair competition by representing the switch to its own Next Step system as a "software update" (Compl. ¶50). This act was allegedly done with the intent to deceive the public and confuse end-users as to the source and identity of the diagnostic and repair system, leveraging the goodwill associated with Plaintiff's product (Compl. ¶32, ¶49, ¶54).
Willful Conduct: The complaint alleges that Defendant's actions were willful and intentional across multiple counts. The breach of contract is described as "willful and malicious" (Compl. ¶47). The alleged misrepresentations are claimed to have been made "knowingly with the intent to gain a competitive advantage" (Compl. ¶53). The alleged tortious interference with Plaintiff's end-user license agreements (EULAs) is characterized as having been done "intentionally and maliciously" (Compl. ¶84).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central contractual issue will be one of definitional scope: does Defendant's "Next Step" system constitute a prohibited "derivative work" or "adaptation" under the SIA Agreement, or can it be proven to be an independently developed system created outside the bounds of the contractual restrictions?
- A key question for the false advertising and unfair competition claims will be one of consumer perception: does the evidence show that Defendant's characterization of the product switch as a "software update" was likely to cause confusion among end-users regarding the source, affiliation, or nature of the new software?
- A third major question will concern causation and damages: to what extent can Plaintiff demonstrate that its alleged loss of customers and revenue was a direct result of Defendant's alleged breach of contract and deceptive marketing, as opposed to the outcome of legitimate competition following the termination of the parties' business relationship?