4:17-cv-04099
Semco LLC v. Trane US Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Semco, LLC (Missouri)
- Defendant: Trane U.S., Inc. (Delaware)
- Plaintiff’s Counsel: Heidepriem, Purtell, Siegel & Olivier, LLP; Polster, Lieder, Woodruff & Lucchesi, LC
- Case Identification: 4:17-cv-04099, D.S.D., 07/26/2017
- Venue Allegations: Plaintiff alleges venue is proper in the District of South Dakota because Defendant has committed acts of infringement in the district and maintains a regular and established place of business there, specifically a sales office in Sioux Falls.
- Core Dispute: Plaintiff alleges that Defendant’s commercial air handling systems, which incorporate dual-wheel technology, infringe a patent for controlling temperature and humidity in a controlled space.
- Technical Context: The lawsuit concerns high-efficiency heating, ventilation, and air conditioning (HVAC) systems designed to precisely control both temperature and humidity, a critical function for large facilities like schools and offices, particularly in humid climates.
- Key Procedural History: The complaint alleges a long history between the parties, including communications in 2005 regarding potential infringement of the patent-in-suit, notice letters sent in 2010 and 2012, and a prior lawsuit filed in the Western District of Missouri in May 2017 that was subject to a venue challenge. The complaint also references a 2012 consent judgment in a separate case where the patent-in-suit was found valid and infringed by other parties. Subsequent to the filing of this complaint, an Inter Partes Review (IPR) was initiated against the patent-in-suit (IPR2018-00514), which resulted in the cancellation of all asserted claims, including independent claim 1, as reflected in a certificate issued January 12, 2021.
Case Timeline
| Date | Event |
|---|---|
| 1999-03-10 | '388 Patent Priority Date |
| 2001-03-13 | '388 Patent Issue Date |
| 2005-04-22 | Email from Trane to SEMCO allegedly acknowledging patent infringement risk |
| 2010-02-18 | SEMCO counsel sends letter and copy of '388 Patent to Trane |
| 2012-02-21 | Consent Judgment entered in SEMCO v. Huntair finding '388 Patent valid and infringed |
| 2012-10-25 | SEMCO counsel sends letter to Trane's attorney enclosing the Huntair Consent Judgment |
| 2013-01-01 | Approximate date of accused system documents for Hoover Elementary School project |
| 2014-01-30 | Follow-up letter from SEMCO counsel to Trane's attorney |
| 2016-01-01 | Approximate date of accused system documents for Sioux Falls City Hall project |
| 2017-05-15 | SEMCO files patent infringement suit against Trane in W.D. Missouri |
| 2017-07-26 | Complaint Filing Date (D.S.D.) |
| 2021-01-12 | U.S. Patent Office issues IPR Certificate cancelling asserted claims of '388 Patent |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,199,388 - "System And Method For Controlling Temperature And Humidity"
The Invention Explained
- Problem Addressed: The patent describes the difficulty conventional HVAC systems have in effectively controlling indoor humidity, especially in facilities that require large amounts of fresh outdoor air, like schools and hospitals (’388 Patent, col. 1:56-64). Existing dual-wheel systems were allegedly limited in their ability to deliver the very dry air needed to handle significant latent (humidity) loads without resorting to inefficient or complex methods like external regeneration heat sources (’388 Patent, col. 4:28-38).
- The Patented Solution: The invention proposes a system architecture comprising three key components in a specific sequence: a total energy recovery device, a cooler, and a dehumidification wheel (’388 Patent, col. 8:23-41). Incoming supply air is first pre-cooled and partially dehumidified by the total energy recovery device. It is then passed through a cooler (e.g., a cooling coil) for further, significant cooling and dehumidification. Finally, the now-cold, saturated air passes through a second, "dehumidification" wheel, which simultaneously reheats the air to a comfortable temperature and removes additional moisture (’388 Patent, col. 6:42-51). This configuration leverages the building's own exhaust air to regenerate both wheels, avoiding the need for an external heat source.
- Technical Importance: This design sought to provide superior dehumidification capabilities using conventional cooling components, thereby decoupling latent load management from sensible temperature control more effectively than prior art systems (’388 Patent, col. 2:10-23).
Key Claims at a Glance
- The complaint asserts infringement of independent Claim 1 (Compl. ¶13).
- The essential elements of Claim 1 are:
- An air supplier creating a supply air stream.
- An air exhauster creating an exhaust air stream.
- A partition separating the air streams.
- A total energy recovery device in contact with both air streams to exchange heat and moisture.
- A dehumidification wheel positioned to rotate through both air streams to exchange heat and moisture.
- A cooler disposed in the supply air stream between the total energy recovery device and the dehumidification wheel, adapted to cool and dehumidify the supply air stream.
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are Trane's commercial air handling systems, as sold for projects at Sioux Falls City Hall, the University of Sioux Falls, Hoover Elementary School, and other locations (Compl. ¶¶8-12).
Functionality and Market Context
The complaint alleges the accused products are "dual path, outside air configuration" systems that employ components Trane calls an "energy wheel" and a "CDQ wheel" (Cool Dry Quiet wheel) (Compl. ¶40). Plaintiff contends that the "CDQ wheel" is a dehumidification wheel (Compl. ¶17). These systems are allegedly designed and sold by Trane for large commercial and institutional facilities, with Trane's sales offices providing marketing, design software, and support to engineers for configuring the systems for specific projects (Compl. ¶¶49-51).
IV. Analysis of Infringement Allegations
'388 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a) an air supplier adapted to supply air to the controlled space, creating a supply air stream; | The accused systems contain fans that function as air suppliers. | ¶14 | col. 8:23-26 |
| b) an air exhauster adapted to exhaust air out of the controlled space, creating an exhaust air stream adjacent to the supply air stream; | The accused systems contain fans that function as air exhausters. | ¶14 | col. 8:26-30 |
| c) a partition disposed between the supply and exhaust air streams that separates the supply and exhaust air streams; | The accused systems contain a partition that separates the two fan sections and air streams. | ¶14 | col. 8:30-33 |
| d) a total energy recovery device in contact with the supply air stream and exhaust air stream that exchanges heat and moisture... | The accused systems include a component designated as a "Wheel" or "Energy wheel," which allegedly rotates through both air streams to exchange heat and moisture. | ¶15 | col. 8:33-37 |
| e) a dehumidification wheel positioned to rotate through the supply air stream and the exhaust air stream that exchanges heat and moisture... | The accused systems include a component designated as a "CDQ Wheel," which allegedly rotates through both air streams and is marketed as being for "humidity control." | ¶¶16-17 | col. 8:37-41 |
| f) a cooler disposed in the supply air stream between the total energy recovery device and the dehumidification wheel, the cooler adapted to cool and dehumidify the supply air stream. | The accused systems contain a "Cooling coil" or "Coil section" that is physically located between the "Energy wheel" and the "CDQ wheel." The complaint describes an "Overall Elevation View" drawing in Exhibit 2 which allegedly illustrates this arrangement. | ¶19 | col. 8:41-45 |
- Identified Points of Contention:
- Scope Questions: The dispute may center on whether Trane's "Energy wheel" meets the claim requirement of a "total energy recovery device" that exchanges both heat and moisture, and whether the "CDQ wheel" meets the functional requirements of the claimed "dehumidification wheel."
- Technical Questions: A primary evidentiary question will be whether the accused Trane systems operate in the specific manner claimed. Does the air flow sequentially through the energy wheel, then the cooling coil, and finally the CDQ wheel? Does the CDQ wheel, in fact, use heat from the exhaust air stream to reheat and simultaneously dehumidify the supply air stream after it has been cooled by the coil, as the patent teaches?
V. Key Claim Terms for Construction
The Term: "a cooler disposed in the supply air stream between the total energy recovery device and the dehumidification wheel"
Context and Importance: This term defines the core structural arrangement of the invention. The specific sequence of components is not merely a list of parts but is central to the patented method's alleged novelty and efficiency. Infringement hinges on whether the accused systems have this exact spatial and functional relationship. Practitioners may focus on this term to determine if there is a literal, structural match between the claim and the accused products.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: A party could argue the term is purely structural and requires only that the cooler be located physically in the air path after the first wheel and before the second wheel, without regard to other minor, unlisted components.
- Evidence for a Narrower Interpretation: The specification consistently emphasizes this sequence as enabling the overall process: pre-cooling, main cooling, and then reheating/final dehumidification ('388 Patent, col. 11:32-37; Fig. 3A). A party could argue that "between" implies a direct functional sequence and that any system that deviates from this operational flow does not meet the limitation.
The Term: "dehumidification wheel... that exchanges heat and moisture between the supply and exhaust air streams"
Context and Importance: This term is critical because it defines the function of the second wheel, which distinguishes the invention from prior art that might simply use a second wheel for reheating. The claim requires that this wheel also exchanges moisture. The case will likely turn on whether Trane's "CDQ wheel" performs this dual function in the manner described by the patent.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language is functional. A plaintiff would argue that any rotating wheel positioned after the cooler that transfers both heat (reheating the supply air) and moisture (dehumidifying the supply air) from the respective air streams falls within the claim's scope.
- Evidence for a Narrower Interpretation: The specification describes a "passive desiccant-based wheel" that operates without external high-temperature regeneration and is optimized for adsorbing moisture from a cool, saturated air stream ('388 Patent, col. 10:40-51). A defendant could argue the claim should be limited to this specific type of "passive" wheel, potentially excluding wheels with different operational principles or desiccant properties.
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement based on Trane's direct involvement with customers. It asserts that Trane personnel and marketing software provide engineers with the necessary data and configurations to design and build the allegedly infringing systems, with Trane's knowledge that the resulting systems would infringe (Compl. ¶¶50-53).
- Willful Infringement: The willfulness claim is supported by allegations of extensive pre-suit knowledge. The complaint points to 2005 emails from Trane management discussing the need to "avoid patent infringement" by using SEMCO's product and noting that Trane's attorneys had identified "the patent" as a concern (Compl. ¶42). The complaint also cites a 2010 notice letter enclosing the patent and a 2012 letter notifying Trane of a consent judgment where the patent was found valid and infringed by others (Compl. ¶¶43, 46).
VII. Analyst’s Conclusion: Key Questions for the Case
Given the complaint as filed, the dispute would have centered on two key questions, though the subsequent cancellation of the asserted claim in IPR proceedings likely rendered them moot.
A core issue would have been one of structural and functional correspondence: Does the physical layout and operational sequence of Trane's accused air handling units—specifically the relative placement and function of its "Energy wheel," "Cooling coil," and "CDQ wheel"—map directly onto the strict, three-stage architecture mandated by Claim 1 of the ’388 patent?
A second central question would have been one of state of mind: Based on the alleged history of communications dating back to 2005, did Trane possess knowledge of the patent and engage in conduct that met the legal standard for willful infringement, potentially exposing it to enhanced damages?