DCT

4:23-cv-00821

Encore Wire Corp v. Southwire Co LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:23-cv-00821, E.D. Tex., 09/14/2023
  • Venue Allegations: Plaintiff Encore Wire alleges venue is proper in the Eastern District of Texas because a substantial part of the events giving rise to the claim occurred in the district and because Defendant Southwire is subject to personal jurisdiction in the district.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its electrical wire products do not infringe fourteen patents owned by Defendant, and that two of those patents are unenforceable due to inequitable conduct.
  • Technical Context: The dispute centers on technologies for manufacturing, packaging, and dispensing electrical building wire, including cable reels, tangle-free packaging systems, and methods for applying lubricants and labels.
  • Key Procedural History: The complaint references a history of litigation between the parties beginning in 2009 involving patents from families also at issue in this action. Notably, the complaint states that in a prior case, Southwire dropped infringement allegations related to a patent family at issue here after visiting Encore Wire's manufacturing facility to view its spray-on process. The complaint also includes detailed allegations that U.S. Patent Nos. 8,347,533 and 9,070,308 are unenforceable due to inequitable conduct during prosecution, specifically the failure to name a third-party inventor and disclose a prior art demonstration to the USPTO.

Case Timeline

Date Event
1993-12-01 Robert Brooks allegedly developed and reduced to practice label machines ('533 & '308 Patents inequitable conduct allegation)
2006-09-01 Mr. Brooks allegedly began developing the label machine disclosed in the application for the '533 Patent
2006-10-26 Mr. Brooks allegedly first communicated with Southwire regarding the purchase of a label machine
2006-11-06 Mr. Brooks allegedly met with Southwire representatives and showed a video of a working labeling machine
2007-01-31 Southwire allegedly installed one of Mr. Brooks' labeling machines in its facility
2007-10-11 Earliest Priority Date (’533, '308 Patents)
2009-01-01 Start of prior litigation between Southwire and Encore Wire
2011-05-04 Earliest Priority Date ('153, '219, '494, '816, '830, '598, '300, '924 Patents)
2013-01-08 U.S. Patent No. 8,347,533 Issues
2013-03-05 Earliest Priority Date ('659, '366, '831 Patents)
2013-09-23 Southwire filed the application that led to the '308 Patent
2015-01-20 U.S. Patent No. 8,936,153 Issues
2015-06-30 U.S. Patent No. 9,070,308 Issues
2015-09-29 U.S. Patent No. 9,145,219 Issues
2016-08-02 U.S. Patent No. 9,403,659 Issues
2017-10-24 U.S. Patent No. 9,796,494 Issues
2018-01-09 U.S. Patent No. 9,867,300 Issues
2018-06-22 Earliest Priority Date ('010 Patent)
2019-04-23 U.S. Patent No. 10,266,366 Issues
2019-07-16 U.S. Patent No. 10,356,924 Issues
2019-10-01 U.S. Patent No. 10,427,816 Issues
2020-09-01 U.S. Patent No. 10,763,010 Issues
2020-11-24 U.S. Patent No. 10,843,830 Issues
2022-03-08 U.S. Patent No. 11,267,598 Issues
2022-06-14 U.S. Patent No. 11,358,831 Issues
2023-08-11 Southwire sends letter to Encore Wire alleging infringement
2023-09-07 Southwire sends follow-up letter to Encore Wire
2023-09-14 Complaint for Declaratory Judgment Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 9,403,659 - "Rotatable Cable Reel"

  • Issued: August 2, 2016

The Invention Explained

  • Problem Addressed: The patent background describes the difficulties of handling large, heavy cable reels, which can weigh several tons when fully wound (Compl. ¶18; ’659 Patent, col. 1:21-66). Manually moving these reels is a labor-intensive and hazardous operation, and conventional reel designs, where the flanges and drum are an integral unit, require special equipment like capstans to pay off the cable (’659 Patent, col. 1:52-66).
  • The Patented Solution: The invention is a cable reel where the central drum and the two side flanges are independently rotatable components mounted on a common axle (’659 Patent, Abstract). This design allows the drum holding the cable to rotate and pay off the cable while the flanges remain stationary, or allows the flanges to rotate (e.g., to roll the reel into position) while the drum's rotational inertia is not engaged (’659 Patent, col. 5:5-15, col. 6:40-44). Key components include bearings that facilitate this independent rotation (’659 Patent, Fig. 1).
  • Technical Importance: This design decouples the movement of the reel's structural flanges from the cable-holding drum, potentially simplifying cable installation by reducing the force and equipment needed to unspool cable on a job site (’659 Patent, col. 6:18-25).

Key Claims at a Glance

  • The complaint asserts non-infringement of independent claim 9 (Compl. ¶33).
  • Essential elements of Claim 9 include:
    • an axle comprising a first end and a second end;
    • a drum affixed to the axle such that the drum and the axle rotate together;
    • a first flange rotatably affixed proximate to the first end of the axle by a first bearing, the first bearing comprising at least one ball or at least one roller for facilitating rotation of the first flange independent of the axle; and
    • a second flange rotatably affixed proximate to the second end of the axle by a second bearing.

U.S. Patent No. 10,266,366 - "Rotatable Cable Reel"

  • Issued: April 23, 2019

The Invention Explained

  • Problem Addressed: As a continuation of the ’659 Patent, the ’366 Patent addresses the same technical problem of managing large, heavy cable reels and the labor required to move them and pay off cable (’366 Patent, col. 1:21-66).
  • The Patented Solution: The ’366 Patent also discloses a cable reel with independently rotatable components, focusing on different structural configurations to achieve this result (’366 Patent, Abstract). The claims asserted in the complaint describe two distinct embodiments: one where flanges are affixed to the axle while the drum rotates freely on it (Claim 17), and another where one flange is affixed to the axle (Claim 11), suggesting various ways to control the interaction between the reel's components (’366 Patent, col. 21:56-22:2, col. 22:11-23).
  • Technical Importance: This technology offers alternative mechanical arrangements for a cable reel with independent components, providing design flexibility while aiming to achieve the same functional benefit of easier cable deployment (’366 Patent, col. 2:8-20).

Key Claims at a Glance

  • The complaint asserts non-infringement of independent claims 11 and 17 (Compl. ¶39).
  • Essential elements of Claim 11 include:
    • an axle comprising a first end and a second end;
    • a drum rotatably installed on the axle;
    • a first flange rotatably affixed proximate to the first end of the axle; and
    • a second flange affixed proximate to the second end of the axle.
  • Essential elements of Claim 17 include:
    • an axle comprising a first end and a second end, wherein the axle has a single-piece construction;
    • a drum rotatably installed on the axle;
    • a first flange rotatably affixed on the axle proximate to the first end; and
    • a second flange rotatably affixed on the axle proximate to the second end.
  • The complaint notes that dependent claims 12 and 18 are also not infringed (Compl. ¶41).

Multi-Patent Capsule: U.S. Patent No. 11,358,831

  • Patent Identification: “Rotatable Cable Reel,” issued June 14, 2022.
  • Technology Synopsis: This patent is in the same family as the ’659 and ’366 patents and relates to cable reels with independently rotatable drums and flanges. It claims a specific configuration where the drum is affixed to the axle to rotate together.
  • Asserted Claims: Claim 24 (independent).
  • Accused Features: Encore Wire's Real Payoff® Premium reel assembly product (Compl. ¶46).

Multi-Patent Capsule: U.S. Patent No. 8,936,153

  • Patent Identification: “Multiple Conductor Container,” issued January 20, 2015.
  • Technology Synopsis: This patent relates to containers for dispensing multiple electrical conductors without tangling. The technology involves arranging conductors in parallel layers within a container, often around a central core, allowing for a smooth "payoff" from the package.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶52).

Multi-Patent Capsule: U.S. Patent No. 9,145,219

  • Patent Identification: “Method for Laying Multiple Conductors in a Container,” issued September 29, 2015.
  • Technology Synopsis: This patent describes methods for packaging multiple conductors into a container. A key aspect is monitoring the length of each conductor as it is fed into the container to ensure consistent lengths and prevent tangling.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶58).

Multi-Patent Capsule: U.S. Patent No. 9,796,494

  • Patent Identification: “Method for Laying Multiple Conductors in a Container,” issued October 24, 2017.
  • Technology Synopsis: Continuing the technology of the '219 patent, this patent also covers methods for packaging multiple conductors. It again focuses on using a monitoring station to ensure the conductors are laid properly within the container.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶64).

Multi-Patent Capsule: U.S. Patent No. 10,427,816

  • Patent Identification: “Method for Laying Multiple Conductors in a Container,” issued October 1, 2019.
  • Technology Synopsis: This patent is in the same family as the '219 and '494 patents. It describes a method for laying multiple conductors that involves receiving them at a monitoring station and then at a drive before they are placed in the container.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶70).

Multi-Patent Capsule: U.S. Patent No. 10,843,830

  • Patent Identification: “Method for Laying Multiple Conductors in a Container,” issued November 24, 2020.
  • Technology Synopsis: This patent continues the same technology family, detailing methods for packaging multiple unbound conductors into a container by passing them through monitoring stations and tension equalization fixtures.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶76).

Multi-Patent Capsule: U.S. Patent No. 11,267,598

  • Patent Identification: “Method for Laying Multiple Conductors in a Container,” issued March 8, 2022.
  • Technology Synopsis: This patent also belongs to the "Barrel" patent family. It describes methods for laying multiple conductors into a container that involves passing them through a tension equalization fixture before they reach a monitoring station.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶82).

Multi-Patent Capsule: U.S. Patent No. 9,867,300

  • Patent Identification: “Multiple Conductor Container,” issued January 9, 2018.
  • Technology Synopsis: This patent describes a container for dispensing multiple sheathed conductors that includes a "restricting mechanism." This mechanism is configured to move within the container as the conductors are paid out, ensuring they dispense smoothly.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶88).

Multi-Patent Capsule: U.S. Patent No. 10,356,924

  • Patent Identification: “Method of Dispensing Multiple Sheathed Conductors From a Container,” issued July 16, 2019.
  • Technology Synopsis: This patent is directed to methods of dispensing conductors from a container that uses a restricting mechanism. A key claimed step is providing a grouping of the conductors after they pass through this mechanism.
  • Asserted Claims: Claim 1 (independent).
  • Accused Features: Encore Wire's Cyclone® Barrel Pack product (Compl. ¶94).

Multi-Patent Capsule: U.S. Patent No. 10,763,010

  • Patent Identification: “Method of Manufacturing Electrical Cable, and Resulting Product, with Reduced Required Installation Pulling Force,” issued September 1, 2020.
  • Technology Synopsis: This patent describes electrical cable with an integrated pulling lubricant. The lubricant is mixed with the insulating material itself during manufacturing to reduce the force needed to pull the cable through a conduit.
  • Asserted Claims: Claim 16 (independent).
  • Accused Features: Encore Wire's NM-B Building product (Compl. ¶100).

Multi-Patent Capsule: U.S. Patent No. 8,347,533

  • Patent Identification: “Machine Applied Labels to Armored Cable,” issued January 8, 2013.
  • Technology Synopsis: This patent describes a method and machine for applying labels to armored electrical cable at spaced intervals while the cable is moving. The process involves folding and heat-shrinking a label onto the cable's irregular, corrugated surface.
  • Asserted Claims: Claim 1.
  • Accused Features: Encore Wire's SmartColorID® technology (Compl. ¶106). This patent is also the subject of an unenforceability claim (Compl. ¶108).

Multi-Patent Capsule: U.S. Patent No. 9,070,308

  • Patent Identification: “Labeled Armored Electrical Cable,” issued June 30, 2015.
  • Technology Synopsis: This patent is in the same family as the '533 patent and covers the resulting product: an armored electrical cable with machine-applied labels that conform to the cable's alternating peaks and valleys.
  • Asserted Claims: Claim 1.
  • Accused Features: Encore Wire's SmartColorID® technology (Compl. ¶106). This patent is also the subject of an unenforceability claim (Compl. ¶108).

III. The Accused Instrumentality

Product Identification

  • The complaint names four categories of accused instrumentalities: (1) the Real Payoff® Premium reel assembly product; (2) the Cyclone® Barrel Pack product; (3) the NM-B Building product; and (4) the SmartColorID® technology (Compl. ¶¶ 33, 52, 100, 106).

Functionality and Market Context

  • The complaint provides minimal affirmative technical details about the accused products, focusing instead on asserting how they differ from the patented technology.
    • The Real Payoff® Premium reel is described as a product for dispensing electrical wire (Compl. ¶33). The complaint alleges that its drum and axle do not "rotate in unison" and that its flanges are not "affixed" in the manner claimed by the asserted patents (Compl. ¶¶ 36, 42).
    • The Cyclone® Barrel Pack is a product for dispensing electrical conductors from a container (Compl. ¶52). The complaint alleges its conductors are not "freely associated unbound" and that it lacks the claimed "monitoring station" and "restricting mechanism" features (Compl. ¶¶ 55, 61, 91).
    • The NM-B Building product is a type of electrical building wire (Compl. ¶100). The complaint alleges it does not contain "a pulling lubricant mixed with at least a portion of the insulating material" as claimed (Compl. ¶103).
    • The SmartColorID® technology is identified as a technology used by Encore Wire (Compl. ¶23.b). The complaint does not describe its functionality but seeks a declaration that it does not infringe the '533 and '308 patents and that those patents are unenforceable (Compl. ¶¶ 106-108).
  • No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

'659 Patent Infringement Allegations

Claim Element (from Independent Claim 9) Alleged Infringing Functionality Complaint Citation Patent Citation
a drum affixed to the axle such that the drum and the axle rotate in unison Plaintiff alleges its Real Payoff® Premium reel assembly products do not have this functionality. ¶36 col. 22:1-2
a first flange rotatably affixed proximate to the first end of the axle by a first bearing...for facilitating rotation of the first flange independent of the axle The complaint does not specifically address this element but makes a general assertion of non-infringement. ¶35 col. 22:3-7

'366 Patent Infringement Allegations

Claim Element (from Independent Claim 11) Alleged Infringing Functionality Complaint Citation Patent Citation
a drum rotatably installed on the axle The complaint does not specifically address this element but makes a general assertion of non-infringement. ¶41 col. 21:58
a second flange affixed proximate to the second end of the axle Plaintiff alleges its Real Payoff® Premium reel assembly products do not have this functionality. ¶42 col. 21:61-62
Claim Element (from Independent Claim 17) Alleged Infringing Functionality Complaint Citation Patent Citation
a drum rotatably installed on the axle Plaintiff alleges its Real Payoff® Premium reel assembly products do not have this functionality. ¶43 col. 22:14
a first flange rotatably affixed on the axle The complaint does not specifically address this element but makes a general assertion of non-infringement. ¶41 col. 22:15-16
  • Identified Points of Contention: The non-infringement arguments presented in the complaint are highly specific and focus on the mechanical relationship between components.
    • Scope Questions: A central dispute for the '659, '366, and '831 patents will be the construction of terms describing how components are connected and move relative to each other, such as "affixed to," "rotatably installed on," and "rotate in unison." The case may explore whether the accused reel's specific assembly method falls outside the scope of these terms as defined in the patents.
    • Technical Questions: For the '010 patent, the dispute may center on the chemical composition of the accused NM-B product's insulation. The key question will be whether it contains a material that functions as a "pulling lubricant mixed with" the insulation, as required by the claim, or if any friction-reducing properties are inherent to the base material itself. Similarly, for the "Barrel" patents, the dispute will likely focus on whether any component of the Cyclone® Barrel Pack product performs the function of the claimed "monitoring station" or "restricting mechanism."

V. Key Claim Terms for Construction

The Term: "rotate in unison" ('659 Patent, Claim 9)

  • Context and Importance: This term is the sole basis for non-infringement of the '659 patent articulated in the complaint (Compl. ¶36). The dispute will likely turn on whether this term requires a complete lack of any relative motion between the drum and axle, such as being welded or keyed together, or if it can encompass a configuration where they are coupled but might exhibit some incidental play or slippage.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification does not appear to provide an explicit definition. A party could argue that in the context of a multi-ton reel, any configuration that causes the drum and axle to functionally turn as a single unit during cable payoff, even if not rigidly fixed, meets the "in unison" requirement.
    • Evidence for a Narrower Interpretation: The patent distinguishes this embodiment from others where the drum and axle rotate independently (e.g., ’366 Patent, Claim 17, "drum rotatably installed on the axle"). This contrast may support an interpretation that "rotate in unison" requires a fixed, non-rotatable connection between the drum and axle.

The Term: "affixed proximate to" ('366 Patent, Claim 11)

  • Context and Importance: Plaintiff's non-infringement argument for Claim 11 hinges on this term, suggesting its reel does not have a flange "affixed" in the claimed manner (Compl. ¶42). The construction will be critical to determining if the connection method used in the accused product meets this limitation.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: "Affixed" could be construed broadly to mean "attached or connected," without requiring a specific method like welding or bolting, as long as the flange is secured near the end of the axle. The patent's use of general terms like "mounted" elsewhere may support this (col. 5:12).
    • Evidence for a Narrower Interpretation: A party could argue that in the context of the patent, "affixed" implies a permanent or semi-permanent, non-rotational attachment to the axle, in contrast to the "rotatably affixed" language used for the other flange in the same claim. This contrast suggests "affixed" carries a meaning of being fixed against rotation relative to the axle.

VI. Other Allegations

Unenforceability / Inequitable Conduct

  • The complaint alleges that U.S. Patent Nos. 8,347,533 and 9,070,308 are unenforceable due to inequitable conduct during prosecution (Compl. ¶108). The specific allegations are:
    • Incorrect Inventorship: The complaint alleges that Southwire failed to name Robert Eugene Brooks as an inventor on the applications leading to the '533 and '308 patents, despite knowing that he developed and reduced to practice the claimed labeling machine (Compl. ¶¶ 109, 111, 115-116). It is alleged that Southwire employees who were named as inventors had met with Mr. Brooks and seen a video of his working machine before filing the patent application (Compl. ¶¶ 113-114).
    • Failure to Disclose Prior Art: The complaint alleges that Southwire failed to disclose to the USPTO the prior art demonstration of Mr. Brooks's machine, which allegedly embodied the invention, constituting a failure to disclose material information with an intent to deceive (Compl. ¶109).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of structural definition: how will the court construe mechanical terms like "rotate in unison," "affixed proximate to," and "rotatably installed on"? The outcome of the infringement analysis for the "Reel" family of patents will likely depend on whether the specific mechanical assembly of the Real Payoff® product falls within these claim boundaries.
  • A second key issue will be one of technical and functional presence: does any feature of the Cyclone® Barrel Pack product perform the function of a "restricting mechanism" as claimed in the '300 and '924 patents? Similarly, does the insulating material of the NM-B Building product contain a distinct "pulling lubricant" as required by the '010 patent, or are its properties inherent to the base polymer?
  • A central evidentiary question will be the allegations of inequitable conduct: what evidence exists regarding what Southwire's named inventors knew about Mr. Brooks's alleged contributions and prior art demonstrations, and their state of mind during the prosecution of the '533 and '308 patents? The resolution of this claim will depend on findings of materiality and deceptive intent.