Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Hearing protection product manufacturer alleges baseless patent litigation by 3M, (Apr 22, 2014)

By Linda O’Brien, J.D., LL.M.

A large manufacturer of hearing protection products engaged in anticompetitive and monopolistic conduct by filing baseless patent infringement litigation against a competitor in an effort to drive the competitor from the market of government contracts for hearing protection products for the military, according to a complaint filed in the federal district court of Los Angeles (Moldex Metric, Inc. v. 3M Company, April 17, 2014).

Moldex Metric, Inc. is in the business of designing, manufacturing, and selling worker safety products, including hearing protection products. 3M Company is a multinational conglomerate corporation that develops, manufactures, and sells numerous products, including hearing protection products. Hearing protectors, such as non-linear or selective attenuation earplugs and earmuffs, are worn by soldiers in the field to protect against the harmful effects of battlefield explosions. The U.S. military is the largest purchaser of such products and can only purchase products that meet certain testing standards.

The complaint states that, in 2011, 3M have been manufacturing and sold its brand of non-linear earplugs for several years. Moldex introduced its own brand of non-linear earplugs and the U.S. military began to place orders for Moldex earplugs. To block Moldex from entering the market, 3M filed suit against Moldex, asserting patent infringement of U.S. Patent No. 6,070,693 (“the '693 patent”). The suit was objectively baseless since the non-linear earplugs have a second mode of attenuation that was not the invention claimed in the '693 patent. Although Moldex informed 3M that its earplug did not infringe on the '693 patent, 3M continued to pursue its suit.

According to the complaint, 3M filed a second patent claim against a different Moldex product - its earmuff. 3M alleged that Moldex’s earmuffs infringed U.S. Patent No. 7,036,157 (“the '157 patent), which covered an earmuff with two separate materials on the outer surface. Moldex first introduced its earmuff in 2001, almost five years before the '157 patent was issued. 3M allegedly knew or should have known that Moldex invented its earmuffs well before the priority date of the '157 patent and did not inform the U.S. Patent and Trademark Office of the existence of Moldex’s earmuffs during the prosecution of the '157 patent. Although Moldex informed 3M that its earmuff did not infringe on the '157 patent, 3M continued to pursue its suit. 3M ultimately dismissed both of its baseless infringement claims against Moldex; however, its pursuit of those claims imposed significant costs and damages on Moldex in the form of legal fees and lost employee time, the complaint alleged.

Since dismissing its sham patent infringement claims, 3M has used other predatory means to monopolize the market, including the misuse of the government contracting process by engaging in misleading assertions concerning its brand earplugs and comparisons with Moldex’s brand earplugs. Moldex seeks compensation for the harm suffered as a result of 3M’s anticompetitive and monopolistic practices and injunctive relief to protect against 3M’s ongoing predatory conduct.

Moldex Metric asserts claims for sham litigation, monopolization, attempted monopolization, malicious prosecution, unfair competition, and violations of Section 2 of the Sherman Act and California’ Unfair Competition Law. The action seeks declaratory and injunctive relief, treble damages, prejudgment interest, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. CV14-02921-PA.

Attorneys: Harold A. Barza (Quinn Emanuel Urquhart & Sullivan, LLP) for Moldex Metric, Inc.

Companies: Moldex Metric, Inc.; 3M Company; 3M Innovative Properties Company

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