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Toyo moves to dismiss Sentury's claims

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CYPRESS. Calif.—Toyo Tire & Rubber Co. Ltd. is immune from the tort allegations of Sentury Tire Americas, despite Sentury’s claims otherwise, according to Toyo’s motion to dismiss the remaining three claims in Sentury’s lawsuit.

Toyo invoked the Noerr-Pennington doctrine against Sentury in its motion filed before the U.S. District Court for the Central District of California, Southern Division, on Jan. 30.

Noerr-Pennington, named for two landmark cases decided by the U.S. Supreme Court in the 1960s, states that in most cases any party who petitions the federal government against allegedly unlawful conduct is exempt from actions involving alleged violations of the Sherman Antitrust Act.

One exception is if the petition is in any way a sham, and this is what Sentury claimed about Toyo’s 2013 patent infringement petition before the U.S. International Trade Commission. Toyo, however, said Sentury’s allegations were invalid on their face.

Toyo filed design infringement petitions against 23 tire manufacturers, exporters, importers, distributors and dealers in China, Thailand and the U.S. Fifteen of these companies settled with Toyo. The ITC issued limited exclusion orders and cease-and-desist orders against the other eight in July 2014.

Sentury was not among the companies named in the petition. Nevertheless, one of its tires—the Landsail Trailblazer CLV6—was named in the settlement agreements as violating Toyo’s U.S. Design Patent No. 675,150, referred to as “150” in the lawsuit. The CLV6 was excluded from U.S. distribution by the ITC.

“It is not uncommon to settle an ITC proceeding with settlement agreements that exclude the importation of allegedly infringing products,” said the complaint filed by Sentury on Sept. 4, 2014.

“However, such agreements can only be lawful where they are generally limited to respondents in the ITC proceeding,” the complaint said. “That was not the case with Sentury on the tire at issue.”

Sentury denied that the CLV6 infringed on Toyo’s “150” patent. “If Toyo believes that Sentury infringed Toyo’s ‘150’ patent, then it would have added Sentury to the ITC complaint…instead of surreptitiously adding the Sentury tire to a list of tires in the settlement agreements,” it said.

By adding the CLV6 and other tires not listed in the petition to the settlement agreements, Toyo misused its patent rights to block lawful competition in the U.S. market, Sentury said.

In November 2014, Toyo filed for a motion to dismiss Sentury’s antitrust claims. Sentury revised its complaint, dropping the antitrust allegations and asking the California court to consider only two claims of tortious interference and one of violating California’s Business & Professions Code.

According to the Toyo document, the exclusion of the CLV6 was part of its settlement agreement with American Omni Trading Co.

“The CLV6 was the only Sentury tire listed in the agreement,” Toyo said. “Accordingly, nothing in the Omni agreement, which Sentury alleges is representative of the other agreements, prevented Omni from doing business with Sentury or selling any other Sentury tire.”

Furthermore, in any ITC action, it is the ITC itself—an agency of the federal government—that determines the merits of any petition for relief and initiates any remedy, according to the Toyo motion.

“That process immunizes the ITC action against any notion that it is a sham or objectively baseless,” it said. “Even if motivation were to be considered, however, there is nothing in the settlement agreements to indicate anything other than Toyo legitimately seeking to enforce its intellectual property rights.”

A hearing on Toyo’s motion to dismiss is scheduled for March 2.