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CTS Cement prevails in decade-long Ultimax patent litigation

Ending a 10-year-old patent litigation against CTS Cement Manufacturing, Cypress, Calif.-based producer of Rapid Set Cement, plus Chairman Edward Rice and a number of customers, U.S. District Court for the Central District of California Judge Andrew Guilford ruled that Rice and CTS have a shop right in the patent they allegedly infringed. The plaintiffs were Ultimax, Hassan Kunbargi, Heartland Cement Sales Co. and the K.A. Group.

Under the law, this shop right gave CTS and Rice a free license to practice the patent for the duration of its existence. The Court further ruled, as additional grounds supporting its decision in CTS’s favor, that Ultimax had also unreasonably delayed filing its suit to the defendant’s prejudice. The Court found that this delay, along with other factors, also combined to bar Ultimax from asserting infringement claims against CTS pursuant to the “doctrines of laches and equitable estoppel.”

In 2002, Ultimax and Heartland Cement sued CTS Cement in Federal Court, alleging infringement of 47 claims in three patents. Following a lengthy legal battle, CTS successfully prevailed on all claims but one. This single claim of the 556 patent went to two jury trials in 2011, the first of which resulted in a mistrial because the judge became ill. The second trial left a jury divided on several significant issues. However, Judge Guilford ruled last month that CTS has an irrevocable and royalty-free right to practice the alleged invention. The Court ruled that the evidence conclusively demonstrated that Kunbargi used CTS’s facilities, resources and personnel to develop the patent at issue.

CTS President Jerry Hoyle expressed gratitude that the company prevailed in this matter. “CTS is vindicated by the Court’s finding that we have shop rights in this alleged invention. The innovations in cement technology that Mr. Kunbargi claimed to have pioneered would not have been possible without the financial and scientific resources [we] provided him while he was working for CTS,” he said.

This CTS victory follows another Ultimax loss in California state court, where it had claimed that CTS had misappropriated trade secrets belonging to Ultimax and committed unfair competition. CTS Cement was represented by Richard Leonard of Leonard, Dicker & Schreiber LLP, and Thomas Gray of Orrick, Herrington & Sutcliffe LLP; Ultimax was represented by Saied Kashani.