Sioux Steel awarded $12M in patent infringement case against Illinois-based competitor

SIOUX FALLS — A Sioux Falls-based steel manufacturing company has won a $12 million patent infringement lawsuit against an Illinois-based competitor after their patented product was knowingly produced and distributed without permission.

Sioux Steel filed suit against Prairie Land Millwright Services Inc., of Mendota, Illinois, in February 2016, alleging that Prairie Land had been marketing, producing and selling a bin paddle sweep that Sioux Steel had patented.

The federal patent lawsuit finally reached a verdict on Wednesday, Dec. 21, ending nearly seven years of litigation with a $12 million award for Sioux Steel, the Dakota Scout first reported.

In initial court filings obtained by Forum News Service, Sioux Steel alleged that their Sioux Falls company and Prairie Land were the only two producers in the United States who offered bin paddle sweeps. Sioux Steel called their product the Daay Bin Paddle Sweep while Prairie Land referred to theirs as the Bin Gator. No non-infringing substitutes to their product were known at the time the lawsuit was filed.

Under a 2015 patent, Sioux Steel has the exclusive right to manufacture, sell and distribute the Daay Bin Paddle Sweep, but accused Prairie Land of knowingly violating the rights of the patent with the Bin Gator. Sioux Steel claimed that at the time of the lawsuit’s filing, they had the capacity to meet the market demand for the Daay Bin Paddle Sweeps in its entirety, and never gave permission for another company to produce a similar product.

Further, Sioux Steel accused Prairie Land of including intentionally misleading advertising materials that specifically disparaged the Sioux Falls company’s product and reputation.

In an exhibit included in court filings, a web page for Prairie Land’s Bin Gator reads: “Purchasing sweeps from other companies means purchasing an auger or a paddle sweep system not designed for commercial sized bins. Those systems are also notorious for not actually sweeping the bin floor clean.

With Sioux Steel’s Daay Bin Paddle Sweep existing as the only other system on the market, the company disputed those claims, adding that Prairie Land’s statements were “likely to impact the purchasing decision of a consumer for such products,” and had “the capacity to deceive and did deceive consumers as to the nature or characteristics of Sioux Steel’s products.”

The initial filing sought a jury to rule on seven questions:

1.  Did Prairie Land infringe upon Sioux Steel’s patent?
2. Did Prairie Land willfully infringe upon Sioux Steel’s Patent?
3. Should Prairie Land be permanently enjoined from the production/sale of the Bin Gator? 
4. Did Prairie Land violate the Lanham Act through false advertising?
5. Did Prairie Land commit trade libel?
6. Did Prairie Land violate the Illinois Consumer Fraud and Deceptive Trade Practices Act?
7. Is Sioux Steel entitled to all earnings from sales of the Bin Gator?

In a 19-page response to Sioux Steel’s allegations filed days later, Prairie Land denied any claim of patent infringement and denied that Sioux Steel should be entitled to any of the relief it seeks.
As part of the response, the company denied containing and utilizing the structure set forth in Sioux Steel’s patent and denied the accusation of violating the patent. The company further denied making false or misleading claims about “other company’s” products and denied targeting Sioux Steel’s customers through their advertising.

Though the verdict remains sealed as of Friday afternoon, U.S. District Judge Mary M. Rowland is expected to enter the judgment in the coming days. Attorneys that represented Sioux Steel did not respond to a request for comment.