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Toshiba Machine Co.11/10/2005
hat orbit boring and shake turning were two names for the same process, regardless of which machine was involved.
In December 1997, SPM issued a purchase order for a BMC-1000 that Toshiba had available for immediate delivery. SPM's purchase order incorporated a proposal from Maruka in which Maruka listed "orbit machining" as a $20,000 option, and stipulated that Toshiba would provide a five-year warranty on " rbit machining software, including support, updates and revisions as they become available." SPM also attached to the purchase order a list of terms captioned "Addendum >A'." Those terms included the following:
* Toshiba would machine a fluid end on a BMC-1000 from a raw forging that SPM had already shipped to Japan, and provide to SPM the data gathered during the machining process;
* Toshiba would provide a process cycle time, i.e., the time it should take to machine a fluid end on the BMC-1000;
* Toshiba would provide the technical support and training needed to make a fluid end on the BMC-1000; and
* SPM's acceptance of the BMC-1000 was conditioned on the successful production of a fluid end on the machine at SPM's factory.
Toshiba accepted SPM's purchase order and down payment without commenting on Addendum A. Toshiba delivered the BMC-1000 to SPM's factory in March 1998. Significantly, Toshiba delivered the machine without the software needed to perform orbit boring.
In late April 1998, Toshiba sent a programmer, Takeshi Ohki, to install orbit boring software on the BMC-1000 at SPM's factory. Ohki testified that this was the first time he had attempted to combine Hale Interpolation and Archimedes Interpolation to create the orbit boring function on a BMC-1000. He was unable to make the software perform to SPM's requirements and returned to Japan.
Soon after Ohki left SPM, Toshiba's Steve Oliphant sent a memorandum to Tony Tani, Toshiba's assistant general manager, raising several issues related to the BMC-1000. Oliphant wrote:
SPM is a Beta site for this very unique [orbit boring] software.
Orbit Boring vs Hale Interpolation: There seems to be some confusion as to the definition and capabilities of these two programs. In the beginning we were told that the Orbit Boring option was available and process descriptions were supplied to the field. This was sold to SPM . . . . What further complicates this definition issue is that Mr. Oki told [Maruka] that Orbit and Hale were two different things and that the BMC1000 was not capable of Orbit.
On May 8, 1998, SPM complained that the BMC-1000 did not perform as expected and requested written confirmation that the machine could produce fluid ends. Toshiba replied that Ohki would return to Fort Worth later in May and again attempt to install the orbit boring software. Ohki returned to SPM on May 18, but still the BMC-1000 could not perform internal contouring. Around the same time, SPM offered to return the machine to Toshiba in exchange for a refund of its down payment if Toshiba had any concern about the BMC-1000's ability to perform. Toshiba promised that a software solution was imminent.
Meanwhile, SPM ordered a second machine tool from Toshiba in late July. This second tool, the BMC-800, was slightly smaller than the BMC-1000 but had the same purported functionality--including orbit boring. Toshiba advised SPM that it would not ship the BMC-800 until SPM paid the $742,500 balance due on the BMC-1000. On August 10, SPM paid the BMC-1000 balance.
Five days later, Toshiba sent SPM an "acceptance" of the BMC-800 purchase order. The acceptance stated that "there is no orbit boring sof
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