Justia Legal Ethics Opinion SummariesArticles Posted in U.S. Court of Appeals for the Federal Circuit
Nova Chemicals Corp. v. Dow Chemical Co.
District court properly awarded “exceptional case” legal fees. In 2005, Dow filed an infringement action against NOVA, which argued that its product did not infringe and that Dow lacked standing because it had transferred ownership of the patents. In 2010, the district court entered judgment against NOVA for $61 million. The Federal Circuit affirmed. In a separate appeal from an award of supplemental damages, the Federal Circuit found the asserted claims invalid as indefinite under the Supreme Court’s intervening “Nautilus” standard, but did not disturb the 2010 judgment relating to preverdict infringement. NOVA became aware of evidence allegedly showing that Dow had committed fraud in obtaining the 2010 judgment but was time-barred from moving to set aside that judgment. In 2013, NOVA filed a separate action in equity for relief from the 2010 judgment, asserting misrepresentation of Dow’s ownership of the asserted patents, based on the testimony of a former Dow employee in an unrelated tax case and on the testimony of Dow’s expert, about testing on the accused product during separate Canadian litigation. The Federal Circuit affirmed dismissal. The district court awarded Dow $2.5 million under 35 U.S.C. 285, which allows courts to award “reasonable attorney fees to the prevailing party” in “exceptional cases.” The court noted the weakness of NOVA’s litigating position and the manner in which NOVA pursued the case. The Federal Circuit affirmed. View "Nova Chemicals Corp. v. Dow Chemical Co." on Justia Law
Dellew Corp. v. United States
Comments that the Court of Federal Claims made during a hearing, before the government’s corrective action materially altered the relationship between the parties, were not sufficient to qualify the contractor as a “prevailing party” under the Equal Access to Justice Act, 28 U.S.C. 2412(a), (d)(1)(A). The Federal Circuit remanded the case, which involved Dellew’s post-award bid protest, alleging that the Army improperly awarded TSI a contract because TSI did not accept a material term of the request for proposals when it refused to cap its proposed general and administrative rate, and the contract awarded varied materially from TSI’s proposal. During oral argument, the Claims Court provided “hint[s]” about its views favorable to Dellew on the merits, and repeatedly expressed its belief that corrective action would be appropriate. The Army subsequently terminated the TSI contract. The Claims Court dismissed Dellew’s action, determined that it retained jurisdiction despited mootness, and awarded Dellew $79,456.76 in fees and costs, stating that it made “numerous substantive comments during oral argument regarding the merits,” that “carried a sufficient judicial imprimatur to materially alter the relationship between [Dellew] and [the Government] such that [Dellew] qualifies as a prevailing party under the EAJA.” View "Dellew Corp. v. United States" on Justia Law
University of Utah v. Max-Planck-Gesellschaft
The Tuschl patents relate to RNA interference, a process for “silencing” genes from expressing the proteins they encode, which may be useful in treating various diseases. In 2000, before the invention was reduced to practice, Dr. Tuschl published an article describing the discoveries. Weeks later, Dr. Bass published a mini-review that focused on Tuschl’s article and included her own hypotheses about enzymatic processes that may be responsible for the RNAi activity reported in Tuschl’s article. Tuschl read Bass’ article and recognized and successfully tested her hypothesis. Bass’ mini-review was cited as prior art during prosecution of the Tuschl patents, each of which issued. Bass sued for correction of ownership, claiming that Bass should be named as either a sole or joint inventor of the patents. During depositions, Bass made admissions undermining allegations that Bass reduced the Tuschl invention to practice and that Bass collaborated with the inventors. On the eve of the deadline for dispositive motions, Bass withdrew the sole inventorship claims, but not the joint inventorship claim. The district court rejected the joint inventorship claims on summary judgment, finding no evidence of collaboration between Bass and the Tuschl inventors. The district court declined a request for eight million dollars in attorney fees under 35 U.S.C. 285, The Federal Circuit affirmed, finding that the case was not objectively unreasonable when all reasonable inferences were drawn in Bass's favor. View "University of Utah v. Max-Planck-Gesellschaft" on Justia Law
Bayer Cropscience AG v. Dow Agrosciences LLC
The patents-in-suit relate to soybeans genetically engineered to tolerate herbicide, and, particularly, to the Bayer-developed dmmg gene. The parties disagreed over the scope of Bayer’s license of the patents to MS Tech, specifically, whether the license granted MS Tech a broad license to commercialize and sublicense the soybean technology. MS Tech had sublicensed to Dow. When Bayer sued Dow for infringement, Dow raised that sublicense as an affirmative defense. The district court entered summary judgment in favor of Dow; the Federal Circuit affirmed. The district court then awarded Dow attorney fees under 35 U.S.C. 285, declaring this an "exceptional case.” The Federal Circuit affirmed, noting Bayer’s weak positions on the merits and litigation conduct. “Bayer’s own witnesses as well as key documents contradicted Bayer’s contorted reading of the contract.” Bayer’s arguments were “fallacious” because they were “implausible” and “made no business sense” in light of the facts surrounding the agreements and their negotiation. View "Bayer Cropscience AG v. Dow Agrosciences LLC" on Justia Law
Walker v. Health International Corp.
Walker filed suit in December 2012, alleging patent infringement. In May 2014, Walker and HSN, both represented by counsel, entered into a Mediated Settlement Agreement, requiring that HSN pay Walker $200,000; Walker was to deliver a release and the parties were to stipulate to dismissal. On May 9, HSN moved to stay deadlines based on the Agreement “that resolves all claims.” Walker opposed the motion, stating that “significant issues” remained. The court denied HSN’s motion. On May 12, HSN sought reconsideration, filing the Agreement and a memorandum arguing that all claims were resolved. During May, Walker moved to file a Third Amended Complaint, moved to set a Markman Hearing, and opposed the filing of the Agreement. On May 29, HSN moved to enforce the Agreement, attaching correspondence from Walker’s counsel acknowledging that the case was settled, but requesting additional discovery. Walker delivered a general release and HSN forwarded the $200,000 payment. Walker filed motions opposing enforcement and attorneys’ fees for HSN. HSN sought sanctions based on Walker’s “meritless filings … on a matter that has been fully resolved.” At a status conference, both parties agreed the case should be dismissed, but disagreed about over what the court retained jurisdiction. The court dismissed and awarded HSN “reasonable attorneys’ fees and costs resulting from Plaintiff’s vexatious actions after the filing of the Notice of Settlement.” Walker unsuccessfully sought reconsideration, then filed an unsuccessful objection to fees. In April 2015, the court entered final judgment awarding HSN $20,511.50 in attorneys’ fees. The Federal Circuit affirmed and, finding Walker’s appeal frivolous, awarded damages and double costs under Federal Rule of Appellate Procedure 38. View "Walker v. Health International Corp." on Justia Law
International Custom Products, Inc. v. United States
Following a request from ICP, Customs issued a Ruling Letter, classifying ICP’s white sauce as “sauces and preparations therefor” under the Harmonized Tariff Schedule of the United States (HTSUS) 2103.90.9060. Years later, Customs issued a Notice of Action reclassifying pending and future entries of white sauce as “[b]utter and . . . dairy spreads” under HTSUS 0405.20.3000, which increased the tariff by approximately 2400%. After protesting and paying duties on a single entry, ICP filed a claim in the Court of International Trade, alleging the Notice of Action improperly revoked the Ruling Letter without following the procedures required by 19 U.S.C. 1625(c). Since ICP filed its first action in 2005, the CIT has issued five separate opinions on the matter, two of which were appealed to the Federal Circuit. In awarding ICP attorney fees, the Trade Court found that “The record ... establishe[d] that the goverment position was rooted in a desire to avoid the timely revocation process” by using the Notice of Action, rather than following the procedures of 1625(c)(1). The Federal Circuit affirmed the award under the Equal Access to Justice Act, 28 U.S.C. 2412(d)(1)(A), upholding the Trade Court’s analysis of whether the government’s conduct was “substantially justified.” View "International Custom Products, Inc. v. United States" on Justia Law
In re: Rearden, LLC
MOVA technology can capture an actor’s facial performance for use in motion picture special effects and video games; it is secured by trademarks, copyrights, and patents, and is reflected in hardware, source code, and physical assets. VGHL claims that Perlman, the head of Rearden, declined to acquire the MOVA assets from OL2 and proposed OL2 sell to a Rearden employee, LaSalle. Perlman introduced LaSalle to Rearden’s corporate attorney who helped LaSalle establish his own company, MO2, and negotiated with OL2. Perlman later demanded that LaSalle convey the MOVA assets to Rearden and terminated LaSalle’s employment when LaSalle refused. MO2 sold the MOVA assets to SHST, which hired LaSalle, and began selling the technology. The Rearden parties claimed that SHST never obtained ownership and that LaSalle was simply hired to handle the acquisition on Rearden’s behalf. SHST sued, alleging that Rearden had made “false or misleading representations ... concerning the ownership of the MOVA Assets ... to mislead the public and actual and prospective users and licensees” and had falsely recorded assignments of the MOVA patents. During discovery, SHST moved to compel Rearden to produce documents exchanged between MO2 and Rearden’s corporate attorney. The district court granted the request, concluding that Rearden had not shown entitlement to assert attorney-client privilege on behalf of MO2 and that LaSalle waived privilege when he shared documents. The Federal Circuit denied a petition for mandamus. Rearden's arguments failed to carry the high burden required on mandamus to overturn the court’s discovery determination. View "In re: Rearden, LLC" on Justia Law
Dynamic 3D Geosolutions LLC v. Schlumberger Ltd.
Schlumberger hired Rutherford in 2006. She was promoted to Director of Intellectual Property and later to Deputy General Counsel for Intellectual Property. Rutherford managed a copyright lawsuit and evaluated legal risks involving Petrel, Schlumberger’s software platform for three-dimensional modeling of oil wells. One competitor’s product analyzed during this project was Austin’s RECON software (the 319 patent). After seven years, Rutherford left Schlumberger. She began working as Senior Vice President and Associate General Counsel at Acacia, which began discussions to acquire the 319 patent. Petrel was discussed as a potential target of patent infringement litigation. Rutherford participated in the decision to hire CEP as outside counsel for all 319-patent-related litigation. Dynamic was formed to hold the 319 patent. Dynamic filed several lawsuits, including one accusing Petrel of infringement. On Schlumberger’s motion, the court disqualified Rutherford, other Acacia in-house counsel, and CEP from representing Dynamic in the case. Schlumberger also sued Rutherford in Texas state court, presenting evidence that she retained confidential, privileged information to provide to Acacia. The Texas court dismissed all but a breach-of-contract claim and sanctioned Schlumberger for bringing the suit. The federal district court found that Rutherford’s work at Schlumberger was substantially related to her work at Acacia; that the evidence of her involvement created an irrebuttable presumption that she acquired confidential information requiring her disqualification; that the acquired knowledge should be imputed to all Acacia attorneys for purposes of Dynamic’s suit; and that disqualification extended to CEP. Because the pleadings were drafted by disqualified counsel, the court dismissed Dynamic’s claims without prejudice. The Federal Circuit affirmed, citing the ABA Model Rules and the Texas Disciplinary Rules. View "Dynamic 3D Geosolutions LLC v. Schlumberger Ltd." on Justia Law
Biery v. United States
In 2007, Kansas landowners sued, alleging that the government had taken their land without compensation by conversion of a rail corridor to a trail under the National Trail Systems Act, 16 U.S.C. 1247(d). The Claims Court granted the government summary judgment concerning five claims and certified questions to the Kansas Supreme Court concerning the scope of Kansas railroad easements. That court determined that it lacked jurisdiction to accept the certified question. The Claims Court then granted plaintiffs summary judgment plus attorney fees under the Uniform Relocation Assistance and Real Property Act, 42 U.S.C. 4654(c), calculated using the lodestar method, where a reasonable number of hours expended is multiplied by the prevailing rate in the relevant community. Based on the “no-interest rule,” historical rates, rather than rates in force at the end of litigation, were to be used. Counsel sought $2,017,987 in fees and $201,924 in costs, based, in part, on rates in effect in Washington D.C. The court reduced the number of hours and applied the St. Louis rate for hours expended until 2010 and Washington D.C. rates for later work. The Federal Circuit denied a request to supplement the record and affirmed, upholding the reductions imposed by the lower court. View "Biery v. United States" on Justia Law
In Re: Queen’s Univ. at Kingston
Queen’s University at Kingston, Canada, owns patents directed to Attentive User Interfaces, which allow devices to change their behavior based on the attentiveness of a user—for example, pausing or starting a video based on a user’s eye-contact with the device. Queen’s sued, alleging that Samsung’s SmartPause feature infringed those patents. Throughout fact discovery, Queen’s University refused to produce certain documents. It produced privilege logs that withheld documents based on its assertion of a privilege relating to communications with its patent agents. A magistrate granted Samsung’s motion to compel, finding that the communications between Queen’s University employees and their non-attorney patent agents are not subject to the attorney-client privilege and that a separate patent-agent privilege does not exist. The district court declined to certify the issue for interlocutory appeal, but agreed to stay the production of the documents at issue pending a petition for writ of mandamus. The Federal Circuit granted that petition, finding that, consistent with Federal Rule of Evidence 501, a patent-agent privilege is justified “in the light of reason and experience” and extends to communications with non-attorney patent agents when those agents are acting within the agent’s authorized practice of law before the Patent Office. View "In Re: Queen's Univ. at Kingston" on Justia Law