Covertech Fabricating Inc v. TVM Building Products Inc

Too often the silence of contracting parties must be filled by the voice of the courts. Such is the case here, where we are called upon to resolve a trademark dispute in which no written contract designates ownership, and, in the process, to clarify the paradigm through which common law ownership of an unregistered trademark is determined when the initial sale of goods bearing the mark is between a manufacturer and its exclusive distributor. The District Court in this case awarded ownership to the manufacturer, but did so on the basis of the first use test, and found the distributor liable for infringement and fraud before rejecting its defense of acquiescence and awarding damages under the Lanham Act. Because the District Court failed to recognize and apply the rebuttable presumption of manufacturer ownership that we conclude pertains where priority of ownership is not otherwise established, and because the District Court incorrectly relied on gross sales unadjusted to reflect sales of infringing products to calculate damages, we will affirm on alternative grounds as to ownership, will affirm as to fraud and acquiescence, and will vacate and remand as to damages.

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Phil-Insul Corp. v. Airlite Plastics

Phil-Insul Corp. d/b/a IntegraSpec (“IntegraSpec”) filed suit against Airlite Plastics Co. and Formtech, LLC (collectively, “Airlite”) alleging infringement of U.S. Patent No. 5,428,933 (“the ’933 Patent”), which relates to insulating concrete forms (“ICFs”) that are used in the construction of buildings. Airlite moved for summary judgment of noninfringement, arguing that IntegraSpec’s claims are precluded by our decision in a prior action. In that case, IntegraSpec asserted claims from the same patent against different defendants with similar products. There, after construing the claims, the district court granted summary judgment of noninfringement, and subsequently granted the parties’ stipulated request for a Rule 54(b) certification for immediate appeal. IntegraSpec timely appealed, challenging only the district court’s claim construction. We summarily affirmed the district court’s final judgment without an opinion. PhilInsul Corp. v. Reward Wall Sys., Inc., 580 F. App’x 907 (Fed. Cir. 2014).

In this case, Airlite argued that IntegraSpec’s infringement claims are the same as the infringement claims it asserted and lost in Reward Wall and that Airlite’s accused products have the same design as the products found noninfringing in that prior litigation. The district court agreed, and granted Airlite’s motion for summary judgment of noninfringement. Phil-Insul Corp. v. Airlite Plastics, Co., No. 8:12-cv-151, 2016 WL 5107131 (D. Neb. Mar. 2, 2016) (“Decision on Appeal”). Because we agree that IntegraSpec’s claims are barred by collateral estoppel, we affirm.

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Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Ltd.

A jury found that Samsung infringed Rembrandt’s asserted patents, which the jury also found not invalid over prior art cited by Samsung. The jury awarded Rembrandt $15.7 million in damages. After trial, Samsung moved for judgment as a matter of law on obviousness and damages, which the district court denied. Samsung appeals the district court’s denial of JMOL, as well as the district court’s claim construction order and an order denying Samsung’s motion to limit Rembrandt’s damages for alleged failure to mark patented articles.

Because we agree with the district court’s challenged claim construction and its denial of Samsung’s JMOL motions, we affirm those decisions. We disagree, however, with the district court’s denial of Samsung’s motion based on the marking statute, and we vacate that decision and remand for proceedings consistent with this opinion.

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Core Wireless Licensing S.A.R.L. v. Apple, Inc.

This appeal arises from a patent infringement action brought in the United States District Court for the Eastern District of Texas. The plaintiff, Core Wireless Licensing S.a.r.l., is the owner of U.S. Patent No. 6,978,143 (“the ’143 patent”). Claim 17 of the patent, the only claim at issue in this appeal, recites a mobile station, such as a mobile telephone, that is connected to a cellular system or network. The claim is directed to means for sending packet data from the mobile station to the network using a selected channel.

Following trial, the jury found that the defendant, Apple Inc., did not infringe any of the asserted claims. The district court denied Core Wireless’s motion for judgment as a matter of law, and Core Wireless took this appeal. We affirm.

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Lipitor Antitrust Litigation

A pharmaceutical company holding the patent on a drug sues the manufacturer of a generic version of that drug for patent infringement. The patent-holder and the generic manufacturer later settle, with the former paying the latter not to produce a generic until the patents at issue expire. In FTC v. Actavis, Inc., 133 S. Ct. 2233 (2013), the Supreme Court recognized that such a settlement—commonly known as a “reverse payment”—where large and unjustified, can sometimes unreasonably diminish competition in violation of the antitrust laws. To answer the antitrust question, Actavis explained, “it is not normally necessary to litigate patent validity” because “the size of the unexplained reverse payment can provide a workable surrogate for a patent’s weakness.” Id. at 2236-37.

These two sets of consolidated appeals involve allegations that the companies holding the patents for Lipitor and Effexor XR delayed entry into the market of generic versions of those drugs. The companies did so, plaintiffs say, by engaging in an overarching monopolistic scheme that involved fraudulently procuring and enforcing the underlying patents and then entering into a reverse-payment settlement agreement with a generic manufacturer. With a single exception, every complaint asserts one of these monopolization claims against the patent-holders. The cases were assigned to the same district judge, who ultimately dismissed the bulk of plaintiffs’ claims.

In this opinion, we address two questions of federal jurisdiction. First, do plaintiffs’ allegations of fraudulent procurement and enforcement of the patents require us to transfer these appeals to the Court of Appeals for the Federal Circuit? That court has exclusive jurisdiction over appeals from civil actions “arising under” patent law. 28 U.S.C. § 1295(a)(1). But not all cases presenting questions of patent law necessarily arise under patent law. See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1986). Where, as here, patent law neither creates plaintiffs’ cause of action nor is a necessary element to any of plaintiffs’ well-pleaded claims, jurisdiction lies in this Court, not the Federal Circuit.

The second jurisdictional question we confront is confined to one of the Lipitor appeals, RP Healthcare, Inc. v. Pfizer, Inc., No. 14-4632. That case, brought by a group of California pharmacists, involves claims solely under California law and was filed in California state court. Following removal the District Court declined to remand the case to state court, citing potential patent defenses. That was error, as federal jurisdiction depends on the content of the plaintiff’s complaint, not a defendant’s possible defenses. Before final judgment, however, the remaining non-diverse defendants were voluntarily dismissed, thus raising the possibility that, notwithstanding the District Court’s failure to remand the case, it possessed diversity jurisdiction before the time it entered judgment. See Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996). But because the state of the record before us is unclear with regard to the citizenship of the parties, we cannot reach the merits of this appeal until that question is resolved. We will accordingly remand the RP Healthcare appeal to the District Court so it can conduct jurisdictional discovery and address the matter in the first instance.

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