Editor’s Note: Avery Welker is a 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

My Civil Procedure I outline turned out to be the longest outline of my first law school semester. Personally, I was betting on joinder and class actions to contain the most notes throughout the semester. As it turned out, discovery took the “most notes” crown. That makes sense – there’s a lot to discover in a lawsuit! Upon review of my outline, some of these rules started to come back to me.

That includes, of course, Rule 26, which outlines discovery generally and contains rules on the duty to disclose.[1] Wrapped within Rule 26 are details about expert testimony.[2] While Rule 26 didn’t end up wholly dispositive of this lawsuit, it certainly was the final nail in the coffin for an inventor’s testimony through the course of Pandrol USA, LP v. Airboss Railway Products, Inc.[3]

This appeal arose from a summary judgment grant to Pandrol[4] (Plaintiffs-Appellees) over Airboss[5] (Defendants-Appellants), declaring that Airboss failed to show clear and convincing evidence of patent invalidity.[6]

The patent at issue, U.S. Patent No. 5,110,046 (’046 Patent), relates to preventing abrasion on tie rail seats by using a plate designed to absorb abrasion between the rail pad and rail tie.[7] FIG. 1 below shows the abrasion plate (labeled 10) in between the pad (labeled 4) and the tie (labeled 1).[8]

One issue in the appeal centered on the testimony of the ’046 Patent’s inventor, Hartley Young.[9] Normally, an inventor testifies on behalf of the patentee. However, by the time of this lawsuit, Young had taken a job with the defendant, Airboss, and submitted a declaration supporting his new employer’s contention that the patent was invalid.[10] At the district court level, assignor estoppel quickly put a stop to that testimony.[11] The Federal Circuit agreed and noted that exclusion of the inventor’s anti-patent testimony was justified based on “unfairness and injustice.”[12]

Where Rule 26 comes into play is the rest of the testimony.[13] Under Rule 26(a)(2), Airboss was required to file an expert report for Young’s declaration because the declaration contained .[14] This declaration contained Young’s opinion on the patent specification interpretation to be used on other issues in the trial.[15] The district court noted that Young’s testimony falls under Federal Rule of Evidence 702 and requires an expert report.[16] On appeal, the Federal Circuit agreed. Even though Young was an inventor and thus a potential fact-witness, his declaration also “contains expert opinion because he opines on claim construction and interpretation of the original application.”[17]  In the end, the Federal Circuit affirmed district court’s exclusion of Young’s testimony on both the assignor estoppel and Rule 26 grounds, thus putting the final nail in his testimony.[18]

With Young’s testimony excluded entirely, clearly, that evidence could not come in. Many can speculate on what the outcome of this case would have been including Young’s testimony. No doubt that information from the inventor himself would be very relevant and accurate as to factual issues! However, one bullet point in my notes on expert witnesses lays out the base reasoning for this rule: “Essentially making sure experts are qualified and aren’t using ‘quack science.’”

Rule 26 certainly has plenty of moving parts. The overarching tools of discovery have many checkboxes and procedural steps to jump through. Sometimes I wonder how I kept it all straight on my final exam last year!

[1] Fed. R. Civ. P. 26.

[2] Id. at 26(a)(2).

[3] Pandrol USA, LP v. Airboss Ry. Prods., Inc., 424 F.3d 1161 (Fed. Cir. 2005).

[4] “Pandrol” includes Pandrol USA, LP and Pandrol Limited.

[5] “Airboss” includes Airboss Railway Products, Inc., Airboss of America Corp., Robert Magnuson, and Jose Mediavilla.

[6] Pandrol USA, LP, 424 F.3d at 1163.

[7] U.S. Patent No. 5,110,046 col 1 l. 38–43.

[8] Id. at col 2 l. 33–34, fig.1.

[9] Pandrol USA, LP, 424 F.3d at 1166; ’046 Patent at [75].

[10] Pandrol USA, LP v. Airboss Ry. Prods., Inc., No. 99-0182-CV-W-SOW, 2003 WL 24272366, at *4 (W.D. Mo. Oct. 15, 2003), aff’d 424 F.3d 1161 (Fed. Cir. 2005).

[11] Id.

[12] Pandrol USA, LP, 424 F.3d at 1167.

[13] Id.

[14] Id.

[15] Pandrol USA, LP, 2003 WL 24272366, at *4.

[16] Id.

[17] Pandrol USA, LP, 424 F.3d at 1166–67.

[18] Id.

Editor’s Note: Avery Welker is a rising 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

If PerDiemCo LLC (PerDiemCo | Defendant) could have it their way, sending demand letters to a company in another state would not constitute minimum contacts for purposes of personal jurisdiction. Trimble, Inc. v. PerDiemCo LLC, No. 19-2164, 2021 WL 1898127, at *1, *7 (Fed. Cir. May 12, 2021). PerDiemCo is the assignee of eleven patents[1] at issue, all related to geofencing and electronic logging technology (commonly used in the trucking industry). Trimble, Inc., and ISE (Trimble’s wholly-owned subsidiary) (Trimble | Plaintiff) offer geofencing and logging technologies along with manufacturing and selling positioning devices. Id. at *1. Below is a figure depicting this technology, which shows the geofenced areas (boxed in), the entry and exit points (see figure reference 2204), and location information logs while a contact is within a geofenced area (see figure reference 2202). U.S. Patent No. 10,171,950 fig.22 (filed May 22, 2018) (issued Jan. 1, 2019).

The entire web of incorporations, headquarters, locations, and personal jurisdiction issue reads like a Civil Procedure personal jurisdiction final exam hypo. Trimble, Inc. is incorporated in Delaware and headquartered in Sunnyvale, California (in the Northern District of California). Trimble Inc., WL at *1. ISE is an Iowa LLC with its principal place of business in Coralville, Iowa (in the Northern District of Iowa). Id. PerDiemCo is a Texas LLC with office space in Marshall, Texas (Eastern District of Texas). Id. The sole owner, employee, and officer lives and works in Washington D.C. and has never visited the office space in Texas. Id.

PerDiemCo sent a letter to ISE in 2018 alleging ISE’s devices used technology in PerDiemCo’s patents (see footnote 1). Id. PerDiemCo attached an unfiled complaint against ISE for the Northern District of Iowa, asserting nine patents against ISE, included a claim chart, offered a non-exclusive license to PerDiemCo’s patents, and a draft nondisclosure agreement for negotiations. Id. ISE subsequently forwarded the letter to Trimble’s IP counsel in Westminster, Colorado. Id. at *2. The counsel responded to PerDiemCo to inform that the issues would be communicated through Trimble. Id. PerDiemCo responded to Trimble and alleged that Trimble’s products also infringed in PerDiemCo’s patents, attaching a claim chart. Id. The parties agreed to negotiate for a few months. Id. PerDiemCo leveled new allegations of patent infringement against Trimble’s geofencing products and allegations based on two previously unasserted patents. Id. PerDiemCo repeatedly threatened to sue Trimble in the Eastern District of Texas on the infringement accounts. Id.

In response, Trimble and ISE sought a declaratory judgment action of non-infringement in the Northern District of California for all patents asserted by PerDiemCo in January 2019. Id. Trimble and ISE asserted that PerDiemCo was subject to specific personal jurisdiction in the Northern District of California. Id. While the district court (and later the Federal Circuit) held that the minimum contacts standard was satisfied, the district court dismissed the action, and Trimble and ISE appealed. Id. at *3, *7.

PerDiemCo argued that specific personal jurisdiction would be unreasonable, citing the five “fairness” factors outlined in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).[2] In Burger King, the Court had to decide whether exercising personal jurisdiction over two out-of-state Burger King franchisees would be fair. Id. at 466, 476. The Court ultimately concluded, after weighing the fairness factors (see footnote 2), that the exercise of personal jurisdiction, in that case, did not offend due process, as the franchisees had fair notice of the danger of suit in Florida. Id. at 487. The franchisees did not show the Court that it would be fundamentally unfair to exercise jurisdiction. Id.

Factor 1 – the burden on the defendant: PerDiemCo argued that litigating anywhere other than the Eastern District of Texas would impose an undue burden. Trimble Inc., WL at *7. However, the district court found that PerDiemCo’s office in Texas was essentially for show since PerDiemCo’s sole employee lived and worked in Washington D.C. Id. Since PerDiemCo filed lawsuits very far away from Washington D.C. and litigating patents away from D.C. is the main operation of PerDiemCo’s business, the Federal Circuit found no burden. Id.

Factor 2 – the forum State’s interest in adjudicating the dispute: The Federal Circuit found that California had an interest in litigating the suit as Tremble resided in California, and the State desires to protect its residents from any frivolous claims of patent infringement. Id. at *8.

Factor 3 – the plaintiff’s interest in obtaining convenient and effective relief: Here, the Federal Circuit found that Trimble had an obvious interest in getting relief from a court in its home forum, where principal employees and documents are. Id.

Factor 4 – the interstate judicial system’s interest in obtaining the most effective resolution of controversies: The Federal Circuit found that even if, as PerDiemCo asserted, a settlement would be the most efficient conflict resolution, both parties could reach a settlement pending litigation in the Northern District of California. Id.

Factor 5 – the shared interest of the several states in furthering fundamental substantive social policies: Given that the same patent laws govern all states, there is no conflict in litigating in the Northern District of California. Id.

Upon the Federal Circuit’s factor weighing, they ultimately decided that PerDiemCo did not show that jurisdiction was unreasonable and reversed the district court’s dismissal, remanding for further proceedings. Id.

Here, PerDiemCo couldn’t “have it their way.” Nothing short of jurisdictional rules so unfair that make litigation so tricky that the party would be severely disadvantaged will defeat asserting personal jurisdiction. Burger King, 471 U.S. at 477. Burger King makes it abundantly clear – if it’s fair, personal jurisdiction is lawful!

[1] U.S. Patent Nos. 8,149,113, 9,319,471, 9,485,314, 9,621,661, 9,680,941, 9,871,874, 9,954,961, 10,021,198, 10,104,189, 10,148,774, 10,171,950.

[2] The factors are: (1) “the burden on the defendant,” (2) “the forum State’s interest in adjudicating the dispute,” (3) “the plaintiff’s interest in obtaining convenient and effective relief,” (4) “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” and (5) the “shared interest of the several States in furthering fundamental substantive social policies.” Burger King, 471 U.S. at 477 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).

Editor’s Note: Avery Welker is a rising 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

This past Spring semester, I had Civil Procedure II on my schedule. As taught this year, Civil Procedure II took us through personal jurisdiction, subject matter jurisdiction, and finished off with the Erie doctrine. Personal jurisdiction was the bulk of our semester, taking us through midterms. I had my midterm on March 19, 2021 – six days before the Ford Motor Co. v. Montana Eighth Judicial Dist. Ct. decision. Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., 141 S.Ct. 1017 (2021). Prof. Crouch[1] diligently placed Ford on our class’s radar as the midterm approached, and I was crossing my fingers every day to hope that my new Civil Procedure book wasn’t going to become outdated less than six months after I bought it.

Luckily, that wasn’t the case! Instead of a radical ripple effect on personal jurisdiction, it made a splash in another way: expanding on our understanding of due process and specific jurisdiction. As of May 24, 2021, 63 cases have cited Ford. Upon reading Ford, it’s easy to see why. Ford is a fantastic resource for personal jurisdiction, elaborating on general and specific personal jurisdiction, expanding understanding of minimum contacts, and giving a north star to perform the analyses. Id. at 1024-25.

Ford’s utility as a roadmap is immediately apparent. One example stems from a budding Trademark infringement suit: Galaxy America, Inc. v. EZ Inflatables, Inc., No. 2:19-cv-855-JES-MRM, slip op. at *1 (M.D. Fla. May 12, 2021). Galaxy America, Inc. (Plaintiff / Galaxy) alleged that EZ Inflatables, Inc. and its owner, Edgar Abraamyan (Defendants / EZ Inflatables), designed and sold knock-off products based on Galaxy’s designs. Id. Galaxy designs various commercial amusement inflatables (e.g., slides, obstacle courses, etc.), marketed under their TOXIC® trademark and Galaxy’s trade dress. Id. This decision partly responds to Abraamyan’s Rule 12(b)(2) motion to dismiss all counts against him for lack of personal jurisdiction. Id.

In performing the personal jurisdiction analysis, the Middle District of Florida lays out the roadmap for the examination, indicating that the court will need to go through specific and general jurisdiction analyses. Id. at *2. Here, the court produces a lengthy quote from Ford, setting the scene for the examinations. The gist of Abraamyan’s argument is that he is not a Florida resident and has insufficient contacts with Florida to warrant the exercise of personal jurisdiction. Id. at *3.

Of course, that is the same song and dance as every personal jurisdiction question hypo given in Civil Procedure classes. In Civil Procedure II, the analysis pattern I learned flowed from first looking to a long-arm statute, seeking out any traditional Pennoyer bases of personal jurisdiction (e.g., presence), and performing an International Shoe minimum contacts analysis.

The Middle District of Florida follows the pattern set out by Ford. The court first analyzes whether Florida may exercise general jurisdiction over Abraamyan, which it declines to assert. Id. at *4-5. Next, the court looks to whether Galaxy pled sufficient facts to plausibly demonstrate specific jurisdiction, based on directing tortious activity to Florida, satisfying Florida’s long-arm statute and the court’s exercise of personal jurisdiction. Id. at *6.

At this point in the decision, my understanding of personal jurisdiction expanded. It was often easy to take the statutory authorization for granted or as a given in class. Generally, most of our analysis came from the multitude of court cases involving personal jurisdiction (e.g., International Shoe, Bristol-Myers Squibb, Daimler A.G., etc.). For me, it serves as a reminder that the analysis must cover all the bases in the analysis. In my first reading of this decision, I assumed that what the court was doing in the specific jurisdiction was a pared-down version of a minimum contacts analysis. Instead, it was what we usually readily assumed in a classroom setting.

Upon finding that the tortious activity alleged by Galaxy was plausible, the court continues the personal jurisdiction inquiry into a third prong of due process under the Fourteenth Amendment. Id. Here is where the comfortable terms “purposeful[] avail[ment],” “arise out of or relate to,” and “traditional notions of fair play and substantial justice” come into play. Id. The court finds that personal jurisdiction is authorized and fair. Id. at *7. Soon, I will be taking a look more in-depth at these factors in future posts.

Personally, Civil Procedure was one of the most interesting classes I had in my 1L. The Ford decision handed down a half-semester’s worth of studying in one neatly wrapped decision. While the Galaxy decision didn’t necessarily take advantage of the more heavy-hitting parts of Ford (e.g., expanding on the “arise out of or relate to” from Bristol-Myers Squibb, see footnote 1.), the decision used the succinctly worded descriptions of specific and personal jurisdiction as their targets for analysis.

Ford will be my quick-reference guide for personal jurisdiction for the time being!

[1] See Prof. Crouch’s Patently-O post about Ford here: https://patentlyo.com/patent/2021/03/montana-personal-jurisdiction.html

Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

The first line of class notes I took in Civil Procedure during our discovery module says, “Spoliation – OLD LEGAL DOCTRINE.” I’m not sure why I felt the need to emphasize that spoliation is an old doctrine at the time, but it makes sense now. Oddly, my note reflects the importance of the doctrine and how it has stood the test of time. Zubulake V, the first case in my Civil Procedure discovery module, is a perfect example of the dangers facing a party if they are not diligent about evidence preservation. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (“Zubulake V”). Sanctions were the “spoils” that Skyline Steel, LLC (Skyline / Plaintiff) sought over PilePro, LLC (PilePro / Defendant) during a “bitter” patent suit between the two companies. Skyline Steel, LLC v. PilePro, LLC, 101 F.Supp 3d 394, 397 (S.D.N.Y. 2015).

Skyline and PilePro are merchants of sheet pile wall systems and components. Id. at 397-98. Sheet pile walls are structures deployed to retain soil or water and are built out of vertical interlocking sheet sections. E.g., Nucor Skyline. PilePro made accusations that Skyline was infringing PilePro’s patent, U.S. Patent No. 8,856,543, through letters and claims on their website. U.S. Patent No. 8,856,543 (filed Mar. 31, 2008) (issued Oct. 15, 2013) (‘543 Patent); Skyline, 101 F.Supp 3d at 397. In relevant part, the ‘543 Patent covers a two-step method for manufacturing a sheet pile section with an interlock connector. U.S. Patent 8,856,543. First, the preliminary wall is formed with a “material accumulation” at the side with the interlock connector, which is then shaved down by shape-cutting to produce a uniform cross-section throughout the interlock connector. Id. The method claims to be able to make different types of connectors, including a T-carrier, Hoesch claw, and a Larsson hook, through the processes shown in figures 1, 2, and 3, respectively, of the ‘543 Patent (shown below). Id. at figs. 1-3.

PilePro’s accusations of infringement on the ‘543 Patent have an interesting origin. To obtain the ‘543 Patent, PilePro had to differentiate their process from an earlier patent, named the “Hermes I.” Skyline, 101 F.Supp 3d at 398. The location of the material accumulation was at issue. Id. The ‘543 Patent differentiated itself (through the eyes of the USPTO) by noting that the material accumulation was only at the area to be made into the interlock, and not the entire flange, as in Hermes I. Id. Hermes I is owned by ArcelorMittal Commercial RPS, which manufactures a sheet pile system called the “HZM System,”  distributed by Skyline. Id. Soon after the ‘543 Patent was issued, PilePro sent letters to Skyline and current and potential customers of Skyline that PilePro would hold the customers liable for damages PilePro was entitled to for the use of the HZM System, which PilePro claimed may infringe on the ‘543 Patent. Id. In addition, PilePro posted a public warning on their website for about a month and a half that the HZM System was infringing on the ‘543 Patent. Id.

PilePro’s spoliation woes flowed from this website. Skyline contended that PilePro failed to produce two types of evidence related to who viewed the warning on PilePro’s website: (1) Google Analytics data and (2) sever log data collected by “PaperTrail” which are both used to track website traffic, among other analytics. Id. at 407.

Here, the court found some guidance in Zubulake V. This case, the fifth opinion in the Zubulake series, details the importance of an attorney’s duty to carefully and thoughtfully ensure everybody in a company is on the same page when it comes to file preservation in anticipation of litigation. You can feel the irritation written into the opinion about this dispute dragging out: “This is the fifth written opinion in this case, a relatively routine employment discrimination dispute in which discovery has now lasted over two years.” Id. at 424.

Laura Zubulake, an equities trader, filed a complaint against her employer, UBS Warburg, LLC (UBS), alleging gender discrimination, failure to promote, and retaliation. Id. at 425. UBS was on notice that Zubulake would file a complaint, and their counsel instructed employees to preserve any evidence that could be used through the claim. Id. However, as you may guess, the employees failed to preserve evidence on several occasions (hence Zubulake I – IV), and where they did preserve evidence, labored in presenting it timely. Id. at 436. The penalty of sanctions for UBS was sweeping, compensating Zubulake for the troubles of the missing and delayed evidence through charging UBS for costs of depositions, paying the cost of the sanctions motion, and giving the jury an adverse instruction for the irrecoverable data. Id. at 436-37.

The court in Zubulake V detailed several (non-exhaustive) steps that counsel should be taking in continually fulfilling the common law duty to preserve evidence: (1) issue and periodically reissue a “litigation hold” when litigation is anticipated; (2) communicate the importance of this hold to “key players,” who are people identified by the initial party disclosure; and (3) direct all employees to immediately turn over any active files for prompt backup and safeguarding. Id. at 433-34. Very convenient and concise for learning in Civil Procedure.

Luckily for PilePro, you don’t have to preserve evidence that never existed. PilePro’s third-party vendor deactivated Google Analytics before the warning went live on PilePro’s website, which was also before Skyline put PilePro on notice of litigation. Skyline, 101 F.Supp 3d at 408. Skyline did not produce evidence that PilePro knowingly directed their third-party vendor to shut down the analytics. Id. at 408-09. PilePro claimed to not know about the deactivation until April 2014. Id. The court concluded that PilePro was unaware of the deactivation had no duty to preserve this evidence. Id. at 409.

The failure to preserve server logs is a different story. This evidence existed but was overwritten weekly, apparently a part of their data policy. Id. The court concluded that when PilePro was put on notice, shortly after posting the message on their website, they had a duty to preserve those logs. Id. The court also found that PilePro acted with a culpable state of mind, defined as at least negligent conduct because counsel for PilePro did not continually ensure the preservation of evidence and communicate this to key players, which allows for a spoliation inference. Id. at 410-11.

The court then needed to determine appropriate sanctions. Because PilePro was merely negligent and did not willfully engage in spoliation, the court did not impose an adverse jury instruction on the missing logs but chose to prevent PilePro from using this lack of evidence against Skyline. Id. at 412. Additionally, PilePro was instructed to reimburse Skyline for the costs associated in moving for sanctions. Id. Skyline won the big prize as well: summary judgment on Skyline’s noninfringement claim was granted. Id. at 403.

The Zubulake V court expressed the duty and dangers of spoliation simply:

At the end of the day, however, the duty to preserve and produce documents rests on the party. Once that duty is made clear to a party, either by court order or by instructions from counsel, that party is on notice of its obligations and acts at its own peril.

Zubulake at 436.

Discovery is one of the unique cornerstones of American legal practice, and spoliation helps protect the integrity of the discovery process.

Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com. – Dennis Crouch

By Avery Welker

Grilling weather is coming up soon! You may be in the market for a new grill to set up in your backyard. Well, now you have to make a choice: will you go with the “Backyard Grill” or the “Backyard BBQ?” That’s not a choice that Variety Stores, Inc. (Variety | Plaintiff) wants you to need to make. Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651 (4th Cir. 2018).

Variety sued Wal-Mart Stores, Inc. (Wal-Mart | Defendant) over Wal-Mart’s use of “Backyard Grill” (logo shown above¹) to promote their line of grills and grilling supplies. Id. at 656. Variety brought a plethora of federal claims, including trademark infringement and unfair competition. Id. at 658. Both parties filed motions for summary judgment and each adduced evidence in support of their own motion. Id. Variety showed evidence of more than $56 million of sales with their mark, which they have been using since 1993. Id. Wal-Mart, while submitting plenty of evidence in their own support, also brought forth evidence that their marks were not confused with Variety’s, whereas Variety did not bring any evidence of confusion at all. Id. The district court then granted partial summary judgment for Variety holding that Variety’s mark was protectable, Wal-Mart’s mark could create confusion, and that Wal-Mart’s choice to not follow their counsel’s advice showed intent to confuse consumers. Id. In part, Wal-Mart appealed the award of partial summary judgement for Variety. Id. at 659.

The “extraordinary” remedy of summary judgment has some deceptively ordinary rules: (1) there must be no genuine issue of material fact and (2) the movant must be entitled to judgment as a matter of law. Fed. R. Civ. P. 56 (2021). Courts, as the gatekeepers of summary judgment, must ensure fairness in the motion by crediting all evidentiary inferences in favor of the nonmovant when investigating any issues of material fact. Tolan v. Cotton, 572 U.S. 650, 656-57 (2014).

Tolan arose from a claim of excessive force, in violation of the Fourth Amendment. Id. at 651. Officer Edwards believed that Tolan (Plaintiff) and his cousin had stolen a car, which the two exited at Tolan’s home. Id. at 651-52. Tolan’s parents came out of the house when they noticed the brewing situation. Id. Officer Cotton (Defendant) arrived, responding to a request for backup from Edwards. Id. at 652. From here, the parties had differing stories. Id. at 653. The two parties disputed how Cotton handled Tolan’s mother during the incident, and as to how Tolan responded to Cotton’s interactions with Tolan’s mother. Id. The stories converge around an unfortunate ending, however: Cotton fired three shots towards Tolan, striking him in the lung. Id.

Cotton moved for summary judgment with the district court, who granted it for Cotton, later affirmed by the Fifth Circuit. Id. at 654. In upholding summary judgment, the Fifth Circuit relied on Cotton’s version of Tolan’s response to Cotton’s interactions with Tolan’s mother (that Tolan rose to his feet) and to the lighting conditions of the porch where the shooting occurred (that it was dimly lit). Id. at 655. The Supreme Court noted that this was in error: the lower courts had failed to credit Tolan’s versions of the facts, vacating the Fifth Circuit’s judgment. Id. at 660. The Supreme Court expressed this message by pointing out the importance of juries:

The witnesses on both sides come to this case with their own perceptions, recollections, and even potential biases. It is in part for that reason that genuine disputes are generally resolved by juries in our adversarial system. By weighing the evidence and reaching factual inferences contrary to Tolan’s competent evidence, the court below neglected to adhere to the fundamental principle that at the summary judgment stage, reasonable inferences should be drawn in favor of the nonmoving party.

Id.

The Fourth Circuit applied this fundamental principle from Tolan to Variety Stores, Inc.  Variety Stores, Inc., 888 F.3d at 662. The court noted that Wal-Mart’s evidence purporting to show weaknesses in Variety’s trademark was improperly uncredited. Id. Both parties had produced evidence, that in the Fourth Circuit’s view, genuinely disputed the strength of Variety’s “Backyard” trademark, an issue that should have been resolved by a jury. Id. at 663-64. The court vacated the judgment for partial summary judgment for Variety. Id. at 667.

Tolan expresses a fundamental principle that makes summary judgment such an “extraordinary” remedy. Crediting the non-movant with permissive inferences is crucial to allowing both sides an opportunity to be heard in a dispute.

= = = =

¹The Backyard Grill branding is all but disappeared from Wal-Mart stores. This is a photo of a friend’s Backyard Grill from Wal-Mart. A search of “Backyard BBQ brand” ironically came up with a Wal-Mart listing for grills. Wal-Mart’s new branding appears to be “Expert Grill.”

Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com. – Dennis Crouch

By Avery Welker

Modeling v. modelling, labeled v. labelled, traveler v. traveller. We borrow a lot from British English in United States English but that doesn’t usually include the extra consonant in words. That’s not quite how Travelers Indemnity Company (Travelers / plaintiff; see logo below) felt when they alleged, among other things, trademark infringement and cybersquatting against Travellers.com (Travellers.com / defendant). Travelers Indem. Co. v. Travellers.com, Civ. No. 10–cv–448 (LO/JFA) 2011 WL 5975082 *1 (E.D. Va., Nov. 28, 2011).

Travelers is a well-established company, Number 106 on the Fortune 500 list, has been around since 1853, and has received lots of unsolicited media coverage. Id. at *3-4. Additionally, Travelers has used the Travelers name and mark since 1865 and has registered their mark with the USPTO under Reg. No. 1,611,053. Id. Below is the “promotional merchandise catalog” cover and clip of the “Un-Retirement Program,” a program for retirees to do temporary work with Travelers, which Travelers used in their USPTO specimen to prove its use in commerce.

Travellers.com, on the other hand, is a site that provides links to other similar traveler insurance sites, and gets revenue on a pay-per-click basis for every time someone uses a link to another traveling insurance provider. Id. at *4. Travelers claimed that Travellers.com activities were cybersquatting, their website was unlawful, and their website infringed on Travelers’s mark. Id.

For Travelers to prove entitlement to summary judgment on Cybersquatting, they needed to prove that the owner of Travellers.com planned to profit in bad faith from the website, and that Travellers.com was used in an inappropriate manner. Id. at *7. One factor in analyzing whether the owner of Travellers.com had any bad faith intent to profit from the website was to determine whether Travellers.com had any intellectual property rights in the name. Id. The owner of Travellers.com asserted that, under Pierson v. Post, he had a first-in-time possessory claim to the Travellers.com domain. Id.

Just like many other 1L Property students, my Property class this semester began with everyone’s favorite fox hunter and the “saucy intruder” that ended up with the kill. Pierson v. Post, 3 Cai. R. 175, 181 (Supreme Ct. NY 1805). Pierson takes the seemingly simple concept of possessory rights but asks the necessary question – what is possession of a fox? Id. at 177. After going through many historical authors, the court in Pierson determined that possession of the fox was established by killing or mortally wounding it. Id. at 177.

Unsurprisingly, the court in Travelers determined that the rule of capture did not excuse bad faith in Travellers.com’s defense of Cybersquatting. Travelers Indem. Co., 2011 WL 5975082 at *7. Unfortunately for Travellers.com, the court found bad faith intent to profit, and that the website was subject to forfeit. Id. at *8. Travellers.com now directs to Travelers Indemnity Company. Id.

Travellers.com’s use of the rule of capture was a creative yet wholly ineffective defense to a finding of bad faith intent to profit off of the Travelers mark. So far, in Property I, I have been learning that many people may be asserting a right to property, but the big question is finding out who has the superior right in a controversy. Introducing the concept of proper “signaling” of property ownership is effectively presented by Pierson v. Post.

Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com. – Dennis Crouch

By Avery Welker

“That doesn’t look too bad,” I thought to myself while scanning through my Civil Procedure reading assignment over Rule 56, Summary Judgment. Fed R. Civ. P. 56 (2020). Then I had the pleasure of reading Celotex Corp. v. Catrett and discovered that if you don’t pay attention to which party bears the burden of proof, you could be in trouble. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). This is where Exigent Technology, Inc. (Exigent) found themselves in 2006 in the process of pursuing an infringement action against Atrana Solutions, Inc. (Atrana). Exigent Tech., Inc. v. Atrana Sols., Inc., 442 F.3d 1301 (Fed. Cir. 2006).

Exigent owned U.S. Patent No. 6,651,885, a “multi-function transaction processing system,” which includes a transaction processing system with the ability to attach a payment to a user account, among other functions, and alleged infringement literally or through the doctrine of equivalents. U.S. Patent No. 6,651,885 (filed Jun. 8, 2000; issued Nov. 25, 2003); Exigent Tech., Inc., 442 F.3d at 1303-04. The general idea was to expand the traditional debit/credit card transactions by issuing “authorization codes” to purchasers on a card, which could have other purchases attributed and stored on it. U.S. Patent No. 6,651,885. The system was designed to rid merchants of the cost of selling multiple cards that only contained singular access codes, like a pre-paid minutes card for calling long-distance, and put them all on one larger card assembly (shown below). Id. The above illustration shows a familiar looking terminal (20) but includes a large card printer (where the purchased information is stored) (37). Id. at fig.1.

The below figure is where the magic happens: The entire “card assembly,” (50) is a large sheet that contains a detachable physical card (e.g., for pre-paid phone minutes) (52), any merchant promotions, or other purchases (e.g., (55), (56)). Id. at fig.2. All in the name of efficiency.

In the lawsuit, the defendant Atrana moved for summary judgment, arguing that the patentee Exigent would not be able to prove infringement. Exigent Tech., Inc., 442 F.3d at 1303. The trial court agreed and granted summary judgment stating that there was no evidence on the record that Atrana infringed the patent. Id. at 1305. Upon a motion from Atrana, the trial court amended the summary judgment order to clarify that Exigent had the burden of proving infringement on every element of the claims. Id. at 1305. Exigent appealed, claiming that Atrana’s summary judgment motion of non-infringement was not sufficiently supported by the evidence. Id. at 1305-06.

Enter Celotex. If summary judgment is the treasure you seek, Celotex is your treasure map. It is the Supreme Court’s definitive guide to supporting a summary judgment motion when the non-moving party holds the burden of proving its case at trial. Celotex arose out of a wrongful-death complaint brought by the respondent, Catrett, who alleged that her husband’s exposure to asbestos-containing products (including those manufactured by Celotex) caused his death. Celotex Corp., 477 U.S. 317 at 319.

Celotex moved for summary judgment asserting that Catrett produced no evidence that any Celotex product was the proximate cause of her husband’s death, and that Catrett could not identify any witnesses that could testify to her husband’s exposure to Celotex’s asbestos-containing products, thus there was no genuine issue of material fact. Id. at 319-320. The trial court granted the motion, but the D.C. Circuit reversed, holding that since Celotex did not try to produce evidence in support of their motion (i.e., prove that Catrett’s husband was not exposed to Celotex’s products), they were not entitled to summary judgment. Id. at 321-22. The Supreme Court then reversed again, holding that summary judgment was proper in that instance. Id. at 328. The Court reasoned that where the nonmoving party has the burden of proof of a dispositive issue at trial, the moving party need only point out to the trial court that there is no evidence supporting the nonmoving party’s case, which discharges the moving party’s usual burden to show an absence of genuine dispute of material fact. Id. at 325.

The Court noted the spirit of Rule 56 in the holding of Celotex:

Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis.

Id. at 327.

Celotex turned out to be bad news for Exigent, who argued in the Federal Circuit that Atrana did not properly support their summary judgment motion with admissible evidence showing non-infringement. Exigent Tech., Inc., 442 F.3d at 1308. This was in reference to an arguably inadmissible declaration from Atrana’s CEO. Id. The Federal Circuit noted that it ultimately did not matter whether the declaration was admissible as evidence because Atrana, the moving party, successfully discharged their burden of proof on the dispositive issue of non-infringement, by pointing out that Exigent had no evidence of infringement. Id. at 1309. The Federal Circuit held that Exigent did not advance any argument or bring any evidence of infringement, and therefore summary judgment was proper. Id.

Summary judgment is a remedy that arguably helps the courts “secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1 (2020). The irony is not lost on me that a remedy that can speed up an action resulted in further litigation, stringing out the action for both parties.