Case dismissed as sanction for misrepresentations

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Judge Keith Ellison issued a scathing order dismissing a patent case after it had been tried to verdict.  Tesco Corp. v. Weatherford Int’l., Inc. (S.D. Tex. Aug. 25, 2014).  Four days into a three-week trial over infringement of some patents relating to drilling rig equipment, an inventor testified that a brochure that constituted 102(b) prior art showed his invention.  The following day, a Friday, patentee’s counsel told the court he would spend the weekend getting to the bottom of the facts about it (there was even a dispute over whether the brochure had been produced to the defendants).

Come Monday, the patentee’s lawyer said that the brochure had been rendered by someone else, Karr, not the inventor and that Karr would unequivocally, no doubt, for sure, and so on say that it was not the inventor’s device.  Trial proceeded.  There was a mixed and inconsistent verdict rendered by the jury.  Rather than enter judgment, Judge Ellison let the case proceed to other issues.

After trial during discovery relating to exceptional case and inequitable conduct, Karr testified that he had had nothing to do with the brochure and that everything the patentee’s counsel had said was false.

The defendants, not surprisingly, moved for sanctions.  Making matters worse, in opposition to those motions, the patentee’s counsel quoted portions of the deposition excerpts that, Judge Ellison felt, were at best misleading.

In this order, the judge dismissed the claims with prejudice, holding that nothing less would protect the judicial system.  It then invited motions for attorneys’ fees to be submitted.  Stay tuned.

Supreme Court: In Copyright, Laches Cannot Preclude Actions Taken Within Three Year Statute of Limitations

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By Dennis Crouch

Petrella v. MGM (Supreme Court 2014)

Frank Petrella wrote a screenplay back in 1963 based on the life of Jake LaMotta and assigned rights to UA/MGM who made the movie Raging Bull. Under the old renewal system, renewal rights went to Petrella’s heir, Paula Petrella, who renewed the copyright in 1991 in a fashion that (seemingly) eliminates the prior license. In 1998 she informed MGM that its continued exploitation of the Raging Bull movie violated her copyright. Finally, in 2009, she did sue – alleging copyright infringement.

Copyright infringement has a three-year statute of limitations indicating that “No civil action shall be maintained under the [Act] unless it is commenced within three years after the claim accrued.” 17 U.S.C. §507(b). However, as in patent law, copyright follows a “separate-accrual rule” that sees each successive violation of a copyright as a new infringing act with its own statute of limitations. Thus, under the statute of limitations, MGM could be liable for its post-2006 actions such as copying and distributing the work.

In the lawsuit, MGM separately asserted the equitable defense of laches based upon the long and unreasonable delay in bringing suit.

In a 6-3 decision, the Supreme Court has sided with Petrella – finding that the statute of limitations does all the work on the question of liability – leaving latches only to potentially shape the remedy.

Laches, we hold, cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window. As to equitable relief, in extraordinary circumstances, laches may bar at the very threshold the particular relief requested by the plaintiff. And a plaintiff’s delay can always be brought to bear at the remedial stage.

The court was clear that equitable estoppel may also apply, but that generally requires some affirmative act by the rights-holder (that leads to

In a footnote, the court draws some parallels with the six-year statute of limitations for collecting back-damages in patent law. 35 U.S.C. § 286. In a 1992 en banc decision, the Federal Circuit held that laches can be an additional bar to collecting back-damages even within the six-year limit. A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F. 2d 1020 (Fed. Cir. 1992) (en banc). Noting that decision, the Supreme Court here only remarked that “We have not had occasion to review the Federal Circuit’s position.”

One interesting aspect of the decision was the unusual split between the majority and dissent. Justice Ginsburg penned the majority opinion that was joined by Justices Scalia, Thomas, Alito, Sotomayor, and Kagen.  Justice Breyer dissented and was joined by Chief Justice Roberts and Justice Kennedy.