Filewrapper® | A patent, trademark, and copyright law blog by MVS - Trade secrets

Accent Packaging, Inc. v. Leggett & Platt, Inc.: Reminders on Claim Construction, Discovery Matters

Wed, 06 Feb 2013 10:58:00-0500

In Accent Packaging, Inc. v. Leggett & Platt, Inc., the Federal Circuit affirmed in part and reversed in part the district court’s grant of summary judgment of non-infringement. Accent is the assignee of U.S. Patents 7,373,877 (the '877 patent) and 7,412,992 (the '992 patent). The patents are drawn to a wire tier device useful for baling and handling recyclables and solid waste to facilitate better handling. Accent sued Leggett for patent infringement and violation of the Missouri Trade Secret Act. Leggett filed a motion to dismiss the trade secret claim for failure to state a claim and the claim was dismissed. During discovery, Accent’s expert inspected Leggett’s allegedly infringing device. Leggett produced a redacted copy of its own patent application that Leggett argued covered its device, engineering drawings, marketing and promotional materials related to the device, and an operating manual for the device. Accent filed a motion seeking additional discovery, including: (1) information related to an alleged sale of Leggett’s device.; (2) a deposition pursuant to FRCP 30(b)(6) to address infringement and claim construction; and (3) production of the redacted parts of the previously produced patent application. The district court denied the motion for additional discovery and both parties filed motions for summary judgment. The district court denied Accent’s motion for summary judgment of infringement and granted Leggett’s motion for summary judgment of non-infringement. Subsequently, Accent appealed to the Federal Circuit. The Federal Circuit opinion provides three reminders:

Reminder #1: Claim construction should allow the claim to cover the preferred embodiments

The '877 Patent

The district court granted summary judgment of non-infringement of the '877 patent largely based on its claim construction of the terms “each” and “a respective one.” The court construed the terms to require four elongated operator bodies, with every operator body coupled only to one gripper, knotter, cutting element or cover. On appeal, Accent argued that the pertinent claim language did not require that each elongated operator body be coupled to one and only one of those articulated elements. The Federal Circuit overruled the district court’s claim construction of the terms “each” and “a respective one” stating the construction essentially excluded a preferred embodiment from the scope of the claims, as a preferred embodiment showed “two elongated operator bodies . . . operably coupled to both the knotter and the cover.” In supporting this holding, the Federal Circuit quoted its previous holding in the 2004 case, On-Line Technologies, Inc. v. Bodenseewerk Perkin-Elmer GmbH stating, “We have held that ‘a claim interpretation that excludes a preferred embodiment from the scope of the claim is rarely, if ever, correct.’” 386 F.3d 1133, 1138 (Fed. Cir. 2004).

The '992 Patent

Accent appealed the district court’s claim construction of the term “of at least about ninety degrees.” The asserted claims of the '992 patent require, “a mount for [the] cover permitting the cover to be pivoted away from said knotter to a knotter access position remote from said wire-maintaining position and through a pivot arc of at least about 90?.” Accent argued that Leggett’s device would pivot through the required ninety degrees if it weren’t for its SafeLatch^TM stop. The district court held that this was “a distinction without a difference, noting “[t]he SafeLatch^TM stop is in fact part of the . . . device.” Accent also argued that the device infringed the '992 patent because the SafeLatch^TM stop can be easily removed, which permits the cover to pivot at least ninety degrees. The Federal Circuit found this argument unpersuasive, again citing its own precedent: “[A] device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim.” High Tech Med. Instrumentation v. New Image Indus., Inc., 49 F.3d 1551, 1555 (Fed. Cir. 1995). In light of this reasoning, the Federal Circuit affirmed the district court’s summary judgment of non-infringement of the '992 patent.

Reminder #2: Plausibility in pleading also applies to discovery motions

As noted above, Accent’s motion for additional discovery was denied by the district court. Accent appealed this ruling and the Federal Circuit affirmed the district court’s ruling. The Federal Circuit stated that Accent’s problem was “that it never ‘set forth a plausible basis for believing that specified facts . . . probably exist.’” Slip op. at 10 (quoting Raby v. Livingston, 600 F.3d 552, 561 (5th Cir. 2010). The Federal Circuit found it important that Accent had received “extensive information” regarding Leggett’s allegedly infringing device through production, and Accent’s counsel and expert had thoroughly inspected the device. Despite all this evidence, “Accent failed to set forth a plausible basis for believing that additional discovery” was necessary. Moreover, the evidence already present suggested the facts were opposite Accent’s argument. Thus, the Federal Circuit affirmed the district court’s denial of Accent’s motion for additional discovery.

Reminder #3: Sufficient factual material to render plausibility is required for all claims

Accent appealed the district court’s dismissal of the trade secret claim arguing that the court ruled on the motion before Accent even had a chance to respond in writing to the motion to dismiss. Accent’s trade secret misappropriation claim was based on the argument that the specifications and tolerances of its commercial device constituted trade secrets. Accent argued that Leggett misappropriated those secrets by copying Accent’s commercial device delivered to one of Accent’s customers. However, the Federal Circuit found it important that Accent’s own complaint acknowledged that its commercial device was sold in the regular stream of commerce. Thus, the device was not subject to reasonable efforts to maintain its secrecy. In affirming the district court’s grant of summary judgment for Leggett, the Federal Circuit relied on Twombly and Iqbal, holding that the “complaint fails to state a claim to relief that is plausible on its face.”

Today's lesson for litigators: make sure you present all your arguments to the district court

Thu, 21 Aug 2008 15:26:00-0500

In a decision Tuesday, the Federal Circuit affirmed a district court's holding that two patents were invalid under the on-sale bar of 35 U.S.C. § 102(b). The inventor filed a declaration during prosecution that the invention was reduced to practice before the critical date of the patents, and thereafter sold the claimed method, also before the critical date. The post-reduction to practice sales could not be considered experimental use, as once an invention is reduced to practice, experimental use is no longer possible. Further, there was insuffucient evidence to call the inventor's declaration into question. On this point, the plaintiff attempted to rely upon additional evidence not presented to the district court in opposition to the defendants' summary judgment motion. The Federal Circuit rebuffed this attempt, limiting the plaintiff on appeal to the evidence presented to the district court in opposition to the summary judgment motion. As a result, the court affirmed the finding of invalidity.

The Federal Circuit further affirmed the district court's dismissal of the plaintiff's trade secret claims as barred under the statute of limitations. The court held the plaintiff had sufficient information to allege trade secret misappropriation at least as early as 1996, but did not file suit until 2005, well outside the applicable 3-year limitations period. Accordingly, dismissal of the trade secret claims was proper.

More concerning In re Cygnus Telecomms. Tech., LLC, Patent Litig. after the jump.

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Seventh Circuit: Injunction against use of plaintiff's copyrights and trade secrets too vague

Mon, 14 Jan 2008 08:29:00-0500

In a decision last week, the Seventh Circuit vacated and remanded a district court's preliminary injunction in a copyright and trade secret case. The court addressed the degree of specificity necessary for an injunction against misappropriating trade secrets and infringing copyrights, and vacated the injunction because it failed to detail the substance of the trade secret or confidential information the defendant was enjoined from using.

Interestingly, the court called attention to the fact that most of the information claimed as trade secret could actually be obtained by FOIA requests sent to state authorities. The parties are modular home manufacturers, and are required to submit specific details of the homes they plan to sell in order to obtain state approval; those details were among the purported trade secrets. The court said the injunction did not specify whether information obtained through the FOIA requests would violate the injunction.

More detail of Patriot Homes, Inc. v. Forest River Housing, Inc. after the jump.

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The problem of marketing an idea: how much do you tell a prospective licensee?

Wed, 06 Dec 2006 16:11:00-0500

Forbes has an interesting piece regarding marketing ideas, specifically way to protect an idea when pitching it to companies or ways to avoid "giving something away" in the process. It's written to be easily understood by non-lawyers, and has some good general suggestions. Notably absent from the list: using the line "I'd tell you, but then I'd have to kill you."

Mattel sues makers of Bratz dolls for trade secret misappropriation

Mon, 27 Nov 2006 07:44:00-0500

Mattel, the manufacturer of Barbie dolls, sued a former employee, Carter Bryant, for trade secret misappropriation in 2004. Now, Mattel is attempting to add MGA Entertainment, makers of the relatively new Bratz dolls, to the case. Mattel alleges that Mr. Bryant conceived of the Bratz doll design while working for Mattel, and therefore Mattel owns the rights to Bratz dolls.

Mattel is also attempting to register several of Mr. Bryant's drawings prepared during his Mattel employment with the copyright office that allegedly show dolls very similar to Bratz. This could potentially give Mattel a copyright infringement case against MGA once they are registered.

While it is unclear how this case will be resolved, this lawsuit illustrates the types of issues that can arise when employees leave a company to work for a competitor. However, in most cases, the intellectual property allegedly taken by the employee doesn't reach $2 billion in sales annually.