Latest Federal Court Cases, 2/25/19
Coda Development S.R.O. v. Goodyear Tire & Rubber Co., Appeal No. 2018-1028 (Fed. Cir. Feb. 22, 2019)
In an appeal from a district court dismissal of a case seeking correction of inventorship, the Federal Circuit reversed and remanded the case for further proceedings, and directed the district court to accept a proposed amended complaint.
The case concerns self-inflating tires (SIT), an industry in which Coda was a front-runner. Coda pitched its ideas to Goodyear. The case provides a succinct summary of the events that followed:
The complaint describes Goodyear’s prior failures with inflation technology. It also describes two meetings with Goodyear representatives—both arranged at Goodyear’s initiative and attended by Mr. Benedict, Goodyear’s point-person on SIT technology. Goodyear sought technical information from Coda at both meetings. And in the second meeting, Mr. Benedict requested that he and his team be allowed to spend some time alone with Coda’s functional prototype, during which he photographed it without permission. After this second meeting, Goodyear stopped communicating with Coda for a time. When Coda reached out to Mr. Benedict attempting to restart communications, Mr. Benedict responded that a meeting would be premature.
Yet the next month, in preparation for Goodyear’s own internal meeting, a Goodyear employee independently contacted Coda to inquire about the status of Coda’s SIT technology. Correspondence with that employee revealed that Mr. Benedict responded in an “oddly vague” way when asked whether Goodyear had looked into Coda’s invention. Also that month, Goodyear applied for the first in a series of patents covering assemblies and methods concerning self-inflating tires, with claims covering the allegedly novel, proprietary, and confidential information Coda disclosed to Goodyear. Years later, after Coda deemed the Goodyear endeavor a bust, Coda received an unsolicited email from the former Goodyear employee, who said that Goodyear copied Coda’s SIT technology.
Coda filed suit pursuant to 35 U.S.C. § 256, seeking to have its inventor, Mr. Hrabal, named on Goodyear’s patents. Goodyear moved to dismiss; Coda opposed. In reply, Goodyear cited an article by Mr. Hrabal, which they argued publicly disclosed the various contributions that Mr. Hrabal allegedly made to the patents. Goodyear asserted that these public disclosures defeated Coda’s claim that Mr. Hrabal contributed to the patented inventions. Coda moved to strike the article as outside the pleadings, moved for a sur-reply, and moved for leave to file an amended complaint.
The district court denied the motion to strike, denied the motion for leave to file an amended complaint, denied the motion for a sur-reply, and granted the motion to dismiss.
The Federal Circuit reversed, holding that the facts in the complaint, including those identified above, lead to reasonable inferences that Coda was entitled to a correction of inventorship—that Mr. Hrabal in fact invented all claims of one of the patents and that the named inventors were not entitled to be named at all. The Court further held that the district court erred in considering the Hrabal article because it was outside the pleadings. Had the Court considered the article, it should have converted the motion to a motion for summary judgment, but allowing the plaintiff a right to respond, which it failed to do here. And in the rare situations where materials outside the pleadings may be considered, the material may not be disputed. In this case, there were numerous disputes about the meaning and import of the Hrabal article such that it should not have been considered as part of a Rule 12 motion to dismiss.
The Federal Circuit also held that the district court erred when it denied leave to file an amended complaint, given the policy of liberally allowing such leave, and a preference for deciding cases on the merits. Even though the Court held that the plaintiff’s original complaint was sufficient, it allowed leave for the plaintiff to file the amended complaint.
The opinion can be found here.
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Dr. Falk Pharma GmbH v. Generico, LLC, Appeal Nos. 2017-2312, 2017-2636, 2018-1320, 2018-2097 (Fed. Cir. 2019)
The Federal Circuit granted motions to disqualify counsel in several cases on appeal from district court and Patent Trial and Appeal Board proceedings. During the course of the proceedings, two attorneys representing Mylan Pharmaceuticals, Inc. changed firms, continuing to represent Mylan in the related actions. However, the new firm was also engaged in a concurrent trademark representation for a corporate affiliate of two parties in the appeal, both adverse to Mylan. In addition to finding that the firm's engagement letter with the affiliate expressly created a client relationship with the two adverse entities, the Court also found that the two adverse entities were sufficiently interrelated with the firm's client to give rise to an affiliate conflict. In making the latter determination, finding no applicable framework in the precedent of the relevant regional circuits, the Court applied a two-factor test from the Second Circuit, examining the degree of operational commonality between the affiliated entities, and the extent to which they were financially interdependent.
The opinion can be found here.