A federal judge from the District of Maine has denied a motion filed by Edens Technologies, LLC to vacate an adverse ruling against Edens in a patent dispute.
Edens, the defendant, had asked the court to vacate an interlocutory summary judgment on liability against it because of “newly discovered” prior art that invalidated that patent of Golf Tech, the plaintiff.
The main questions raised by Edens’ motion were whether the judgment could be vacated, and whether the Federal Circuit applies different standards for a motion of this nature when patent validity is concerned.
The court’s prior ruling of summary judgment in favor of Golf Tech came on January 6, 2009, in a dispute between Golf Tech and Edens Technologies over patent validity. The District Court judge had ruled on several, separate motions for summary judgment regarding a Golf Tech patent and infringement liability. The motion was granted in favor of Golf Tech on the Golf Tech patent, and Edens moved in the present case to reopen summary judgment, alleging that “’newly discovered’ prior art… invalidates Golf Tech’s patent.”
Edens’ motion argued that, during discovery in preparation for the impending damages trial in this controversy, prior art was discovered to have existed more than one year before Golf Tech filed its patent. This would render said patent invalid according to 35 U.S.C. §102(b), which states that “[a] person shall be entitled to a patent unless . . . the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.”
As to why it did not discover this prior art sooner, the movant gave two reasons: (1) Edens was “extremely diligent” and discovered this prior art by chance and; (2) there was no evidence that Edens lacked due diligence, as no “reasonable systematic search…would have uncovered these devices” since a search of patent databases or other standard source of prior art did not produce them. In fact, Edens learned of this prior art via decades-old sales data provided by non-party competitor companies in both Idaho and California. Edens urged the court to consider this “newly discovered” evidence in order to prevent “’manifest injustice’ and as a matter of public policy” since patent litigation affects the public interest of free competition.
The District Court disagreed with Edens that public policy and the interests of justice demand that the summary judgment order from January be reopened on patent invalidity. Its decision was based on its interpretation of the District’s Local Rule 7(g) and the Federal Rule of Civil Procedure 54(b).
Local Rule 7(g) provides that a motion of this type “shall demonstrate that the order was based on a manifest error of fact or law and shall be filed within ten (10) days from the date of the order unless the party seeking a reconsideration shows cause for not filing within that time. Cause…includes newly available material evidence and an intervening change in the governing legal standard.” In the present case, the court determined that it was Edens’ burden to show cause, and that “newly available material evidence” was applicable. However, the court found that Edens failed to show necessary cause under the Rule, since the prior art was in the public domain and would have been discovered by reasonable diligence and would go against sound public policy and administration of justice if it were allowed.
Applying FRCP Rule 54(b), the court acknowledged its power to revise an interlocutory order. According to the Supreme Court, this is at the discretion of the district judge. Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 12, 103 S. Ct. 927, 74 L. Ed. 2d 765 & n.14 (1983). This is echoed in the First Circuit by a number of cases, noting that although there is no “’precise definition,’ for what justice requires, … a court assessing the ‘interests of justice’ should consider the following:
(1) the nature of the case, (2) the degree of tardiness, (3) the reasons underlying the tardiness, (4) the character of the omission, (5) the existence vel non of cognizable prejudice to the nonmovant in consequence of the omission, (6) the effect of granting (or denying) the motion on the administration of justice, and (7) whether the belated filing would, in any event, be more than an empty exercise.
United States v. Roberts, 978 F.2d 17, 21-22 (1st Cir. 1992).”
In its analysis of the first prong (the “nature of the case”), the court recognized the importance of special consideration for patent cases, as the subject matter is closely tied to the economy. Ultimately, the court found that the nature of this case as patent law “does not call for a court to ignore the standard rules for orderly case processing.”
The second and third prongs led the court to conclude that the degree of tardiness was severe and the reasons underlying it were weak. The fourth (character of the omission) was determined to be Edens’ failure to conduct a thorough investigation of the case and present relevant evidence accordingly, therefore lacking a satisfactory excuse and qualifying as a “glaring omission”. The degree of prejudice to the other party under the fifth prong was severe, the court explained, since it would nullify all expenses incurred by Golf Tech in preparing for the impending damages trial.
Under the sixth prong, the court found that the administration of justice would be greatly negatively affected and delayed if the motion was granted, and would invite other litigants to “come back to court and ask for a second bite at the apple.” Citing specifically to comments by the First Circuit in Hayden v. Grayson, the court noted that “Rule 54 ‘does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment.” Hayden v. Grayson, 134 F.3d 449, 455 n.9 (1st Cir. 1998) (quoting Aybar v. Crispin-Reyes, 118 F.3d 10, 16 (1st Cir. 1997)). Lastly, in analyzing the seventh prong, the court recognized patent’s special consideration in law and declined to preview the substance of Edens’ arguments and evidence.
The court granted Eden’s request for leave to file a motion under FRCP rule 54(b) to reopen and revise the previous summary judgment order on validity, but denied the subsequent motion to reopen and revise. Also denied were Edens’ request to file a summary judgment motion on invalidity and motion to stay all trial and pretrial dates.
Golf Tech, LLC and Sports Vision, LLC v. Edens Technologies, LLC, DBA Dancingdogg Golf; D.Maine; CIVIL NO. 07-194-P-H, 2009 U.S. Dist. LEXIS 37440; 4/30/09
Attorneys of Record: (for Plaintiffs): Michael J. Sullivan, Robert H. Steir, Sean L. Sweeney, Lead Attorneys, Pierce Atwood LLP, Portland, ME. (for Defendant): Bradford E. Kile, Scott W. Houtteman, Lead Attorneys, Kile Goekjian Reed & McManus PLLC, Washington, DC; Kurt E. Olafsen, Lead Attorney, Law Office of Kurt E. Olafsen, Portland, ME.
This summary was written by University of Texas Law School student Jacqueline Sudano