Justia Contracts Opinion Summaries

DTC filed suit against JPMC and others, alleging willful patent infringement relating to electronic check-processing systems. JPMC was the first bank to reach a settlement agreement with DTC in 2005. As part of the settlement, JPMC entered into a consent judgment in which it admitted the patents were valid and enforceable and that JPMC had infringed them. It also entered into a license agreement permitting JPMC unlimited use of DTC’s patented technology going forward. At issue in this appeal is the district court’s interpretation of a most favored licensee (MFL) clause in the license agreement allowing JPMC to use DTC's patented check processing technology. JPMC invoked its rights under the MFL clause based on DTC’s granting a similar unlimited license to another entity for a lesser lump sum than JPMC paid. The court agreed with the district court that after comparing these two lump-sum license agreements, the later agreement is indeed more favorable, and JPMC therefore is entitled to a refund from DTC for the difference between the amount it paid for its license and the lesser amount bargained for in the later license agreement. Accordingly, the court affirmed the judgment. View "JP Morgan Chase Bank, N.A. v. Datatreasury Corp." on Justia Law

In 1997 Seagate recruited Dr. Shukh, a native of Belarus, to move to the U.S. Shukh executed Seagate’s standard Employment Agreement, assigning to Seagate all “right, title, and interest in and to any inventions” made while at Seagate. Seagate prohibited employees from filing patent applications for their inventions. During his employment, Shukh was named as an inventor on 17 patents. Shukh’s time at Seagate was tumultuous. His performance evaluations indicated that he did not work well with others due to his confrontational style. In 2009, Seagate terminated Shukh and 178 others. Shukh has not yet secured employment and claims that he was told that he would never find employment at certain companies with his reputation. Shukh alleges that Seagate wrongfully omitted him as an inventor from several patents relating to semiconductor technologies; that Seagate discriminated against and terminated him based national origin and in retaliation for complaining about discrimination. He sought correction of inventorship of the disputed patents under 35 U.S.C. 256. The district court held that Shukh had no interest in the patents based on the assignment; dismissed claims for rescission of his Employment Agreement, breach of contract, breach of fiduciary duty, and unjust enrichment; and rejected claims of reputational harm, retaliation, fraud, and discrimination on summary judgment. The Federal Circuit vacated with respect to correction of inventorship, but otherwise affirmed. There is a genuine dispute of material fact as to whether Shukh’s negative reputation is traceable to Seagate’s omission of Shukh as an inventor from disputed patents. View "Shukh v. Seagate Tech., LLC" on Justia Law

Konig’s SRI Employment Agreement, stated: I agree ….To promptly disclose… all discoveries, improvements, and inventions, including software … during … my employment, and … to effect transfer of ownership … to SRI . . . . I understand that termination of this employment shall not release me from my obligations. While employed by SRI, Konig started generating documents relating to a personalized information services idea called “Personal Web” and formed a company, Utopy. Konig left SRI and filed a provisional patent application in 1999; the 040 patent issued in 2005. In 2001, Konig asked an SRI scientist to test the Utopy products. The 040 patent was eventually assigned to PUM. Konig filed another patent application in 2008. PUM was the assignee; the 276 patent issued in 2010. In 2009, PUM sued Google, asserting infringement. PUM provided interrogatory responses that asserted that the conception of the inventions was while Konig was still at SRI. Google had acquired “any rights” that SRI had and counterclaimed breach of contract. The court stated that no reasonable juror could have found that the injury was “inherently unknowable,” applied the three-year limitations period for contracts claims, and granted PUM judgment on the counterclaim. The court also entered judgment of invalidity and noninfringement. The Federal Circuit affirmed, noting that the claim construction had no effect on the outcome and declining to issue an advisory opinion. View "Personalized User Model, LLP v. Google, Inc." on Justia Law

Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims. View "Kehoe Component Sales Inc. v. Best Lighting Prods., Inc." on Justia Law

At issue in this case was whether Florida law recognizes a “bright-line rule” that distinguishes an assignment from a sublicense. This complex commercial litigation involved an agreement wherein a licensee transferred its entire interest in a patent license agreement except for one day. A federal district court concluded that the agreement was a prohibited assignment and not a sublicense. On appeal, the Eleventh Circuit certified the question of whether a “bright-line” rule could be applied to determine whether the licensee’s transfer of its interest constituted an assignment or a sublicense. The Supreme Court answered the certified question in the negative, holding that this legal determination depends on a multiple of factors, and the ultimate resolution of whether the transfer of the licensee’s interest constitutes an assignment or a sublicense is a mixed question of law and fact. View "MDS (Canada) Inc. v. Rad Source Techs., Inc." on Justia Law

In 2001, ASC and Paragon entered into a contract to develop and support computer software for the Chicago Tribune. This software, called the “Single Copy Distribution System” (SCDS) would allow the Tribune to manage and track newspaper deliveries and subscriptions. Tensions emerged and Paragon terminated the contract in 2003. ASC successfully sued Paragon in Ohio state court, obtaining a declaration that ASC was the sole owner of the SCDS. In federal court, ASC alleged copyright infringement, trademark infringement, breach of contract, conversion, tortious interference with a business relationship, unjust enrichment, and unfair competition based on Paragon’s alleged copying of the SCDS software to use in its DRACI software, developed in 2004 for another newspaper. After eight years of litigation, the district court granted summary judgment to Paragon on all claims. The Sixth Circuit affirmed, stating that ASC had never submitted any evidence identifying the unique protectable elements of SCDS, and that there was insufficient evidence to generate even an implication that DRACI is substantially similar to SCDS. View "Automated Solutions Corp. v. Paragon Data Sys., Inc." on Justia Law

In 1987, Krauser, a periodontist, designed a dental implant system. He paid BHI’s predecessor to produce drawings and prototypes. In1991, the parties entered into a written agreement that specified that Krauser would develop new products for the company to produce and sell and that the drawings were “property of [BHI].” Krauser was entitled to royalties. Krauser obtained a patent covering one component of the system and listing Krauser as the inventor. The company subsequently secured patents covering dental implant systems, naming Shaw as the sole inventor. Krauser sued the company and Shaw for a declaration of ownership rights and for copyright and patent infringement. While the suits were pending, the company filed for bankruptcy, and Krauser filed claims in bankruptcy court. In a settlement agreement, Krauser granted the company a 10-year patent license and “all rights . . . [to] the dental implant system currently being manufactured.” The bankruptcy court approved the agreement. Later, several patents on dental implant systems issued to BHI. None listed Krauser as an inventor. Krauser alleged that BHI failed to pay the full amount of royalties or submit to required audits and claimed default. The district court granted BHI summary judgment, construing the settlement to apply only to implants being manufactured in 1996, not implants manufactured at the time of litigation, and finding that Krauser had no ownership rights. The Eleventh Circuit transferred the case “[b]ecause the Federal Circuit has exclusive appellate jurisdiction … relating to patents.” The Federal Circuit transferred the case back, noting that Krauser had dropped his claim of inventorship. View "Krauser v. Biohorizons, Inc." on Justia Law

Hauge and his former employer, ERI, disputed ownership of intellectual property rights related to “pressure exchangers,” a type of energy recovery device used in reverse osmosis. In 2001 they entered into an Agreement. The district court adopted the Agreement, holding that ERI was to be the sole owner of three U.S. patents and one pending patent application. After expiration of the Agreement’s non-compete clause, in 2004, Hauge filed a patent application, titled “Pressure Exchanger,” and a utility application. The patent issued in 2007, describing “[a] pressure exchanger for transferring pressure energy from a high-pressure fluid stream to low-pressure fluid stream.” In 2009, Hauge’s new company, Isobarix, unsuccessfully attempted to reach a new agreement with ERI. Isobarix began selling a pressure exchanger, called “XPR.” Hauge entered into a consulting agreement with two ERI employees. ERI sought an Order to Show Cause, in 2012, submitting an expert’s declaration that Isobarix was using pressure exchanger technology from pre-March 19, 2001 in design and manufacture of XPR, which is “virtually identical to the ERI pressure exchanger” in operation. The court entered a Contempt Order, finding that allowing Hauge to develop new products using technology he assigned to ERI solely because the new inventions post-date the Agreement would render the Agreement useless. The Federal Circuit vacated, finding that Hauge did not violate the “four corners” of the 2001 Order. View "Energy Recovery, Inc. v. Hauge" on Justia Law

Access sells software for mobile communication, owns the patents at issue, and entered into an exclusive license agreement with APAC, a subsidiary of Acacia. The agreement gave APAC the exclusive right to grant sublicenses, to sue for damages and to seek relief for infringement of the patents. The agreement disclaims third-party-beneficiary rights, states that APAC may not enforce the patents against, or seek licenses to practice the patents from, Access’s customers and end-users in connection with Access’s products and services, and states that APAC and Access consent to the exclusive jurisdiction of any California state or federal court. APAC assigned all of its rights and liabilities in the patents to a wholly owned subsidiary, SmartPhone. SmartPhone sued Huawei, which makes mobile handsets and tablets, in Texas, alleging that Huawei products infringe the patents. Huawei then sued SmartPhone, Acacia Research, and Access in California, alleging that Huawei has been an Access customer for more than 10 years and seeking declaratory judgments of noninfringement. Based on the Texas filing, the district court dismissed the noninfringement and invalidity counts under the first-to-file rule. Dismissing remaining counts, the court stated that.an allegation that the parties intended Huawei to benefit from the license agreement conflicted with its terms. The Federal Circuit affirmed. View "Futurewei Tech., Inc. v. Acacia Research Corp." on Justia Law

In 1997 Wawrzynski was awarded the 990 patent, entitled “Method of Food Article Dipping and Wiping in a Condiment Container.” The description illustrates a condiment container that has a flexible cap with a slitted opening. A user introduces a food article, such as a French fry, into the container through the slit and dips it into the condiment. As the food article is removed, the flexible cap wipes away excess condiment , reducing the likelihood of a drip or spill. . Wawrzynski presented his “Little Dipper” concept, permitting a consumer to either dip or squeeze, to Heinz in a 2008. Heinz indicated that the company was not interested in the product, but months later, released its new “Dip & Squeeze®” packet. Wawrzynski filed a lawsuit asserting breach of an implied contract and unjust enrichment. Heinz counterclaimed that Heinz did not infringe the patent and that the patent was invalid. The district court entered summary judgment, holding that federal patent law preempted the state law claims and that Wawrzynski failed to prove infringement. The Federal Circuit transferred to the Third Circuit, stating that its subject matter jurisdiction over patent disputes derives solely from the complaint, not from any counterclaim. View "Wawrzynski v. H.J. Heinz Co." on Justia Law