Justia Contracts Opinion Summaries

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

Jang, a doctor and inventor, sued BSC, the company to which Jang assigned his coronary stent patents, for breach of the patent assignment agreement, which required BSC to share profits from the patents with Jang, including any damages it recovers from third-party infringers. In 2010, BSC settled a claim against Cordis for infringement in combination with anther claim that Cordis had against BSC. BSC made a payment to Cordis, and the parties exchanged several patent licenses. BSC then denied that it had recovered any damages that it was obligated to share with Jang. The Third Circuit reversed judgment on the pleadings in favor of BSC. Two of Jang’s claims are sufficient to survive judgment on the pleadings: that BSC breached the contract because the cash offset qualifies as a “recovery of damages” and that BSC violated the implied covenant of good faith and fair dealing by structuring a settlement to thwart the agreed purpose of the patent assignment. View "Jang v. Boston Scientific SciMed Inc." on Justia Law

Taurus sued DaimlerChrysler, alleging that external websites infringed its patent for “a computer system for managing product knowledge related to products offered for sale by a selling entity.” Daimler Chrysler asserted license and release defenses, asserted a breach of contract counterclaim, and filed a contract claim against third-party defendants (including Orion), which, it claimed violated a 2006 patent licensing agreement between DaimlerChrysler and Orion, to settle prior patent infringement suits. The district court entered summary judgment, finding that the accused websites did not infringe any asserted claims and that certain claims were invalid as anticipated by prior art. The district court found the DaimlerChrysler suit to be exceptional under 35 U.S.C. 285, and awarded damages of $1,644,906.12, for costs incurred in Chrysler’s defense. With respect to remaining issues, the district court: found that certain third parties were alter egos and declined to dismiss for lack of jurisdiction; held that the 2006 agreement did not provide a release to the infringement alleged in the patent suit; held that issues of fact remained as to whether certain third parties had breached a warranty in the 2006 agreement; held that Orion had breached the warranty; and imposed sanctions on Orion and another for pre-trial witness tampering (those parties were not permitted to present evidence to support their defense that Chrysler did not rely on the warranty). The Federal Circuit affirmed, except with respect to attorney fees. View "Taurus IP, LLC v. DaimlerChrysler Corp." on Justia Law

This case involved disputes over licensing agreements for, inter alia, the RS 3400 blood irradiation device. At issue was whether the Federal Circuit has exclusive jurisdiction to hear an appeal of a breach of contract claim that would require the resolution of a claim of patent infringement for the complainant to succeed. The court concluded that it did not have appellate jurisdiction and resolved dispositive issues in favor of Rad Source, leaving a single dispositive issue for certification: When a licensee enters into a contract to transfer all of its interests in a license agreement for an entire term of a license agreement, save one day, but remains liable to the licensor under the license agreement, is the contract an assignment of the license agreement, or is the contract a sublicense? View "MDS (Canada) Inc., et al. v. Rad Source Technologies, Inc." on Justia Law

Wilson Sporting Goods agreed to pay Frolow royalties for “Licensed Article(s),” defined as “tennis rackets which are covered by one or more unexpired or otherwise valid claims” of Frolow’s 372 patent. After conducting an audit, Frolow concluded that Wilson was not paying royalties on all the Licensed Articles and filed suit alleging that Wilson breached the License Agreement and infringed the 372 patent. Due to an arbitration provision in the Agreement, the court limited the breach of contract case to determining which Wilson racket models were Licensed Articles and summarily dismissed the patent infringement claim. The court ultimately entered summary judgment for Wilson. The Federal Circuit reversed with respect whether certain rackets were Licensed Articles, reasoning that the fact that Wilson marked their products with Frolow’s patent number supports his allegation that Wilson’s products fall within the claims. View "Frolow v. Wilson Sporting Goods Co." on Justia Law

This appeal arose out of a contract dispute between Verint and Tekelec where Tekelec sought a right to payment stemming from a patent dispute between two corporate entities not directly involved in this appeal. The district court awarded summary judgment to Tekelec and denied Verint's cross-motion for summary judgment. The court rejected Verint's claims that Tekelc lacked constitutional standing to enforce its right to the payments at issue. Because the court concluded that Verint's fixed, contractual payment obligations under the Blue Pumpkin/IEX Agreement unambiguously fell outside of the scope of the subsequent Verint/NICE Settlement's boilerplate Non-Accrual Clause, the court need not consider Tekelec's alternative argument that the disputed payments accrued prior to the effective date of the Verint/NICE Settlement. Accordingly, the court affirmed the judgment. View "Tekelec, Inc. v. Verint Systems, Inc." on Justia Law

SEL owns the 463 patent, which names Nagata as a co-inventor. During prosecution in 1991, Nagata assigned his rights to applications and patents related to the patent to SEL’s founder Yamazaki, and subsequently signed a substitute Declaration and Assignment of those applications and patents. From 2002 to 2003, Nagata assisted SEL in a patent infringement suit against another party and was paid for his cooperation and services. In 2009, SEL sued Samsung and others for infringement and contacted Nagata for further assistance, but learned that Nagata had agreed to assist Samsung as a fact witness. Nagata gave testimony repudiating his signature on the 1991 Declarations and Assignments. Samsung then claimed that the patents, including the 463 patent, were unenforceable due to inequitable conduct. SEL sued Nagata, alleging violation of patent law, anticipatory breach of contract, slander of title, and unjust enrichment. The district court dismissed the federal claim for lack of subject matter jurisdiction under 28 U.S.C. 1338(a). The Federal Circuit affirmed; there is no federal cause of action based on assignor estoppel. View "Semiconductor Energy Lab. Co., Inc. v. Nagata" on Justia Law

In this interlocutory appeal, Motorola appealed from the district court's preliminary injunction to enjoin Motorola temporarily from enforcing a patent injunction that it obtained against Microsoft in Germany. The underlying case before the district court concerned how to interpret and enforce patent-holders' commitments to industry standard-setting organizations (SSOs), which established technical specifications to ensure that products from different manufacturers were compatible with each other. Specifically, the case involved the H.264 video coding standard set by International Telecommunications Union (ITU), and the 802.11 wireless local area network standard set by the Institute of Electrical and Electronics Engineers (IEEE). The court held that, under the unique circumstances of this case, the district court's narrowly tailored preliminary injunction was not an abuse of discretion. Accordingly, the court affirmed the judgment. View "Microsoft Corp. v. Motorola, Inc., et al" on Justia Law