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Federal Circuit Review - Provided by Patterson, Belknap, Webb & Tyler LLP

The following is a review of Federal Circuit intellectual property cases decided the week ending November 8, 2002.



Golan v. Pingel Enter., Inc., No. 01-1626 (November 7, 2002). Opinion by Gajarsa, joined by Newman and Prost.

The Federal Circuit affirmed a summary judgment to defendants on plaintiff Golan's federal and California antitrust and unfair competition claims, and state tort claims. The appeals court held that the district court had properly dismissed the federal and state antitrust claims because Golan had failed to provide evidence of the relevant market, and of defendants' market power. The district court had properly dismissed Golan's state tort claims because these claims were preempted by federal patent law, since Golan could not show by clear and convincing evidence that defendants had acted in "bad faith."

Golan and Pingel compete in providing after-market motorcycle fuel valves, known as "petcocks," for Harley-Davidson motorcycles. Defendant Pingel Enterprises is the assignee of U.S. Patent No. 4,250,921 and Design 363,533 for petcocks. Pingel sent a cease-and-desist letter to Golan, and sent letters to Golan's customers that Golan's petcocks infringed Pingel's patents and Pingel's trademarks. Pingel also informed customers that Golan's petcocks did not provide the flow-rate that was advertised in Golan's product literature. Golan sued Pingel for a declaratory judgment of non-infringement of Pingel's patents, and also alleged federal and state antitrust claims, federal and state unfair competition claims, and state law business tort claims. Pingel counterclaimed for patent and trademark infringement.

The Federal Circuit held that even after the Supreme Court's decision in Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc.¸ 122 S. Ct. 1889, 1893 (2002), the Federal Circuit had jurisdiction over cases where the complaint requested declaratory judgment of patent non-infringement, invalidity, or unenforceability. Although Pingel's patent infringement counterclaims were irrelevant for jurisdiction, Golan's declaratory judgment allegations in his complaint conferred jurisdiction on the Federal Circuit.

Golan's federal antitrust claim was dismissed because Golan failed to provide evidence to define a relevant market, and failed to show that Pingel had monopoly power, as required by § 2 of the Sherman Act. Golan's evidence showed only that Golan and Pingel were the only competitors in the "high end high performance market," but did not show whether lower-priced products, which might be lower end or lower performance, were acceptable substitutes for consumers. Even if Golan's narrow market definition were accepted, Golan did not show that Pingel had monopoly power in that market. Furthermore, the requirements of California's antitrust statute are identical to the Sherman Act's requirements, and thus, were also not satisfied.

Golan's remaining state-law claims, and his federal-unfair-competition claim, were properly dismissed. Golan could not show, by clear and convincing evidence, that Pingel acted in bad faith when they advised Golan's customers regarding patent infringement, and when they advised Golan's customers that his products did not meet his advertised flow-rates. Pingel's '921 patent had in fact expired before Pingel had sent cease-and-desist letters. However, Pingel had relied upon incorrect advice of counsel who had given Pingel a later date of expiration. Pingel also relied upon opinions of counsel, which had opined that the issue of Golan's infringement was close, but that Pingel had a chance of prevailing. Since the evidence showed that Pingel believed that he was acting in good faith, even though his legal advice was erroneous,

Golan's claims were properly dismissed. And since Golan could not show that Pingel's statements regarding Golan's valves' flow rate were untrue, these statement could not have been made in bad faith.

The case was remanded to determine the status of Pingel's trademark counterclaims. The record did not indicate whether Pingel held federally registered trademarks, which would be governed by federal law, or unregistered trademarks, which would be governed by state law. The district court was instructed to determine which law applied.


The following is a review of Federal Circuit intellectual property cases decided the week ending December 13, 2002.


Toxgon Corp. v. BNFL, Inc. and GTS Duratek, No. 02-1302 (December 10, 2002). Opinion by Clevenger, joined by Newman and Gajarsa.

Toxgon appealed the district court's grant of BNFL's and GTS Duratek's (collectively, the "Defendants") motion to dismiss for lack of subject matter jurisdiction. In their motion to dismiss, the Defendants contended, and the district court agreed, that because any alleged infringement occurred "under the authority of and for the sole benefit of the United States," the litigation must proceed in the Court of Federal Claims under 28 U.S.C. § 1498(a) and therefore the District Court lacked jurisdiction. The Federal Circuit found that the District Court had jurisdiction, and reversed and remanded.

Reviewing the decision de novo, the Federal Circuit applied Federal Circuit and Supreme Court precedent to find that in cases between private parties, as opposed to those in which the government is a party, section 1498(a) acts as an affirmative defense rather than a jurisdictional bar. The Federal Circuit instructed that the purpose of the statute was to relieve contractors of liability for infringements performed on behalf of the government. "In such litigation between private parties, this court has long complied with Supreme Court precedent holding that section 1498 (a) acts as a codification of defense and not as a jurisdictional statute."

Defendants argued, nonetheless, that district court's procedural error was harmless as the original motion to dismiss could be converted into a successful Rule 56 summary judgment motion asserting the affirmative defense. The Court rejected that argument, explaining that in such a summary judgment motion the burden of proof would be on the Defendants while the burden of proof in the present 12 (b)(1) motion was on Toxgon to show jurisdiction. The Court further declared that even if it entertained the Defendants' request to treat the 12 (b)(1) motion as a summary judgment motion it would decline to grant summary judgment because both parties presented the Federal Circuit with facts not before the district court. The Court admonished, "we sit as a court to review claims that a trial judge erred, and not as a court of first instance." The Court then vacated the district court's order and remanded.


The following is a review of Federal Circuit intellectual property cases decided the week ending December 20, 2002.



In re Bass, No. 02-1046 (Dec. 17, 2002). Opinion by Mayer, joined by Clevenger and Rader.

Bass appealed the decision of the Board of Patent Appeals and Interferences affirming the examiner's obviousness rejection of patent claims in reexamination. The Federal Circuit affirmed.

The patent-at-issue had undergone a first reexamination proceeding based on a third-party request. The examiner found the claims allowable and issued a Notice of Intent to Issue Reexamination Certificate (NIRC). Before the reexamination certificate issued, however, a second reexamination was requested by the same third party, who had submitted the same references as in the first reexam request along with additional prior art. The examiner granted the second request and merged the two proceedings, ultimately rejecting the claims as obvious in view of a combination of art from the first and second reexams. Bass argued that because a NIRC had issued, under 35 U.S.C. § 303(a) (as interpreted by the Federal Circuit in In re Portola Packaging, since overruled by the November 2002 amendments to § 303(a), but extant at the time of the examiner's rejection), the examiner was not permitted to use the previously considered prior art from the first reexam as raising a substantial new question of patentability in the second reexam request.

The Federal Circuit held that the NIRC merely notified Bass of the PTO's intent to issue a certificate; however, reexamination is only complete upon the issuance of a reexamination certificate. "A NIRC does not wrest jurisdiction from the PTO precluding further review of the matter." Therefore, because no prior completed proceeding had reviewed the references from the first reexam, the examiner was free to reconsider these references in the second reexam and base a rejection on them.