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Results for "Trademark appeal"
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Cookie Trade Dress Infringement Case Crumbles in Face of Functionality Challenge

by | Oct 29, 2020 |

The US Court of Appeals for the Third Circuit found that trade dress protection did not extend to the design of a chocolate-dipped, stick-shaped cookie, because the product configuration was useful. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l America Corp., Case No. 19-3010 (3d Cir. Oct. 8, 2020) (Bibas, J.).

Ezaki Glico is a Japanese confectionary company that makes and sells the snack food Pocky, which is a thin, stick-shaped cookie with one side dipped in chocolate (or a flavored cream) and the other uncoated. Pocky cookies have been sold in the United States for more than 40 years, during which time Ezaki Glico obtained two trade dress registrations for the Pocky design and a patent for a “Stick Shaped Snack and Method for Producing the Same.”

In 2015, Ezaki Glico sued its competitor, Lotte, alleging that Lotte’s similarly designed cookie, Pepero, infringed the Pocky trade dress. The district court granted Lotte’s motion for summary judgment, finding the Pocky product configuration functional and therefore not protected by trade dress. Ezaki Glico appealed.

Ezaki Glico argued that the Pocky trade dress is not functional because it is not essential to its design. The Third Circuit disagreed, stating “that test is too narrow.” The Court explained that functionality applies to features that are useful, even if they are not necessarily essential. The Court enumerated four indicators of functionality:

  • Evidence that the feature or design makes the relevant product work better
  • Examples of marketing materials touting the usefulness of the feature or design
  • Existence of a utility patent
  • Availability of other designs.

The Third Circuit found that most of these factors supported the finding of functionality. First, the design makes the product work better because “[e]very feature of Pocky’s registration relates to the practical functions of holding, eating, sharing, or packing the snack.” Ezaki Glico’s advertisements also promoted the functional features of Pocky’s design: they featured phrases such as “convenient design,” “the no mess handle of the Pocky Stick,” and “easier for multi-tasking without getting chocolate on your hand.” Likewise, the Court was unpersuaded by Ezaki Glico’s evidence of alternative designs, finding that “[e]very aspect of Pocky is useful. The nine other designs do not make it less so.”

The existence of the utility patent, however, was not a supporting factor in the functionality analysis. The Third Circuit explained that “the patent’s innovation is a better method for making the snack’s stick shape. The method is useful for making the shape whether or not the shape itself is useful for anything.” Although the district court improperly considered this factor in its analysis, the Third Circuit noted that the misstep was “immaterial” given that the district court ultimately reached the correct conclusion.

Practice Note: It is not necessary for a design feature to be essential for it to be considered functional. Trade dress may be considered functional—and therefore not protectable via trademark law—if it is merely useful to the design.



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PTO Seeks Comments on Proposed Rulemaking for Denying Patent Reviews

by | Oct 29, 2020 | ,

The US Patent and Trademark Office (PTO) requested public comments on considerations for instituting trials under the Leahy-Smith America Invents Act (AIA). Comments are due by November 19, 2020.

Patent practitioners have grown accustomed to reviewing the PTO Patent Trial and Appeal Board (Board) administrative guide, precedential or informative opinions, and other published filings and decisions to discern best practices for filing petitions for and defending against inter partes review, post-grant review, covered business method and derivation proceedings before the Board. For example, the latest Board Consolidated Trial Practice Guide (Nov. 2019) (CTPG) is available here. The PTO is considering codifying or modifying its current policies and practices through formal rulemaking and wishes to gather public comments on its current approach and other approaches suggested by stakeholders.

PTO policies and Board decisions such as General Plastic, Valve Corp. I, Valve Corp. II, NHK Spring and Fintiv set forth factors for analyzing whether to institute an AIA proceeding (and particularly a follow-on or serial petition) or issue a discretionary denial due to the timeline for parallel district court proceedings. Many of these policies and cases are also discussed in the CTPG. The PTO already has received input from stakeholders on these policies that expand on the PTO director’s discretionary authority to institute an AIA trial. Most stakeholder comments suggested that the case-specific analysis outlined in precedential opinions and the CTPG achieves the appropriate balance and reduces gamesmanship—for example, by ensuring that AIA proceedings do not create excessive costs and uncertainty for the patent owner or the system, while allowing meritorious challenges to patents to be heard. However, some stakeholders have proposed that the PTO adopt brightline rules, regardless of the case-specific circumstances, to:

  • Use its discretion to preclude claims from being subject to more than one AIA proceeding
  • Permit more than one AIA proceeding only if the follow-on petitioner is unrelated to the prior petitioner
  • Place no limits on the number of petitions that can be filed or the number of AIA trials that can be instituted against the claims of a patent, so long as the petition complies with statutory timing requirements and the institution threshold of showing that at least one claim of the patent is unpatentable
  • Preclude institution of an AIA trial against challenged claims if the patent owner opposes institution and a related district court or US International Trade Commission (ITC) action (in which any of the challenged claims are or have been asserted against the petitioner, the petitioner’s real-party-in-interest or a privy of the petitioner) is unlikely to be stayed
  • Eliminate any consideration of the status of any district court or ITC actions involving the challenged patent, so long as the petition complies with statutory timing requirements and the institution threshold.

These contrasting views prompted the PTO to issue a request for comments on the factors that should be considered as part of a balanced assessment of the relevant circumstances when exercising its discretion to institute an AIA trial. The PTO [...]

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Only Human: Broadest Reasonable Interpretation Standard Applies to Intentionally Expired Patent

by | Oct 22, 2020 | ,

Affirming an invalidity finding by the Patent and Trial Appeal Board (PTAB), the US Court of Appeals for the Federal Circuit found that the claims of the now-expired patent should be construed under the broadest reasonable interpretation (BRI) standard, and not under the Phillips standard, because the patent owner intentionally gave up the remainder of the patent term only after the appeal was fully briefed. Immunex Corp. v. Sanofi-Aventis U.S. LLC, Case Nos. 19-1749, -1777 (Fed. Cir. Oct. 13, 2020) (Prost, C.J.).

Immunex owns a patent directed to human antibodies that inhabit certain receptors to treat inflammatory diseases such as arthritis. After being sued for infringement, Sanofi and Regeneron (collectively, Sanofi) requested inter partes review (IPR) of the patent, which the PTAB instituted. Based on the IPR filing date and because the patent was unexpired during the pendency of the IPR proceeding, the PTAB used the BRI standard to construe various claim terms. Had the patent been expired, the PTAB would have used the more stringent Phillips standard to construe the claims. Ultimately, the PTAB found all of the challenged claims unpatentable. Immunex appealed.

After appellate briefing was complete, Immunex filed a terminal disclaimer of its patent. The US Patent and Trademark Office accepted the terminal disclaimer, and as a result the patent term expired approximately two months before oral argument. Immunex then filed a citation of supplemental authority informing the Federal Circuit of the terminal disclaimer and asking the Court to change the applicable claim construction standard from BRI to Phillips.

The Federal Circuit found that the application of the BRI standard to Immunex’s patent was appropriate. Although the PTAB currently applies the Phillips claim construction standard in all newly filed IPRs, at the time that Sanofi filed its IPRs, the PTAB applied the Phillips standard only to expired patents. For unexpired patents, it applied the BRI standard. The Court noted that the use of the Phillips standard in cases where the patent expired during the appellate process should not be an absolute, particularly when the patent term expired at an unexpected early date, such as through the filing of a terminal disclaimer.

The Federal Circuit further affirmed the PTAB’s claim construction under the BRI standard and the invalidity finding predicated on that claim construction. The issue on appeal was whether a “human antibody” must be entirely human (as asserted by Immunex) or whether it may also be “partially human,” including “humanized” (as asserted by Sanofi and construed by the PTAB). The Court agreed with the PTAB and found that the patent’s specification supported the conclusion that the BRI of “human antibody” “includes both fully human and partially human antibodies.” The Court also found that “human antibodies” in the context of the patent-in-suit is a broad category that encompasses both partially and completely human antibodies. The Court therefore affirmed the PTAB’s finding.

The Federal Circuit also commented on the PTAB’s departure from an earlier claim construction ruling by a district court in which “human” was construed to mean “fully [...]

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Supreme Court to Consider Whether PTAB Judges Are Unconstitutionally Appointed

by | Oct 22, 2020 |

The Supreme Court of the United States agreed to consider whether Patent Trial and Appeal Board (PTAB) judges are unconstitutionally appointed. The United States of America v. Arthrex, Inc., Case Nos. 19-1452, -1458, -1459 (Supr. Ct. October 13, 2020) (certiorari granted).

In what quickly turned into a controversial decision, the US Court of Appeals for the Federal Circuit held the appointment of administrative patent judges at the PTAB unconstitutional. Arthrex, Inc. v. Smith & Nephew, Inc.  The Federal Circuit found that PTAB judges were appointed as if they were “inferior officers” but vested by the PTAB with authority that is reserved for Senate-confirmed “principal officers.” Smith & Nephew, Arthrex and the United States of America petitioned the Supreme Court for review of the decision.

The questions presented are:

  1. Whether, for purposes of the Appointments Clause, US Const. Art. II, § 2, Cl. 2, administrative patent judges of the US Patent and Trademark Office are principal officers who must be appointed by the president with the Senate’s advice and consent, or “inferior officers” whose appointment Congress has permissibly vested in a department head.
  2. If administrative patent judges are principal officers, whether the court of appeals properly cured any Appointments Clause defect in the current statutory scheme prospectively by severing the application of 5 USC 7513(a) to those judges.


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Eye Don’t: No Counterfeiting Without Likelihood of Confusion

by | Oct 15, 2020 |

Referring to the act of counterfeiting as “hard core” or “first degree” trademark infringement, the US Court of Appeals for the Ninth Circuit for the first time confirmed that the Lanham Act requires a likelihood of confusion in order for the trademark holder to prevail on a counterfeiting claim. Arcona, Inc. v. Farmacy Beauty, LLC, et al., Case No. 19-55586 (9th Cir. Oct. 1, 2020) (Lee, J.) In doing so, the Court affirmed a grant of summary judgment in favor of defendant Farmacy Beauty in a counterfeiting action brought by skin care brand Arcona.

Arcona’s counterfeiting claims (which remained in the district court action after Arcona requested dismissal of its trademark infringement and unfair competition claims) stemmed from Farmacy Beauty’s use of the term EYE DEW on its skincare products, which Arcona asserted to be counterfeit versions of its eye cream sold in the United States under the registered EYE DEW trademark. The district court, however, found that dissimilar packaging and branding made it “implausible” that consumers would be tricked into believing that Farmacy’s EYE DEW product was actually one of Arcona’s skin care products, and granted partial summary judgment for Farmacy on the counterfeiting claim. Arcona appealed.

Arcona argued that it was not required to show a likelihood of consumer confusion with respect to the parties’ EYE DEW eye creams in order to pursue its trademark counterfeiting claim. The Ninth Circuit starkly disagreed, finding that the plain language of the Lanham Act, 15 USC § 1114, expressly states that likelihood of confusion is a requirement for a counterfeiting claim.

The Ninth Circuit also rejected Arcona’s alternative argument, that there should be a presumption of likelihood of confusion based on the parties’ use of the identical mark EYE DEW. The Court explained that in a claim of counterfeiting—even with identical trademarks—there is no presumption of consumer confusion if the products themselves are not identical. Here, evidence demonstrated that the parties sold their respective EYE DEW products in very different packages, with Arcona’s eye cream being in a “tall, cylindrical, silver bottle encased in a slim, cardboard outer box,” and Farmacy’s eye cream sold in a “short, wide, white jar, along with a squarish outer box.” In reviewing the parties’ respective products as a whole, including prominent displays of the respective house marks FARMACY and ARCONA, as well as differences in packaging, size, color, shape and “all other attributes,” the Court determined that the parties’ products were not identical and that there was no presumption of consumer confusion.

The Ninth Circuit concluded that summary judgment of no counterfeiting was proper because there was no genuine dispute of material fact about the likelihood of consumer confusion factor. The Court acknowledged that the parties’ eye cream products do compete in the same space and in the same geographic markets, but explained that a claim of counterfeiting nevertheless requires that the parties’ marks be “considered in their entirety and as they appear in the marketplace.” Noting that the available evidence demonstrated significant differences between [...]

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Logic to Modify: Even Deceptive Intent Does Not Bar Inventorship Correction

by | Sep 16, 2020 |

The US Court of Appeals for the Federal Circuit vacated a district court invalidity determination finding that judicial estoppel prevented a patent owner from relisting an inventor previously removed for strategic litigation purposes. Egenera, Inc. v. Cisco Sys., Inc., Case Nos. 19-2015, -2387 (Fed. Cir. Aug. 28, 2020) (Prost, C.J.).

Egenera sued Cisco for infringement of a patent directed to a reconfigurable virtual network that included a “logic to modify” and transmit received messages. In response Cisco petitioned for inter partes review (IPR). During the IPR’s pendency, Egenera realized that all claim limitations were conceived of before inventor Schulter began working at the company, and petitioned the US Patent and Trademark Office (PTO) to remove Schulter as a listed inventor. The Patent and Trial Appeal Board (PTAB) declined to institute Cisco’s IPR, and the PTO granted Egenera’s petition to remove Schulter shortly thereafter.

During the litigation, the district court construed the patent claims’ “logic” terms as means-plus-function elements and concluded that the “logic to modify” limitation corresponded to a “tripartite structure” described in the specification. Cisco then asserted invalidity under pre-America Invents Act (AIA) § 102(f), contending that Schulter invented the tripartite structure, and that the patent therefore did not list all inventors. Egenera attempted to re-correct inventorship to include Schulter, but the court rejected the attempt. The district court found the patent invalid under § 102(f), reasoning that judicial estoppel precluded Egenera from “resurrecting” Schulter’s inventorship. Egenera appealed both the means-plus-function construction and the judicial estoppel finding.

The Federal Circuit first addressed whether Egenera could correct inventorship absent any judicial estoppel. The Court looked to the plain meaning of post-AIA § 256, which provides that “the error of omitting inventors . . . shall not invalidate the patent . . . if it can be corrected.” Notably, post-AIA § 256 removed the requirement that an inventorship error occur “without . . . deceptive intent.” The Federal Circuit stated it plainly: “‘Error’ is simply the incorrect listing of inventors” and does not exclude even deceptive intention. The Court explained that the inequitable conduct rules provide a safety valve for such actions, not § 256. The Court also noted that at the time Egenera removed Schulter as an inventor, no one had argued that “logic to modify” was means-plus-function language, which it presumptively was not. Egenera’s preferred construction of that term was consistent with its assertion that Schulter was not an inventor. The omission of Schulter as inventor was thus an “error” within the scope of § 256.

The Federal Circuit next turned to whether Egenera was judicially estopped from relisting Schulter as an inventor. Applying the First Circuit’s New Hampshire factors, the Federal Circuit looked to whether Egenera’s positions were inconsistent, whether its first position was successfully accepted by the court, and whether Egenera would derive an unfair advantage if not estopped. The Federal Circuit found that the district court erred in finding Egenera’s changing inventorship positions inconsistent. The Court explained that inventorship is complex and can depend on claim [...]

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Use of Infringing Product, Misappropriated Trade Secrets May Continue—for a Licensing Fee

by | Sep 3, 2020 |

The US Court of Appeals for the Sixth Circuit affirmed a district court’s stay of a permanent injunction against copyright infringement and trade secret misappropriation, permitting the infringer to continue use of an infringing product and misappropriated trade secrets but requiring the infringer to pay a licensing fee. ECIMOS, LLC v. Carrier Corp., Case Nos. 19-5436, -5519 (6th Cir. Aug. 21, 2020) (Boggs, J.).

Carrier sold HVAC systems. ECIMOS designed and sold a quality-control-testing system that assessed each HVAC unit at the end of Carrier’s assembly line. ECIMOS’s system consisted of a software program, associated hardware and a database that stored results of runtests performed by the system. Carrier paid ECIMOS to maintain and periodically upgrade its software system. ECIMOS licensed Carrier to use the system but prohibited unauthorized copying, distributing or creating derivative works based in whole or in part on the software.

Years into the relationship, ECIMOS upgraded its software to run on a new operating system. ECIMOS expected Carrier to agree to the proposed upgrade just as it had done previously. Unbeknownst to ECIMOS and without its consent, Carrier had already installed ECIMOS’s software directly onto the new operating system. Carrier started a venture with a third party, Amtec, to develop a new quality-control software and storage database to replace the ECIMOS system.

ECIMOS sued Carrier for violating the copyright on the ECIMOS system’s database, breaching the parties’ software-licensing agreement and misappropriating ECIMOS’s trade secrets. At trial, ECIMOS alleged that Carrier improperly shared ECIMOS’s copyrights and trade secrets with Amtec, allowing Amtec to develop a competing system. The jury agreed, finding that the competing system incorporated ECIMOS’s trade secrets. The jury determined that Carrier infringed the copyright on ECIMOS’s runtest database script source code, that ECIMOS held a trade secret in its software source code and its assembled hardware drawings and wiring diagrams, and that Carrier misappropriated those trade secrets by sharing them with Amtec. The jury awarded ECIMOS copyright and contract damages.

The district court also imposed a permanent injunction against Carrier’s use of the infringing Amtec database, but stayed the injunction until Carrier developed a noninfringing database. The court also enjoined Carrier from further disclosure of ECIMOS’s trade secrets, but did not enjoin Carrier from using those trade secrets. To the contrary, the district court appointed a special master to supervise the redesign and permitted Carrier to continue using the infringing database that incorporated ECIMOS’s trade secrets until the redesigned system was complete. The district court further required Carrier to pay ECIMOS the licensing fees that ECIMOS would have charged in the course of an ongoing, mutually agreeable licensing relationship. ECIMOS objected to the stay and appealed.

ECIMOS argued that the stay was an abuse of discretion, that the injunction should have prohibited Carrier from using (not just disclosing) ECIMOS’s trade secrets, and that the injunction should have prohibited Carrier’s disclosure and use of ECIMOS’s assembled hardware, not just the hardware drawings and wiring diagrams. The Sixth Circuit disagreed, affirming in full the district court’s [...]

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No Refunds: Cancellation of Patent Claims in IPR Isn’t a Taking

by | Sep 3, 2020 |

The US Court of Appeals for the Federal Circuit found that cancellation of a patent in an inter partes review (IPR) proceeding is not a taking and does not grant the patentee any compensable claim against the United States. Christy, Inc. v. United States, Case No. 19-1738 (Fed. Cir. Aug. 24, 2020) (Hughes, J.).

After Christy sued two competitors for infringement of a patent directed to a vacuum, one of the competitors filed petitions for IPR. The Patent Trial and Appeal Board (PTAB) instituted the IPRs and ultimately found a majority of the patent claims unpatentable. Christy appealed to the Federal Circuit, which affirmed the PTAB’s invalidity decision.

Christy then filed a class action suit in the US Court of Federal Claims to recover from the government the issuance and maintenance fees Christy had paid for the patent, investments Christy had made in the patented technologies, attorneys’ fees from defending the IPR proceedings, the value of the patent claims, royalties and other payments for use of the patents. The government moved to dismiss all six claims for lack of subject matter jurisdiction and failure to state a claim. The court partially granted the motion to dismiss, but found that it had jurisdiction to consider Christy’s Fifth Amendment takings claim. The court found that Christy did not state a claim for relief on the merits, and reasoned that the cancellation of claims in an IPR did not amount to a compensable taking of Christy’s property interest. The court held that it did not have jurisdiction to consider Christy’s alternative illegal exaction claim, since a statute granting authority to the US Patent and Trademark Office (PTO) to refund mistakenly excessive patent-related fees displaced the court’s Tucker Act jurisdiction. In any case, the court found that on the merits, Christy’s issuance and maintenance fees were properly owed at the time they were paid, and were not paid by mistake. The government did not require Christy to pay any alleged damages on the government’s behalf, or at all, and so Christy’s theory that damages were illegally exacted was found “devoid of merit.” Christy appealed.

On appeal, Christy argued that the claims court erred in finding 1) that Christy failed to state a compensable taking claim based on the cancellation of patent claims, 2) that the claims court lacked subject matter jurisdiction over the illegal exaction claim, and 3) that Christy failed to state a plausible illegal exaction claim. The Federal Circuit disagreed, affirming the claims court and reiterating its finding in Golden v. United States that the AIA did not displace Tucker Act jurisdiction over IPR-based takings claims, and that cancellation of patent claims in an IPR cannot be a taking under the Fifth Amendment. Thus, the Court found that the claims court correctly found that it had jurisdiction over Christy’s takings claim, but that such cancellation was not a taking.

The Federal Circuit next considered Christy’s illegal exaction claim. Illegal exaction occurs when money is “improperly paid, exacted, or taken from the claimant [...]

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Diamonds to Dust? Too Many Factual Disputes Precludes Summary Judgment

by | Aug 26, 2020 |

The US Court of Appeals for the Second Circuit vacated a district court’s summary judgment grant in favor of a fine jewelry producer for trademark infringement, counterfeiting and unfair competition because factual disputes exist around whether the accused infringer’s use of the word “Tiffany” was merely descriptive of a particular ring setting, thereby supporting a fair use defense to infringement. Tiffany and Company v. Costco Wholesale Corporation, Case Nos. 17-2798-cv, -19-338, -19-404 (2nd Cir. Aug. 17, 2020) (Livingston, J.).

In 2012, a Costco customer alerted Tiffany that she believed Costco was selling diamond engagement rings advertised as Tiffany rings. When Tiffany approached Costco about the issue in December 2012, Costco asserted that its point-of-sale displays bearing the Tiffany name referred to the diamond setting styles of its rings, and that other similar point-of-sale displays also identified common ring settings such as “bezel” or “cathedral” settings. Costco also claims that within one week after Tiffany’s December 2012 outreach, it voluntarily removed all uses of “Tiffany” from its jewelry displays and has not since used the word “Tiffany” to identify any rings or setting styles.

Nevertheless, in 2013, Tiffany filed suit against Costco for trademark infringement and counterfeiting under the Lanham Act, and unfair competition in violation of New York state law, based on Costco’s sales of otherwise unbranded diamond engagement rings identified by point-of-sale signs containing the word “Tiffany.” In response, Costco raised the affirmative defense of fair use, arguing that its use of “Tiffany” on certain signage for rings was not as a source-identifying trademark, but merely to describe a particular six-prong diamond setting style. Costco also filed a counterclaim seeking to cancel certain federal trademark registrations for the TIFFANY mark as “generic” for a specific jewelry setting, and not entitled to registered trademark protection.

The district court granted Tiffany’s motion for summary judgment finding Costco liable for trademark infringement and counterfeiting as a matter of law. The district court then revised a jury’s damages award finding that Costco was liable for willful or intentional infringement to the tune of more than $21 million. Costco appealed.

On appeal, Costco argued it had successfully raised a question of material fact as to its liability for trademark infringement and counterfeiting and was entitled to present its fair use defense to a jury. The Second Circuit addressed the lower court’s trademark “likelihood of confusion” assessment under its own Polaroid factors and explained that if a factual inference must be drawn to arrive at a particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment. Here, the Court determined that Costco raised a triable question of fact as to at least three of the Polaroid factors, namely, (1) whether Costco’s customers were actually confused as to the source or affiliation of its diamond engagement rings, (2) whether Costco adopted Tiffany’s trademark in bad faith and (3) whether the relevant population of consumers was sufficiently [...]

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Eighth Circuit Cools Off Antitrust Claims Based on Alleged Patent Fraud

by | Aug 5, 2020 |

The US Court of Appeals for the Eighth Circuit affirmed a grant of summary judgment dismissing antitrust and tortious interference claims based on fraudulent procurement of patents where the plaintiff failed to show a knowing and willful intent to deceive the US Patent and Trademark Office (PTO). Inline Packaging, LLC v. Graphic Packaging International, LLC, Case No. 18-3167 (8th Cir. June 18, 2020) (Smith, J.).

Inline Packaging and Graphic Packaging are manufacturers of susceptor packaging, a specialized food packaging used for microwaving frozen foods. Graphic developed the susceptor design in partnership with Nestlé in 2005. The packaging was redesigned from a prior patent obtained several years earlier. Although Graphic’s computer-aided design drafter was listed as the sole inventor of the redesigned packaging claimed in the asserted patent, Nestlé’s engineer provided feedback that was implemented into the design, including the addition and deletion of certain features of the packaging.

In 2014, Nestlé held an auction to select the next manufacturer of its susceptor packaging. Nestlé originally selected Inline as the supplier of its susceptor packaging, but later awarded 90% of the susceptor packaging business to Graphic after Graphic notified Nestlé that Inline would likely infringe on Graphic’s patents. In June 2015, Graphic initiated patent litigation against Inline. In July 2015, Inline brought an antitrust suit against Graphic alleging that Graphic monopolized the susceptor packaging market using anticompetitive practices in violation of federal and state antitrust laws. To support its antitrust claims, Inline alleged that Graphic fraudulently procured the asserted patents, made baseless litigation threats and engaged in predatory discount bundling through the use of multi-year supply agreements. At the time the lawsuit was initiated, Graphic was the dominant supplier of susceptor packaging, with an almost 95% share of the US market. The district court granted summary judgment in favor of Graphic, dismissing Inline’s claims. Inline appealed.

The Eighth Circuit reviews grants of summary judgment de novo to determine whether a genuine dispute of material fact exists and whether judgment is entitled as a matter of law. Here, all inferences were viewed in the light most favorable to Inline. Section 2 of the Sherman Act prohibits monopolizing, or attempting to monopolize, any part of the trade or commerce among the several states. To prove a violation of Section 2, a claimant must show that an entity possessed monopoly power in the relevant market and willfully acquired or maintained such monopoly power through anticompetitive conduct rather than as the result of fair competition (e.g., by means of a superior product or business acumen).

The Eighth Circuit first considered whether Graphic fraudulently procured the asserted patents. Patent fraud, also known as Walker Process fraud, can support a monopolization claim where the defendant procured the patent at issue by knowing and willful fraud on the PTO, or maintained and enforced the patent with knowledge of the fraudulent manner in which it was obtained. Knowing and willful fraud requires an intent to deceive or inequitable conduct. The Court reasoned that this standard requires clear and convincing [...]

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