Petition for Writ of Certiorari — Clifford A. Lowe, et al., Petitioners v. ShieldMark, Inc., et al.
Supreme Court briefAug 8, 2025
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No. 25In the
Supreme Court of the United States
CLIFFORD A. LOWE AND SPOTA LLC,
FKA INSITE SOLUTIONS, LLC,
Petitioners,
v.
SHIELDMARK, INC., ADVANCED PLASTICS, INC.
AND CROWN EQUIPMENT CORPORATION,
Respondents.
On Petition for a Writ of Certiorari to the United
States Court of A ppeals for the Federal Circuit
PETITION FOR A WRIT OF CERTIORARI
Ray L. Weber
Counsel of Record
Laura J. Gentilcore
Renner, Kenner, Greive, Bobak,
Taylor & Weber Co., L.P.A.
Huntington Tower
106 S. Main Street, Suite 400
Akron, OH 44308
(330) 376-1242
rlweber@rennerkenner.com
Attorneys for Petitioners
Clifford A. Lowe and Spota, LLC,
fka InSite Solutions, LLC
384111
A
(800) 274-3321 • (800) 359-6859
i
QUESTIONS PRESENTED
The questions presented are:
(1) Whether a district court, after first deciding it
lacks subject matter jurisdiction and dismissing
with prejudice a cause of action, retains the power
to declare an “alternative” decision on the merits
despite the apparent “advisory” character of any
such “alternative” decision; and
(2) Whether a court of appeals has the power to
affirm a decision of a district court issued “in the
alternative” after that district court first decided
it lacked subject matter jurisdiction to hear the
cause of action on the merits?
ii
PARTIES TO THE PROCEEDING
Petitioners Clifford A Lowe (“Lowe”) and Spota
LLC (fka InSite Solutions, LLC) (“Spota”) (collectively
“Petitioners”) were plaintiffs in the District Court below
and appellants before the Federal Circuit.
Respondents ShieldMark, Inc. (“ShieldMark”),
Advanced Plastics, Inc. and Crown Equipment Corporation
(“collectively “Respondents”) were defendants in the
District Court below and appellees before the Federal
Circuit.
iii
RULE 29.6 CORPORATE
DISCLOSURE STATEMENT
Pursuant to Rule 29.6, Petitioner states as follows:
Petitioner Spota, LLC (fka InSite Solutions, LLC) is
a limited liability company, that has no parent company,
nor does any publicly held company have any ownership
interest therein.
iv
RELATED PROCEEDINGS
United States District Court for the Northern District
of Ohio Case No. 1:19-00748-JSG
United States Court of Appeals for the Federal Circuit
Case No. 21-2164
United States Court of Appeals for the Federal Circuit
Case No. 2022-2273
United States Court of Appeals for the Federal
Circuit Case Nos. 2023-1786, 2023-1871 and 2023-1893
(Consolidated)
United States Court of Appeals for the Federal Circuit
Case No. 2025-1913.
v
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i
PARTIES TO THE PROCEEDING . . . . . . . . . . . . . . . . ii
RULE 29.6 CORPORATE DISCLOSURE
STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
RELATED PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . iv
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . v
TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . vii
TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . ix
PETITION FOR A WRIT OF CERTIORARI . . . . . . . 1
OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CONSTITUTIONAL AND STATUTORY
PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . 6
I.
Legal Background . . . . . . . . . . . . . . . . . . . . . . . . . 6
II. Factual Background . . . . . . . . . . . . . . . . . . . . . . . 9
vi
Table of Contents
Page
III. Procedural Background . . . . . . . . . . . . . . . . . . . 10
REASONS FOR GRANTING THE PETITION . . . . 17
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
vii
TABLE OF APPENDICES
Page
A PPEN DI X A — OPI N ION OF T H E
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
MARCH 24, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
APPENDIX B — ORDER OF THE UNITED
S TA T E S C OU R T OF A P P E A L S F OR
T H E F E D E R A L C I R C U I T, F I L E D
NOVEMBER 28, 2022 . . . . . . . . . . . . . . . . . . . . . . . 28a
A P P E N DI X C — DE C I S ION O F T H E
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
MARCH 4, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34a
A PPENDI X D — OPINION A ND ORDER
OF THE U NIT ED STAT ES DISTRICT
COURT FOR THE NORTHERN DISTRICT
OF OHIO, FILED APRIL 21, 2023 . . . . . . . . . . . . 58a
APPENDIX E — OPINION AND ORDER OF
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO,
FILED MARCH 16, 2023 . . . . . . . . . . . . . . . . . . . . 78a
APPENDIX F — OPINIONS AND ORDERS
OF THE U NIT ED STAT ES DISTRICT
COURT FOR THE NORTHERN DISTRICT
OF OHIO, FILED AUGUST 26, 2022, AND
SEPTEMBER 19, 2022 . . . . . . . . . . . . . . . . . . . . . . . 87a
viii
Table of Appendices
Page
APPENDIX G — OPINION AND ORDER OF
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO,
FILED AUGUST 23, 2022 . . . . . . . . . . . . . . . . . . . . 95a
APPENDIX H — ORDER FOR REHEARING
OF THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT,
FILED MAY 12, 2025 . . . . . . . . . . . . . . . . . . . . . . . 124a
ix
TABLE OF CITED AUTHORITIES
Cases
Page
Balkalian v.
Central Bank of the Republic of Turkey,
932 F.3d 1229 (9th Cir. 2019) . . . . . . . . . . . . . . . . . . . 20
Center for Reproductive Law and Policy v. Bush,
304 F.3d 183 (2d Cir. 2002) . . . . . . . . . . . . . . . . . . . . . 20
Chambers v. NASCO, Inc.,
501 U.S. 32, 111 S.Ct. 2123,
115 L.Ed.2d 27 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . 26
Ex parte McCardle,
7 Wall 506, 514, 19 L.Ed.264 (1868) . . . . . . . . 4, 17, 18
Friends of the Everglades v. EPA,
699 F.3d 1280 (11th Cir. 2012) . . . . . . . . . . . . . . . . . . 21
Jordon v. Attorney General of U.S.,
424 F.3d 320 (3d Cir. 2005) . . . . . . . . . . . . . . . . . . . . 20
Minesen Co. v. McHugh,
671 F.3d 1332 (Fed. Cir. 2012) . . . . . . . . . . . . . . . . . 20
Montague v. NLRB,
698 F.3d 307 (6th Cir. 2012) . . . . . . . . . . . . . . . . . . . . 20
Owen Equip. & Erection Co. v. Kroger,
437 U.S. 365, 98 S. Ct. 2396 (1978) . . . . . . . . . . . . . . 23
x
Cited Authorities
Page
Riley v. Bondi,
606 U.S. ___, 145 S. Ct. 2190 (2025) . . 5, 17, 18, 19, 20
Rhode Island v. Massachusetts,
37 U.S. 657 (1838) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 119 S. Ct. 1563 (1999) . . . . . . . . . 4, 5, 19
Seale v. INS,
323 F.3d 150 (1st Cir. 2002) . . . . . . . . . . . . . . . . . . . . 20
Sheldon v. Sill,
49 U.S. (8 How.) 441 (1850) . . . . . . . . . . . . . . . . . . . . . 23
Sinochem Intern. Co. Ltd. v.
Malaysia Intern. Shipping Corp.,
549 U.S. 422, 127 S. Ct. 1184 (2007) . . . . . . . . . 4, 5, 19
Starkey v. Boulder Cty Soc. Servs.,
569 F.3d 1244 (10th Cir. 2009) . . . . . . . . . . . . . . . . . . 20
Steel Co. v. Citizens for a Better Environment,
523 U.S. 83, 118 S. Ct. 1003
(1998) . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 5, 6, 17, 18, 19,
20, 22, 23, 28
Waleski v. Montgomery, McCracken,
Walker & Rhoads, LLP,
599 U. S. ___, 144 S. Ct. 53,
216 L.Ed. 1309 (2023) . . . . . . . . . . . . . . . . . . . . . . . . . 21
xi
Cited Authorities
Page
Statutes and Rules
28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Lanham Act, § 42(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 11
Fed. R. Civ. P. 12(h)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fed. R. Civ. P. 25(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Authorities
R. Bork, Neutral Principles and Some First
Amendment Problems, 47 Ind. L. J. 1 (1971) . . 25-26
1
PETITION FOR A WRIT OF CERTIORARI
Petitioners respectfully petition for a writ of certiorari
to review the judgment of the United States Court of
Appeals for the Federal Circuit affirming the “alternative”
judgment invalidating U.S. Patent No. 10,214,664 and
additional subsequent orders of the District Court for the
Northern District of Ohio issued after first dismissing the
case/action with prejudice for lack of Article III subject
matter jurisdiction.
OPINIONS BELOW
Judgment of the Federal Circuit finding one of the
two Petitioners (Spota) to have had Article III standing
as the patentee entitled to sue for infringement and
affirming the District Court’s alternative decision finding
the patent-in-issue to be invalid as anticipated by prior
art. Finding that the other Petitioner (“Lowe”) had lost
standing to pursue his patent infringement claim, the
Federal Circuit also affirming the sanctions award of the
District Court against both Petitioners, accepting the
District Court’s finding Petitioners [plural] had delayed
the litigation with respect to Lowe’s patent infringement
claim [notwithstanding the complaint as amended alleged
but a single patent infringement claim common to both
Petitioners]. This Judgment of the Federal Circuit is
unreported but is reproduced as App. to Pet. for Cert. A.
Order of the Federal Circuit finding that it lacked
subject matter jurisdiction to hear the first-filed appeal
after the District Court for the Northern District of Ohio
had dismissed the action/case with prejudice for lack of
Article III subject matter jurisdiction. The Federal Circuit
2
found the appeal to be “premature” because, in Opinions
& Orders subsequent to its dismissal of the case/action
with prejudice for lack of subject matter jurisdiction, the
District Court had clarified that it had not intended to do
so. This Order of the Federal Circuit is unreported but is
reproduced as App. to Pet. for Cert. B.
Judgment of the United States Court of Appeals for
the Federal Circuit in part vacating the District Court’s
Decision granting summary judgment of non-infringement
and remanding for further proceeding consistent with
Opinion, Dated March 4, 2022. This Judgment of the
Federal Circuit is unreported but is reproduced as App.
to Pet. for Cert. C.
Opinion & Order of the District Court for the Northern
District of Ohio awarding Respondents damages in the
amount of $213,765 for Petitioners having continued to
litigate Petitioners’ patent infringement claim after losing
Article III standing. This Opinion & Order of the District
Court is reproduced as App. to Pet. for Cert. D.
Opinion & Order of the District Court for the
Northern District of Ohio granting Respondents’ motion
for summary judgment on Petitioners’ claim for false
advertising. This Opinion & Order of the District Court
is reproduced beginning as App. to Pet. for Cert. E.
Opinion & Order of the District Court for the Northern
District of Ohio dismissing the action/case with prejudice
for lack of Article III subject matter jurisdiction, and in
the alternative, granting Respondents’ patent invalidity
summary judgment motion. This Opinion & Order of the
District Court is reproduced as App. to Pet. for Cert.
3
G. The Opinions & Orders of the District Court for the
Northern District of Ohio issued subsequent to its having
dismissed the action/case with prejudice for lack of subject
matter jurisdiction are reproduced as App. to Pet. for
Cert. F.
Order of the United States Court of Appeals for the
Federal Circuit denying Petition for Panel Rehearing and
Rehearing En Banc, Dated May 12, 2025. This Order of
the Federal Circuit is unreported but is reproduced as
App. to Pet. for Cert. H.
JURISDICTION
On March 24, 2025, the Federal Circuit filed its
decision in relevant part (1) vacating the District Court’s
decision that both Petitioners lacked subject matter
jurisdiction which could not be cured by joinder of the
real party in interest and thereby dismissing the case
with prejudice; and (2) affirming the District Court’s
alternative ruling that the patent-in-issue is invalid as
anticipated by prior art. (App. to Pet. for Cert. A). On
May 12, 2025, the Federal Circuit denied Petitioners’
combined petition for rehearing and rehearing en banc.
(App. to Pet. for Cert. H). This petition is therefore timely,
and the Court has jurisdiction under 28 U.S.C. §1254(1).
CONSTITUTIONAL AND
STATUTORY PROVISIONS
In Steel Co. v. Citizens for a Better Environment, 523
U.S. 83, 94 (1998), delivering the opinion for this Court,
Justice Scalia wrote that should a district court find it is
without subject matter jurisdiction it cannot proceed at all
4
in any cause. He further wrote that lacking the power to
declare the law, the only function remaining to a district
court is to announce that fact and dismiss the cause.
As acknowledged by Justice Scalia in Steel Co., these
principles are rooted in case law dating back to at least
1868. Ex parte McCardle, 7 Wall 506, 514, 19 L.Ed.264
(1868). Since Steel Co. these principles have been affirmed
in both Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,
584, 119 S.Ct. 1563 (1999) and Sinochem Intern. Co. Ltd.
v. Malaysia Intern. Shipping Corp., 549 U.S. 422, 127
S.Ct. 1184, 1191-92 (2007).
In Ruhrgas, this Court unanimously reaffirmed the
core of Justice Scalia’s opinion:
Steel Co. held that Article III generally requires
a federal court to satisfy itself of its jurisdiction
over the subject matter before it considers the
merits of a case. ‘For a court to pronounce upon
[the merits] when it has no jurisdiction to do so,’
Steel Co. declared, ‘is ... for a court to act ultra
vires. 523 U.S., at 101–102, 118 S.Ct. 1003.’
In Sinochem, this Court again held that “[j]urisdiction
is vital only if the court proposes to issue a judgment on
the merits.”
Both Ruhrgas and Sinochem affirm that courts are
powerless to reach the merits without subject-matter
jurisdiction, while refusing to distinguish between
jurisdiction’s statutory and constitutional components.
Consistent with this Court’s holding in Steel Co., is
Fed. R. Civ. P. 12(h)(3) which provides:
5
Lack Of Subject-Matter Jurisdiction. If the
court determines at any time that it lacks
subject matter jurisdiction, the court must
dismiss the case.
On June 25, 2025, while said to have abrogated Steel
Co. with its decision in Riley v. Bondi, 606 U.S. ___,
145 S.Ct. 2190 (2025), this Court not only left intact but
reiterated these fundamental principles while holding
that a district court may, after first assuring itself that an
issue is jurisdictional, address it prior to the merits. In his
concurring opinion (Riley, 606 U.S. at 2206) citing Steel
Co., Justice Thomas once again expressly recognized that
while a district court can address various jurisdictional
issues in any order it chooses, it must assure itself of
jurisdiction before proceeding to the merits.
The lower courts here misapplied that which remains
Supreme Court precedent after this Court’s decision
in Riley. After first holding that it lacked Article III
subject matter jurisdiction and dismissing the case/
action with prejudice, the District Court below opined
in the alternative entering judgment on the merits
invalidating the patent owned by Petitioner Spota LLC,
formerly InSite Solutions LLC. (App. to Pet. for Cert.
G). It addressed the merits despite finding it lacked
jurisdiction—a course of action clearly not adopted much
less endorsed by this Court in Riley. The Federal Circuit,
without considering this Court’s decision in Steel Co., or
the precedent cited therein dating back to at least 1838,
or subsequent decisions in Ruhrgas Ag and Sinochem,
affirmed the District Court’s alternative decision on the
merits. (App. to Pet. for Cert. A).
6
In Steel Co., Justice Scalia embraced an absolute
prohibition against “hypothetical jurisdiction.” Instead
of adopting that absolute prohibition as has the Eleventh
Circuit, the lower courts here appear to have followed
those circuits (First, Second, Third, Sixth, Ninth, and
Tenth) carving out yet another exception. The exception
carved out by the lower courts herein, however, if allowed
to stand, “will have swallowed the rule.” A district
court finding it is without subject matter jurisdiction
must not proceed to issue an alternative decision on the
merits. Nor should an appellate court give any credence
to such an alternative decision on the merits, which an
appellate court does even when classifying its decision as
“non-precedential.” Rather, such only demonstrates the
failure to appreciate that which was at stake in this case:
as acknowledged by Justice Scalia, core constitutional
principles under Article III. Such does not promote
“judicial efficiency” but rather creates confusion and
encourages improper judicial behavior, as can be seen
from the record of the case below. Once a district court
finds that it lacks subject matter jurisdiction, it has no
power to declare in the alternative a case-ending decision
on the merits. Nor does an appellate court have the power
to affirm any such alternative decision.
STATEMENT OF THE CASE
I.
Legal Background
Petitioners Lowe as patent owner and Spota (fka
InSite Solutions LLC) (“Spota”) as exclusive licensee
filed a First Amended Complaint for infringement of U.S.
Patent No. 10,214,664 (“the ’664 patent”), as well as false
advertising. The false advertising claim was tied to the
7
patent infringement claim in that if Respondents argued a
patent claim element was absent in their product to avoid
infringement but had advertised that it was present, any
such advertising was literally false.
After receiving an order granting Respondents’
summary judgment of non-infringement, Petitioners
appealed to the Federal Circuit. In response to that
appeal, the Federal Circuit vacated the judgment of noninfringement, finding it to have been based on erroneous
claim construction. (App. to Pet. for Cert. C).
When the case was remanded to the District Court,
rather than address the issue of patent infringement with
proper claim construction, the District Court instructed
Respondents to file additional briefing on the issue of
patent invalidity. At or about that same time, having found
an assignment document on the public record, Respondents
raised the question of subject matter jurisdiction due to a
transfer of ownership of the ’664 patent from Petitioner
Lowe to Petitioner Spota. Petitioners admitted to the
District Court that the transfer occurred during the
pending appeal as well as the fact that Petitioner Spota
had granted a non-exclusive license under the ’664 patent
to a non-party. The Fourth Amended Complaint had been
refiled upon remand as the parties previously agreed it
would be. Petitioners sought leave to correct Petitioner
Spota’s changed position to owner and Petitioner Lowe’s
changed position to that of an exclusive licensee, but the
District Court denied their request.
After briefings, based on the admitted transfer and
grant of the non-exclusive license, the District Court found
both Petitioners had lost subject matter jurisdiction and
8
issued an order dismissing the case/action with prejudice.
(App. to Pet. for Cert. C). The District Court thereafter
awarded damages to Respondents in the amount of
$213,765, Respondents’ attorneys’ fees associated with
Petitioners having litigated their patent infringement
claim. (App. to Pet. for Cert. D). The District Court
reasoned that because Petitioners had failed to properly
identify the change in ownership interest in the refiled
complaint and failed to provide the assignment and patent
license document to the Respondents in December of 2021
while the case was pending on appeal, Petitioners caused
an unnecessary extension of the case. (App. to Pet. for
Cert. D).
Petitioners appealed. The first appeal was rejected
by the Federal Circuit as premature due to the additional
false advertising claim which had not been heard. (App.
to Pet. for Cert. B). In that first appeal, the Federal
Circuit found that although the District Court had with
prejudice dismissed the action/case for lack of subject
matter jurisdiction, the District Court had, in orders
issued subsequent to the dismissal entry, clarified that it
had not intended to do so. (App. to Pet. for Cert. F).
After remand, the District Court granted summary
judgment to Respondents on Petitioner InSite’s false
advertising claim, and Petitioners again appealed. (App.
to Pet. for Cert. E). The second appeal resulted in the
finding that Petitioner Spota did not lose Article III
subject matter jurisdiction by its grant of a non-exclusive
license to the non-party. (App. to Pet. for Cert. A). Finding
however that Petitioner Lowe had lost Article III and
statutory subject matter jurisdiction, the Federal Circuit
affirmed the damages award. (App. to Pet. for Cert. A). In
9
so holding, the Federal Circuit did not address whether,
contrary to the District Court, the case would necessarily
have and did continue to finality because Petitioner Spota
never lost either Article III or statutory subject matter
jurisdiction. (App. to Pet. for Cert. A).
Petitioners filed for rehearing which was denied. (App.
to Pet. for Cert. H).
Petitioners thereafter have timely filed this petition
for certiorari.
II. Factual Background
Petitioner Lowe is the inventor and original patentee
of U.S. Patent No. 10,214,664 (“the ’664 patent”), as well
as additional patents. All of his intellectual property
remained in his name until December 9, 2021. Up until
December 9, 2021, Petitioner Lowe licensed his patents to
Petitioner Spota, a limited liability company for which he
is the Managing Director. His license of the ’664 patent
to Spota was oral and exclusive.
During the first-filed appeal to the Federal Circuit,
Petitioner Lowe decided to sell to a non-party (“Insite
DE”) all but two of his patents, one being the ’664
patent. Instead of selling the ’664 patent, (1) Petitioner
Spota would be assigned ownership of the ’664 patent;
(2) Petitioner Spota would grant a non-exclusive license
in the ’664 patent (“PLA”) to InSite DE; (3) under the
terms of the PLA, Petitioner Lowe, along with Petitioner
Spota, “ would retain the exclusive rights to elect to
maintain, control, and settle” the present litigation with
Respondents; (4) Petitioner Lowe, along with Petitioner
10
Spota, would have the right to the proceeds of the
litigation, if any, whether by lump sum settlement or
through the collection of royalties; and (5) Petitioner Lowe
along with Petitioner Spota would also have the same
rights of enforcement with respect to others found to have
infringed the ’664 patent prior to the date of execution
of the PLA (December 16, 2021). While Insite DE would
receive an option to acquire all right, title, and interest
in and to the Licensed Patents, it would have no present
rights of enforcement. The option would be subject to an
option commencement date subsequent to the resolution
of the ShieldMark litigation and any Further Litigation
brought by Petitioners Lowe and Spota.
On December 9, 2021, Petitioner Lowe assigned his
intellectual property assets to Petitioner Spota. The
assignment of the ’664 patent was filed on the public
record. On December 16, 2021, Petitioner Spota gave
the above-described non-exclusive license under the ’664
patent to nonparty InSite DE.
III. Procedural Background
When the original Complaint was filed on April 4,
2019, Petitioner Lowe was the patentee by virtue of his
ownership of the “’664 patent” and he was identified as
such therein.
On May 14, 2019, Petitioner Spota was added as a
plaintiff in a First Amended Complaint. At that time,
under an exclusive oral license from Petitioner Lowe,
Petitioner Spota was engaged in the manufacture and
distribution of floor marking tape under the ’664 patent.
11
On July 8, 2019, Petitioners Lowe and Spota filed a
Second Amended Complaint, Count II of which claimed
false advertising under the Lanham Act, § 42(a)(1)(B).
The Lanham Act claim was expressly pleaded in the
alternative based on the belief, to avoid a District Court’s
finding of patent infringement, Respondents would
argue the absence in the accused floor marking tape of
certain elements claimed in the ’664 patent despite their
advertising expressly touting those very elements:
Pleading in the alternative, if ShieldMark’s
Mighty Line floor marking tape product does
not comport with the pictorial illustration
of its advertising in a manner so as to avoid
infringement of the ’664 patent, then such
advertising is false as to both the pictorial
illustration and the representations that the
beveled edges “increase durability for fork lift
traffic;” “beveled edge tape can take a beating
from industrial wheel traffic;” and “Mighty
Line floor tape withstands…, forklifts….””
The basis for the count was Respondent ShieldMark’s
advertising and promotion of Mighty Line ® floor marking
tape, the accused product, as having “beveled edges” and
that such “beveled edges increase durability for forklift
travel;” that “beveled edge tape can take a beating from
industrial wheel traffic;” and that “Mighty Line ® floor
tape would withstand…forklifts….”
The case proceeded through patent claim construction
and summary judgment practice, with the District Court
entering summary judgment of non-infringement in favor
of Respondents. Petitioners Lowe and Spota appealed the
12
District Court’s claim-construction-order and attendant
summary judgment of non-infringement to the Federal
Circuit. With the District Court’s approval, the parties
agreed Petitioner Spota would dismiss without prejudice
its Lanham Act claim, with the right to reinstate it if
the Federal Circuit found the District Court’s claim
constructions to be erroneous and reversed the grant of
summary judgment.
On March 4, 2022, the Federal Circuit vacated the
District Court’s non-infringement summary judgment
based on erroneous claim constructions, adopted the
claim constructions of Petitioners Lowe and Spota, and
remanded for further proceedings consistent with its
opinion. (App. to Pet. for Cert. C). The mandate was
entered on April 20, 2022.
On May 25, 2022, the District Court held its first
status conference after remand. The District Court judge
began the status conference by stating he was going to
“reverse the Federal Circuit.” He queried Respondents’
counsel whether Respondents would renew their motion
for invalidity and unenforceability, whereupon he made the
statement that “all flat marking tapes have edges.” The
District Court signaled that it had no intention to follow
the “remand for further proceedings consistent with this
opinion” as directed by the Federal Circuit. (App. to Pet.
for Cert. C).
After that “status conference,” Petitioners Lowe and
Spota filed a Motion to Recuse or Disqualify. After first
suggesting that Respondents should file their opposition
as to that motion, the District Court judge determined, on
his own, to deny it. In his opinion, he did not deny having
made the statements accredited to him.
13
On June 7, 2022, Petitioners Lowe and Spota filed their
Fourth Amended Complaint, reinstating as had been set
out in the Third Amended Complaint, Petitioners’ counts
for patent infringement, and, in the alternative, false
advertising.
On June 29, 2022, based on a publicly filed assignment,
Respondents questioned Petitioner Lowe’s standing. That
document discloses the assignment of the ’664 patent
between Petitioners, with Petitioner Lowe as assignor and
Petitioner Spota as assignee. That same day, Petitioners
Lowe and Spota confirmed to the District Court that
there had been an assignment of the ’664 patent between
Petitioners (from Lowe to Spota), and that Petitioner
Spota had accommodated Petitioner Lowe’s continuing
rights, along with Petitioner Spota, to maintain, control
and settle the present litigation, pursue additional
infringers for the period during which Petitioner Lowe
owned the ’664 patent, with settlement in each instance
including the possibility of licensing. This accommodation
is acknowledged in the non-exclusive PLA subsequently
entered between Petitioner Spota and non-party to the
litigation, InSite DE.
On June 30, 2022, Respondents again questioned
the continuing standing of Petitioner Lowe. The District
Court ordered Respondents to supplement their briefing.
Respondents filed an Updated Standing Brief on July
25, 2022. Petitioners responded on July 28, 2022, again
advising the District Court (1) that the only assignment
of the ’664 patent was between Petitioners; (2) admitting
that the Fourth Amended Complaint was in error to the
extent Petitioner Spota was now the owner of the ’664
14
patent and Petitioner Lowe, an exclusive licensee by
virtue of retaining exclusionary rights as recited in the
PLA and acknowledged by non-party InSite DE by its
execution of the PLA; and (3) requesting leave to amend
under Fed.R.Civ.P.25(c) because of the exchange of
interests between Petitioners. The District Court denied
Petitioners’ request for leave to amend.
A hearing was held on August 15, 2022, on the issues
of Petitioners’ continued standing and invalidity of the
’664 patent. At that hearing, counsel for Respondents
responded to inquiry by the District Court as follows:
I think you have to rule on standing first.
It’s the gatekeeping. You have to make a
decision on that, and we think the case should
be over and ended based on that ruling. But
we would not object if Your Honor wanted to
then kind of provisionally go forward to the
substance, if Your Honor concluded that would
be appropriate.
It was in that hearing that the District Court acknowledged
such a ruling would be “to some degree” “dicta” or “an
advisory opinion.”
On August 23, 2022, the District Court docketed the
Opinion & Order finding: (1) Petitioner Lowe no longer had
any exclusionary rights in the ’664 patent and therefore
lacked Article III standing; (2) Petitioner Spota lacked
Article III standing for having transferred all substantial
rights in the ’664 patent to non-party Insite DE; and (3) the
lack of standing could not be corrected because, holding
only a non-exclusive license, non-party InSite DE could
not sue. (App. to Pet. for Cert. G).
15
Prior to issuing this order, the District Court had
twice instructed Respondents to file a summary judgment
motion on their counterclaim of invalidity. Thus, included
in the District Court’s order was an “alternative” opinion
and judgment in favor of Respondents that the ’664 patent
is invalid. (App. to Pet. for Cert. G).
In its August 23, 2022 Opinion & Order, the District
Court further stated that “…in light of the Court’s
conclusion that Plaintiffs lack standing, the Court declines
to address the Lanham Act summary judgment issue in
this opinion.” (App. to Pet. for Cert. G). As arising from
and dependent upon resolution of the same nucleus of facts
as Petitioners’ patent infringement claim, this language
was consistent with the District Court having dismissed
with prejudice the action/case for lack of subject matter
jurisdiction as further stated in its August 23, 2022,
Opinion & Order. (App. to Pet. for Cert. G).
Notwithstanding its dismissal of the action/case
with prejudice for lack of subject matter jurisdiction, the
District Court went on to issue its August 26, 2022 and
September 19, 2022, Opinions & Orders which the Federal
Circuit would later refer to as “clarifying” orders. (App.
to Pet. for Cert. F). In the latter Opinion & Order, the
District Court stated it did not intend to moot Petitioners’
Lanham Act claim.
The District Court having stated it was dismissing
the action/case with prejudice for lack of subject matter
jurisdiction, on September 22, 2022, Petitioners Lowe and
Spota filed a Notice of Appeal with the Federal Circuit.
The Federal Circuit dismissed the appeal as “premature,”
stating that the August 23, 2022, Opinion & Order did not
resolve all of Petitioners’ claims. (App. to Pet. for Cert. B).
16
On March 16, 2023, the District Court granted
summary judgment to Respondents on Petitioner Spota’s
claim for literal false advertising finding the alleged false
statements to be “nonactionable puffery,” while denying
the motion of Petitioner Spota for summary judgment on
that claim. (App. to Pet. for Cert. E). It rejected Petitioner
Spota’s argument that Respondents, in arguing in defense
of Petitioner Spota’s claim for patent infringement, had
argued the absence of patent claim elements in the accused
floor marking tape advertised as being present therein.
On April 14, 2023, Petitioners Lowe and Spota again
filed a Notice of Appeal. With the entry of an order/
judgment by the District Court on April 21, 2023, finding
under its inherent powers Petitioners’ conduct in opposing
Respondents’ claims of loss of subject matter jurisdiction
had delayed them from earlier filing for summary
judgment of invalidity and awarding Respondents
$213,765 in sanctions, Petitioners amended its April 14,
2023 Notice of Appeal on April 26, 2023.
On March 24, 2025, the Federal Circuit issued its
opinion. (App. to Pet. for Cert. A). The Federal Circuit (1)
held that Petitioner Lowe had lost standing by assigning
his patent to Petitioner Spota based on the lack of evidence
that Petitioner Spota had accommodated Petitioner
Lowe’s retention of exclusionary rights by oral license,
the statements in the PLA being insufficient proof; (2)
reversed the District Court’s finding that Petitioner Spota
lost standing—the patent license agreement it gave to
non-party InSite DE being non-exclusive; (3) accepting
the District Court’s factual finding of delay with respect
to Petitioner Lowe’s patent infringement claim, affirmed
the District Court’s sanctions award; and (4) having found
that the District Court never lost Article III standing,
17
held it would consider and did affirm the District Court’s
alternative ruling that the ’664 patent is invalid.
Petitioners filed a petition for rehearing and rehearing
en banc, which was denied on May 12, 2025. (App. to Pet.
for Cert. H).
Consideration was not given to Petitioners’ argument
before the District Court or before the Federal Circuit,
that the District Court, having found it lacked Article III
subject matter jurisdiction and having dismissed with
prejudice the action/case, could not proceed to decide
the validity of the ’664 patent on the merits. Notably,
Petitioners’ citation to Steel Co. went without comment
from the Federal Circuit.
REASONS FOR GRANTING THE PETITION
As addressed by Justice Scalia in Steel Co. (523 U.S.at
94-95), it has been the substantial precedent of this Court
that the first and fundamental question in every case is
that of jurisdiction. “Jurisdiction is power to declare the
law…” Steel Co., 523 U.S. at 94, citing Ex parte McCardle,
7 Wall 506, 514, 19 L.Ed. 264 (1868).
And, as further expressed by Justice Scalia and
most recently acknowledged by Justice Thomas in his
concurrence in Riley (606 U.S. at 2206), it is inflexible
without exception. Without jurisdiction a court cannot
proceed at all in any cause. Steel Co., 523 U.S. at 9, citing
McCardle, 7 Wall at 514.
[W]hen [jurisdiction] ceases to exist, the only
function remaining to the court is that of
18
announcing the fact and dismissing the cause.
Id.
Both the rule that the first and fundamental question
is that of subject matter jurisdiction, and its corollary that
without subject matter jurisdiction a court cannot proceed
on the merits, provide certainty to the law in a clear and
simple fashion.
Jurisdiction is the power to hear and determine
the subject matter in controversy between
parties to a suit, to adjudicate or exercise
any judicial power over them; the question is
whether on the case before a court, their action
is judicial or extrajudicial, with or without the
authority of law, to render a judgment or decree
upon the rights of the litigant parties. They
provide certainty in the law. Steel Co. at 94,
citing Rhode Island v. Massachusetts, 37 U.S.
657, 718 (1838)
Both the rule and corollary remain after the abrogation of
Steel Co. by Riley, in which this Court held that a district
court, after assuring that an issue is jurisdictional, may
address it prior to the merits.
Prior to Steel Co., some lower courts finding (a) the
merits question to be the more readily resolved, and
(b) the prevailing party on the merits to be the same
as the prevailing party were jurisdiction denied, would
determine a case on the merits without regard to subject
matter jurisdiction. Writing for this Court in Steel Co.
Justice Scalia rejected this concept of “hypothetical
jurisdiction,” as compelled by Article III’s cases or
controversies requirement:
19
Hypothetical jurisdiction produces nothing
more than a hypothetical Judgment—which
comes to the same thing as an advisory opinion,
disapproved by the Supreme Court from the
beginning.
Steel Co.523 U.S. at 98.
Justice Scalia’s concern was that deciding a case on
the mere assumption of subject matter jurisdiction can
lead to the rendering of advisory opinions in violation of
Article III.
Indeed, that is exactly what happens when a district
court, first finding it lacks subject matter jurisdiction,
engages in the practice of issuing an alternative decision
on the merits—the mere assumption of jurisdiction and
the rendering of an advisory opinion in violation of Article
III. Per the very acknowledgement of the District Court
herein, it is the rendering of an advisory opinion.
While this Court’s subsequent decisions in Ruhrgas
and Sinochem appear at first to have softened Steel Co.’s
impact by permitting various non-merits issues to be
decided before determining subject matter jurisdiction,
they nonetheless reaffirm and strengthen Steel Co.’s
absolute prohibition on reaching merits issues before
confirming subject matter jurisdiction, as does the
concurrence of Justice Thomas in Riley:
On remand, the Fourth Circuit must assure
itself of its jurisdiction before it can proceed to
the merits of Riley’s petition. See Steel Co. v.
Citizens for Better Environment, 523 U.S. 83,
101-012, 118 S.Ct. 1002, 140 L.Ed.2d 210 (1998).
20
Notably, while Riley may have introduced flexibility
for non-merits procedural rulings, it did nothing to
authorize courts to render advisory opinions or proceed
on the merits without jurisdiction. It did not disturb the
core constitutional principle that courts cannot decide
the merits of a case without subject matter jurisdiction.
Indeed, Riley reaffirmed the importance of resolving
jurisdictional questions before proceeding to the merits.
While the black-letter rule of Steel Co., that subject
matter jurisdiction be decided first , has not been
overruled, the “foreordained” exception adopted by the
circuits have whittled away at it, no doubt leading to yet
another exception by the lower courts herein. In its opinion
in Center for Reproductive Law and Policy v. Bush, 304
F.3d 183, 194 (2d Cir. 2002), the Second Circuit explained
that, should the outcome in a case be foreordained by that
in another, then the jurisdictional question could have no
effect and need not be first addressed. The Second Circuit
so held notwithstanding recognizing in the same opinion,
the danger of allowing such an exception—the rendering
of an advisory opinion in violation of Article III. Id. at 195.
The “foreordained exception” has since been relied on by
at least the First Circuit in Seale v. INS, 323 F.3d 150,
155 (1st Cir 2002); the Third Circuit in Jordon v. Attorney
General of U.S., 424 F.3d 320, FN 8 (3rd Cir. 2005); the
Sixth Circuit in Montague v. N.L.R.B., 698 F3d 307, 313
(6th Cir. 2012); the Ninth Circuit in Balkalian v. Central
Bank of the Republic of Turkey, 932 F.3d 1229, 1236 (9th
Cir. 2019); and the Tenth in Starkey v. Boulder Cty Soc.
Servs., 569 F.3d 1244, 1260-61 (10th Cir. 2009), as well as
the Federal Circuit in Minesen Co. v. McHugh, 671 F.3d
1332, 1337 (Fed. Cir. 2012). Only the Eleventh Circuit
has held fast to Steel Co.’s absolute prohibition against
“hypothetical jurisdiction:”
21
[E]ven if the resolution of the merits were
foreordained—an issue we do not decide—the
Supreme Court has explicitly rejected the
theory of ‘hypothetical jurisdiction.’ Friends
of the Everglades v. EPA, 699 F.3d 1280, 1288
(11th Cir. 2012).
In dissenting from the denial of certiorari in in Waleski
v. Montgomery, McCracken, Walker & Rhoads, LLP, 599
U. S. ___, 144 S.Ct. 53, 216 L.Ed. 1309 (2023), Justice
Thomas recognized the continued use of “hypothetical
jurisdiction” as the subject of a longstanding split of
authority, while referencing the decision of the Eleventh
Circuit in Friends of the Everglades. Justice Thomas was
joined in his dissent by Justices Gorsuch and Barrett.
Therein Justice Thomas wrote:
Although ‘[s]ome cases might cry out for decision
on the merits,’ and sometimes it is convenient to
assume away difficult jurisdictional questions
to decide a case on easier merits grounds,
courts’ ‘threshold duty to examine [their] own
jurisdiction is no less obligatory in’ such cases.
It is what was feared by the Second Circuit in adopting the
“foreordained exception”—the rendering of an advisory
opinion in violation of Article III—and what was rejected
by the Eleventh Circuit—the resort to “convenience”—
that occurred in the lower courts herein.
What then is the duty of a district court that
determines it lacks subject matter jurisdiction? Is not
proceeding to determine the merits after first finding
the absence of subject matter jurisdiction, not just an
22
exception to, but rather, a blatant disregard of the absolute
prohibition against “hypothetical jurisdiction”? That is
what occurred in the lower courts herein.
The District Court took it upon itself to opine on
the merits as if it had jurisdiction, despite first finding
that it did not. The District Court understood it was not
deciding in the alternative a non-merits issue. The merits
question had not been decided in a companion case with
the consequence that the jurisdictional question could have
no effect on the outcome. Nor was the merits-outcome
predetermined by the District Court’s previous rulings.
Indeed, the District Court relied on the absence of Article
III jurisdiction in dismissing with prejudice the patent
infringement cause of action. It did not assume statutory
standing for the purposes of deciding whether Petitioners
otherwise had a viable cause of action because it found
the question of Article III standing to be too difficult to
resolve. Rather, the District Court here went a step further
than even the prior cases adopting the “foreordained
exception,” creating yet another exception akin to that
prohibited under Steel Co.—a district court, despite
first determining it lacks jurisdiction, can nonetheless
assume that it has jurisdiction and thereby dispose of a
case by ruling that the claim fails on the merits. But, an
alternative ruling on the merits after determining the
absence of subject matter jurisdiction clearly violates
Article III and therefore cannot be countenanced.
Although raised on appeal, the Federal Circuit did
not address the issue of whether the District Court, after
first finding that it lacked Article III subject matter
jurisdiction, could proceed. Instead, the Federal Circuit
accepted that it could and affirmed the District Court’s
23
“alternative” opinion on the merits that the ’664 patent is
invalid. While classifying its opinion as “nonprecedential,”
the Federal Circuit accepted the District Court’s newly
created exception only compounding the error and
encouraging its continuance into the future.
For a court to reach the merits in the absence of either
Article III or statutory jurisdiction is for it to act beyond
its authority—to act ultra vires.
A federal court acts ‘ultra vires’ regardless
of whether its jurisdiction is lacking because
of the absence of a requirement specifically
mentioned in Article III, such as standing. Steel
Co. at 101-102.
A federal court must possess both constitutional and
statutory authority to reach the merits of a case. Sheldon
v. Sill, 49 U.S. (8 How.) 441, 449 (1850).
As this Court has cautioned,
The limits upon federal jurisdiction, whether
imposed by the Constitution or by Congress
must be neither disregarded nor evaded. Owen
Equip. & Erection Co. v. Kroger, 437 U.S. 365,
374 (1978)
Steel Co. abrogated the defense of “hypothetical
jurisdiction” as promoting judicial minimalism and judicial
economy. 523 U.S. at 93-94. Allowing the District Court
herein to ignore its own preliminary finding of the absence
of subject matter jurisdiction and provide an “alternative”
decision on the merits did nothing to promote either
24
judicial minimalism or judicial economy, instead having
the effect of introducing chaos into the proceedings
which should have ended in dismissal without prejudice.
The record below exposes the problems inherent in
“hypothetical jurisdiction”—unnecessary litigation on
appeal (i.e., inefficiency), and confusion and inconsistency
as to the scope of rulings.
Upon appeal, taking up the standing issue, the
Federal Circuit agreed with the District Court as to
the loss of standing of one of the two Petitioners (Lowe)
but disagreed as to the loss of standing by the other
(Spota). Yet, the Federal Circuit went on to affirm the
District Court’s sanction award which was based upon
the extension of the case by both Petitioners having lost
standing. In so doing, the Federal Circuit found Petitioner
Lowe’s loss of standing delayed the case with respect to
his patent infringement claim, notwithstanding there was
only a single patent infringement claim jointly asserted
by Petitioners which had to be adjudicated to conclusion
given that Petitioner Spota never lost standing.
The Federal Circuit did not consider either the
impact of the statements made by or the conduct of the
District Court Judge leading up to his deciding to issue
what he himself characterized as an “advisory opinion,”
invalidating not just the patent claims asserted, but the
entire ’664 patent. Not considered were the statements by
the District Court Judge: prior to the appeal of his noninfringement summary judgment order, that any attorney
having more than six weeks experience knew better than
to threaten a judge with an appeal, when Petitioners’
counsel simply stated that Respondents’ patent claim
constructions would not withstand an appeal—which
25
they did not; after his summary judgment order of noninfringement was vacated by the Federal Circuit for
erroneous patent claim construction, that he would reverse
the Federal Circuit; extraneously upon remand in an order
granting Respondents’ expert substitution motion, that
“the Federal Circuit disregarded the accompanying rule
that interpreting courts should consider specifications
when interpreting the claim language;” to Respondents
immediately upon remand, instructing them to file a
motion for summary judgment on the issue of invalidity;
not satisfied with Respondents’ briefing, instructing them
to supplement that motion; and at the same time as he
was so instructing Respondents, that all flat marking
tapes have edges—a blatant over simplification of the
invalidity argument. These statements and actions of the
District Court Judge were with the understanding that
he lacked subject matter jurisdiction–he found he lacked
subject matter jurisdiction and dismissed the action/case
with prejudice. All were based on his “assuming” he had
jurisdiction. All were “hypothetical jurisdiction.” All went
unaddressed by the Federal Circuit.
Does not the ability to issue an alternative judgment
despite first finding it lacks subject matter jurisdiction
permit a district court judge to direct the outcome of a
case? Does it not encourage improper judicial behavior? Is
this not a problem inherent in “hypothetical jurisdiction”?
[J]udges must act like umpires. To be an
umpire, the judge ‘must stick close to the text
and the history, and their fair implications,’
because there ‘is no principled way’ for a neutral
judge ‘to prefer any claimed human value to
any other.’ R. Bork, Neutral Principles and
26
Some First Amendment Problems, 47 Ind. L.
J. 1, 8 (1971).
Also not considered by the Federal Circuit was the
insufficiency of the factual basis upon which the District
Court Judge awarded damages to support an award of
sanctions against both Petitioners—particularly after
its own finding that Petitioner Spota never lost subject
matter jurisdiction and thus the case was not delayed
but had to continue on the very same issues in any event.
In Chambers v. NASCO, Inc., 501 U.S. 32, 44, 45-46, 111
S.Ct. 2123, 115 L.Ed.2d 27 (1991), this Court held that
“A court’s inherent power is not a broad reservoir of
power…but a limited source; an implied power squeezed
from the need to make the court function.;” that Federal
courts “may assess attorney[s’] fees when a party has
acted in bad faith, vexatiously, wantonly, or for oppressive
reasons;” and that the inherent power to award attorneys’
fees should be invoked only when a court finds that “fraud
has been practiced upon it or the very temple of justice
has been defiled.” Chambers, 501 U.S. at 45-46 (internal
quotation marks and citation omitted).
Is the grant of attorneys’ fees based upon the delay of
litigation attributed to the withholding of two documents,
one of which was found by the Federal Circuit (the nonexclusive PLA) to have clearly established retained subject
matter jurisdiction requiring continuation of the litigation,
sufficient evidence of a fraud having been perpetrated
on the District Court? If the answer is “no,” what does
that say about the danger associated with the exercise of
“hypothetical jurisdiction.” Was the case over in December
of 2021 due to the loss of subject matter jurisdiction with
the assignment of the ’664 patent and execution of the PLA
27
and only extended by Petitioners having hidden that fact?
Did not the Federal Circuit answer that question in the
negative, yet fail to vacate the sanctions award?
Was not the district court’s grant of sanctions and
award of attorney fees expressly grounded solely upon and
quantified by the loss of jurisdiction by both Petitioners,
as was the grant of dismissal with prejudice? Did not
the Federal Circuit reverse the district court on the loss
of jurisdiction by both Petitioners, yet leave intact both
the grant of sanctions and quantified attorney fees and
leave unaddressed the dismissal with prejudice when the
grounds for such were abated, rather than remand for
further proceedings which would have accommodated (1)
the amended complaint that the district court summarily
refused and (2) the reassessment of sanctions and damages
which were expressly based on the fiction of a total loss of
jurisdiction by both Petitioners – when in fact jurisdiction
over the case was never lost.
Upon taking up the alternative decision of patent
invalidity, the Federal Circuit further failed to recognize
the ’664 patent could not be invalidated in its entirety
but only as to claims asserted against Respondent by the
Petitioners in their complaint and asserted by Respondents
to be invalid in their answer, counterclaim and motion.
Also, without the benefit of having all information before
it (in its opinion the Federal Circuit acknowledges that it
went into the district court docket to review the “28-page
long chart” presented by Respondents to the District
Court but makes no reference to having similarly reviewed
the counter of Petitioners to that chart filed earlier), the
Federal Circuit applied a new patent claim construction.
This was notwithstanding that the case had previously
28
gone up on appeal and the constructions of Petitioners
prevailed.
Here, efficiency was not achieved by the District
Court dismissing with prejudice the case/action for
lack of subject matter jurisdiction and providing an
alternative judgment of invalidity. What ensued was
only confusion, and thereby injustice. The first question
posed by the Court of Appeals at oral argument during
the second appeal was “why” the large number of issues
presented. But, the multitude of issues was necessitated
by the District Court’s dismissal with prejudice for lack
of subject matter jurisdiction coupled with an alternative
holding. The confusion which occurred would never have
occurred if, when first brought up on appeal, the Federal
Circuit had followed the precedential rule and corollary
of Steel Co., vacated the dismissal with prejudice, and
remanded with instruction to dismiss without prejudice.
There would have been no confusion had the Federal
Circuit initially determined that the District Court could
not issue subsequent opinions correcting its dismissal of
the case/action with prejudice for lack of subject matter
jurisdiction. There would have been no issue as to the
District Court Judge’s overreach. If dismissed at that stage
of the proceedings, there would have been no confusing
sanctions award. Full and unbiased consideration would
have been given to the issue of patent validity with the
refiling of the case/action. Allowing a district court the
ability to offer an alternate opinion on the merits after
first finding the absence of subject matter jurisdiction is
anything but a permissible exception to the rule against
“hypothetical jurisdiction,” it is “hypothetical jurisdiction”
with all its inherent problems—-inefficiency, confusion of
issues, and the undermining of judicial legitimacy. It is
29
a violation of Article III which should not be given any
credence by this Court in allowing the decisions of the
lower courts to stand.
CONCLUSION
Based upon the foregoing, the petition for a writ of
certiorari should be granted to abide by the precedent
of this Court rejecting the concept of “hypothetical
jurisdiction” and requiring that a court must, without
exception, assure itself of its jurisdiction before it can
proceed to the merits, thereby unifying the Circuits as
to these principles and effecting justice.
Respectfully submitted,
Ray L. Weber
Counsel of Record
Laura J. Gentilcore
Renner, Kenner, Greive, Bobak,
Taylor & Weber Co., L.P.A.
Huntington Tower
106 S. Main Street, Suite 400
Akron, OH 44308
(330) 376-1242
rlweber@rennerkenner.com
Attorneys for Petitioners
Clifford A. Lowe and Spota, LLC,
fka InSite Solutions, LLC
August 8, 2025
APPENDIX
i
TABLE OF APPENDICES
Page
A P P E N DI X A — O P I N ION O F T H E
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
MARCH 24, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
APPENDIX B — ORDER OF THE UNITED
STAT ES COU RT OF A PPEA LS FOR
T H E F E DE R A L C I R C U I T, F I L E D
NOVEMBER 28, 2022 . . . . . . . . . . . . . . . . . . . . . . . 28a
A P PEN DI X C — DECI SION OF T H E
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
MARCH 4, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34a
A PPENDIX D — OPINION AND ORDER
OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT
OF OHIO, FILED APRIL 21, 2023 . . . . . . . . . . . . 58a
APPENDIX E — OPINION AND ORDER OF
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO,
FILED MARCH 16, 2023 . . . . . . . . . . . . . . . . . . . . 78a
APPENDIX F — OPINIONS AND ORDERS
OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT
OF OHIO, FILED AUGUST 26, 2022, AND
SEPTEMBER 19, 2022 . . . . . . . . . . . . . . . . . . . . . . . 87a
ii
Table of Appendices
Page
APPENDIX G — OPINION AND ORDER OF
THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO,
FILED AUGUST 23, 2022 . . . . . . . . . . . . . . . . . . . . 95a
APPENDIX H — ORDER FOR REHEARING
OF THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT,
FILED MAY 12, 2025 . . . . . . . . . . . . . . . . . . . . . . . 124a
1a
APPENDIX A — Appendix
OPINIONAOF THE UNITED
STATES COURT OF APPEALS FOR THE
FEDERAL CIRCUIT, FILED MARCH 24, 2025
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
Nos. 2023-1786, 2023-1871, 2023-1893
CLIFFORD A. LOWE, SPOTA LLC, FKA INSITE
SOLUTIONS, LLC,
Plaintiffs-Appellants,
v.
SHIELDMARK, INC., CROWN EQUIPMENT
CORPORATION, ADVANCED PLASTICS, INC.,
Defendants-Cross-Appellants.
United States Court of Appeals, Federal Circuit.
Decided: March 24, 2025
OPINION
NOTE: This disposition is nonprecedential.
Appeals from the United States District Court for the
Northern District of Ohio in No. 1:19-cv-00748-JG, Judge
James S. Gwin.
Before Lourie, Bryson, and Reyna, Circuit Judges.
2a
Appendix A
Bryson, Circuit Judge.
This patent case is before us following remand
proceedings in the district court. The parties have
raised numerous issues on appeal. We affirm the district
court’s decision on the issues of patent invalidity and
false advertising under the Lanham Act, and on most of
the procedural issues raised by the parties. We vacate
and remand on one of the issues bearing on the sanctions
imposed against the plaintiffs.
I
Clifford A. Lowe is the inventor on U.S. Patent No.
10,214,664 (“the ’664 patent”), which is directed to floor
marking tape of the sort used in industrial facilities.
Independent claim 1 of the ’664 patent recites:
1. A floor marking tape adhered to a floor
wherein the floor marking tape establishes
a boundary on the f loor; the combination
comprising:
...
The upper surface of each lateral edge portion
comprising an extension of the upper surface
of the body;
The lower surface of each lateral edge portion
being a flat coplanar extension of the lower
surface of the body;
3a
Appendix A
The entire body of each lateral edge portion
being tapered with the upper surface of the
first lateral edge portion extending to the lower
surface of the first lateral edge portion and the
upper surface of the second lateral edge portion
extending to the lower surface of the second
lateral edge portion. . . .
’664 patent, col. 5, ll. 2-32.
Independent claim 11 recites:
11. A floor marking tape adhered to a floor
wherein the floor marking tape establishes
a boundary on the f loor; the combination
comprising:
...
The entire body of each lateral edge portion
being tapered with the upper surface of the
first lateral edge portion extending to the lower
surface of the first lateral edge portion to meet
at a first junction and the upper surface of the
second lateral edge portion extending to the
lower surface of the second lateral edge portion
to meet at a second junction;
The first and second junctions disposed on the
uppermost surface of the floor such that the
floor marking tape limits unintentional lifting
of the floor marking tape from the floor. . . .
Id. at col. 6, ll. 1-32.
4a
Appendix A
Briefly summarized, the complex procedural history
of this case is as follows:
In 2019, Lowe and Spota LLC f iled a patent
infringement action against the three defendants, which
are involved in manufacturing, distributing, and selling
floor marking tape under the trade name “Mighty Line.”
Dkt. No. 1 (Original Complaint). The plaintiffs alleged
that Lowe was the owner of the ’664 patent and that
Spota (which at that time was known as InSite Solutions
LLC, a North Carolina limited liability company) was
the exclusive licensee of the patent. Spota later added a
claim against ShieldMark, one of the defendants, for false
advertising in violation of the Lanham Act. The defendants
counterclaimed, alleging that the ’664 patent was invalid
and was unenforceable due to inequitable conduct.
Based on its claim construction rulings, the district
court granted the defendants’ motion for summary
judgment of non-infringement. On appeal, we vacated the
district court’s claim construction order and remanded the
case for further proceedings. Lowe v. ShieldMark, Inc.,
No. 2021-2164, 2022 WL 636100 (Fed. Cir. March 4, 2022).
On remand, the district court entered several
significant orders. First, in light of intervening events,
the court held that neither Lowe nor Spota had standing
to sue on the patent. In the alternative, the court held that
the asserted claims of the ’664 patent were anticipated
by a prior art reference, U.S. Patent No. 6,120,395
(“Dorenbusch”). The court also granted the defendants’
motion for summary judgment on the plaintiffs’ false
advertising claim under the Lanham Act.
5a
Appendix A
The court awarded attorney’s fees and costs to the
defendants under 35 U.S.C. § 285 as well as its inherent
power to sanction. The court, however, declined to
award fees based on inequitable conduct. The plaintiffs
have appealed from the court’ dismissal order, and the
defendants have appealed from the court’s order denying
fees for inequitable conduct.
II
A
The defendants’ standing argument is based on two
transactions executed while this case was pending before
this court on the plaintiffs’ first appeal. On December 9,
2021, Lowe and Spota executed an agreement referred
to as the Patent Rights Assignment, in which Lowe
transferred to Spota his “entire right, title and interest”
in the ’664 patent, including “any cause(s) of action and
damages accruing prior to this assignment.” App. 1803.
A week later, on December 16, 2021, Spota and InSite
Solutions, LLC, a Delaware limited liability company
(“InSite DE”) executed a Patent License Agreement
(“PLA”). Under the PLA, Spota granted InSite DE a
nonexclusive license to practice the ’664 patent, as well as
the right to sublicense the patent. App. 1809. In addition,
Spota granted InSite DE an exclusive option to acquire
the ’664 patent and agreed not to transfer any ownership
right in the patent or any claims of infringement of the
patent to any third party. App. 1810.
6a
Appendix A
Section 2.3 of the PLA provided that “Lowe as owner,
and [Spota] as exclusive licensee, of the Licensed Patents
prior to [December 16, 2021], retain the exclusive rights
to elect to maintain, control, and settle the ShieldMark
Litigation,” and that “Lowe and [Spota] shall bear all costs
associated therewith and enjoy any recovery therefrom.”
Id. The clause further provided that “Lowe and [Spota]
also retain the exclusive rights to enforce the Licensed
Patents for recovery of damages for infringement prior
to [December 16, 2021].” Id.
B
To establish standing under A rticle III of the
Constitution, a plaintiff must have “(1) suffered an injury
in fact, (2) that is fairly traceable to the challenged conduct
of the defendant, and (3) that is likely to be redressed by
a favorable judicial decision.” Spokeo, Inc. v. Robins, 578
U.S. 330, 338 (2016).
It is undisputed that Lowe and Spota had Article
III standing when they first filed their claim of patent
infringement. The question is whether they lost standing
to pursue that claim in December 2021 when Lowe
assigned his patent rights to Spota and Spota granted
a non-exclusive license to InSite DE with the right to
sublicense.
“[T]he touchstone of constitutional standing in a
patent infringement suit is whether a party can establish
that it has an exclusionary right in a patent that, if violated
by another, would cause the party holding the exclusionary
7a
Appendix A
right to suffer legal injury.” WiAV Sols. LLC v. Motorola,
Inc., 631 F.3d 1257, 1265 (Fed. Cir. 2010). “A patent owner
has exclusionary rights as a baseline matter unless it has
transferred all exclusionary rights away.” Intell. Tech LLC
v. Zebra Techs. Corp., 101 F.4th 807, 816 (Fed. Cir. 2024).
A “shared ability to license” does not divest the patent
owner of all exclusionary rights. Id.
The Article III standing inquiry is distinct from
analyzing whether a plaintiff is a “patentee” under 35
U.S.C. § 281 that is entitled to sue for infringement. See
id. at 814. The term “patentee,” as defined in 35 U.S.C.
§ 100(d), includes not only the patentee to whom the patent
was issued but also the successors in title to the patentee.
It does not include mere licensees. Lone Star Silicon
Innovations LLC v. Nanya Tech. Corp., 925 F.3d 1225,
1229 (Fed. Cir. 2019). “[W]hether a party possesses all
substantial rights in a patent does not implicate [Article
III] standing or subject-matter jurisdiction.” Id. at 123536.
Because A r ticle III st andi ng is a th reshold
jurisdictional issue, we first address whether Spota has
retained an exclusionary right. It is undisputed that Spota
currently owns the ’664 patent and that InSite DE is a
nonexclusive licensee. See Blue Br. at 21; Red Br. at 19,
28. Spota did not give InSite DE an “express or implied
promise that others shall be excluded from practicing the
invention,” meaning that Spota remains free to license
other parties. Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d
1538, 1552 (Fed. Cir. 1995) (en banc). Contrary to the
defendants’ argument, Spota’s right to license has not
8a
Appendix A
been rendered illusory by its agreement not to “assign
or transfer to any third party any ownership right or
interest” in the ’664 patent. See App. 1810. A nonexclusive
license is not an ownership right, but merely “a promise by
the licensor not to sue the licensee.” Jim Arnold Corp. v.
Hydrotech Sys., Inc., 109 F.3d 1567, 1577 (Fed. Cir. 1997);
see also Ulead Sys., Inc. v. Lex Comput. & Mgmt. Corp.,
351 F.3d 1139, 1147 (Fed. Cir. 2003) (“It is well settled that
a non-exclusive licensee of a patent has only a personal
and not a property interest in the patent.”).
Spota has an exclusionary right sufficient to establish
Article III standing even if InSite DE has an unrestricted
right to sublicense. See Intell. Tech, 101 F.4th at 816 (“IT
still suffers an injury in fact from infringement even if IT
and Main Street can both license the patent.”). As stated
in Judge Lourie’s additional views in Uniloc USA, Inc.
v. Motorola Mobility LLC, 52 F.4th 1340, 1351 (Fed. Cir.
2022), the fact that a “licensee could preempt . . . a suit by
granting a sublicense . . . is a far cry from holding that the
patent owner, simply by having granted a non-exclusive
license with the right to sublicense, loses the power to sue
an unlicensed infringer.”
In addition to having Article III standing, Spota, as
the assignee of the ’664 patent, may sue in its own name.
As an initial matter, we reject the defendants’ argument
that neither Spota nor InSite DE has all substantial rights
in the ’664 patent and that those rights “are in a state of
suspension.” Red Br. at 28. Under the facts of this case, if
Spota did not transfer all substantial rights to InSite DE,
then Spota has necessarily retained those rights. Patent
rights do not exist in the ether.
9a
Appendix A
That Spota did not transfer all substantial rights to
InSite DE is evident from the fact that InSite DE received
only a non-exclusive license. “[A] nonexclusive licensee
suffers no legal injury from infringement.” Sicom Sys.
Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir.
2005). The PLA makes clear that InSite DE does not have
the right to sue for any infringement that occurred prior
to December 16, 2021, and that its right to sue for any
infringement occurring after that date is conditioned on
its exercise of the option to acquire the ’664 patent. See
App. 1809-10. Because InSite DE has not yet exercised
that option, the fact that it may one day acquire the right
to sue is irrelevant for purposes of assessing whether it
has all substantial rights as of the present. See Intell.
Tech, 101 F.4th at 817 (“[I]t is clear that assignment must
be evaluated based on the actual transfer of rights, not
mere ability” to obtain those rights).
The defendants nevertheless argue that Spota lacks
all substantial rights, contending that Spota has only
a “hunting license” that “does not equate to a right to
enforce.” Red Br. at 20. The defendants further argue
that any right to enforce the patent is rendered illusory
by InSite DE’s right to sublicense, citing Speedplay, Inc.
v. Bebop, Inc., 211 F.3d 1245, 1251 (Fed. Cir. 2000) and
Lone Star, 925 F.3d at 1231. Id.1
1. Citing the Asset Purchase Agreement, the defendants
argue that Lowe and Spota no longer have the right to practice
the ’664 patent. Red Br. at 21. Specifically, the defendants assert
that Lowe, on behalf of himself and Spota, “agreed that he and
his company would not manufacture or sell floor markers or floor
tape.” Id. The defendants, however, made no argument related to
10a
Appendix A
The defendants’ arguments are not persuasive.
First, Spota does not have a mere “hunting license,” i.e.,
a contractual arrangement that grants only the right to
sue for infringement without any proprietary interest in
the patent. See Prima Tek II, L.L.C. v. A-Roo Co., 222
F.3d 1372, 1381 (Fed. Cir. 2000); Ortho Pharm. Corp. v.
Genetics Inst., Inc., 52 F.3d 1026, 1034 (Fed. Cir. 1995). To
the contrary, Spota has the “entire right, title and interest”
in the ’664 patent through the Assignment on December 9,
2021, as acknowledged by the PLA. See App. 1811 (Spota’s
representation that “it is the owner of all right, title and
interest in and to the Licensed Patents and has all legal
rights necessary to grant the licenses provided for in this
Agreement”). Second, neither Speedplay nor Lone Star
suggests that Spota lacks the right to sue because of InSite
DE’s right to sublicense.
In Speedplay, we concluded that all substantial rights
had been transferred to an exclusive licensee, which had
received the right to enforce the asserted patent as well
as the right to sublicense. See 211 F.3d at 1250-51. The
licensors, however, had retained the right to enforce
the patent if the exclusive licensee did not. Id. at 1251.
Regarding the licensors’ right to sue, we held that the
right was “illusory, because [the exclusive licensee]
the Asset Purchase Agreement before the district court. See App.
1786-1801. In any event, the Asset Purchase Agreement simply
defines Lowe (not Spota) as a “Restricted Party” and provides that
Lowe will not engage or participate in a competing business for a
limited number of years. See App. 2811-12. A prohibition against
practicing the patent in the future does not deprive a party of its
right to sue on the patent.
11a
Appendix A
can render that right nugatory by granting the alleged
infringer a royalty-free sublicense.” Id. That may also
be true of Spota’s right to enforce, given InSite DE’s
unrestricted right to sublicense. However, unlike the
licensee in Speedplay, InSite DE has only a non-exclusive
license and lacks any right to enforce the ’664 patent.
Speedplay therefore does not support finding that Spota
has transferred all substantial rights to InSite DE.
In Lone Star, the agreement at issue purported to
transfer “all right, title and interest” in the asserted
patents while imposing several limits on the transferee.
925 F.3d at 1227. The transferee received the right to
sue entities specifically listed in the agreement, but the
transferor retained the right to sublicense the patents
to unlisted entities, among other rights. Id. at 1228.
In concluding that the transferor retained the right to
sue under the patents, we noted that the transferee’s
enforcement rights were “illusory, at least in part”
because of the transferor’s right to sublicense. Id. at
1231. However, the transferor in Lone Star had rights
in addition to the right to sublicense that ensured that it
“will always control how the patents are asserted.” Id. at
1233. InSite DE lacks any such rights.
Accordingly, Spota has Article III standing and
remains the “patentee,” entitled to sue for infringement.
C
“Generally, one seeking money damages for patent
infringement must have held legal title to the patent at
12a
Appendix A
the time of the infringement.” Rite-Hite Corp., 56 F.3d at
1551; see also Moore v. Marsh, 74 U.S. 515, 522 (1868) (“[A]
subsequent assignee or grantee can neither maintain an
action in his own name, or be joined with the patentee in
maintaining it for any infringement of the exclusive right
committed before he became interested in the patent.”).
But “[a] party may sue for past infringement transpiring
before it acquired legal title if a written assignment
expressly grants the party a right to do so.” Abraxis
Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1367
(Fed. Cir. 2010).
Because Lowe owned the ’664 patent until December
9, 2021, any infringement of the patent before that date
harmed Lowe as the patent owner. See Crown Die & Tool
Co. v. Nye Tool & Mach. Works, 261 U.S. 24, 41 (1923)
(“[T]he injury inflicted by an act of infringement falls
upon the individual who owns the monopoly at the date
of the infringement.”). On December 9, 2021, however,
Lowe expressly conveyed to Spota his “entire right, title
and interest” in the ’664 patent, including “any cause(s)
of action and damages accruing prior to this assignment.”
App. 1803. That express and unambiguous transfer of the
right to sue for infringement prior to December 9, 2021,
has deprived Lowe of Article III standing in this case.
Before the district court, the plaintiffs sought to
overcome the clear implication of the Assignment by
arguing that “[w]ith Lowe’s assignment of ownership of the
’664 patent to [Spota], [Spota] granted Lowe the exclusive
right to continue to assert infringement against alleged
infringers of the ’664 patent during his ownership of the
’664 patent, expressly including against ShieldMark.”
13a
Appendix A
App. 2703. According to the plaintiffs, “[t]he grant of the
exclusive right to sue ShieldMark for patent infringement
did not have to be in writing because the law does not
require licenses to be in writing – only assignments.”
Id. Although the district court agreed that the license
agreement did not have to be in writing, the court found
that “Lowe has not presented adequate evidence that an
exclusive license agreement exists.” App. 11.
There is no clear error in that finding of jurisdictional
fact. See Abraxis Bioscience, 625 F.3d at 1363 (“To the
extent any jurisdictional facts are in dispute . . . the
findings of fact are reviewed for clear error.” (cleaned up)).
The record contains no evidence of when the alleged oral
agreement took place; there is only attorney argument
on appeal that it was “subsequent[ ]” to the Assignment
on December 9, 2021. Blue Br. at 29. Moreover, the only
evidence that the plaintiffs point to for both the existence
and the substance of the oral agreement is the PLA. In
particular, the plaintiffs rely on Section 2.3 of the PLA,
which recites that InSite DE “acknowledges and agrees
that Lowe as owner, and [Spota] as exclusive licensee,
of the Licensed Patents prior to the Effective Date, 2
retain the exclusive rights to elect to maintain, control,
and settle the ShieldMark Litigation.” App. 1810. That
statement, however, makes no reference to an oral
licensing agreement. If anything, its reference to Lowe
as simply the prior “owner” of the patent cuts against the
2. Section 2.3 does not accurately reflect the dates of the
transfer of rights. The Effective Date of the PLA is December
16, 2021. The Assignment, however, was executed on December
9, 2021, so that Lowe was no longer the owner past that date.
14a
Appendix A
existence of an oral licensing agreement that has changed
his status to an exclusive licensee.
Because the district court did not clearly err by finding
inadequate evidence of an oral licensing agreement, we
need not address whether any agreement that returned
Lowe’s right to sue for infringement prior to December
9, 2021, would have constituted a mere “hunting license.”
Lowe lost standing on December 9, 2021, when he
transferred his “entire right, title and interest” in the ’664
patent, including the right to sue for past infringement
during the time he owned the patent.
III
Because we hold that Spota has Article III standing
and qualifies as a “patentee” that may sue in its own name,
we turn to the district court’s alternative ruling that the
’664 patent is anticipated by the Dorenbusch patent.
Claim 1 of Dorenbusch recites:
1. A rear rangeable marking system for
temporarily marking a defined area on a hard
floor or ground surface without interfering with
use of the surface, said rearrangeable marking
system comprising a set of individual spot
markers with each said individual spot marker
made of a synthetic polymeric material, each
said individual spot marker further having (i)
a substantially flat low profile with a thickness
of from about 100 mils to about 300 mils, (ii)
peripheral edges beveled downwardly at an
15a
Appendix A
about 30 degree to about 60 degree angle to
the horizontal, (iii) a non-slip bottom surface
for resisting lateral forces, and (iv) a textured
top surface, whereby each said individual spot
marker when placed on the surface resists
lateral forces to remain in place yet is readily
lifted from the surface for movement to another
area or to storage.
App. 66, col. 4 ll. 2-16.
The plaintiffs’ argument to the district court that
Dorenbusch does not disclose every limitation of the ’664
patent was based solely on two limitations. See App. 104243 (the plaintiffs’ initial briefing on anticipation), App.
1676-77 (the plaintiffs’ post-remand briefing, which is
identical to the initial brief ). First, the plaintiffs argued
that Dorenbusch does not disclose that “the upper surface
of each lateral edge portion [comprises] an extension of
the upper surface of the body,” as claimed in independent
claim 1 (the “extension of the upper surface” limitation).
App. 1676. Second, the plaintiffs argued that Dorenbusch
does not disclose that the tape “limits unintentional lifting
of the floor marking tape from the floor,” as claimed in
independent claim 11 (the “limits unintentional lifting”
limitation). App. 1677. The plaintiffs made no argument
about the “securing” limitation found in claims 1 and 11 or
any limitation found in the dependent claims. They have
therefore waived any argument that Dorenbusch does not
disclose those limitations. 3
3. The plaintiffs’ waiver is clear in light of the 28-page long
chart that the defendants filed as an exhibit to their brief, which
16a
Appendix A
As to the two limitations in dispute, the plaintiffs first
argue that Dorenbusch does not disclose the “extension of
the upper surface” limitation because “[a]s apparent from
the drawing of Fig. 4 of [Dorenbusch] . . . the edges 13 are
sharply cut and are separate and distinct from the top
surface of the marker, not an extension of the top surface
as required by the claims of the ’664 patent.” Blue Br. at
40. The plaintiffs, however, do not explain the basis for
their assertion that “separate and distinct side surfaces”
do not constitute an “extension of the top surface.”4 Id.;
see also Yellow Br. at 20 (arguing that the surfaces of the
walls of a room are “clearly not” extensions of the surface
of the ceiling and that the four distinct sides of a trapezoid
are not “an extension of the other”). At most, the plaintiffs
argue that “[a] smooth transition at the edge is required
for sliding or dragging pallets, skids, and the like across
a factory floor as with the invention of the ’664 Patent.”
Blue Br. at 40-41.
Next, the plaintiffs argue that Dorenbusch does
not disclose the “limits unintentional lifting” limitation
goes through each claim of the ’664 patent and asserts why each
limitation is anticipated by Dorenbusch. See App. 1347 (“Exhibit
C clearly and convincingly demonstrates that each and every
restriction, element, and limitation of the asserted claims of the
’664 patent is present in the Dorenbusch patent.”); Dkt. No. 1483 (Exhibit C). The defendants filed their brief a week before the
plaintiffs, but the plaintiffs chose not to address any limitation
other than the “extension of the upper surface” limitation and the
“limits unintentional lifting” limitation.
4. The parties’ joint proposed claim construction to the
district court did not include the term “extension.” See App.
1486-95.
17a
Appendix A
because the title and abstract of Dorenbusch characterize
the spot markers as “temporarily marking a surface”
and being “readily lifted from the surface” on which
they are placed. Id. at 41. The plaintiffs also point out
that Dorenbusch uses an adhesive as merely an option
and that the Dorenbusch specification states that “[a]n
adhesive with a low degree of adhesion is used so as not
to unduly make difficult the spot marker’s removal from
the surface.” Id. (quoting App. 66, col. 3, ll.18-20).
We find no error in the district court’s grant of
summary judgment of anticipation by Dorenbusch. Based
on the disputed limitations, no reasonable jury could find
that Dorenbusch does not anticipate the ’664 patent.
“[A]n independent claim should not be construed
as requiring a limitation added by a dependent claim.”
Curtiss-Wright Flow Control Corp. v. Velan, Inc., 438
F.3d 1374, 1380 (Fed. Cir. 2006). We therefore do not
read claim 1 of the ’664 patent as requiring the “upper
surface of the body [to be] smoothly curved between the
lateral edge portions” (claim 3) or “the upper surfaces
of the lateral edge portions [to be] smoothly tapered”
(claim 5). ’664 patent, col. 5, ll. 40-41, 46-47. Based on that
differentiation, a lateral edge that is an “extension of the
upper surface” in claim 1 simply means a lateral edge
that is connected to the upper surface. And Dorenbusch
recites a spot marker that has “peripheral edges beveled
downwardly at an about 30 degree to about 60 degree
angle to the horizontal.” App. 66, col. 4, ll. 9-11. No
reasonable jury could find that those peripheral edges of
Dorenbusch are not “an extension of the upper surface”
of the spot markers.
18a
Appendix A
Dorenbusch further recites a spot marker that has “a
non-slip bottom surface for resisting lateral forces,” id.
at col. 4, ll. 11-12, and the Dorenbusch specification states
that the “non-slip bottom surface . . . resists lateral forces
to remain in place during use,” App. 65, col. 1, ll. 55-57. By
its terms, limiting unintentional lifting does not foreclose
intentional lifting of the floor marking tape. No reasonable
jury could find that Dorenbusch fails to disclose the “limits
unintentional lifting” limitation.
Accordingly, the district court did not err in
granting summary judgment for the defendants on their
counterclaim of patent invalidity.
IV
The plaintiffs next object to the district court’s
dismissal of their claim of false advertising under the
Lanham Act. The Lanham Act prohibits any person from
using in commerce any “false or misleading description
of fact” in commercial advertising or promotion that
misrepresents the nature, characteristics, or qualities of
that person’s goods. 15 U.S.C. § 1125(a)(1)(B). Liability
arises under the Lanham Act if the commercial message
“is either (1) literally false or (2) literally true or ambiguous
but has the tendency to deceive consumers.” Innovation
Ventures, LLC v. N.V.E., Inc., 694 F.3d 723, 735 (6th Cir.
2012) (cleaned up). As it did below, Spota argues that
ShieldMark’s statements regarding is “Mighty Line” tape
were literally false.
“Only an unambiguous message can be literally false.”
Id. at 737 (cleaned up). “[R]easonable consumers know
19a
Appendix A
that marketing involves some level of exaggeration – what
the law calls ‘puffery.’” Wysong Corp. v. APN, Inc. (171975), 889 F.3d 267, 271 (6th Cir. 2018). “Courts thus view
Lanham Act claims challenging hyperbolic advertising
with a skeptical eye.” Id.; see also Interactive Prods.
Corp. v. a2z Mobile Off. Sols., Inc., 326 F.3d 687, 699 (6th
Cir. 2003) (“[M]ere puffery . . . is not actionable under the
Lanham Act.”).
The three advertising statements at issue in this
case are: (1) Mighty Line Floor Tape’s “[b]eveled edge
tape can take a beating from industrial wheel traffic”; (2)
“Mighty Line Floor Tape withstands industrial brush
scrubbers, forklifts, and heavy industrial wheel traffic”;
and (3) Mighty Line Floor Tape’s “[b]eveled edges increase
durability for forklift traffic.” App. 26-27.
Spota argues that those statements are literally
false because ShieldMark “necessarily admitted . . . its
product unintentionally lifts from the floor.” Blue Br. at 44.
That is, Spota points out that ShieldMark asserted noninfringement on the basis that the Mighty Line tape does
not satisfy the claim limitation requiring that the product
“limits unintentional lifting of the floor marking tape
from the floor.” Id. Spota also points out that ShieldMark
argued that the Mighty Line tape was no different from
its previous product, DuraStripe, and that DuraStripe had
a disclaimer that it was “not warranted against damage
caused by items pushed or dragged across the product,
such as skids or pallets.” Id. at 45.
Even assuming that the Mighty Line floor tape can be
unintentionally lifted from the floor, no reasonable jury
20a
Appendix A
could find that statements about “increase[d] durability”
or “withstand[ing]” or “tak[ing] a beating” from industrial
wheel traffic were unambiguously false. 5 Each of those
terms accommodates variations in degrees. As the district
court put it, “Defendant’s statements make no measurable
promises other than that Mighty Line Floor Tape probably
falls somewhere between tape that disintegrates at the
lightest touch and tape strong enough to survive a nuclear
bomb.” App. 28. Moreover, “[t]hose terms can just as easily
refer to a tape’s ability to resist abrasion, discoloration,
or deformation when forklifts and other machines pass
over it.” Id.
The district court did not err in granting summary
judgment on Spota’s false advertising claim.
V
Following the 2022 remand to the district court, Lowe
and Spota filed a motion to recuse or disqualify Judge
5. Spota suggests in its reply brief that those statements
are literally false because the Mighty Line tape does not even
have “beveled edges” to begin with. See Yellow Br. at 25. But that
argument is waived. In addition to being raising it only in the reply
brief, Spota asserted below that “Plaintiffs have never alleged that
the accused tape does not have ‘beveled edges’; rather, Plaintiffs
have always alleged the accused tape does not have the claimed
edges.” App. 2096.
Spota also makes an argument based on Novartis Consumer
Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
290 F.3d 578, 586 (3d Cir. 2002), for the first time in the reply brief.
Because that argument was not raised in Spota’s opening brief,
it has been waived.
21a
Appendix A
Gwin. App. 1238. The court denied the motion, and the
plaintiffs have appealed.
The Sixth Circuit “reviews decisions denying . . .
motions to recuse under the abuse of discretion standard.”
Youn v. Track, 324 F.3d 409, 422 (6th Cir. 2003) (cleaned
up). The court “must have a definite and firm conviction
that the trial court committed a clear error of judgment
before reversing under the abuse of discretion standard.”
Id. (cleaned up).
In Liteky v. United States, 510 U.S. 540 (1994), the
Supreme Court set out the pertinent principles that apply
to judicial recusal. “First, judicial rulings alone almost
never constitute a valid basis for a bias or partiality
motion,” and “[a]lmost invariably, they are proper grounds
for appeal, not for recusal.” Id. at 555. “Second, opinions
formed by the judge on the basis of facts introduced or
events occurring in the course of the current proceedings,
or of prior proceedings, do not constitute a basis for a bias
or partiality motion unless they display a deep-seated
favoritism or antagonism that would make fair judgment
impossible.” Id. “Thus, judicial remarks during the course
of a trial that are critical or disapproving of, or even hostile
to, counsel, the parties, or their cases, ordinarily do not
support a bias or partiality challenge.” Id.
The facts alleged in Lowe’s affidavit (as well as in the
affidavits of plaintiffs’ counsel, Ray L. Weber and Laura
J. Gentilcore) focus on various statements the court made
in proceedings, in addition to orders the court entered
regarding scheduling, supplemental briefing, and the
22a
Appendix A
substitution of an expert witness. See App. 1254-65,
2714-20. Those facts fail to support a “definite and firm
conviction that the trial court committed a clear error of
judgment.” Youn, 324 F.3d at 422. Accordingly, there was
no abuse of discretion in the district court’s denial of the
plaintiffs’ recusal motion.
VI
A
The district court awarded the defendants fees
and costs incurred in litigating the plaintiffs’ patent
infringement claim from December 2021 onwards, in
the amount of $213,765.6 App. 43. The district court cited
both 35 U.S.C. § 285 and its inherent power to sanction as
independent grounds for the award. See id. at 37-39. We
affirm the award under the district court’s inherent power
to sanction, which we review for an abuse of discretion.
Youn, 324 F.3d at 420. It is therefore unnecessary to
address the parties’ arguments regarding section 285.
A district court has inherent power to “assess attorney’s
fees when a party has acted in bad faith, vexatiously,
wantonly, or for oppressive reasons.” Chambers v. NASCO,
Inc., 501 U.S. 32, 45-46 (1991) (cleaned up). The court may
6. Although the district court awarded fees and costs
beginning in December 2021, the defendants submitted fee tables
only from May 2022 because the case was inactive at the district
court level until April 2022, when we remanded the case from
the first appeal. App. 41 n.46. The district court accepted the
defendants’ fee calculation.
23a
Appendix A
assess attorney’s fees against a party that “shows bad
faith by delaying or disrupting the litigation.” Id. at 46.
“The imposition of inherent power sanctions requires a
finding of bad faith, or conduct tantamount to bad faith.”
Youn, 324 F.3d at 420 (cleaned up).
The district court found that the plaintiffs’ actions from
December 2021 onwards “strongly support an inference of
bad faith.” App. 38. Specifically, the court found that early
on in discovery, the defendants had “requested production
of any documents relating to ownership and licensing of
the ’664 patent” and that the only response the plaintiffs
made in July 2019 was that there were “no responsive
documents.” App. 37. The district court further found
that by December 16, 2021, after both the Assignment
and the PLA were executed, the plaintiffs knew that they
now had documents responsive to the request and that
they had a duty to supplement their discovery responses
under Federal Rule of Civil Procedure 26(e)(1)(A). Id.
The district court found that, despite such knowledge,
“Plaintiffs (1) took no initiative to supplement their
productions; (2) refused to produce the ownership and
license documents when confronted by Defendants; and
(3) filed a Fourth Amended Complaint in which Plaintiffs
explicitly misrepresented to Defendants and to this Court
the status of the patent.” Id.
The plaintiffs argue that they did not “hide” the
change in ownership since a copy of the Assignment
was publicly available. Blue Br. at 55. The plaintiffs also
argue that the Assignment and the PLA had “no impact”
on Lowe or Spota’s “Article III or prudential standing,”
24a
Appendix A
suggesting that the non-disclosure of those documents
was therefore harmless or not in bad faith. Id. Finally, the
plaintiffs point to the fact that they produced the PLA to
the defendants in July 2022, “within 14 days after the issue
was first raised by Defendants.” Id. at 56. The plaintiffs,
however, do not dispute that they did not take the initiative
to supplement their discovery responses, nor do they deny
that they misrepresented the state of ownership in the
Fourth Amended Complaint, which was filed nearly six
months after the transactions in December 2021, and in
which the plaintiffs identified Lowe as the patent owner
and Spota as the exclusive licensee.
In their reply brief, the plaintiffs assert that
they admitted in the district court that they had
mischaracterized the status of Lowe and Spota in
their Fourth Amended Complaint. Yellow Br. at 36.
They also assert that discovery “was over before the
transfer” and that after remand, they were “not looking
at supplementation” because “they were knee-deep in
addressing allegations of invalidity, as the district court
directed briefing on the issue.” Id. at 36-37.
Factual findings underlying sanctions based on the
district court’s inherent powers are reviewed for clear
error. Youn, 324 F.3d at 420. Applying that standard,
we defer to the district court’s implied finding that the
plaintiffs’ misrepresentation in the Fourth Amended
Complaint was not merely an honest mistake. Moreover,
the duty to supplement discovery responses under Rule
26(e) continues even after the discovery period has closed.
See L.A. Terminals, Inc. v. United Nat’l Ins. Co., 340
F.R.D. 390, 396 (C.D. Cal. 2022) (collecting cases).
25a
Appendix A
We discern no clear error in the district court’s finding
of bad faith conduct by the plaintiffs that prejudiced the
defendants. Lowe lost Article III standing after the
Assignment, and the plaintiffs’ conduct delayed litigation
with respect to Lowe’s patent infringement claim. We
therefore affirm the district court’s award under its
inherent power to sanction.
B
The district court also invoked its inherent power to
sanction in awarding the defendants fees and costs they
incurred when they moved to seal an expert report that
the plaintiffs filed. App. 39.7 Local Patent Rule 2.2 for
the Northern District of Ohio provides that “[p]ending
entry of a protective order, discovery and disclosures
deemed confidential by a party shall be produced to the
adverse party for the eyes of outside counsel of record
only, marked ‘Attorney’s Eyes Only Subject to Protective
Order[ ]’ . . . and shall not be disclosed to the client or any
other person.” The district court found that the plaintiffs
violated that rule by filing on the court’s public docket
an expert report that “disclosed information Defendants
had marked as Attorney’s Eyes Only.” Id. at 40. At the
time of the filing, no protective order had been entered
by the court.
7. The district court held that although Federal Rule of Civil
Procedure 37(b) ordinarily governs discovery sanctions, the rule
“does not appear to encompass sanctions for violations of local
discovery rules.” App. 39. The court thus relied on its inherent power
to sanction, which exists to “fill in the interstices” not covered by
sanction statutes and rules. Id. at 39-40 (quoting Chambers, 501
U.S. at 46).
26a
Appendix A
The district court, however, made no finding that
the plaintiffs acted in bad faith when filing that expert
report. See id. at 39-40. Nor did the district court make
a finding that Spota and Lowe’s conduct was tantamount
to bad faith. Id. Because the district court did not make
the necessary findings to invoke its inherent power to
sanction, see Youn, 324 F.3d at 420, we vacate the district
court’s award of $4,750 for fees and costs arising from the
plaintiffs’ violation of Local Patent Rule 2.2 and remand
for the required findings.
VII
The defendants also sought fees for Lowe’s inequitable
conduct before the PTO, pointing to a photograph that
Lowe submitted during the prosecution of the ’664 patent.
The photograph shows two floor tapes side by side with no
other information than the statement that one was on sale
prior to 2004 and the other on sale in 2018. See App. 1988.
The defendants assert that Lowe was not forthcoming
about the prior-art DuraStripe tape and submitted the
photograph of DuraStripe floor tape “without identifying
it as the prior-art DuraStripe floor tape with ‘unique
beveled edges’ that Lowe had advertised, distributed, and
sold through Insite Solutions more than one year before
the . . . priority date of the ’664 Patent.” Gray Br. at 4-5.
“ I n e q u it a bl e c on d uc t i n c lud e s a f f i r m a t i ve
misrepresentation of a material fact, failure to disclose
material information, or submission of false material
information, coupled with an intent to deceive.” Bd.
of Educ. Ex rel. Bd. of Trs. of Fla. State Univ. v. Am.
Bioscience, Inc., 333 F.3d 1330, 1343 (Fed. Cir. 2003). We
27a
Appendix A
review for clear error the district court’s determination
of “whether the conduct meets a threshold level of
materiality” and “whether the evidence shows a threshold
level of intent to mislead the PTO.” Id.; see also Star Sci.,
Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365
(Fed. Cir. 2008) (holding that the accused infringer must
prove both materiality and intent to deceive by clear and
convincing evidence). It is only after the threshold levels
of materiality and intent have been established that the
district court is required to weigh them and “determine
whether the applicant’s conduct is so culpable that the
patent should be held unenforceable.” Am. Bioscience,
333 F.3d at 1343. “We review the district court’s ultimate
determination of inequitable conduct under an abuse of
discretion standard.” Id.
The district court found that “Lowe did not hide the
existence of DuraStripe or the possibility of prior art
entirely” and that “[b]ecause there was some limited
effort to disclose, Defendants have not established by
clear and convincing evidence that Lowe intended to and
did withhold material information.” App. 36. We find no
clear error to those threshold determinations made by
the district court, even considering the defendants’ expert
report and the defendants’ argument on the difference
that further information would have been material to
the prosecution. We therefore affirm the district court’s
finding on inequitable conduct.
Each party shall bear its own costs for this appeal.
AFFIRMED IN PART, VACATED
AND REMANDED IN PART
28a
B THE UNITED
APPENDIX B —Appendix
ORDER OF
STATES COURT OF APPEALS FOR THE
FEDERAL CIRCUIT, FILED NOVEMBER 28, 2022
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
2022-2273
CLIFFORD A. LOWE, INSITE SOLUTIONS, LLC,
NKA SPOTA LLC,
Plaintiffs-Appellants
v.
SHIELDMARK, INC., ADVANCED PLASTICS,
INC., CROWN EQUIPMENT CORPORATION,
Defendants-Appellees
Appeal from the United States District Court for the
Northern District of Ohio in No. 1:19-cv-00748-JG, Judge
James S. Gwin.
ON MOTION
Before Lourie, Taranto, and Stark, Circuit Judges.
Stark, Circuit Judge.
Decided: November 28, 2022
29a
Appendix B
ORDER
ShieldMark, Inc., Advanced Plastics, Inc., and Crown
Equipment Corporation (collectively, “ShieldMark”) move
to dismiss this appeal as premature and for sanctions
pursuant to Rule 38 of the Federal Rules of Appellate
Procedure. Clifford A. Lowe and InSite Solutions, LLC,
nka Spota LLC, (collectively, “Lowe”) oppose. We grant
the motion to dismiss the appeal as premature and deny
the motion for sanctions.
I
The background of this case was described in our
opinion in an earlier appeal. Lowe v. Shieldmark, Inc.,
No. 2021-2164, 2022 U.S. App. LEXIS 5745, 2022 WL
636100 (Fed. Cir. Mar. 4, 2022). We focus here on the
facts necessary to resolve ShieldMark’s motions. In
its complaint, Lowe asserted that “this is an action for
patent infringement” and “[t]his is also an action for false
advertising . . . pursuant to the Lanham Act.” Dkt. No. 127
at 2.1 More particularly, Lowe alleged that if the accused
Mighty Line floor marking tape product “comports with
the pictorial illustration of [ShieldMark’s] advertising,
that product infringes;” and “[i]n the alternative, if
ShieldMark’s [product] does not comport with the pictorial
illustration of its advertising in a manner so as to avoid
infringement . . . then such advertising is false” and in
violation of the Lanham Act. Dkt. No. 127 at 12-13.
1. All references to “Dkt. No.” herein refer to entries in the
underlying district court docket.
30a
Appendix B
A fter various proceedings, ShieldMark moved
to dismiss the patent infringement claim for lack of
subject matter jurisdiction (based on a change in patent
ownership) and for summary judgment of invalidity. Dkt.
Nos. 148, 169. For the Lanham Act claim, ShieldMark
moved for summary judgment based on a lack of evidence.
Dkt. No. 95. In an August 23, 2022, order, the district
court concluded that Lowe could not maintain its patent
infringement claim (based on a change in patent ownership
during the course of the proceedings) and therefore
“DISMISSE[D] this action for lack of subject matter
jurisdiction with prejudice,” and, “[i]n the alternative
. . . GRANT[ED]” the motion for summary judgment of
invalidity. Dkt. No. 191 at 19 (emphases in original). The
court’s order further stated that “in light of the Court’s
conclusion that Plaintiffs lack standing, the Court declines
to address the Lanham Act summary judgment issue in
this opinion.” Dkt. No. 191 at 2 n.1.
On August 26, 2022, the court issued an order
noting that “Plaintiffs asserted a Lanham Act false
advertising claim” and “[h]aving resolved Plaintiffs’ patent
infringement claim in favor of Defendants,” the court
directed “the parties to discuss between themselves what
claims survive and the status of trial preparation on any
remaining claims.” Dkt. No. 192 at 1. Lowe then moved
for reconsideration, which the district court denied on
September 19, 2022. In doing so, the court considered and
rejected Lowe’s argument that the August 23, 2022, order
dismissed the entirety of the action, explaining that “[t]he
Court did not rule on Plaintiffs’ Lanham Act claim” and
did not sever “the patent infringement claims from the
31a
Appendix B
rest of the action,” and therefore its decision on the patent
claims “is not yet final and appealable and amounts only to
a grant of partial summary judgment.” Dkt. No. 200 at 2.
Lowe’s counsel subsequently contacted ShieldMark’s
counsel to propose that the parties make a joint request
for entry of partial judgment under Federal Rule of Civil
Procedure 54(b) so Lowe could immediately appeal. See
Dkt. No. 206 at 1-3. ShieldMark declined and “reiterated
their view on an appropriate way forward and discouraged
Plaintiffs from filing a notice of appeal” based on the lack
of an appealable final decision. Id. at 2. On September 21,
2022, Lowe filed its notice of appeal seeking review of the
court’s August 23, 2022, order and other orders that Lowe
does not dispute are otherwise interlocutory.
II
Typically, we only have jurisdiction over a “final
decision of a district court,” 28 U.S.C. § 1295(a)(1). “For a
ruling to be final, it must end the litigation on the merits
and the judge must clearly declare his intention in this
respect.” FirsTier Mortg. Co. v. Investors Mortg. Ins.
Co., 498 U.S. 269, 273-74, 111 S. Ct. 648, 112 L. Ed. 2d
743 (1991) (cleaned up). “Whether an order is final does
not depend on the specific ‘form of words’ that it uses
but instead on whether the order evinces the district
court’s clear intent to end the case.” PlasmaCAM, Inc. v.
CNCElectronics, LLC, 24 F.4th 1378, 1383 (Fed. Cir. 2022)
(citation omitted). We discern no such intent by the district
court here; to the contrary, the district court has made
clear that its August 23, 2022, order was not an attempt
to end the entirety of the case on the merits.
32a
Appendix B
In the August 23, 2022, order itself, the district
court noted that it “decline[d] to address the Lanham
Act summary judgment issue in this opinion.” Dkt.
No. 191 at 2 n.1 (emphasis added). And even if the later
statement in the order dismissing “this action for lack
of subject matter jurisdiction with prejudice,” Dkt. No.
191 at 19, was ambiguous in isolation, the district court
issued another order three days later clarifying that it
had only “resolved Plaintiffs’ patent infringement claim
in favor of Defendants.” Dkt. No. 192. And then, after
Lowe disputed whether the court resolved its Lanham
Act claim (but before it filed its notice of appeal), the
district court issued another order confirming that it “did
not rule on Plaintiffs’ Lanham Act claim” so “its decision
on [the patent infringement] claims is not yet final.” Dkt.
No. 200 at 2. These orders make clear that the court had
not issued a “final decision” that “en[ded] the litigation on
the merits,” by the time Lowe filed its notice of appeal,
FirsTier, 498 U.S. at 273-74.
Lowe’s arguments to the contrary are not persuasive.
Lowe contends that the Lanham Act claim “is necessarily
mooted by the district court’s finding of the lack of
subject matter jurisdiction” for the patent infringement
claim because the Lanham Act claim was “pleaded in the
alternative” and “arises from the same nucleus of fact,”
ECF No. 11 (Response) at 3-4. But that issue, among
others, is currently pending before the district court, and
the district court has made clear that its August 23, 2022,
order did not resolve all of Lowe’s claims and therefore is
not immediately appealable. We have considered Lowe’s
other arguments and find them to be without merit.
33a
Appendix B
For at least these reasons, we lack jurisdiction over
this premature appeal. 2 Although we may award just
damages and single or double costs to the appellee when
an appeal is frivolous, see Fed. R. App. P. 38, because this
is a close case (given the district court’s clarifying orders),
we ultimately decline to impose such sanctions under the
particular circumstances of this case.
Accordingly,
It Is Ordered That:
(1) The motion to dismiss is granted. Appeal No. 20222273 is dismissed for lack of jurisdiction.
(2) The motion for sanctions is denied.
(3) Each side shall bear their own costs.
For the Court
November 28, 2022
Date
/s/ Peter R. Marksteiner
Peter R. Marksteiner
Clerk of Court
ISSUED AS A MANDATE: November 28, 2022
2. Because we conclude that we lack jurisdiction, we do not
address ShieldMark’s alternative arguments challenging finality.
34a
Appendix COF THE UNITED
APPENDIX C — DECISION
STATES COURT OF APPEALS FOR THE
FEDERAL CIRCUIT, FILED MARCH 4, 2022
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
2021-2164
CLIFFORD A. LOWE, INSITE SOLUTIONS, LLC,
Plaintiffs-Appellants
v.
SHIELDMARK, INC., ADVANCED PLASTICS,
INC., CROWN EQUIPMENT CORPORATION,
Defendants-Appellees
Appeal from the United States District Court for the
Northern District of Ohio in No. 1:19-cv-00748-JG, Judge
James S. Gwin.
Decided: March 4, 2022
Before Lourie, Bryson, and Cunningham,
Circuit Judges.
Lourie, Circuit Judge.
Clifford A. Lowe and InSite Solutions, LLC (“Lowe”)
appeal from the decisions of the United States District
35a
Appendix C
Court for the Northern District of Ohio (1) granting
summary judgment following claim construction that
ShieldMark, Inc. et al. (“ShieldMark”) does not infringe
claims 1-6, 10-16, and 20-21 of U.S. Patent 10,214,664 (“the
’664 patent”), (2) dismissing Lowe’s claim for a declaratory
judgment of invalidity and unenforceability of U.S. Patent
10,738,220 (“the ’220 patent”), and (3) denying attorney
fees. Lowe v. ShieldMark, Inc., No. 1:19-CV-748, 2021
U.S. Dist. LEXIS 115091, 2021 WL 2530219 (N.D. Ohio
June 21, 2021) (“Noninfringement Decision”); Lowe v.
ShieldMark, Inc., No. 1:19-CV-748, ECF No. 87 (N.D.
Ohio May 19, 2021) (“Claim Construction Order”), J.A.
1-18; Lowe v. ShieldMark, Inc., No. 1:19-CV-748, ECF No.
104 (N.D. Ohio July 16, 2021) (“Dismissal”), J.A. 27-31.
Because the distr ict court er red in its claim
construction, we vacate its decision granting summary
judgment of noninfringement and remand for further
proceedings consistent with this opinion. We affirm the
court’s dismissal of Lowe’s declaratory judgment claim
and denial of attorney fees.
BACKGROUND
Lowe and ShieldMark both sell floor marking tape, a
product used to mark boundaries on a floor. Each party
owns a patent that covers its tape product. Lowe owns the
’664 patent and sells its tape under the name “Superior
Mark.” J.A. 99. ShieldMark owns the ’220 patent and sells
its tape under the name “Mighty Line.” J.A. 383, 411. We
begin with a brief overview of both patents.
36a
Appendix C
I
Lowe’s ’664 patent is directed to an improved floor
marking tape. The specification explains that existing tape
was “prone to being caught on floor cleaning devices or
skids.” ’664 patent, col. 1 ll. 28-30. The patented invention
purports to solve that problem by disclosing tape with
features that prevent it from “unintentional lifting and
delamination” from the floor. Id. Abstract. The “[t]ape 10
generally includes a body 20 having an upper surface 22
and a lower surface 24.” Id. col. 2 ll. 19-24. The body has
a “pair of lateral edges” that are “smoothly beveled,” thus
“prevent[ing] tape 10 from being unintentionally lifted.”
Id. col. 1 ll. 42-43; col. 2 ll. 23-27.
The specification further explains that “[i]n one
embodiment,” the tape has shoulders “that define[] a
recess” to “hold[] the bulk of the adhesive.” Id. col. 1 ll.
56-59; see id. Abstract. The shoulders “prevent[] the
adhesive from flowing out to the outer edge of the tape.”
Id. col. 1 ll. 57-59. Figure 1, below, shows the tape (10) with
shoulders (32), a recess (30), and a lower surface (24). Id.
col. 2 ll. 28-33.
37a
Appendix C
Claims 1 and 11 are the only independent claims.
Claim 1 reads as follows:
1. A floor marking tape adhered to a floor
wherein the floor marking tape establishes
a boundary on the f loor; the combination
comprising:
a f loor having an uppermost surface; the
uppermost surface of the floor configured to
support personnel and equipment thereupon;
a floor marking tape having a body that has an
upper surface and a lower surface; the lower
surface facing the uppermost surface of the
floor to which the floor marking tape is adhered
such that the body of the floor marking tape is
disposed above the uppermost surface of the
floor;
the body of the floor marking tape having a
longitudinal direction;
the body of the floor marking tape having first
and second lateral edge portions disposed in
the longitudinal direction; each of the first and
second lateral edge portions having an upper
surface and a lower surface;
each of the first and second lateral edge
portions having a width defined in a direction
perpendicular to the longitudinal direction;
38a
Appendix C
the upper surface of each lateral edge portion
comprising an extension of the upper surface
of the body;
the lower surface of each lateral edge portion
being a flat coplanar extension of the lower
surface of the body;
the entire body of each lateral edge portion
being tapered with the upper surface of the
first lateral edge portion extending to the lower
surface of the first lateral edge portion and
the upper surface of the second lateral edge
portion extending to the lower surface of the
second lateral edge portion;
each of the first and second lateral edge
portions having a maximum height that is less
than its width; and
an adhesive securing the lower surface of the
body to the uppermost surface of the floor to
establish a boundary.
Id. col. 5 ll. 2-36 (emphases added).
Claim 11 similarly recites a “a floor marking tape
adhered to a floor” with a “body” and tapered “lateral
edge portions.” Id. col. 6 ll. 1-36 (emphasis added).
Claims 10 and 20 depend from claims 1 and 11,
respectively. They each recite that the tape has “a central
39a
Appendix C
body portion disposed between the first and second lateral
edge portions.” Id. col. 5 ll. 61-67 (emphasis added); col. 6
ll. 61-67 (emphasis added).
All of the remaining asserted claims depend from one
of the above noted independent claims.
This appeal concerns one aspect of the claims: whether
they require the tape to have “shoulders” and a “recess”
such that it does not lie flat.
II
ShieldMark’s ’220 patent is directed to “a polymeric
adhesive tape” with features that purport to prevent
“wearing, tearing, cracking and breakage from heavy and
repeated traffic.” ’220 patent, col. 1 ll. 21-39.
The tape “usually comprises a layer of polymeric
material and at least one layer of adhesive material.”
Id. col. 1 ll. 58-60. It “may optionally have an additional
layer, such as a laminating substrate on an outermost
side of the above adhesive layer.” Id. col. 1 ll. 63-65. The
tape’s composition allegedly provides “superior ductility,
strength, tear resistance[,] and abrasion resistance.” Id.
col. 1 ll. 35-38.
Claim 1 of the ’220 patent is representative and reads
as follows:
1. A roll of an adhesive tape aisle marking
system comprising:
40a
Appendix C
a layer of polyvinyl chloride having a Shore A
Hardness between 92 and 100 and a thickness
between 20 mil and 65 mil;
a layer of adhesive physically contacting the
layer of polyvinyl chloride, where the layer of
adhesive has a thickness less than the thickness
of the polymer layer; and
a laminating substrate contacting the layer
of adhesive, where the adhesive tape aisle
marking system comprises a peel adhesion
greater than 2.0 pounds per inch width when the
laminating substrate is removed and a sample
of the adhesive tape aisle marking system is
adhered, the peel adhesion measured under
a test method including peeling the sample of
the adhesive tape aisle marking system at a 90
degree angle after application to a stainless
steel panel.
Id. col. 4, ll. 34-52.
III
On April 4, 2019, Lowe sued ShieldMark, alleging that
ShieldMark’s Mighty Line tape infringes claims 1-6, 1016, and 20-21 of the ’664 patent. J.A. 70-80. In response,
ShieldMark raised a defense of noninfringement. J.A. 137.
According to ShieldMark, the ’664 patent claims require
the tape to have shoulders and a recess and thus cannot
41a
Appendix C
cover its Mighty Line tape, which has a single, flat lower
surface without shoulders.1
On August 11, 2020, ShieldMark’s own floor marking
tape patent issued—the ’220 patent. Accordingly,
ShieldMark amended its answer to Lowe’s complaint,
adding a counterclaim against Lowe for infringing “at
least claims 1-3, 9, 10 and 17-19” of the ’220 patent through
sale of Superior Mark tape. J.A. 362, 425. In response,
Lowe amended its complaint to include a declaratory
judgment claim for invalidity and unenforceability of the
’220 patent. J.A. 662.
Subsequently, Lowe decided to alter the design of
its Superior Mark tape such that “it arguably no longer
infringes” the ’220 patent claims. Dismissal, slip. op. at
2; J.A. 1413-14. In turn, ShieldMark provided Lowe with
a covenant not to sue. The signed covenant provided that:
ShieldMark . . . hereby unconditionally
covenants not to file or maintain any lawsuit
anywhere in the world against Clifford A. Lowe
or Insite Solutions, LLC for the infringement
or alleged infringement of the ’220 patent for
any past or present manufacture, use, sale, offer
for sale, or importation by Clifford A. Lowe or
Insite Solutions, LLC of floor marking tape
currently marketed as Superior Mark floor
marking tape.
J.A. 1409 (emphasis added).
1. Neither party disputes that ShieldMark’s Mighty Line
tape has a flat lower surface.
42a
Appendix C
On March 8, 2021, in view of the covenant, ShieldMark
moved to (1) voluntarily dismiss with prejudice its ’220
patent infringement suit against Lowe under Federal
Rule of Civil Procedure 41(a), and (2) dismiss Lowe’s
corresponding declaratory judgment claim for lack of
subject matter jurisdiction. Dismissal, slip. op. at 2.
Lowe, however, opposed both motions. It also continued
to pursue its declaratory judgment claim, filing a motion
for summary judgment of invalidity and unenforceability
of the ’220 patent. J.A. 1762.
The district court reviewed the parties’ motions and
issued two decisions. The first decision addressed the ’664
patent claims and the second addressed the ’220 patent
claims.
With respect to the first decision, the district court
granted summary judgment that ShieldMark does not
infringe the ’664 patent claims. The court’s judgment
was based on its construction of the terms “lateral edge
portion,” “coplanar extension,” and “central body portion.”
The district court construed the term “lateral edge
portion” to mean “the portion of the floor marking tape
from the shoulder to the edge of the tape when viewed in
cross section.” Claim Construction Order, slip. op. at 9
(emphasis added). The court acknowledged that “the term
‘shoulder’ is not present in the ‘664 [p]atent[] claims,” but
explained that it “appears repeatedly in the patent [s]
pecification[].” Id., slip. op. at 8.
43a
Appendix C
The district court construed the limitation “the lower
surface of each lateral edge portion being a flat coplanar
extension of the lower surface of the body” to mean “a
planar relationship exists between two or more things
[that] does not allow the entire lower surface of the tape
body to be one flat or planar surface.” Id., slip. op. at 10
(emphasis added) (internal quotation marks omitted).
Again, in support of its construction, the court pointed out
that the tape cannot have a flat lower surface because the
specification repeatedly describes “a [l]ower surface 24
[that] defines a recess 30 bounded by a pair of shoulders
32.” Id., slip. op. at 11.
Finally, the district court construed “central body
portion” to mean “the portion of the tape body between
the shoulders of the two lateral edge portions.” Id., slip.
op. at 10 (emphasis added).
In view of its claim construction, the district court
g ranted summar y judg ment of noninfringement.
Noninfringement Decision, 2021 U.S. Dist. LEXIS
115091, 2021 WL 2530219, at *4. The court explained that,
because the claims require the tape to have shoulders and
a recess, they cannot encompass ShieldMark’s Mighty
Line tape, which has a completely “flat lower surface”
and no shoulders. 2021 U.S. Dist. LEXIS 115091, [WL]
at *3-4. For the same reasons, the district court also held
that ShieldMark’s Mighty Line tape does not infringe the
remaining asserted dependent claims. Id.
With respect to the second decision, the district court
dismissed all claims concerning the ’220 patent.
44a
Appendix C
First, the district court granted ShieldMark’s motion
to dismiss its ’220 patent infringement suit pursuant to
Federal Rule of Civil Procedure 41. Dismissal, slip. op.
at 5. The court conditioned its dismissal on ShieldMark’s
continuing consent to abide by the covenant. Id. The
court also dismissed Lowe’s declaratory judgment claim
for invalidity and unenforceability of the ’220 patent.
The court did not expressly state on what ground it was
dismissing the declaratory judgment claim. Id.
Second, the court denied as moot ShieldMark’s motion
to dismiss Lowe’s ’220 patent declaratory judgment claim
for lack of subject matter jurisdiction. The court also held
that each party should bear its own attorney fees. Id.
Lowe appealed the district court’s decisions concerning
the ’664 and ’220 patents. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(1).
DISCUSSION
Lowe raises three arguments on appeal. Specifically,
Lowe argues that the district court erred (1) in granting
summary judgment that ShieldMark does not infringe
the ’664 patent, (2) in dismissing Lowe’s declaratory
judgment claim for invalidity and unenforceability of the
’220 patent, and (3) in denying attorney fees. We address
each argument in turn.
45a
Appendix C
I
We turn first to Lowe’s argument that the district court
erred in granting summary judgment of noninfringement.
According to Lowe, the court’s judgment stemmed directly
from its erroneous construction of the terms “lateral edge
portion” (claims 1 and 11), “coplanar extension” (claim 1),
and “central body portion” (claims 10 and 20). We thus
focus our analysis on the court’s construction of those
three terms.
We review a district court’s grant of summary
judgment according to the law of the regional circuit.
Lanard Toys Ltd. v. Dolgencorp LLC, 958 F.3d 1337,
1341 (Fed. Cir. 2020) (citing Kaneka Corp. v. Xiamen
Kingdomway Grp. Co., 790 F.3d 1298, 1303 (Fed. Cir.
2015)). The Sixth Circuit reviews a grant of summary
judgment de novo. ETW Corp. v. Jireh Publ’g, Inc., 332
F.3d 915, 919 (6th Cir. 2003).
Claim construction is ultimately an issue of law, which
we review de novo. Shire Dev., LLC v. Watson Pharm.,
Inc., 787 F.3d 1359, 1364 (Fed. Cir. 2015). We review
de novo the district court’s findings of fact on evidence
“intrinsic to the patent,” and review for clear error all
other subsidiary findings of fact. Teva Pharm. USA, Inc. v.
Sandoz, Inc., 135 S. Ct. 831, 841, 190 L. Ed. 2d 719 (2015).
Although infringement is a question of fact, Lucent Techs.,
Inc. v. Gateway, Inc., 580 F.3d 1301, 1309 (Fed. Cir. 2009),
we review de novo the district court’s grant of summary
judgment of noninfringement, Unwired Planet, LLC v.
Apple Inc., 829 F.3d 1353, 1356 (Fed. Cir. 2016).
46a
Appendix C
A
Lowe first asserts that the district court erred in
construing the term “lateral edge portion” to mean “the
portion of the floor marking tape from the shoulder to
the edge of the tape when viewed in cross section.” Claim
Construction Order, slip. op. at 9 (emphasis added). Lowe
contends that the court erroneously imported the term
“shoulder” from the specification into the claim language.
According to Lowe, the claimed invention does not require
the tape to have shoulders. Rather, the shoulders are
merely part of one embodiment. Thus, Lowe argues, the
lateral edge portions are simply “a portion of the tapered
edges of the tape body.” Appellants’ Br. 19. ShieldMark
responds that the court correctly construed the term
“lateral edge portion.” According to ShieldMark, because
the specification uniformly describes the claimed invention
as requiring a tape with shoulders, the court correctly
included the term “shoulders” in its construction.
We agree with Lowe that the district court erred
in construing the term “lateral edge portions.” We have
repeatedly “cautioned against limiting the claimed
invention to preferred embodiments or specific examples
in the specification.” Teleflex, Inc. v. Ficosa N. Am. Corp.,
299 F.3d 1313, 1328 (Fed. Cir. 2002) (quoting Comark
Communs. v. Harris Corp., 156 F.3d 1182, 1186 (Fed.
Cir. 1998)). Here, the court did just that. Specifically, it
determined that, because the term “shoulders” “appears
repeatedly in the patent specification[],” the claimed
invention must include shoulders. Claim Construction
Order, slip. op. at 8. But, as is clear from the claim
47a
Appendix C
language and the specification, the asserted claims are
not so limited.
Starting with the claim language, neither claim 1 nor
claim 11 recites that the tape has shoulders demarcating
a recess. In fact, neither claim even mentions the word
“shoulders.” Moreover, claim 7, which depends from claim
1, does recite that the tape has a recess and (by implication)
shoulders that demarcate the recess. ’664 patent, col. 5
ll. 50-52. Thus, if we were to construe the claims as
ShieldMark proposes, claim 7 would be superfluous. See
Wi-LAN USA, Inc. v. Apple Inc., 830 F.3d 1374, 1391
(Fed. Cir. 2016) (“A construction that would cause two
differently worded claims to cover exactly the same claim
scope would render one of the claims superfluous, so we
apply a presumption against such constructions.”).
The specification provides further evidence that the
asserted claims are not as narrow as ShieldMark contends.
For example, it states that tape with shoulders and a
recess is just “one embodiment” of the claimed invention.
’664 patent, Abstract; col. 1 ll. 56-59 (emphasis added). It
further explains that “[o]ther structures combined with
body 20 may also be used in place of . . . shoulders 32.” Id.
col. 2 ll. 33-36 (emphasis added). The specification goes on
to describe additional “embodiments” or “configurations”
of tape, several without shoulders. Id. col. 1 ll. 38-46; col. 1
ll. 60-64; col. 2 ll. 64-67; see Poly-Am., L.P. v. API Indus.,
Inc., 839 F.3d 1131, 1136 (Fed. Cir. 2016) (“[T]he standard
for disavowal is exacting, requiring clear and unequivocal
evidence that the claimed invention includes or does not
include a particular feature.” (citing Openwave Sys., Inc.
v. Apple Inc., 808 F.3d 509, 513-14 (Fed. Cir. 2015))).
48a
Appendix C
The parent of the ’664 patent, U.S. Patent 8,883,290,
also supports our determination. Both the ’664 and ’290
patents share a specification and recite claims directed to
floor marking tape. Importantly, however, unlike the ’664
patent claims, the ’290 patent claims expressly recite that
the tape has “shoulders” and “a recess.” ’290 patent, col.
4 l. 62-col. 5 l. 15. Accordingly, the patentee knew how to
claim tape with shoulders and a recess when specifically
intended. Thus, as is clear from the evidence, the claimed
invention is not as narrow as ShieldMark asserts.
ShieldMark makes several additional arguments, all
unpersuasive.
First ShieldMark contends that, because every figure
of the ’664 patent shows an embodiment of tape with
shoulders, the claimed invention must have shoulders.
We disagree. ShieldMark is correct that every
figure in the specification depicts tape with shoulders.
Importantly, however, that does not necessarily require
us to narrowly limit the claimed invention to those figures.
As explained above, the specification describes various
embodiments of the tape, several without shoulders.
Second, ShieldMark asserts that Lowe’s proposed
construction, which omits the word “shoulders,” would
violate 35 U.S.C. § 112. Specifically, ShieldMark contends
that, without the word “shoulders” in the construction, it is
unclear “where the lateral edge portions begin and other
parts of the tape end.” Appellees’ Br. 28.
49a
Appendix C
We disagree with ShieldMark that construing the
claims without reference to the word shoulders would
render them invalid. The claim language itself details
the position of the lateral edge portions: they are at the
tapered edges of the floor marking tape, without reference
to shoulders. More specifically, claim 1 recites that the
lateral edge portions (1) are tapered 2; (2) are disposed
in the longitudinal direction; (3) have an “upper surface”
“comprising an extension of the upper surface of the
body;” and (4) have a “maximum height that is less than
[their] width.” ’664 patent, col. 5 ll. 2-36. That description
speaks for itself. We thus reject ShieldMark’s argument.
B
Lowe next asserts that the district court erred in
construing the limitation “lower surface of each lateral
edge portion being a flat coplanar extension of the lower
surface of the body” to mean “a planar relationship
exists between two or more things [that] does not allow
the entire lower surface of the tape body to be one flat or
planar surface.” Claim Construction Order, slip. op. at 10
(internal quotation marks omitted). First, Lowe argues
that the court should have construed the limitation to
mean “the bottom surfaces of the lateral edge portions
2. We decline to consider Lowe’s argument that the district
court erroneously construed the term “tapered.” Lowe fails to
explain how the court’s construction would affect our infringement
analysis. See Jang v. Bos. Sci. Corp., 532 F.3d 1330, 1336 (Fed. Cir.
2008) (resolving claim construction issues “that do not actually
affect the infringement controversy between the parties” would
result in an impermissible advisory opinion).
50a
Appendix C
are flat, lie in the same plane, and define an extension
of the lower surface of the body.” Appellants’ Br. 20. In
other words, Lowe contends that “coplanar” refers to
the relationship between the two lateral edge portions.
Second, Lowe argues that the court again limited the
claimed invention to one embodiment in the specification:
tape with shoulders and a recess. Specifically, Lowe points
out that if the tape cannot lie flat, then by implication, it
must have shoulders and a recess. Id. at 23.
ShieldMark responds that the court’s construction
was correct. It first asserts that, “‘coplanar extension’
necessarily implies a reference to two distinct points
that a continuous flat line does not have.” Appellees’ Br.
29. It also asserts that, because the claimed invention
is limited to tape with shoulders and a recess, the tape
cannot have one flat lower surface. Moreover, according
to ShieldMark, in an earlier decision denying institution
of post-grant review for the ’664 patent, the U.S. Patent
and Trademark Office Patent Trial and Appeal Board (the
“Board”) allegedly determined that the term “coplanar
extension” cannot encompass a single, flat lower surface.
We ag ree w ith Lowe that the district court’s
construction was incorrect. Claim 1 simply recites that
the lateral edge portions are (1) flat, (2) coplanar with
each other, and (3) extensions of the lower surface of
the body. Contrary to ShieldMark’s assertion, claim
1 does not “necessarily impl[y] a reference to two
distinct points that a continuous flat line does not have.”
Appellees’ Br. 29 (internal quotations marks omitted).
Moreover, in construing the term “coplanar extension,”
51a
Appendix C
the district court erroneously imported limitations from
the specification into the claims. For example, it observed
that “the specification language” “weighs heavily against
[Lowe’s] proposed construction” because it “describe[s] ‘a
[l]ower surface 24 [that] defines a recess 30 bounded by a
pair of shoulders 32.’” Claim Construction Order, slip. op.
at 11. But for the reasons explained above, the asserted
claims are not so limited.
Nor are we persuaded by ShieldMark’s argument
regarding the post-grant review. ShieldMark misreads
the Board’s decision. The Board did not, as ShieldMark
argues, construe the claims to exclude a single, flat lower
surface. Rather, it simply held that the claims do not
require “the lower surface of the lateral edge portions to
be coplanar with the lower surface of the tape body defined
by recess 30.” J.A. 1109. The Board further explained that
the lower surfaces of the first and second lateral edge
portions “1) are flat, 2) are coplanar with each other, and 3)
define an ‘extension of the lower surface of the body.’” Id.
Thus, the Board’s construction did not speak to whether
the tape must have shoulders with a recess.
C
Finally, Lowe asserts that the district court erred in
construing the term “central body portion” to mean “the
portion of the tape body between the shoulders of the two
lateral edge portions.” Claim Construction Order, slip.
op. at 10 (emphasis added). According to Lowe, the court
should have construed the term “central body portion”
to mean the “portion of the tape that extends along and
52a
Appendix C
on each side of the body’s centerline.” Appellants’ Br. 22.
ShieldMark responds, as it did before, that the court’s
construction was correct because the claimed invention
requires shoulders.
We agree with Lowe. Again, the court’s construction
improperly imported the term “shoulders” into the claims.
For the reasons explained above, that construction was
erroneous. Except for claims 7 and 17 and the claims that
depend from them, the claims are not so limited.
In summary, because the district court erred in
construing “lateral edge portion,” “coplanar extension,”
and “central body portion,” we vacate its claim construction
order and adopt Lowe’s construction of those terms.
Additionally, because the court granted summary
judg ment of noninfr ingement based on its claim
construction, we vacate its summary judgment decision
involving all of the asserted claims of the ’664 patent
and remand for further proceedings consistent with this
opinion.
II
We turn next to Lowe’s argument that the district
court erred in dismissing the declaratory judgment claim
for invalidity and unenforceability of the ’220 patent.
As an initial matter, the district court did not expressly
state on what ground it dismissed the declaratory
judgment claim. Dismissal, slip. op. at 5. However, “an
appellate court may affirm a judgment of a district court
53a
Appendix C
on any ground the law and the record will support [as] long
as that ground would not expand the relief granted.” Glaxo
Grp. Ltd. v. TorPharm, Inc., 153 F.3d 1366, 1371 (Fed.
Cir. 1998). Because the record shows that the district court
lacked subject matter jurisdiction over Lowe’s declaratory
judgment claim, we affirm on that ground.
“Subject matter jurisdiction in a declaratory
judgment suit depends upon the existence of ‘a substantial
controversy, between the parties having adverse legal
interests, of sufficient immediacy and reality to warrant
the issuance of a declaratory judgment.’” Dow Jones
& Co. v. Ablaise Ltd., 606 F.3d 1338, 1345 (Fed. Cir.
2010) (quoting MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 127, 127 S. Ct. 764, 166 L. Ed. 2d 604 (2007)).
Whether the district court had subject matter jurisdiction
is a question we review de novo. Prasco, LLC v. Medicis
Pharm. Corp., 537 F.3d 1329, 1335 (Fed. Cir. 2008).
Here, Lowe fails to show that there remains a
substantial controversy between the parties.
Fi rst , Sh ield Ma rk volunt a r i ly d ism issed it s
infringement suit against Lowe with prejudice. It did
so after learning that Lowe had sold few Superior Mark
products and then created a noninfringing redesign.
Second, there was (and still is) only a speculative
possibility that ShieldMark will sue Lowe again for
infringing the ’220 patent claims through sale of Superior
Mark tape; ShieldMark provided Lowe with a covenant
not to sue for past and present infringement of the ’220
54a
Appendix C
patent claims. J.A. 1409. And the district court conditioned
its dismissal on ShieldMark’s continuing consent to the
covenant. Dismissal, slip. op. at 5. See Dow Jones, 606
F.3d at 1348 (“In the case at bar, [patentee’s] covenant
not to sue avowed that” it would not sue “for any acts of
infringement. . . . The covenant therefore extinguished
any current or future case or controversy between the
parties and divested the district court of subject matter
jurisdiction.”).
Still, Lowe emphasizes that, because the covenant
covers only past and present acts, if Lowe decides to
keep selling or manufacturing its original Superior Mark
tape in the future, ShieldMark will likely sue again for
infringement of the ’220 patent claims. Lowe also points
out that “ShieldMark has yet another continuation
application pending,” and that it is “more probable than
not” that ShieldMark will sue Lowe for infringement once
that patent issues. Appellants’ Br. 33.
Lowe’s arguments are unpersuasive. With respect to
the ’220 patent, ShieldMark has expressly stated that it
will not sue Lowe for future manufacture, sale, or use of
the original Superior Mark tape design. Oral Argument, at
23:06-26:40. With respect to the continuation application,
other than mere speculation, Lowe fails to point to
any evidence that ShieldMark intends to sue Lowe for
infringement if and when the patent issues. Accordingly,
Lowe does not satisfy the “sufficient immediacy”
requirement of MedImmune. At best, Lowe has shown
only that there is a “a hypothetical ‘prospect of a second
lawsuit.’” See Dismissal, slip. op. at 4 (emphasis added).
55a
Appendix C
That is insufficient. A “case or controversy must be based
on a real and immediate injury or threat of future injury
. . . an objective standard that cannot be met by a purely
subjective or speculative fear of future harm.” Asia Vital
Components Co. v. Asetek Danmark A/S, 837 F.3d 1249,
1253 (Fed. Cir. 2016) (quoting Prasco, 537 F.3d at 1339).
Because the record shows that there was no remaining
live controversy, we affirm the district court’s dismissal
of Lowe’s declaratory judgment claim on the ground of
lack of subject matter jurisdiction. 3
III
Finally, we address Lowe’s third argument that the
district court abused its discretion in denying attorney
fees following dismissal of the ’220 patent infringement
suit.
We review a district court’s denial of attorney fees
under 35 U.S.C. § 285 for abuse of discretion. Highmark
Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559,
564, 134 S. Ct. 1744, 188 L. Ed. 2d 829 (2014). “Abuse of
discretion is a highly deferential standard of appellate
review.” Bayer CropScience AG v. Dow AgroSciences
LLC, 851 F.3d 1302, 1306 (Fed. Cir. 2017). “Because the
district court lives with the case over a prolonged period
3. Because we affirm the district court’s dismissal of Lowe’s
declaratory judgment claim for invalidity and unenforceability
of the ’220 patent, we need not address Lowe’s request that we
reverse the district court’s decision and remand with an instruction
to grant summary judgment of invalidity and unenforceability of
the ’220 patent.
56a
Appendix C
of time, it is in a better position to determine whether a
case is exceptional, and it has discretion to evaluate the
facts on a case-by-case basis.” Raniere v. Microsoft Corp.,
887 F.3d 1298, 1308-09 (Fed. Cir. 2018) (quoting SFA Sys.,
LLC v. Newegg Inc., 793 F.3d 1344, 1351 (Fed. Cir 2015)).
Lowe asserts that it was entitled to attorney fees
because ShieldMark engaged in a variety of allegedly
exceptional behavior. Specifically, Lowe contends
that ShieldMark voluntarily dismissed its ’220 patent
infringement suit “only after being confronted with
significant invalidity and unenforceability contentions.”
Appellants’ Br. 55. In other words, according to Lowe,
ShieldMark “ran from the fight.” Id. at 36. ShieldMark
responds that it acted reasonably throughout the litigation
and that Lowe’s allegations are factually unsupported.
We agree with ShieldMark that the district court did
not abuse its discretion in denying attorney fees. Here,
the court considered the record and the parties’ conduct
and reasonably concluded that ShieldMark’s behavior
did not warrant attorney fees. As the court explained,
ShieldMark had a “compelling” reason to voluntarily
dismiss its infringement suit: it learned that Lowe
altered the design of its Superior Mark tape so that it
“arguably no longer infringes” ShieldMark’s ’220 patent.
Dismissal, slip. op. at 2, 4. The court further explained
that ShieldMark did not delay seeking a dismissal. Id.,
slip. op. at 4. Accordingly, Lowe fails to persuade us that
the court abused its discretion in denying attorney fees.
57a
Appendix C
CONCLUSION
We have considered the parties’ remaining arguments
but find them unpersuasive. For the foregoing reasons,
we vacate the district court’s decision granting summary
judgment of noninfringement and remand for further
proceedings consistent with this opinion. We affirm the
court’s dismissal of Lowe’s declaratory judgment claim
and denial of attorney fees.
VACATED-IN-PART, REMANDED-IN-PART, AND
AFFIRMED-IN-PART
Costs
No costs.
58a
APPENDIX D —Appendix
OPINIONDAND ORDER OF
THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF OHIO,
FILED APRIL 21, 2023
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
[Resolving Doc. 199, 203, 218, 223]
CLIFFORD A. LOWE, et al.,
Plaintiffs,
vs.
SHIELDMARK, INC., et al.,
Defendants.
OPINION & ORDER
JAMES S. GWIN, UNITED STATES DISTRICT
JUDGE:
This Court previously granted summary judgment
for Defendants ShieldMark Inc., Advanced Plastics, Inc.,
and Crown Equipment Corporation on Plaintiffs Lowe
and Spota LLC’s patent infringement and Lanham Act
false advertising claims.1 Defendants counterclaim for
attorneys’ fees and costs under § 285 of the Patent Act of
the Patent Act, and alternatively move for fees and costs
under both Fed. R. Civ. P. 37 for discovery sanctions and
the Court’s inherent power to impose sanctions. 2
1. Doc. 191, 219.
2. Doc. 203, 218.
59a
Appendix D
Defendants seek fee awards on three grounds. First,
Defendants say they should receive all fees and costs for
litigating Plaintiffs’ patent infringement claim because
Plaintiff Lowe engaged in inequitable conduct before
the Patent and Trademark Office (“PTO”). Second, in
the alternative, Defendants seek costs and fees incurred
in the patent infringement portion of this action from
December 2021 onwards. In seeking costs and fees,
Defendants argue that Plaintiffs prolonged litigation of the
infringement claim by concealing that in December 2021,
they transferred away their exclusionary rights in the
patent and thereby relinquished their Article III standing.
Third, Defendants ask for fees and costs incurred when
in July 2022, Defendants had to move to seal a Plaintiff
expert report that contained information Defendants had
marked as highly confidential. 3
The Court finds that Plaintiffs acted in bad faith to
hide their loss of standing, and that they violated their
obligation to protect Defendants’ confidential information.
Accordingly, the Court will GRANT IN PART Defendants’
motion as to fees and costs incurred after December 2021
for the patent litigation and for the motion to seal and
will DENY IN PART Defendants’ motion as to patent
litigation fees incurred before December 2021.4
3. Id.
4. After the Court granted summary judgment for Defendants
on Plaintiffs’ Lanham Act claim, Plaintiffs on April 14, 2023, filed a
Notice of Appeal to the Federal Circuit. (Doc. 222). Then, on April 20,
2023, Plaintiffs asked the Court to clarify whether their appeal was
premature or whether the Court’s Lanham Act order, in combination
with the Court’s previous patent-infringement summary judgment
60a
Appendix D
I.
BACKGROUND
The Court has already summarized the background
of this case in other orders. 5 Briefly, Plaintiffs Lowe and
Spota LLC compete with Defendants in the industrial
floor-tape market. Plaintiffs sued Defendants alleging
that Defendants’ floor tape infringed on Plaintiffs’ tape
patent and that Defendants’ tape did not conform to how
Defendants described the tape in their advertising.
When this litigation commenced, Plaintiff Lowe owned
the relevant ’664 patent.6 But in early December 2021,
Lowe sold his patent to Plaintiff Spota LLC (then d/b/a
Insite Solutions North Carolina).7 Then, on December
16, 2021, Spota LLC granted nonparty Insite Delaware
a permanent, irrevocable, non-exclusive and royalty-free
license under the patent. Crucially, because the license
was both “fully transferable” and “fully sub-licensable,” it
eliminated Spota’s power to exclude Defendants under the
patent. Thus, by December 2021, both Lowe and Spota had
relinquished their exclusionary power under the patent
and their standing to enforce the patent. 8
order, created a final, appealable judgment. (Doc. 223). Because this
order disposes of the final, outstanding counterclaim at issue in this
case, the Court DENIES Plaintiffs’ motion to clarify as moot.
5. Doc. 191, 219.
6. Doc. 191 at PageID #: 6282.
7. Id. at PageID #: 6287.
8. Id. at PageID #: 6285.
61a
Appendix D
In discovery, Defendants had previously requested
Plaintiffs produce all ’664 patent ownership and licensing
materials. 9 But despite Plaintiffs’ Rule 26 obligation
to supplement discovery, Plaintiffs did not amend
their discovery responses or production to disclose the
ownership and licensing changes.10 In fact, Plaintiffs
filed a Fourth Amended Complaint that specifically
misrepresented the ownership and licensing status of the
patent.11 As a result, Plaintiffs’ standing issue did not come
to light until around seven months later, when Defendants
independently discovered the ownership change.
When Defendants discovered the sale and confronted
Plaintiffs about it, Plaintiffs initially refused to produce
the new ownership and licensing agreements. Defendants
were forced to move to compel production, and in July
2022, the Court ordered Plaintiffs to file inter alia all
available documents related to any ownership transfer
of the ’664 patent; all documents related to any licensing
of the ’664 patent; and all documents related to Plaintiff
Lowe’s authority to prosecute ’664 patent claims.12 These
productions culminated in Defendants moving for and the
Court granting summary judgment on Plaintiffs’ patent
infringement claim. Because they had transferred the ’664
patent right to exclude, the Court found they lost standing.
9. Id. at PageID #: 6284.
10. Id.
11. Doc. 127 at PageID #: 5259.
12. Doc. 154.
62a
Appendix D
Separately, in July 2022, Plaintiffs publicly filed an
expert report that cited to information from documents
that Defendants had marked as highly confidential and
for Attorneys’ Eyes Only. Defendants moved to seal the
expert report and to implement a protective order,13 and
on July 27, 2022, the Court granted the protective order
motion.14
II. DISCUSSION
A.
Jurisdiction
As a preliminary matter, the Court notes that it has
subject matter jurisdiction to decide Defendants’ fees
counterclaim.
Plaintiffs argue to the contrary, contending that the
Court lost jurisdiction over Defendants’ § 285 counterclaim
when it dismissed Plaintiffs’ patent infringement claim.
But a § 285 counterclaim confers subject matter
jurisdiction independent of an initial patent infringement
claim. Indeed, in H.R. Technologies, Inc. v. Astechnologies,
Inc., the Federal Circuit held that a district court that
dismissed a plaintiff’s patent infringement suit for lack
of standing had erred in also dismissing the defendant’s
counterclaims for § 285 attorneys’ fees.15
13. Doc. 162, 172.
14. Doc. 174.
15. 275 F.3d 1378, 1386 (Fed. Cir. 2002).
63a
Appendix D
The panel in Astechnologies wrote:
The standing defect, however, had no effect
on the remaining counterclaims. Regardless
of patent ownership, it was not improper for
[defendant] to assert the counterclaims of
unfair competition, tortious interference with
business relations, and section 285 attorney fees
against [plaintiff].16
Thus, the Court keeps jurisdiction to hear Defendants’
fees counterclaim.17
16. Id. Several district courts have found that they cannot award
fees under § 285 to a party who obtains a dismissal without prejudice,
because dismissal without prejudice is not final and does not render
the moving party a “prevailing party.” See, e.g., Waterblasting
Techs., Inc. v. Blasters, Inc., 2018 U.S. Dist. LEXIS 20262, 2018 WL
791263 (M.D. Fla. Feb. 7, 2018); Polyzen, Inc. v. Radiadyne, LLC,
2017 U.S. Dist. LEXIS 181680, 2017 WL 5005990 (E.D.N.C. Nov. 2,
2017). These cases are not relevant here because the Court’s patent
summary judgment order dismissed Plaintiffs’ patent infringement
claim with prejudice after finding their standing issue incurable.
17. Plaintiffs bafflingly have repeatedly cited to Astechnologies
to support their argument that the Court lacks jurisdiction over
Defendants’ fees claim. (Doc. 208 at PageID #: 6704; Doc. 223 at
PageID #: 7012, n. 1). As demonstrated above, Astechnologies
directly contradicts Plaintiffs’ position. See also Highway Equip.
Co. v. FECO, Ltd., 469 F.3d 1027, 1032-33 (Fed. Cir. 2006) (“Highway
Equipment first argues that the district court erred in retaining
jurisdiction over FECO’s request for attorney fees under 35 U.S.C.
§ 285 because, once Highway Equipment gave FECO a pre-verdict
covenant not to sue on the patent infringement issues, the court
lost Article III subject matter jurisdiction over the patent-based
fee request. We disagree. Under our precedent, the district court
64a
Appendix D
B. Timeliness
The Court also finds that Defendants’ fees motion
was timely filed.
Fed. R. Civ. P. 54(d)(2)(B) directs parties to file
motions for attorneys’ fees no later than 14 days after
entry of judgment. Plaintiffs argue that Defendants’
motion is untimely because Defendants should have moved
for fees within 14 days of the Court granting partial
summary judgment for Defendants on Plaintiffs’ patent
claim on August 23, 2022.
But unless a court has severed its order under Rule
54(b), an order granting only partial summary judgment
is not a final judgment that triggers the 14-day window.18
Plaintiffs repeat an argument that this Court and the
Federal Circuit have both already rejected, namely that
the Court severed the patent issue and that its summary
judgment order was a final order. Because this was not
the case, Defendants’ motion is not untimely.
C.
Defendants’ § 285 Counterclaim
1.
Legal Standard
“An award of attorneys’ fees under § 285 is intended
to compensate the prevailing party for costs that it would
correctly retained jurisdiction over FECO’s claim for attorney fees
under 35 U.S.C. § 285.”).
18. DeShiro v. Branch, 183 F.R.D. 281, 284 (M.D. Fla. 1998).
65a
Appendix D
not have incurred but for the conduct of the losing party
and is within the sound discretion of the district court.”19
Awarding fees is a two-step inquiry: the district court
must determine “whether there is clear and convincing
evidence that a case is exceptional,” and if so, “whether
an award of attorney fees is justified.” 20
A prevailing party may prove that a case is exceptional
“by showing: inequitable conduct before the PTO; litigation
misconduct; vexatious, unjustified, and otherwise bad faith
litigation; a frivolous suit or willful infringement.” 21
2.
Inequitable Conduct
Defendants argue that from the outset, Plaintiff
Lowe’s inequitable conduct before the PTO tainted this
litigation.
“Inequitable conduct occurs when a patent applicant
intentionally does not disclose to the PTO information
that is material to their patent application.” 22 Material
information includes “any information that a reasonable
19. Campbell v. Spectrum Automation Co., 601 F.2d 246, 251
(6th Cir. 1979).
20. Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d
1358, 1372-73 (Fed. Cir. 2009).
21. Brasseler, U.S.A. I., L.P. v. Stryker Sales Corp., 267 F.3d
1370, 1380 (Fed. Cir. 2001).
22. M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439
F.3d 1335, 1339 (Fed. Cir. 2006).
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Appendix D
examiner would be substantially likely to consider
important in deciding whether to allow an application
to issue as a patent.” 23 At the summary judgment stage,
courts evaluate inequitable conduct based on whether a
patent applicant (1) knew of highly material information,
(2) knew or should have known that the information was
material, and (3) has not credibly explained why they
withheld that information from the PTO. 24
Here, Defendants argue that Plaintiff Lowe knew and
did not disclose to the PTO that Defendant ShieldMark
used to make a patented, prior art floor tape called
DuraStripe. DuraStripe, like the ’664 tape, is an industrial
f loor tape with unique beveled edges. 25 Lowe was
indisputably familiar with DuraStripe when he applied
for the ’664 patent in 2015: he worked as a DuraStripe
distributor from 2004-2011. 26
Despite his familiarity with DuraStripe, Lowe
submitted minimal information about the tape to the
PTO. He provided a photograph depicting DuraStripe
and Defendant ShieldMark’s current floor-tape product,
Mighty Line, sitting side by side, and he provided a
description of that photograph which read: “Photograph
23. GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir.
2001).
24. Ferring B.V. v. Barr Lab’ys, Inc., 437 F.3d 1181, 1191 (Fed.
Cir. 2006).
25. Doc. 203 at PageID #: 6502.
26. Id.
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Appendix D
showing profiles of two floor-tapes; the left-hand tape
was on sale in the United States prior to April 2004; the
right-hand tape is on sale in 2018.”27 Nothing he submitted
identified DuraStripe by name or patent number.
Lowe argues that he satisfied his obligation to disclose
DuraStripe when he submitted the photograph, and that
he was not required to “interpret” the photograph for
the examiner. He cites to cases finding that a “patent
examiner is capable of independently evaluating the
material before him, so the representations as to how to
interpret that material cannot be the basis for a finding of
inequitable conduct.”28 The Court is skeptical of the extent
to which these cases apply, as they all appear to involve
scenarios where the Patent Office had enough information
to identify the prior art at issue.
Although a close question, the Court nevertheless
does not find that Lowe engaged in inequitable conduct
rising to a level that merits a fee award. Lowe did not
hide the existence of DuraStripe or the possibility of
prior art entirely—he noted to the patent office that the
photograph contained a tape on sale since 2004. Because
there was some limited effort to disclose, Defendants
have not established by clear and convincing evidence that
Lowe intended to and did withhold material information.
27. Id. at PageID #: 6501. Although Lowe first applied for
the ’664 patent in 2015, it was not issued until 2019—hence Lowe’s
submission of a photograph noting that there was a floor tape on
sale as late as 2018.
28. See, e.g., Exergen Corp. v. Brooklands Inc., 290 F. Supp. 3d
113, 124 (D. Mass. 2018) (cleaned up).
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Appendix D
3.
Litigation Misconduct
Even if the Court declines to award Defendants
fees based on inequitable conduct, the Court still has
discretion under § 285 to award Defendants fees based
on other litigation misconduct that the Court finds to be
“exceptional.”
The Court will not repeat the entirety of its previous
summary judgment order. Suffice to say that by December
16, 2021, the day that Plaintiff Spota LLC licensed the ’664
patent to Insite Delaware, Plaintiffs knew that Defendants
had previously requested production of any documents
relating to ownership and licensing of the ’664 patent. 29
They knew that back in July 2019, their only responses
to Defendants’ requests for production on ownership
had been that there were “no responsive documents.” 30
Plaintiffs knew that there now were, in fact, responsive
documents. Finally, Plaintiffs knew that under Fed. R.
Civ. P. 26(e)(1)(A), they had a duty to supplement their
prior discovery responses in a “timely manner.”
Instead, Plaintiffs (1) took no initiative to supplement
their productions; (2) refused to produce the ownership
and license documents when confronted by Defendants;
and (3) filed a Fourth Amended Complaint in which
Plaintiffs explicitly misrepresented to Defendants and to
this Court the status of the patent.
29. Doc. 169-3 at PageID #: 6089.
30. Id.
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Appendix D
Indeed, the Fourth Amended Complaint, filed six
months after the ownership and licensing transfers
occurred, blatantly misrepresented that “Lowe is the
owner of all rights, title, and interest in and to the ’664
patent. InSite is an exclusive licensee under the ’664
patent [...]. Lowe and InSite share rights of enforcement
and recovery under the ’664 patent.” 31
Plaintiffs argue that they did not “hide” Lowe’s sale
of the patent to Spota LLC because the agreement was
publicly available, as evidenced by the fact that Defendants
eventually discovered it. 32
To quote a fellow district court:
How absurd! The Federal Rules do not
shield publicly available documents from
discovery merely because of their accessibility.
A limitation of this nature would lead to patently
absurd consequences. Indeed, it would require
litigants to scour the public domain for nuggets
of information [...]—a task that is as Herculean
as it is nonsensical. 33
31. Doc. 127 at PageID #: 5259.
32. Doc. 220 at PageID #: 6992.
33. Shatsky v. Syrian Arab Republic, 312 F.R.D. 219, 223-24
(D.D.C. 2015). See also Martino v. Kiewit New Mexico Corp., 600
F. App’x 908, 911 (5th Cir. 2015) (“[E]ven if a document is publicly
available or in the opposing party’s possession, a party must still
disclose it under Rule 26(a)(1)(A) to provide notice of evidence central
to its claims or defenses.”).
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Appendix D
And Plaintiffs’ argument is particularly unconvincing
considering Plaintiffs’ explicit misrepresentations.
Plaintiffs not only failed to disclose information that
they had a duty to disclose, but actively misrepresented
to Defendants and to the Court the ’664 patent’s status.
Finally, Plaintiffs argue that it should not have
mattered whether they disclosed the ownership and
licensing transfers because the transfers would have had
no impact on the litigation had this Court not erroneously
determined that Plaintiffs now lack standing. 34 In other
words, Plaintiffs lament that the transfers would have been
irrelevant if only the Court had not found them dispositive.
But the transfers did prove dispositive, and Plaintiffs’
failure to timely disclose those transfers prevented
Defendants from moving for summary judgment sooner.
Thus, Plaintiffs’ actions strongly support an inference
of bad faith and a finding of litigation misconduct. The
Court finds that there is a direct “causal connection” 35
between Plaintiffs’ conduct and the fees and costs that
Defendants incurred in litigating Plaintiffs’ patent claim
from December 2021 onwards, and it will award those
expenses to Defendants.
D.
The Court’s Inherent Power to Sanction
The Court notes that its inherent power to craft
sanctions also serves as an alternative basis to award
34. Doc. 220 at PageID #: 6993.
35. In re Rembrandt Techs. LP Pat. Litig., 899 F.3d 1254, 1280
(Fed. Cir. 2018).
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Appendix D
Defendants the above patent litigation fees. The
“assessment of attorney’s fees is undoubtedly within a
court’s inherent power,” particularly “when a party has
acted in bad faith, vexatiously, wantonly, or for oppressive
reasons.” 36 These inherent powers are not displaced by a
statute’s sanctions scheme, and likewise “can be invoked
even if procedural rules exist which sanction the same
conduct.” 37
E. Fees for Defendants’ Motion to Seal
Defendants ask for the fees and costs they incurred
when they needed to seek the sealing of an expert report
that they say Plaintiffs should have filed under seal in the
first instance. At the time that Plaintiffs filed the report,
there was no protective order in place. But the parties
were subject to—and Defendants say Plaintiffs violated—
the confidentiality-designation and disclosure provisions
in this district’s Local Patent Rule 2.2.
Ordinarily, Fed. R. Civ. P. 37(b) governs discovery
sanctions. But Rule 37(b)(2)(C) only addresses awarding
attorneys’ fees when a party violates a “discovery
order.” The plain language of Rule 37 does not appear
to encompass sanctions for violations of local discovery
rules. Nevertheless, the Court’s inherent power to craft
sanctions “extends to a full range of litigation abuses,” in
part because that power exists to “fill in the interstices”
36. Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111 S. Ct.
2123, 115 L. Ed. 2d 27 (1991).
37. Id. at 46-48.
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Appendix D
that sanctions statutes and rules do not cover. 38 Thus, the
Court will consider whether sanctions under that inherent
power are merited here.
Local Patent Rule 2.2 instructs:
Pending entry of a protective order,
discovery and disclosures deemed confidential
by a party shall be produced to the adverse
party for the eyes of outside counsel of record
only, marked “Attorney’s Eyes Only Subject
to Protective Order.” The discovery and
disclosures so marked shall be used solely for
purposes of the pending case and shall not be
disclosed to the client or any other person.
Despite L.P.R. 2.2’s restrictions on disclosure, Plaintiffs
publicly filed an expert report that disclosed information
Defendants had marked as Attorney’s Eyes Only. 39
Plaintiffs argue that filing the report did not violate
L.P.R. 2.2 because the information disclosed was already
in the public domain. Plaintiffs are correct that some—but
not all—of the information disclosed could be found in
public records.40
38. Id. at 46.
39. Doc. 218 at PageID #: 6911-6912.
40. The Court agrees that a previous litigation had already
disclosed certain of Defendant ShieldMark’s royalty rate terms. But
that earlier filing did not identify the specific licensee who had agreed
to those rates. And, contrary to Plaintiffs’ assertions, ShieldMark
does not appear to have publicly disclosed its exact sales figures.
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Appendix D
But parties are not automatically free to disclose
information marked confidential simply because that
information can also be found in the public domain.41 And
the plain language of L.P.R. 2.2 makes no such exception.
So, the Court will award Defendants fees and costs
arising from litigating Plaintiffs’ disclosure.
F.
Reasonableness of Fee Awards
Once a court determines that a party is entitled to
a fee award, it must determine a reasonable amount to
award.42 The court starts with a strong presumption that
the proper amount is the “number of hours reasonably
expended on the litigation multiplied by a reasonable
hourly rate.”43 But the “product of reasonable hours times
a reasonable rate does not end the inquiry. There remain
other considerations that may lead the district court
to adjust the fee upward or downward,”44 including the
attorneys’ “customary fee[s]”; “the amount involved and
41. See e.g., Doherty v. State Farm Gen. Ins. Co., 2020 U.S.
Dist. LEXIS 87400, 2020 WL 2510642, at *4 (
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