Opposition Brief — Astronics Corp. v. Patecell

yo

Supreme Court, U.S.

U.

FILED

OCT 5S (G2

No. 92-396 OFFICE OF THE QLERK

In The

Supreme Court of the United States

October Term, 1992

*

ASTRONICS CORPORATION and

RODGARD CORPORATION,

Petitioners,

V.

THEODORE C. PATECELL and

THE PATECELL CORPORATION,

Respondents.

¢

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

+

Brief In Opposition For the Respondents

THEODORE C. PATECELL AND THE

PATECELL CORPORATION

S

GLENN L. STEPHENSON, Esq.*,

and

LEONARD NicHo.Las FLorio, Esq.

GLENN L. STEPHENSON P.C.

1984 Washington Avenue

Seaford, New York 11783-2248

(516) 826-3600

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLBCT (402) 342-2831

——— —

BEST AVAILABLE COPY:

QUESTIONS PRESENTED FOR REVIEW

Does Rule 36 of the Federal Circuit Court of Appeals,

providing for judgment of affirmance without opin-

ion, deny litigants any fundamental right?

Is the Supreme Court the proper forum for reviewing

a Jury damage award, that was A) upheld by the trial

judge as being supported by “a sufficient quantum

and quality of evidence” and B) affirmed by the Fed-

eral Circuit despite the claims of the petitioner of no

substantial evidence and improper jury instructions?

i

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW........... i

TABLE OF AUTHORITI€-® ...--4 2005050 es sea iii

STATEMENT OF THE (Ape. 3s eee eee 1

SUMMARY OF THE ARGUMENT ................. 3

ARGUMENT. .. . ... «0s 00 cls eae 4

A. RODGARD/ASTRONICS’ PETITION FOR

CERTIORARI IS MERITLESS AND IT SETS

FORTH NO REASONS WARRANTING

REVIEW ON WRIT OF CERTIORARI........ 4

B. RODGARD/ASTRONICS’ PETITION FOR

CERTIORARI ASKS THIS COURT TO VOID

ALL THE FEDERAL APPELLATE RULES

ALLOWING DECISIONS WITHOUT OPIN-

ili

TABLE OF AUTHORITIES

. Page

Cases:

Bio-Rad Laboratories v. Nicolet Instrument, 739 F.2d

renee Rie 1908)... soe. 5

Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d

scirli s sipsnas tia a ae a a ea 5

Ergy Register Co. v. Standard Register Co., 23 F.2d

si ei i) a 5

Furman v. United States, 720 F.2d 253 (2d Cir. 1983)

PRES SHRM SEE Ge SN ASK 4 whan nace, 8, 9, 10

Georgia Pacific Corp. v. U.S. Plywood Champion

Papers, 318 F. Supp. 1116 (2d Cir. 1971), cert.

denied, 404 U.S. 870 (1971)..................0... ,.

Gyromat Corp. v. Champion Spark Plug Co., 735 F.2d

Ber POO Air 1988) cc ivncccees.e.. 5

Lego v. Twomey, 404 U.S. 477 to Se a 8

NLRB v. Amalgamated Clothing Workers of America,

430 F.2d 966 (5th Cir. i Se ae 8, 9, 10

Panduit Corp. v. Stahlin Bros. Fibre Works, 575 F.2d

1152 (6th Cir. 1978).......................0 >, 3, 6, 7

Taylor v. McKeithen, 407 U.S. 191 eI ea 8

United States v. Baynes, 548 F.2d 481 (3d Cir. 1977) ..... 8

STATUTES:

Title 28, United States Code, Section af) 9

RULEs:

Rule of the Supreme Court of the United States

vich ed Baaes CR SES 4

iV

TABLE OF AUTHORITIES — Continued

Page

Rule 36 of the Federal Rules of Appellate Pro-

SAREE NAN AS DT fen ee rea rr ar en pen oe 8

eS See i I oe Su Os reer ate ate eee ae alee Y

Pe ae, ee can hea heads aes ieee 2

Pe es Ne A ag ork crore oc a Cae cana eee a ae 2

a Se a SA ae. RP greene rere ey Eepowed key ae aes RENE 3

RULES OF THE CIRCUIT CouRT OF APPEALS:

ee ee ee ee ee ere ee ere rye 9

MES ATADRCE Ce ac ee eat cea mentees 9

sO cca deer cen Canes 9

aE lke ei ter ahi ree ees 9

Pe AA ae eee 2 hn vee aie eee eee 9

PURPURA ol eee en, ce ue mes 9

PA Oe nck Feels thegane eke sc a eee 9

See Re Ws en hc eorks iden Ca tteaa a uee eee 9

SA RY Ana cea eer RR I Poy un Rt ie 9

ee er eR int Sad whi de Paes eee ee 9

Ses es! Me Oe bees ns wa Ph ee eee i 9

Oe RCE Ob ad yaaa ahs oa eeu Mie ce i, 4,9

STATEMENT OF THE CASE

This action was instituted by Rodgard/Astronics

(petitioners herein) in the United States District Court for

the Western District of New York. Prior to this Suit,

Patecell (respondent herein, and defendant at trial in this

suit) brought suit in the United States Claims Court for

government infringement of his patents. In the claims

court Mr. Patecell alleged infringement of his patents as

the result of United States purchases of a runflat (safety

roller) device manufactured by Rodgard. Rodgard

became aware of the product when Patecell hired them as

a subcontractor to produce the same.

Immediately after Patecell brought suit in the claims

court, Rodgard/Astronics (Petitioners) brought this suit

claiming libel/slander of business title (as the result of

Patecell telling the industry that Rodgard/Astronics was

infringing his patents) and seeking a declaration of

invalidity and non-infringement of Patecell’s patents.

Patecell counterclaimed against Rodgard/Astronics for

fraud, unfair competition (alleging Rodgard misused the

technical trade knowledge, and customer lists that they

obtained from Pactecell while being his subcontractor, by

competing against him at a reduced price). Patecell fur-

ther counterclaimed for patent infringement of several

claims of two separate patents. The matter was tried in

the Western District of New York before a jury from

December 12, 1990 to January 16, 1991, Judge John T.

Elfvin presiding.

Upon conclusion of Rodgard/Astronics case in chief,

the court granted Patecell’s motion for a directed verdict

and dismissed Rodgard/Astronics claims of patent

invalidity. Rodgard/Astronics slander/libel claims and

Patecell’s unfair competition and infringement claims

were submitted to the jury. At the conclusion of Patecell’s

case in chief the court denied Rodgard/Astronics motion

for a directed verdict. This was the first time Rodgard/

Astronics alleged that Patecell had failed to meet the

burden of proof on damages. The court, disagreed and

instructed the jury on damages. The jury found that

Rodgard/Astronics had unfairly competed and infringed

some of the claims of one of respondents’ patents. The

jury held all of the claims of one patent (the unexpired

one) not infringed and found no liability on Rodgard/

Astronics libel/slander claims. The district court subse-

quently denied petitioners’ motions for a judgment not-

withstanding the verdict purusant to Fed. R. Civ. P. 50 (b),

and, in the alternative, for a new trial pursuant to Fed. R.

Civ. P. 59(a). In rendering its decision, the court noted

that “there was a sufficient quantum of evidence which

was before the jury upon which reasonable jurors could

come to the declared conclusion” (Petitioners’ Appendix

6a).!

Petitioners appealed to the United States Court of

Appeals for the Federal Circuit. On appeal Rodgard/

Astronics argued |) The jury as a matter of law, could not

have found infringement of claim 29 of the reissue patent;

Il) the jury award of damages was not supported by the

evidence; or in the alternative Rodgard/Astronics was

entitled to a new trial because of III) insufficient evidence

1 “A” refers to the joint appendix filed in the Federal Cir-

cuit, a copy of which has been filed with the Clerk of this Court.

to support the verdict and IV) improper jury instructions.

Patecell answered the appeal with transcript documenta-

tion of the infringement;? transcript documentation of

each damage element of Panduit Corp. v. Stahlin Bros. Fibre

Works, Inc., 575 F.2d 1152 (6th Cir. 1978);3 and argued that

Rodgard/Astronics failure to comply with Federal Rules

of Civil Procedure 50(b), 59(b) and 51(c) should prohibit

the appeal. The Federal Circuit, five days after oral argu-

ment, issued an order affirming without opinion.

©

SUMMARY OF THE ARGUMENT

Petitioners’ arguments that there was inadequate evi-

dence upon which to instruct the jury, relative to dam-

ages, is without merit. Examination of the trial record and

the case law regarding the determination of damages

clearly indicates that sufficient evidence was presented

upon which the court could instruct the jury in making its

damage award. Furthermore, it is not the function of the

Supreme Court to second guess the jury, the trial judge

and the Federal Circuit in their unanimous rejection of

* Including an admission of Rodgard’s/Astronics expert of

infringement (A726a).

* The four prong test delineated in Panduit Corp., supra 575

F.2d at 1164, required the patent holder to establish: (1) a

demand for the patented product; (2) his marketing and manu-

facturing capability to exploit the demand; (3) the absence of

acceptable non-infringing substitutes; and (4) the amount of

profit which he would have made. Pages 28 through 33 of

Patecell’s brief outlines each element of Panduit with transcript

references.

Rodgard/Astronics claim of insufficient evidence of lost

profits.

Petitioners’ criticism of the court of appeals use of a

summary affirmance pursuant to Federal Circuit Rule 36,

which permits the court to affirm without opinion where

the evidence is sufficient “or” there is no error of law is

not simply meritless, but also is not an issue of dimension

which would warrant the time and attention of this court.

Rodgard/Astronics has not raised any constitutional

issue. Petitioners Rodgard/Astronics, set forth no “spe-

cial and important reasons” for the grant of certiorari, as

described in Rule 10 of the Rules of the Supreme Court of

the United States.

Accordingly, this Court should reject this Petition for

a Writ of Certiorari.

ARGUMENT

A. RODGARD/ASTRONICS’ PETITION FOR CER-

TIORARI IS MERITLESS AND SETS FORTH NO

REASONS WARRANTING REVIEW ON WRIT OF

CERTIORARI

Rodgard/Astronics argue that the Patecells’ proof of

damages presented to the trial court was inadequate

upon which to instruct the jury. Said argument lacks

merit and is not worthy of this Court’s consideration.

Petitioners prefer to ignore the evidence of record of each

element of the four prong lost profit test established in

Panduit Corp.4 They mistakenly argue that Patecell must

introduce evidence of royalties when there is ample cred-

ible evidence of lost profits and mistakenly alleged that

the evidence of reasonable royalty is separate and distinct

from the evidence relating to lost profits. Said position is

contrary to prior holdings of the Federal Circuit.®

Throughout the trial, the evidence elicited clearly

demonstrates more than a sufficient basis upon which the

jury could have based a damage award. The trial testi-

mony of the respondent, Theodore C. Patecell, thor-

oughly established compliance with the test as set out in

7

Panduit. Demand for the Patecell “safety roller” or “run

flat” is evidenced by the fact that Patecell had been

selling safety rollers for 9 years prior to Rodgard’s

8 ; B

4 Supra, at note 2.

° “Although this court has accepted the Panduit standard as

a permissible way to establish entitlement to lost profits, we

have not made that standard the exclusive one for determining

entitlement to lost profits.” Central Soya Co. v. Geo. A. Hormel &

Co., 723 F.2d 1573, n. 5 (Fed. Cir. 1983); Gyromat Corp. v. Cham-

pion Spark Plug Co., 735 F.2d 549, 551 (Fed. Cir. 1984); Bio-Rad

Laboratories v. Nicolet Instrument, 739 F.2d 604, 616 (Fed. Cir.

1984). See also Ergy Register Co., v. Standard Register Co., 23 F.2d

438, 443, (6th Cir. 1928), “In fixing a reasonable royalty, the

primary inquiry, often complicated by secondary ones, is what

the parties would have agreed upon, if both were reasonably

trying to reach an agreement. This must be modified by the

commercial situation, and when the result is to interfere with a

patent monopoly, which the patented was in position to and

aesired to keep, by retaining the entire market to himself, his

compensation for pariing against his will with that opportunity

must take due account of the loss to him of anticipated profits

on the business which the licensees will thus get away from

him.”

———E—————

infringement and most heads of state had them installed

on their limousines.© The manufacturing and marketing

capability is clearly established by the fact that prior to

Rodgard’s infringement, Patecell was the sole supplier to

the world for nine (9) years and had other manufacturers,

other than Rodgard, producing safety rollers on sub-

contract.”? The assertion of an acceptable non-infringing

substitute, namely the “Tyron Band,” was proven to be

erroneous, there was no proof of sales of the tyron band

and there was evidence that the “Tyron Band” was not a

“run flat” device, but was a rim band designed to main-

tain a tire bead.® Lastly, the profit determination was

easily calculable by taking Patecell’s sales price for each

wheel size, less the price he was paying to have it manu-

factured and shipped.’

As noted above, the Panduit test is not the sole

method for damage computation.'° Petitioners further

contended a lack of evidence regarding the royalty claim

and ignore the fact that the first inquiry to be made is of

lost profits. Only if lost profits cannot be credibly shown,

do you move on to a reasonable royalty.

Furthermore, to determine the reasonable royalty, the

loss of anticipated profits that respondent would have

& (A409, A411).

7 (A446a), (A417, A559-560, A614, A640, A646, A739).

8 (A661-662).

9 (A734-742).

10 See note 5, supra.

received but for the infringement is the primary inquiry."

Consequently, respondents’ testimony as to lost profits

would be the basis upon which the royalty determination

would be made. In the face of the extensive evidence

regarding Patecell’s lost profits, petitioners’ argument is

without merit. Patecell’s testimony regarding his cost per

unit (he contracted for the units to be made) was fixed.

His sales price was fixed. The difference, was his profit

per unit. He testified that his only overhead was his

typewriter in his basement. The damage summaries sub-

mitted to the jury contained the cost and Patecell’s estab-

lished sales price for each size and type of insert. The

difference was multiplied by the actual number of respec-

tive units sold by Rodgard. The lost protits were deter-

mined without difficulty by the jury.

B. RODGARD/ASTRONICS’ PETITION FOR CER-

TIORARI ASKS THIS COURT TO VOID ALL THE

FEDERAL APPELLATE RULES ALLOWING DECI-

SIONS WITHOUT OPINION

It is readily apparent that the premise underlying

petitioners’ appeal, is their contention that appellate

11 The Court of Appeals in Panduit, in taking up the issue,

instructed the lower court on remand to consider: “ . . . the

future business and attendant profit Panduit would expect to

lose by licensing a competitor, . . . ” 575 F.2d at 1164. Addi-

tionally, see Georgia Pacific Corp., v. U.S. Plywood Champion

Papers, 318 F. Supp. 1116, 1127 (2d Cir. 1971) cert. denied, 404

U.S. 870 (1971) (“In the hypothetical negotiations, USP would

have been reasonable in taking the position that it would not

accept a royalty significantly less than the profit it was making

by its policy of licensing no one to sell striated fir plywood in

the United States.”).

courts give inadequate consideration when their decision

is not accompanied by a written and published opinion.

That premise has no sound basis in law or in fact.}?

Given its adoption of Appellate Rule 36, it is not

surprising that the Supreme Court has seen no legal

impediment to an appellate court’s decision of an appeal

without opinion.!%

Congress has given the circuit courts of appeals free-

dom to proscribe rules for the conduct of their own

business, consistent with Acts of Congress and the rules

of practice and procedure established by the Supreme

12 “There is no requirement in law that a federal appellate

court’s decision be accompanied by a written opinion.” See

Furman v. United States, 720 F.2d 263, 264 (2d Cir. 1983).

Rule 36 of the Federal Rules of Appellate Procedure, as

prescribed by the Supreme Court, expressly contemplates that

some appeals will be decided without an opinion. That rule

provides, in pertinent part, as follows:

The notation of a judgment in the docket constitutes

entry of the judgment. . . . If a judgment is rendered

without an opinion, the clerk shall prepare, sign and

enter the judgment following instruction from the

court. The clerk shall, on the date judgment is

entered, mail to all parties a copy of the opinion, if

any, or of the judgment if no opinion was written, and

notice of the date of entry of the judgment.

13 “(T]he courts of appeals should have wide latitude in

their decisions of whether or how to write opinions. That is

especially true with respect to summary affirmances.” See Taylor

v. McKeithen, 407 U.S. 191, 194 n. 4, (1972) (Rehnquist, J., dissent-

ing); Lego v. Twomey, 404 U.S. 477, 482 n. 6, (1972) (reviewing

court of appeals’ summary affirmance without comment on its

summary nature). Accord United States v. Baynes, 548 F.2d 481

(3d Cir. 1977); NLRB v. Amalgamated Clothing Workers of America,

430 F.2d 966 (5th Cir. 1970); Furman, 720 F.2d at 265 n. 1.

Court. See 28 U.S.C.S. § 2071(a). Most Courts of Appeals,

have promulgated rules which permit them to decide

cases without full opinions, and provide that the decision

in such cases are not to be published.'*

They have promulgated said rules in recognition of

the fact that they are no longer able to write full opinions

in every case, (due to the large number of filings) and

that the proliferation of published opinions must be

reduced. The use of the summary affirmance, as opposed

to the written decision, does not treat a case as being

unimportant,!5 but only means that the decision of the

Court of Appeals has no precedential value and does not

require a new interpretation of law.'®

14 See First Cir. R. 14; 2d Cir. R. 0.23; 3d Cir. IOP, Ch.6; 4th

Cir. R. 18; 5th Cir. R. 47.6; 7th Cir. R. 35; 8th Cir. R. 47B; 9th Cir.

R. 36-1-36-5; 10th Cir. R. 36.1; 11th Cir. R. 36-1; D.C. Cir. R. 14;

Fed. Cir. R. 36.

15 “(T]he fact that a disposition is by informal summary

order rather than by formal published opinion in no way indi-

cates that less than adequate consideration has been given to the

claims raised in the appeal.” Furman, 720 F.2d 263, 265.

16 See Amalagamated Clothing Workers, 430 F.2d 966, 971

(“our experience, bearing out that of appellate courts generally,

is convincing that in a number of cases there is no real need for

an opinion at all. Where in a given case that is the considered

judicial judgment of three judges comprising a panel, then it is

perfectly obvious that the now limited and precious judicial

resources can be husbanded by a procedure which eliminates

that unnecessary opinion.”); Furman, 720 F.2d 263, 266 (“A great

many cases do not present any new or significant issue for

which there are not ample precedents already in the published

reports. Many lawyers and judges complain that they do not

have enough time to read the opinions now being produced and

published each week, without the addition of a new flood of

opinions that serve no jurisprudential purpose.”).

10

The adoption of rules that permit unexplained affir-

mances represents an attempt to respond to the ever

increasing federal court work load!” and provides the

courts of appeal with the latitude envisioned to maximize

the efficiency of their resources. 18

a

17 See Amalagamated Clothing Workers, 430 F.2d 966, 970

(“we can see it is our duty to exercise imaginative, inventive

resourcefulness in fashioning new methods and in adapting or

modifying older ones, to enable us to at least stay abreast of this

flood tide.”).

18 “(T]he use of summary orders permits judges to devote

more time to the remaining cases that truly merit fully devel-

oped exercises of judicial craftsmanship.” Furman, 720 F.2d at

266.

11

CONCLUSION

For the foregoing reasons, this court should find that

Rodgard’s Petition for Certiorari does not present a claim

of any importance warranting Supreme Court review and

should deny the Petition.

Respectfully submitted,

GLENN L. STEPHENSON, Esq.

Counsel of Record

LEONARD NicHoLas FLorio, Esq.

GLENN L. STEPHENSON P.C.

1984 Washington Avenue

Seaford, New York 11783/2248

(516) 826-3600

Attorney for Respondents

Theodore C. Patecell and

The Patecell Corporation