Arctic Cat Inc. v. Bombardier Recreational Prods., Inc.
Arctic Cat Inc. v. Bombardier Recreational Prods., Inc.
Opinion of the Court
THIS CAUSE is before the Court upon Defendants Bombardier Recreational Products, Inc. and BRP U.S. Inc.'s (together, "BRP") Motion for Summary Judgment and Memorandum of Law, ECF No. [307] ("BRP's Motion"), filed on June 1, 2018 and Plaintiff Arctic Cat, Inc.'s ("Arctic Cat") Sealed Motion for Summary Judgment, ECF No. [310] ("Arctic Cat's Motion"), also filed on June 1, 2018. The Court has reviewed the Motions, the materials filed in support and opposition, record, and the case law, and is otherwise fully advised.
I. The Federal Circuit Mandate
The Court writes for the parties and assumes familiarity with the procedural and factual background of this patent infringement case. On March 19, 2018, the Federal Circuit issued its mandate in the appeal of this matter following a jury trial. ECF No. [274]; see also Arctic Cat Inc. v. Bombardier Recreational Prod. Inc. ,
In reviewing the issue of marking, the Federal Circuit held that "an alleged infringer *1241who challenges the patentee's compliance with § 287 bears an initial burden of production to articulate the products it believes are unmarked 'patented articles' subject to § 287."
The Federal Circuit found, however, that once BRP had satisfied this burden of production, the Court should have required the patentee, here, Arctic Cat, to prove compliance with § 287(a). "Arctic Cat, therefore, did not have a fair opportunity to develop its case regarding the Honda PWCs at trial."
After issuance of the mandate, the Court entered an order requiring the parties to advise the Court whether the parties believed any additional discovery was necessary, and whether the parties planned to file any pretrial motions. In addition, the Court required the parties to submit concise statements of the issues remaining for remand. See ECF No. [275]. The parties thereafter complied, filing the Joint Scheduling Report, ECF No. [290]; the Concise Statement of Issues filed by Arctic Cat, ECF No. [291]; and the Concise Statement of Issues filed by BRP, ECF No. [293]. Meanwhile, Arctic Cat filed a Sealed Motion for Entry of Modified Judgment and Execution of Partial Judgment, ECF No. [284] ("Judgment Motion"). The Court set a briefing schedule for the Judgment Motion, ECF No. [286], and BRP filed an opposition to the Judgment Motion on April 23, 2018, ECF No. [292]. Arctic Cat replied on April 30, 2018. ECF No. [295]. On May 11, 2018 BRP filed a Motion for Protective Order Regarding Plaintiff's Notice of Deposition, ECF No. [298] ("Motion for Protective Order").
Four days later, the Court entered an order ruling on all pending motions and setting a trial schedule based on the parties' representations in the Joint Scheduling Report and the Concise Statements of Issues. ECF No. [300] ("Omnibus Order"). In the Omnibus Order, the Court noted that the Federal Circuit found that "the only dispute between the parties is whether any of the Honda PWCs was covered by the patent claims at issue." Arctic Cat Inc. v. Bombardier Recreational Prod. Inc. ,
II. LEGAL STANDARD
The standard of review for cross-motions for summary judgment does not differ from the standard applied when only *1242one party files a motion. See Am. Bankers Ins. Grp. v. United States ,
The moving party shoulders the initial burden to demonstrate the absence of a genuine issue of material fact. See Shiver v. Chertoff ,
As before the Court here, "cross motions for summary judgment may be probative of the nonexistence of a factual dispute, but this procedural posture does not automatically empower the court to dispense with the determination whether questions of material fact exist." Georgia State Conference of NAACP v. Fayette Cty. Bd. of Comm'rs ,
III. THE MOTIONS
a. BRP's Motion for Summary Judgment
BRP moves for summary judgment to preclude Arctic Cat from seeking any damages *1243prior to the filing of this action on October 16, 2014 based on Arctic Cat's failure to mark the products at issue and failure to provide actual notice pursuant
Second, BRP argues that based on stipulations entered into by the parties before trial, there is no genuine issue of material fact regarding both constructive and actual notice.
(1) "On or about February 15, 2002, Arctic Cat and Honda entered into a license agreement that included ... both the '545 Patent and the '969 Patent";
(2) Arctic Cat "agreed to a license that did not include a marking requirement";
(3) Honda sold fourteen models of Aquatrax PWCs in the United States;
(4) Arctic Cat "did not make any effort to ensure Honda marked the PWCs that it sold with the patent number of the '545 Patent, '969 Patent, or any related patents."
(5) Arctic Cat "first gave BRP actual notice of infringement of the '545 Patent and the '969 Patent on October 16, 2014, when it filed its complaint in this lawsuit."
In opposition, Arctic Cat makes two arguments asserting that it should not be limited to damages as a matter of law to those incurred after October 16, 2014. First, Arctic Cat urges that BRP's Motion must be denied as Arctic Cat is entitled to damages from the date that Honda stopped selling the unmarked PWCs, that is, September 6, 2013. ECF No. [317] at 5. Arctic Cat argues that during the period between September 6, 2013 and October 16, 2014, Arctic Cat could not have violated Section 287's marking requirement since Honda sold no unmarked products. Thus, Arctic Cat is due damages during this period because there was no marking violation.
b. Arctic Cat's Motion for Summary Judgment
Arctic Cat also moves for summary judgment arguing that there are no genuine issues of material fact regarding its entitlement to pre-suit damages on two separate theories which mirror its theories in opposition to BRP's Motion. First, Arctic Cat argues that even if it failed to comply with the marking requirements of Section 287 and even if it did not give *1244actual notice of the infringement to BRP until October 16, 2014, Arctic Cat is due all its pre-suit damages from October 2008 onward based on the jury's finding of willfulness. In making this argument, Arctic Cat argues that the Federal Circuit's decision in Amsted Industries Inc. v. Buckeye Steel Castings Co. ,
In the alternative, Arctic Cat argues that it is entitled to is pre-suit damages from September 6, 2013 onward-the date on which Honda stopped selling the unmarked PWCs-because after that date, there was no longer any products to be marked and therefore no need to comply with the marking requirements of Section 287.
BRP opposes Arctic Cat's Motion for Summary Judgment. ECF No. [314]. First, it argues that the Court should reject Arctic Cat's "invitation to ignore controlling law and Arctic Cat's own binding stipulation" in order to find that Arctic Cat is due all its pre-suit damages from October 2008 onward. Id. at 5. Further, BRP argues that Arctic Cat cannot avoid the marking requirements of Section 287 because Honda ceased to sell the unmarked PWCs. Rather, once the unmarked products are produced, BRP argues that the only cure is actual notice, which the parties stipulated occurred on October 16, 2014.
IV. THE MATERIAL UNCONTROVERTED FACTS ON REMAND
While the parties have filed lengthy motions in support of their cross motions for summary judgment, their Statements of Material Facts are brief and tailored to the narrow marking issue before the Court on remand. The following facts are not in dispute unless stated otherwise:
Arctic Cat developed an off-throttle steering system for PWCs and secured seven patents for the technology in 1999, including two at issue in this case, the '545 and '969 patents. ECF No. [310] at 8-9; ECF No. [326] at 6. On February 15, 2002, Arctic Cat entered into a licensing agreement with Honda that included the '545 and '969 patents. ECF Nos. [308] ¶¶ 1-2; [318] ¶¶ 1-2. The license agreement contained no marking requirement, and Arctic Cat made no effort to ensure that Honda marked the PWCs that it sold. ECF Nos. [308] ¶ 4; [318] ¶ 4. Thereafter, Honda sold at least fourteen models of PWCs in the U.S. which practiced the '545 and '969 patents. ECF Nos. [308] ¶¶ 2, 14; [318] ¶¶ 2, 14. These personal watercrafts were unmarked. ECF No. [310] at 9. Arctic Cat states that Honda stopped manufacturing in 2009 the unmarked personal watercraft which practiced the patents and stopped selling them in 2013. ECF No. [311] at 2. Arctic Cat further states that Honda has no unsold inventory of these personal watercrafts. Id. BRP disputes that Honda stopped manufacturing the PWCs that practiced the patents at issue in 2009, that Honda ceased selling those PWCs in 2013, and that Honda has no unsold inventory of these PWCs.
Although Arctic Cat discussed licensing the patents with BRP, the parties never entered into a license agreement. Id. at 10. In the meantime, BRP developed its own off-throttle steering system that, after a jury trial, was found to have infringed on the '545 and '969 patents. While the record supports that BRP consulted both internally and externally regarding whether its system may have infringed on the '545 and '969 patents, Arctic Cat did not affirmatively communicate to BRP about the alleged infringement until it filed this lawsuit *1245on October 16, 2014. ECF Nos. [308] para 8-9; [318] 8-9; ECF No. [1].
V. ANALYSIS
a. The Marking Statute
A patentee can only recover damages in an infringement suit for those acts of infringement that occurred after the patentee gave the alleged infringer "notice of infringement."
Marking is not mandatory. Rembrandt ,
Actual notice under Section 287(a) requires "an affirmative act on the part of the patentee which both identifies the patentee and informs the defendant of infringement." Amsted Indus. Inc. v. Buckeye Steel Castings Co. ,
Compliance with the marking statute is a question of fact. Maxwell v. J. Baker, Inc. ,
b. Constructive Notice
Under this standard, Arctic Cat is entitled to calculate its damages from when it constructively notified BRP of the patents by marking its products or when it engaged in an affirmative act to notify BRP of the alleged infringement. As to constructive notice by marking, the parties agree that Arctic Cat and Honda entered into a license agreement that included the '545 and '969 patents, and that the license agreement contained no marking requirement. The parties further do not dispute that Arctic Cat made no effort to ensure that Honda marked the PWCs it sold that practiced '545 and '969 patents, and that Honda sold at least fourteen models of unmarked PWCs. On remand, Arctic Cat specifically concedes that it cannot meet its burden to show that the unmarked Honda PWCs identified by BRP do not practice the '545 and '969 patents. As a licensee, the Honda PWCs which *1247practice the patents at issue fall under the marking statute, see, e.g. , Amsted ,
c. Actual Notice
Since Arctic Cat failed to mark the PWCs identified by BRP, Arctic Cat can only recover damages commencing when it provided actual notice to BRP regarding infringement. The parties agree that Arctic Cat first informed BRP of the infringement on October 16, 2014 by filing this lawsuit. The parties further agree that Arctic Cat never provided any affirmative communication or notification to inform BRP of the infringement prior to filing this action. In its statement of material facts, BRP states:
8. Arctic Cat has identified no specific charge of infringement communicated to BRP by any specific accused product or device prior to filing this lawsuit.
9. Arctic Cat has produced no affirmative communication of a specific charge of infringement by a specific accused product or device dated prior to the filing of this lawsuit.
In response, Arctic Cat disagrees with these statements of material fact and clarifies by providing its own material facts:
Arctic Cat has not identified an affirmative communication from Arctic Cat to BRP communicating a specific charge of infringement by a specific accused product or device dated before this suit was filed. But that does not mean that BRP did not have actual notice that its personal watercraft infringed before this suit was filed.
Arctic Cat's material facts end the inquiry. Actual notice under Section 287(a) requires the patentee to provide an "affirmative communication of a specific charge of infringement by a specific accused product or device." Amsted Indus. Inc. v. Buckeye Steel Castings Co. ,
Arctic Cat argues in its Motion and in opposition to BRP's Motion that its meets it burden to show actual notice under Section 287 based on both the Court's rulings and the jury's findings of willful infringement. ECF No. [318] at 2-3. Arctic Cat further points to evidence introduced at trial that BRP knew about the '545 and '969 patents and was aware internally about potential infringement. But the reading of the statute that Arctic Cat urges conflates the patentee-centered inquiry of notice under Section 287(a) with the infringer-centered inquiry of willfulness with regard to liability. Moreover, such a reading runs contrary to binding precedent from the Federal Circuit.
*1248Amsted ,
Arctic Cat argues in the alternative that it is entitled to pre-suit damages beginning on September 6, 2013. Arctic Cat states that from September 6, 2013 to October 16, 2014 it complied with the marking requirement of Section 287(a) because Honda sold no products-marked or unmarked-during that time. However, the binding authority Arctic Cat cites in support of this argument falls into two factually distinct categories: instances where no patented products were produced or sold at all, see, e.g. , Texas Digital Sys., Inc. v. Telegenix, Inc. ,
The Court rejects the extension of Section 287(a) that Arctic Cat urges. Such a holding would run contrary to the statute's purpose to prevent innocent infringement, encourage patentees to give notice to the public that the article in question is patented, and aid the public in identifying whether an article is patented. Rembrandt Wireless Techs., LP v. Samsung Elecs. Co. ,
VI. CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED as follows:
1. Defendants' Motion for Summary Judgment and Memorandum of Law, ECF No. [307] , is GRANTED.
2. Plaintiff's Sealed Motion for Summary Judgment, ECF No. [310] , is DENIED.
3. The parties shall confer and jointly file a proposed modified judgment consistent with this Order by August 24, 2018. Should the parties be unable to agree, Arctic Cat shall file its proposed modified judgment by August 27, 2018. BRP may thereafter file its proposed modified judgment by August 31, 2018 .
4. To the extent not otherwise disposed of, all pending motions are denied as MOOT and all deadlines are TERMINATED;
5. The Clerk of Court shall ADMINISTRATIVELY CLOSE this case.
DONE AND ORDERED in Chambers at Miami, Florida, this 10th day of August, 2018.
Section 287(a) provides in pertinent part as follows:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat", together with the number of the patent .... In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.
Arctic Cat admits as much and argues that this Court should not follow binding precedent. See generally , ECF No. [310] at 7, 15-20.
Reference
- Full Case Name
- ARCTIC CAT INC. v. BOMBARDIER RECREATIONAL PRODUCTS, INC., and BRP U.S. Inc.
- Cited By
- 1 case
- Status
- Published