Filmtec Corporation v. Hydranautics

67 F.3d 931, 1995 WL 599982
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 23, 1996
Docket94-1034
StatusPublished
Cited by42 cases

This text of 67 F.3d 931 (Filmtec Corporation v. Hydranautics) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Filmtec Corporation v. Hydranautics, 67 F.3d 931, 1995 WL 599982 (Fed. Cir. 1996).

Opinions

Circuit Judge NEWMAN filed a separate opinion in which she concurs in the judgment.

PLAGER, Circuit Judge.

This case addresses the tension between the rights of a patentee seeking a remedy and the rights of a competitor seeking recompense for litigation that is claimed to be anticompetitive and violative of the antitrust laws. The district court denied the alleged infringer’s motion to amend its answer to a complaint of patent infringement. The amendment was for the purpose of adding a counterclaim for antitrust violations. The district court also denied a motion for restitution for losses caused by a wrongful injunction arising out of the original infringement suit. We affirm.

BACKGROUND

This court has already told much of the rather tortuous story of the litigation surrounding this invention. See FilmTec Corp. v. Hydranautics, 982 F.2d 1546, 25 USPQ2d 1283 (Fed.Cir.1992), cert. denied, — U.S. -, 114 S.Ct. 85, 126 L.Ed.2d 53 (1993) (FilmTec v. Hydranautics); see also FilmTec Corp. v. Allied-Signal, Inc., 939 F.2d 1568, 19 USPQ2d 1508 (Fed.Cir.1991) (FilmTec v. Allied). We repeat only what is necessary to understand this phase of the litigation.

In 1977, an inventor named John Cadotte, working for a not-for-profit research corporation called Midwest Research Institute (MRI) on a government-funded project, invented a reverse osmosis membrane used for the desalinization of water.1 Soon thereafter, Cadotte and others established a for-profit corporation, FilmTec, for the purpose of commercially manufacturing reverse osmosis membranes. Cadotte filed for a patent on his membrane, and assigned all his rights in his invention to FilmTec. United States Patent No. 4,277,344 (the ’344 patent) issued to Cadotte.

Hydranautics, defendant-appellant in this case, competes with plaintiff-appellee Film-Tec in manufacturing and selling reverse osmosis membranes. Another competitor is Allied-Signal, Inc. (Allied). FilmTec has sued, separately, both Hydranautics and Al[934]*934lied for infringement of the ’344 patent. It is necessary to describe the parallel litigation between FilmTec and Allied in order to appreciate fully the course of the litigation between FilmTec and Hydranautics.

FilmTec filed suit against Allied first, in April 1988. The suit, filed in the District Court for the District of Delaware, alleged that Allied’s membranes infringed the ’344 patent. FilmTec sought injunctive relief. The suit was subsequently transferred to the District Court for the Southern District of California. In its answer, Allied challenged FilmTee’s ownership of the ’344 patent. The district court issued a preliminary injunction ordering Allied to stop producing its allegedly infringing products pending the outcome of the patent litigation.

Allied appealed the preliminary injunction to this court. In July 1991 this court vacated the preliminary injunction and remanded the case for further proceedings. FilmTec v. Allied, 939 F.2d at 1569, 19 USPQ2d at 1509. Our remand instructed the trial court to look further at the question of whether ownership of the invention was ever in Cadotte. The answer to this question turned on whether FilmTec, as assignee of Cadotte, had acquired any rights in the ’344 patent, a key factor in its entitlement to a preliminary injunction.

Meanwhile, in May 1990, shortly after the District Court had issued its preliminary injunction against Allied, FilmTec sued Hydra-nautics in the Southern District of California, alleging that Hydranautics’ membrane also infringed the ’344 patent. This case was placed before the same judge who was responsible for the proceedings between Film-Tec and Allied. The judge bifurcated the trial of the issues of liability and damages, and in May 1991 conducted a bench trial on the liability issues. As part of its defense, Hydranautics, as did Allied, challenged whether FilmTec’s title to the patent was fatally defective.

In August 1991, now having before it our remand in the Allied litigation, the district court in the Hydranautics case held that FilmTec had good title to the ’344 patent, and enjoined Hydranautics from commercial activity that might infringe or induce infringement. In light of its finding that Film-Tec had title to the ’344 patent, the district court, in the litigation between FilmTec and Allied, reinstated the preliminary injunction barring Allied from manufacturing membranes covered by the ’344 patent. Both Hydranautics and Allied appealed to this court.

In April 1992, while its case was on appeal here, Allied filed in the district court a separate complaint against FilmTec, alleging antitrust violations, specifically that FilmTec was fraudulently using the patent system to monopolize the market for such membranes. Allied also moved to consolidate its antitrust claim with the still pending patent infringement litigation against it, or, in the alternative, to amend its answer in that litigation to counterclaim violations of the antitrust laws.

FilmTec moved to dismiss Allied’s antitrust complaint, arguing that Allied failed to state a claim on which relief could be granted because FilmTec was immune from antitrust liability on the basis of the Noerr-Penning-ton doctrine. See Eastern R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) (Noerr); United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965) (Pennington). In August 1992 the district court denied FilmTec’s motion to dismiss the antitrust claims, and granted Allied’s motion to consolidate the antitrust and patent infringement litigations between FilmTec and Allied. The dispute between FilmTec and Allied was concluded eventually without further involvement by this court.

The appeal taken by Hydranautics from the adverse decision of August 1991 was decided by this court in December 1992. FilmTec v. Hydranautics, 982 F.2d 1546, 25 USPQ2d 1283. We held, for reasons related to Cadotte’s employment at the time the invention was conceived and in light of governing federal statute, that title to the invention was and always had been in the United States, and that FilmTec was without standing to sue on the ’344 patent.

Hydranautics then attempted to follow Allied’s strategy in countersuing for antitrust [935]*935violations. In March 1993 Hydranauties filed in the district court an antitrust suit against FilmTee. Hydranauties’ claim tracked that earlier filed by Allied. Again following Allied’s strategy, Hydranauties moved in the alternative for leave to amend its answer in the infringement litigation in order to raise its antitrust claim as a counterclaim. (Hy-dranautics’ proposal to consolidate its antitrust claim with that brought by Allied became moot when Allied and FilmTee settled.)

FilmTee responded by moving to dismiss the antitrust suit and arguing that the motion to amend by way of counterclaim in the pending patent litigation should be denied. With regard to the counterclaim, FilmTee argued that leave to amend should not be granted because the patent infringement litigation was immune from suit under the Noerr-Pennington

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Bluebook (online)
67 F.3d 931, 1995 WL 599982, Counsel Stack Legal Research, https://law.counselstack.com/opinion/filmtec-corporation-v-hydranautics-cafc-1996.