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Unitherm Food Systems, Inc. And Jennie-O Foods, Inc. v. Swift-Eckrich, Inc. (Doing Business as Conagra Refrigerated Foods)
Citation: 375 F.3d 1341Docket: 03-1472
Court: Court of Appeals for the Federal Circuit; September 14, 2004; Federal Appellate Court
Swift-Eckrich, Inc., operating as ConAgra Refrigerated Foods, appeals a judgment from the U.S. District Court for the Western District of Oklahoma, which followed a jury verdict in favor of plaintiffs Unitherm Food Systems, Inc. and Jennie-O Foods, Inc. The court found ConAgra liable for attempted monopolization and tortious interference with prospective economic advantage. Additionally, the court had previously issued a partial summary judgment declaring U.S. Patent No. 5,952,027 ("the '027 Patent") invalid and unenforceable, dismissing ConAgra's counterclaim for patent infringement.
The appellate court affirmed the district court's conclusions regarding the validity of the '027 Patent based on prior use and sale under 35 U.S.C. § 102(b). It also upheld the jury's findings on tortious interference, agreeing with the court's decision to let the jury determine liability and damages. However, the appellate court found error in allowing the jury to consider Unitherm's antitrust claims, citing a lack of economic evidence to support those claims. As a result, the appellate court affirmed in part, vacated in part, and remanded the case for further proceedings.
The '027 Patent application, filed by ConAgra engineer Prem Singh in 1998, pertained to a method for browning precooked whole muscle meat products and was issued in 1999. In 2000, ConAgra communicated with industry competitors about the patent, warning them of its intent to protect its rights. Unitherm, claiming to have developed a similar process earlier, did not receive these communications but based its lawsuit on the assertion that its President had conceived the method prior to the patent filing. ConAgra later attempted to license the patent but did not secure any licenses.
Jennie-O, a division of Hormel and competitor of ConAgra in the pre-cooked meats sector, received a letter from ConAgra that prompted an investigation into its use of Unitherm equipment at its Montevideo, MN plant. Jennie-O executives concluded that their use of the Unitherm process likely infringed on ConAgra's '027 Patent, which described a method for browning precooked meats. This letter created apprehension about future business with Unitherm. On February 23, 2001, Unitherm and Jennie-O filed a lawsuit against ConAgra, including three significant claims: a declaratory judgment for the '027 Patent's invalidity, a state claim for tortious interference with Unitherm's economic relationships, and a Walker Process claim for antitrust violations under Section 2 of the Sherman Act. ConAgra countered by asserting that Jennie-O infringed the '027 Patent, but the district court ruled in favor of Jennie-O for non-infringement, a decision that ConAgra did not appeal. The district court also addressed the validity of the '027 Patent, which consists of 36 claims. Claims 1 and 20 outline processes for browning precooked meat products, detailing the application of browning liquids and specific heating methods to achieve a desired color and minimal shrinkage. The remaining claims introduce variations on these processes, adjusting factors like heat sources and browning agents.
ConAgra opposed the motion for summary judgment, emphasizing the need for the district court to interpret all disputed claim limitations. However, it did not specify any disputed terms or provide interpretations, largely countering the plaintiffs' claims with general objections. The only term explicitly disputed by ConAgra was "golden brown," which it argued required a separate hearing for proper construction due to page limitations. The district court formally construed "golden brown" based on its plain meaning, concluding that the term was not defined by the patentee and referring to Webster's dictionary for clarification. The court defined "golden brown" as a color description that is a strong brown, yellower and slightly darker than gold brown.
After determining the proper construction, the district court analyzed whether the Unitherm process was the same as the patented process. It found that the '027 Patent described a process that had been on sale and in public use before May 11, 1997, concluding that the patent was issued in error. Consequently, the court granted the plaintiffs' motion for summary judgment declaring the patent invalid and unenforceable, and also granted Jennie-O's motion for summary judgment of noninfringement.
Furthermore, both plaintiffs alleged that ConAgra's actions regarding the '027 Patent violated antitrust laws. ConAgra sought to dismiss Unitherm's claim for lack of antitrust standing and Jennie-O's claim for lack of cognizable antitrust injury. The district court found that the plaintiffs had a viable claim, referencing the Supreme Court's Walker Process decision, which indicates that enforcement of a fraudulently procured patent may violate Section 2 of the Sherman Act, allowing for treble damages under the Clayton Act for injured parties.
The district court determined that Unitherm had antitrust standing due to its direct competition with ConAgra and the potential injuries from ConAgra's threats regarding patent enforcement. Conversely, Jennie-O's antitrust claim was dismissed and not appealed. At trial, the jury received instructions on the relevant market, defined as the browning process from the '027 patent, and the criteria for establishing antitrust injury, which required proof that Unitherm was harmed by ConAgra's actions aimed at monopolization. The jury ruled in favor of Unitherm on the attempted monopolization claim.
In addition to antitrust claims, the court allowed Unitherm to pursue claims of tortious interference and fraud. The jury found ConAgra liable for tortious interference but not for fraud, a decision Unitherm did not appeal. The jury awarded Unitherm $18 million in antitrust damages (including trebled damages) and additional amounts for tortious interference and punitive damages. The district court entered a judgment for $18 million plus interest, and awarded over $1 million in attorneys' fees. ConAgra appealed the decision.
The appeal involves multiple issues, including the standard of review for summary judgment, which the court will assess de novo, viewing facts favorably for the non-movant. The district court had ruled the '027 Patent invalid under 35 U.S.C. § 102(b) due to prior sale and use, with the determination of patent validity under § 102(b) being a legal question dependent on factual findings.
To invalidate a patent under the on-sale bar of 35 U.S.C. § 102(b), an accused infringer must provide clear and convincing evidence of a definite sale or offer to sell occurring over one year before the patent application. The determination of whether a product was placed on sale prior to the critical date is a legal conclusion based on factual findings, with ultimate determinations reviewed de novo, while factual findings are assessed for clear error.
In reviewing the district court's summary judgment of invalidity and unenforceability, the court must consider whether the facts, viewed favorably for ConAgra, present clear and convincing evidence of prior use or sale. Additionally, the court addressed a judgment against ConAgra following a jury finding of antitrust liability on Unitherm's Walker Process claim, applying Federal Circuit law to antitrust claims related to patent infringement suits. The legality of a patentee's actions regarding patent procurement and enforcement, which could affect immunity from antitrust laws, is also reviewed de novo under Federal Circuit law, while the Tenth Circuit law governs non-patent-specific antitrust claim elements.
Antitrust standing is treated as a legal question subject to de novo review, while market definition and antitrust injury require factual determinations based on the "commercial realities" that consumers face. Respondents must show a genuine issue of material fact regarding an illegal conspiracy that caused them injury to survive summary judgment.
For jury verdicts challenged on appeal, the Tenth Circuit limits its review to whether substantial evidence in the record supports the jury's decision, viewing the evidence in the light most favorable to the prevailing party. The jury is responsible for credibility assessments, weighing testimony, drawing inferences, resolving evidence conflicts, and making ultimate factual conclusions. In substantial evidence reviews, the court disregards evidence favorable to the moving party that the jury is not required to believe.
The jury's finding of ConAgra's liability for tortious interference with prospective economic advantage is reviewed under Oklahoma state law, which mandates affirmation of a jury verdict if any competent evidence supports it. This standard remains unchanged even if damages awarded are inconsistent with the liability finding. Regarding claim construction, ConAgra's requests for a Markman hearing do not establish a material fact dispute, as the district court only explicitly construed the term "golden brown," while other terms were presumably undisputed. The court's decision not to construct undisputed claim terms prior to summary judgment is supported by precedent. ConAgra's contention that "golden brown" should encompass a range of specific color measurements from the patent examples conflicts with the district court's reliance on the term's plain meaning from a dictionary, as no specific definition was found in the intrinsic evidence. The court also highlighted that while dictionaries and similar resources help define claim terms, an explicit definition by the patentee or a clear disavowal of claim scope can rebut the presumption of ordinary meaning.
The district court did not reference a dictionary before examining intrinsic evidence to define the term "golden brown." It concluded that the patent holder did not define the term specifically, thus relying on its plain meaning. Subsequently, the court consulted a dictionary to provide a legally precise definition that did not contradict any intrinsic evidence. This reliance on dictionary definitions for claim term construction is permissible, provided it aligns with the patent documents. The district court's plain meaning construction is presumed correct, and ConAgra must show a clear and explicit disclaimer of this meaning to challenge it. ConAgra's attempts to derive numeric ranges from examples do not amount to such a disclaimer, as these examples merely illustrate the commonly understood range of "golden brown." The court noted that importing limitations from examples into claim terms is against established precedent. It emphasized that claims should be interpreted based on their ordinary meanings and that limitations should not be read into claims from the specification or prosecution history. The district court appropriately reviewed all intrinsic evidence before affirming the plain meaning of "golden brown" as understood by one skilled in the art, leading to the affirmation of its claim construction.
ConAgra contends that the district court incorrectly granted summary judgment on the invalidity and unenforceability of the '027 Patent by overlooking several disputed facts. The court, however, relied on undisputed evidence provided by Unitherm, which demonstrated substantial similarities between Unitherm's process and the patented process. This evidence included correspondence, photographs, witness testimonies, and promotional videos, highlighting multiple points of identity.
In 1993, Unitherm showcased its process to several companies, including ConAgra, in Elk Grove, Illinois. The demonstrations involved techniques for removing purge and drying precooked turkey and ham, using Maillose, and employing a RapidFlow circulating air oven to achieve desired browning effects with minimal shrinkage. Notably, the demonstrations fulfilled all limitations of independent Claims 1 and 20 of the patent, which detail methods for browning muscle meats with specific pyrolysis product applications and temperature controls.
Furthermore, Unitherm continued its public demonstrations until the critical date of May 11, 1997, showcasing various combinations of temperatures, dip times, and liquid pickup amounts. These presentations illustrated the variability inherent in the patent claims. Unitherm also produced promotional videos in 1993 and 1996, which featured demonstrations of browning techniques and highlighted the versatility of the process, distributing around 500 copies within the industry.
In 1996, Unitherm produced videos demonstrating the cooking process of whole muscle ham logs and turkey breasts using its RapidFlow oven, which resulted in a desirable golden-brown appearance. Approximately 500 copies of these videos were distributed without confidentiality obligations, providing substantial evidence of prior public use relevant to the '027 Patent's claims. Unitherm also established sales of its RapidFlow ovens and the associated process before the critical date of May 11, 1997, including transactions with Jennie-O, Thorn Apple, Hudson Foods, Plantation, and Foster Farms. Testimony from Jennie-O indicated that the purchased process was capable of preparing surfaces and applying liquid smoke.
ConAgra did not contest the evidence of prior use or sale but argued that unresolved factual disputes regarding the differences between its patented process and Unitherm's process warranted denial of summary judgment. However, ConAgra failed to identify specific disputed material facts. It mischaracterized Unitherm's desire to protect trade secrets as evidence that the Unitherm process was a trade secret and suggested that not all uses of Unitherm's ovens aligned with the patented process.
ConAgra's first argument claimed the district court misinterpreted Unitherm's promotional videos, asserting that Unitherm admitted these did not fulfill all patent claims. Unitherm's own documentation indicated its videos satisfied most claims and rendered others obvious under patent law, failing to create a material factual dispute.
Second, ConAgra pointed to conflicting testimony regarding whether Unitherm's process remained a trade secret in 1998. Unitherm acknowledged its process was not a secret while maintaining nondisclosure agreements, which did not constitute a material dispute.
Lastly, ConAgra referenced a discrepancy regarding the timing of when Unitherm first disclosed the process to it, citing different years (1993 vs. 1995). However, since both dates could invalidate the patent, this did not represent a material factual dispute.
ConAgra challenges the district court's reliance on unclear data sheets from Dr. Syed Hussain regarding Unitherm's 1993 demonstrations, arguing that the court overemphasized their importance without clearly indicating their significance. Hussain's inability to recall whether the Unitherm process produced a 'golden brown' finish is deemed insufficient to create a material factual dispute. ConAgra further claims that the court overlooked triable factual issues by referencing experiments that supposedly did not meet the '027 Patent limitations, yet fails to provide a solid basis for this conclusion. Additionally, ConAgra cites testimony from a Hudson executive regarding Unitherm's sale of products, arguing the witness lacked detailed knowledge of the process, and references unclear handwritten documents. However, ConAgra does not establish that these points create a material dispute.
Ultimately, Unitherm's evidence convincingly demonstrated that its process satisfied all limitations of the '027 Patent, while ConAgra's evidence did not establish any material factual disputes. The district court correctly ruled that the undisputed facts from Unitherm's demonstrations and sales constituted clear and convincing evidence of prior use and sale, leading to the conclusion that the '027 Patent is invalid and unenforceable under 35 U.S.C. § 102(b).
In considering ConAgra's appeal regarding the jury verdict, the elements of a Walker Process claim are outlined, alleging that ConAgra sought to enforce the '027 Patent through fraudulent means, which would negate its antitrust immunity. If ConAgra can demonstrate good faith compliance with patent laws, it may retain its antitrust exemption. The query into ConAgra's antitrust immunity is merely the beginning of a broader antitrust examination.
To establish a violation under Section 2 of the Sherman Act regarding a patent claim, it is essential to define the relevant market to assess the defendant's potential to harm competition. Without this definition, measuring the impact on competition is impossible. The patented process may not represent a relevant market if effective substitutes exist that do not infringe on the patent, which also pertains to proving damages.
Unitherm must demonstrate several elements to succeed in its Walker Process claim against ConAgra: (1) ConAgra attempted to enforce the '027 Patent; (2) the patent was obtained through fraudulent means from the PTO; (3) this enforcement threatened competition within a relevant antitrust market; (4) Unitherm incurred antitrust damages; and (5) all other aspects of attempted monopolization are satisfied.
ConAgra contests the jury’s verdict, arguing Unitherm failed to present sufficient evidence for key elements of its claim, including the relevant antitrust market and standing. Unitherm claims to have provided substantial evidence but does not cite specific instances.
Both parties reference Tenth Circuit law, but antitrust claims linked to patent abuses are governed by Federal Circuit law. This principle was established by the Federal Circuit in 1998, emphasizing uniformity in patent law enforcement. The court clarified that while antitrust issues unique to patent law will be governed by Federal Circuit law, other issues will follow the law of the regional circuit, in this case, the Tenth Circuit.
The core of Federal Circuit antitrust law revolves around the conditions under which a patentee's actions in securing or enforcing a patent may lead to antitrust liability. Generally, compliant behavior with patent laws is immune from antitrust scrutiny, but this immunity is not absolute. Historically, the Supreme Court has determined that a patentee who fraudulently obtains a patent forfeits this immunity, aligning with the understanding that patentees cannot extend their patents beyond lawful bounds.
Patent misuse occurs when a patent owner exploits their patent rights in a manner that contravenes public policy, resulting in penalties that prevent recovery of any profits gained during the misuse period until it is purged. The Supreme Court has established that patentees can be held liable if they abuse their dominant position to extend their market control, particularly if the patent was obtained through fraudulent means. A key aspect of this liability is the Walker Process claim, which asserts that a patentee who procures a patent fraudulently cannot claim antitrust immunity and may face treble damages for monopolistic actions taken under the fraudulent patent. This claim is limited to cases involving intentional fraud in patent acquisition, and it highlights the tension between protecting patent rights and enforcing antitrust laws. The determination of activities that can strip patent immunity is specific to patent law and should not be interpreted variably across different circuit courts. Consequently, the Federal Circuit focuses on identifying the behaviors that can lead to such a loss of immunity in the context of antitrust liability.
A patentee's behavior is evaluated under Federal Circuit law to determine if it constitutes an appropriate attempt to procure or enforce a patent. If deemed appropriate, the antitrust inquiry concludes. Conversely, if the behavior is inappropriate, further examination under regional circuit law is required. In the case of ConAgra's acquisition of the '027 Patent, Unitherm's allegations differ from standard Walker Process claims as they are presented as ancillary to a Declaratory Judgment Action rather than a counterclaim in a patent infringement case. Traditionally, antitrust claims seeking to strip a patentee of antitrust immunity arise as counterclaims. However, the rationale for Walker Process claims indicates that ancillary claims should be treated similarly to counterclaims. A Walker Process claim is based on a patent procured through fraud, yet a plaintiff can pursue a Declaratory Judgment Action for patent invalidity without evidence of enforcement. The assessment of the defendant's conduct must consider the "totality of the circumstances" to establish reasonable apprehension for jurisdiction in a Declaratory Judgment Action. If a defendant's actions only involve patent acquisition without further enforcement, no apprehension exists, protecting inactive patent holders from frivolous litigation. The standards for jurisdiction in a Declaratory Judgment Action of patent invalidity also set the baseline for "enforcement" needed to support a Walker Process claim for attempted monopolization. The conclusion drawn from the facts indicates that the plaintiff failed to establish jurisdiction for a declaratory judgment and that the defendant did not act to enforce its patent.
In the case of Unitherm's Walker Process claim against ConAgra, it is alleged that ConAgra enforced a patent obtained through fraudulent means with respect to the U.S. Patent and Trademark Office (PTO). The legal framework for Walker Process fraud is based on common law fraud, which includes five elements: (1) a material misrepresentation, (2) the falsity of that representation, (3) intent to deceive or reckless disregard for the truth, (4) justifiable reliance on the misrepresentation by the deceived party, and (5) injury resulting from that reliance. The first element involves ConAgra's claim that Prem Singh, the inventor, represented to the PTO that he had not publicly used or offered the claimed process for sale prior to May 11, 1997. Although direct evidence of this representation is lacking, it is assumed Singh, as the named inventor, reviewed and signed the necessary documents, as required by patent regulations. It is acknowledged that Singh, as a ConAgra employee, assigned the patent to the company, and both he and other ConAgra personnel were aware of demonstrations of the Unitherm process. Under agency law, ConAgra could be held liable for Singh's representations if they were authorized or within Singh's capacity as an agent of the company.
Singh filed his patent application while employed by ConAgra, assigning the rights to the company, which establishes potential liability for damages due to Singh's misstatements. The facts indicate that David Howard invented the process claimed in the '027 Patent before 1993 and had used and sold it multiple times, thus invalidating the patent under § 102(b). Proving ConAgra's intent to deceive the PTO is challenging, but substantial circumstantial evidence suggests a reckless state of mind equivalent to intent, supporting the intent element of common-law fraud. Intent does not require direct evidence, but rather can be inferred from the applicant's conduct and the surrounding context. To meet the burden of proof, Unitherm must provide clear and convincing evidence that ConAgra intended to mislead the PTO, a claim contested by ConAgra on appeal. Unitherm presented evidence of browning demonstrations conducted for ConAgra, with key witness Syed Hussein acknowledging Singh's presence during these events, indicating that ConAgra was aware of the prior uses of the process.
Unitherm presented substantial evidence of demonstrations conducted for ConAgra from 1995 to 1997, including testimony from Arnold Mikelberg, who invited David Howard to showcase his process, leading to further testing and discussions. Communications, such as a fax from Unitherm on April 25, 1996, containing schematics for a browning line, reinforced their claims. A letter from Howard on April 21, 1997, highlighted that he had sold the process to four competitors and sought to encourage ConAgra to proceed, indicating ConAgra's awareness of prior sales and demonstrations. Despite ConAgra's challenges to the credibility of Unitherm's documents and witness recollections, the jury was entitled to accept Unitherm's evidence and reject ConAgra's assertions. The jury reasonably concluded that Singh was aware his invention mirrored Unitherm's process, which had been pitched to ConAgra since 1993, and that he intended to mislead the PTO regarding his status as the original inventor. The PTO's reliance on Singh's misrepresentations led to the issuance of a patent, which is presumed valid, thus demonstrating that the PTO was defrauded. Additionally, the fraud resulted in harm to both the PTO and the public interest, as the integrity of the patent system is essential to prevent monopolies arising from fraudulent claims.
ConAgra is found liable for Singh's false representation to the Patent and Trademark Office (PTO) regarding the inventorship of a process that had not been used or sold within one year prior to the patent application. David Howard is identified as the actual inventor who had used or sold the process before the critical date. ConAgra's intent to deceive the PTO through these misrepresentations allowed the issuance of the '027 Patent, which has weakened the integrity of the patent system, constituting fraud. Unitherm has satisfied the primary requirement for a Walker Process antitrust claim by demonstrating that ConAgra's patent enforcement was based on such fraud, thus stripping ConAgra of its antitrust immunity and exposing it to liability under Tenth Circuit law.
The focus of Federal Circuit antitrust law is whether conduct related to patent procurement or enforcement can revoke a patentee's antitrust immunity. ConAgra contests Unitherm's standing, asserting that an antitrust plaintiff must show not only direct harm from wrongful behavior but also that such behavior restrained competition. Unitherm argues that ConAgra's actions qualify for both antitrust and tort claims, exemplified by extreme cases like a monopolist sabotaging a competitor.
To establish antitrust standing under Tenth Circuit law, Unitherm must prove it suffered an "antitrust injury," defined as harm that antitrust laws aim to prevent. Relevant factors for evaluating this standing include the connection between the antitrust violation and the harm, the defendants' intent, whether the injury falls within antitrust damages' scope, the directness of the injury linked to the violation, the speculative nature of claimed damages, and the risk of duplicative recoveries.
Unitherm successfully established all six factors required for antitrust standing under Tenth Circuit law, indicating that ConAgra's enforcement of the '027 Patent impaired Unitherm's sales, demonstrated improper intent through fraudulent actions towards the PTO, and that antitrust laws provide remedies for diminished competition. Furthermore, the enforcement of the patent was shown to reduce competition, and while damage calculations are feasible, Unitherm still failed to present concrete evidence supporting its market definition and the claim of antitrust injury. Defining the relevant market is a factual matter for the jury, but Unitherm's evidence was insufficient to substantiate its proposed market definition or demonstrate antitrust injury. Under the Sherman Act, claims of attempted monopolization require proof of a relevant market, intent to monopolize, anticompetitive conduct, and a likelihood of success. The definition of the market relies on the availability of substitutes and economic evidence. If Unitherm's economic evidence had been adequate to persuade a reasonable jury, the antitrust claim would proceed; however, if it was insufficient, the case should not have reached the jury. The court will assess the sufficiency of the economic evidence provided by Unitherm, including testimony from Dr. Mangum regarding the lack of substitutes for the patented process.
Mangum's testimony fails to support Unitherm's definition of a relevant market. He defined the market as the process of browning precooked whole muscle products using a browning agent, assuming the patented process and the Unitherm process were identical based on the court's summary judgment ruling. Consequently, he equated the scope of the '027 Patent with the relevant antitrust market. Mangum identified seven unique technical benefits of the patented process, asserting no substitutes exist due to this combination, but also claimed that pre-cooked turkeys made with the patented process compete with those made without it at the retail level, yet not at the wholesale level, without clarification.
Mangum did not address the distinction between technological and economic substitution, which is crucial for market definition in antitrust analysis. The record lacks evidence on whether customers would switch to other processes in response to a price increase. Defining a relevant market requires a narrow approach that excludes products with limited substitutability. Mangum's focus on technological rather than economic substitutability undermines his market definition, as economic evidence suggests otherwise, such as ConAgra's failure to attract licensees, indicating a lack of pricing power. Market power is defined as the ability to raise prices and restrict output, and Mangum's reliance solely on technological aspects results in an inadequate economic foundation for his proposed market. Additionally, he acknowledged ignorance of any sales of the defined process outside of oven sales.
Mangum testified that there has been no transaction in the proposed relevant market he identified, which relates to a specific browning process. He did not clarify the connections between this market, the broader market for browning processes, and the market for ovens that use these processes. His refusal to discuss the relationship between the bundling of the browning process with an oven and the pricing of ovens undermines the narrow market definition posited by Unitherm for its antitrust claim. Mangum's testimony lacked substantive economic analysis and essentially relied on a tautology regarding ConAgra's "dangerous probability of success" in enforcing a patent, which he equated with attempts to enforce the patent itself.
In addressing antitrust injury, Mangum referenced Dr. Kinrich's analysis, which was premised on a hypothetical favorable jury verdict for Unitherm against Swift-Eckrich. However, Kinrich failed to differentiate between damages caused by ConAgra's alleged antitrust violations and other potential liabilities. As a result, neither Mangum nor Kinrich established a causal link necessary for proving antitrust injury, a critical requirement that the judge emphasized to the jury.
Overall, Unitherm did not provide adequate economic evidence to support its defined relevant antitrust market or other components of its Section 2 claim. The expert's testimony was largely conclusory, equating market definition to patent possession without proper market analysis, and conflating unsuccessful royalty collection attempts with a dangerous probability of success. Consequently, the court vacated the judgment against ConAgra for antitrust liability and the associated damages. Additionally, ConAgra appealed the jury's verdict on tortious interference with prospective economic advantage, a state law claim.
The Oklahoma Supreme Court outlines the principles of tortious interference with business relations, emphasizing the right to conduct lawful business without unlawful interference. Malicious interference constitutes an actionable wrong. Distinctions are made between interference with prospective economic advantage and contractual relationships. Key elements of tortious interference include: the existence of a valid business relationship or expectancy, the interferer's knowledge of this relationship, intentional interference causing a breach or termination, and resultant damages.
In the case involving Unitherm and ConAgra, Oklahoma law required Unitherm to demonstrate a reasonable expectation of future profits and that ConAgra intentionally interfered with this expectation. Testimonies from Unitherm's President and a salesman indicated anticipated profitable sales, while an expert presented evidence of significant business decline correlating with ConAgra's patent application. This evidence supported a reasonable jury's conclusion that Unitherm had a valid business expectancy and that ConAgra's actions constituted intentional interference.
The jury's findings, backed by competent evidence, led to an affirmation of liability for tortious interference and the associated damages. Additionally, the district court's ruling that the '027 Patent was invalid under 35 U.S.C. § 102(b) was upheld, confirming the jury's decision on tortious interference was appropriately allowed to proceed.
The district court's judgment against ConAgra for violating Section 2 of the Sherman Act is vacated due to the lack of economic evidence supporting Unitherm's antitrust claims. All associated damages are also vacated, and the case is remanded for further proceedings. Each party is responsible for its own costs. The excerpt explains that patent law affects antitrust claims, indicating that while a patentee may have antitrust immunity for certain behaviors, this immunity does not extend beyond the patent's monopoly. The Sherman Act imposes strict limits on activities by patent owners, and the resolution of disputes involving antitrust claims may depend on the interplay between federal patent law and regional circuit law. The excerpt references relevant statutes, including the Clayton Act, and emphasizes that the prosecution history is significant in proving claims of fraud against the Patent and Trademark Office (PTO).
The prosecution history serves as the primary record of the communications between the patentee and the PTO, providing critical evidence of the patentee's representations. In this case, the prosecution history was not included in the record by either party, forcing the plaintiffs to rely on circumstantial evidence through inferences and presumptions. The presumption of validity suggests the Examiner deemed the patent valid upon issuance. Regulations required inventor Singh to sign an oath affirming his inventorship, thus implying he represented himself as the original inventor to the PTO.
ConAgra did not renew its motion for judgment as a matter of law (JMOL) after the verdict, which Unitherm argues constitutes a waiver of ConAgra's right to challenge the sufficiency of evidence supporting the jury's antitrust verdict. The Federal Circuit mandates that a 50(b) motion is necessary to preserve such arguments for appeal in patent law cases. For antitrust issues, like market definition, regional circuit law applies. In the Tenth Circuit, failure to file a post-verdict JMOL does not bar an appeal on evidence sufficiency, provided that a motion for directed verdict was made prior to jury submission. However, without a 50(b) motion, the court cannot enter judgment for ConAgra, leaving only the option of a new trial and the ability to vacate the jury's verdict in favor of Unitherm. A claim for tortious interference under state law requires proof of bad faith, which is preempted by patent law if absent. Nonetheless, under Tenth Circuit law, ConAgra preserved its appeal rights by moving for directed verdicts at appropriate stages, despite not filing a post-verdict JMOL.