Addressing a sua sponte grant of summary judgment, the U.S. Court of Appeals for the Federal Circuit affirmed a party is not deprived of due process rights when provided a fair opportunity to present its case. Air Turbine Tech., Inc. v. Atlas Copco AB, Case No. 04-1387 (Fed. Cir. Jun. 7, 2005) (Schall, J.).
Two tool manufacturers, Air Turbine Technology (ATT) and ACTAB, a subsidiary of Atlas Copco AB (Atlas), entered into a private brand agreement (PBA). The PBA included the following clause: "AC[TAB] will not exploit ATT’s technology covered by ATT’s patents….This provision is valid for the life of the patent." Until ATT terminated the PBA, Atlas sold its grinder tool (the model TSF06) under the agreement.
ATT subsequently acquired the `346 patent related to an "automatic braking mechanism" for grinders. In the meantime, Atlas had begun selling another grinder tool which it touted as having the same characteristics as the TSF06.
ATT sued Atlas and ACTAB for, inter alia, infringement of the `346 patent, false advertising and breach of contract. The district court granted Atlas’s motion for summary judgment as to the false advertising and breach of contract claims, but the patent infringement claim proceeded to trial. After a final judgment adverse to ATT, the district court denied ATT’s post-trial motion (based on exclusion of proffered expert testimony) for a new trial.
On appeal, ATT challenged the district court’s sua sponte grant of summary judgment on the false advertising claim as a denial of due process. The Federal Circuit, applying Eleventh Circuit law, found ATT had received due process. As the Court noted, in its summary judgment motion, Atlas had put ATT on notice of the critical deficiency, and ATT previously had a "fair opportunity" to present its case in briefs and at hearings. Furthermore, the Court noted ATT had failed to provide evidence establishing a necessary element of a false advertising claim. Thus, summary judgment was proper.
Regarding the grant of summary judgment as to breach of contract, ATT argued that ACTAB had "exploited" ATT’s technology in violation of the PBA by marketing the TSF07—all predicated on the allegation that the new tool infringed the `346 patent. The Federal Circuit noted, however, advertising is not an "exploitation of technology," and the `346 patent could not form the basis of a breach of contract claim because the application for the patent had been filed after termination of the PBA.
Finally, the Court found no abuse of discretion by the trial court in failing to grant ATT a new trial, noting that exclusion of testimony not disclosed in ATT’s expert’s report and exclusion of "expert" testimony from a co-inventor were both proper. As to the latter, the Court noted that having knowledge of the claimed invention does not endow an inventor with "particularized knowledge and experience" of the accused device.
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