Issuing a summary order, the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s finding that defamation did not exist when an accused infringer’s patent counsel circulated a letter to customers disclosing the belief that the invention contained in the patent was not conceived of by the patentee. R.H. Murphy Co., Inc. v. Illinois Tool Works, Inc., Case No. 2006-1273 (Fed. Cir., Nov. 8, 2006) (Bryson, J.).
In 1993, a Motorola engineer approached R.H. Murphy seeking a storage for ball grid array devices. The Motorola engineer sent a fax to Murphy suggesting the tray and provided sketches detailing the invention. Murphy accepted the idea and offered co-inventorship to the Motorola engineer, who refused, under the belief that Murphy had not conceived of the invention and should not receive inventorship rights. Ignoring the Motorola engineer, Murphy filed a patent application covering the ball grid array trays in October of 1993. Murphy then offered to sell trays covered by the application to Motorola. Motorola refused to purchase the trays from Murphy and instead purchased the trays from Illinois Tool Works (ITW).
In 2000, ITW’s patent counsel drafted an opinion determining the issued patent to be invalid. The opinion stated that the patent was invalid because ITW had sold very similar products more than one year prior to the effective filing date of the patent and that the invention did not originate with Murphy, but rather with the engineer at Motorola with whom Murphy was working. The opinion was subsequently circulated to customers of ITW, some of which were also customers of Murphy.
In 2005, Murphy filed suit in the district court against ITW alleging patent infringement and defamation based on the circulated letter. With regard to the defamation claim, the district court held that, as a matter of law, the statement questioning the validity due to ITW’s prior sales could not be considered defamatory. The district court held that questioning the validity of the patent was not susceptible to a defamatory meaning "any more that [Murphy’s] accusations of infringement leveled at ITW could be construed to be defamatory."
However, the district court indicated that the statement implying Murphy had stolen the idea from an engineer at Motorola could be considered defamatory. Under controlling law, to find actionable defamation, "there must be publication of a false statement of fact that tends to lower the plaintiff in the esteem of any substantial and respectable group of people." Conversely, a statement of opinion is not actionable, unless it may reasonably be understood to imply the existence of defamatory fact as the basis for the opinion. The district court determined that ITW’s attorney could not be alerted to the statement being a false fact, for in the opinion of the Motorola engineer, Murphy did not conceive of the invention and the Motorola engineer sincerely believed that the invention was his. Accordingly, the district court held that there was no proof that ITW’s attorney, in drafting the opinion, acted with a reckless or negligent disregard for the truth. The district court eventually invalidated the patent based on two prior art trays under 35 USC § 103.
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