Info-Hold, Inc. v. Sound Merchandising, Inc.
| Citation | 538 F.3d 448 |
| Decision Date | 18 August 2008 |
| Docket Number | No. 07-4238.,07-4238. |
| Parties | INFO-HOLD, INC., Plaintiff-Appellant, v. SOUND MERCHANDISING, INC., dba Intellitouch Communications, Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Daniel J. Wood, Law Office, Cincinnati, Ohio, for Appellant. Thomas P. O'Brien III, Frost Brown Todd, Louisville, Kentucky, for Appellee.
ON BRIEF:
Daniel J. Wood, Law Office, Cincinnati, Ohio, for Appellant. Thomas P. O'Brien III, Frost Brown Todd, Louisville, Kentucky, for Appellee.
Before: BOGGS, Chief Judge; MOORE and CLAY, Circuit Judges.
Plaintiff, Info-Hold, Inc. ("Info-Hold"), appeals the district court's denial of its Federal Rule of Civil Procedure 60(b) motion for relief from an order, entered pursuant to a Settlement, Release, and License Agreement (the "Settlement Agreement"), dismissing InfoHold's patent infringement action, brought under 28 U.S.C. § 1338 (2000), against Defendant, Sound Merchandising, Inc. ("SMI"), doing business as Intellitouch Communications. Info-Hold contends that relief is warranted because (1) SMI fraudulently induced Info-Hold to enter the Settlement Agreement, and (2) SMI committed a material breach of the Settlement Agreement. For the reasons that follow, we AFFIRM the district court's denial of Info-Hold's Rule 60(b) motion.
Info-Hold and SMI are manufacturers of on-hold message players. On-hold message players are devices that can be connected to a business telephone system to play pre-stored audio messages through that phone system so that a caller can hear the messages when he or she is placed on hold. Info-Hold has secured several patents to protect the technology used in its various on-hold messaging products.
On December 31, 2003, Info-Hold filed a patent infringement action against SMI in the United States District Court for the Southern District of Ohio. As subsequently amended, InfoHold's complaint alleged that SMI had infringed upon Info-Hold's U.S. Patent Nos. 6,272,211 and 6,687,352 by making and selling its own on-hold message players. Info-Hold's amended complaint, however, did not identify which of SMI's message players Info-Hold considered to be patent-infringing.
On January 11, 2005, the district court entered a case management and scheduling order which (1) directed Info-Hold to identify by January 30, 2005, the name and model number of any allegedly patent-infringing products of SMI, and (2) ordered that all non-expert discovery be completed by September 30, 2005. By March 1, 2005, Info-Hold had still not specified which of SMI's products it found to be patent-infringing and the district court issued a second order directing Info-Hold to do so. On March 5, 2005, Info-Hold finally identified SMI's OHP5000 product as the allegedly patent-infringing device.
Several months later, on August 5, 2005, Info-Hold sent SMI its first set of discovery interrogatories, which included the following question:
10. Please describe all products or services offered by Defendant or any companies or business entities owned in whole or in part by Defendant, Michael Sakakeeny, or any business associate of either, that relate to the on-hold messaging industry.
a. Please produce any and all documents related to such products or services.
J.A. at 268. In its September 6, 2005 response to this first set of interrogatories, SMI answered question 10 as follows:
10. ANSWER: SMI objects to this Interrogatory for the reason that the phrase "relate to the on-hold messaging industry" and the term "business associate" are vague and ambiguous, and for the further reason that this Interrogatory is overly broad, unduly burdensome and seeks the discovery of information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Michael Sakakeeny is not a party in this action and does not control SMI. Without waiving and subject to the foregoing objections, and to the extent this Interrogatory can be understood, SMI offers business telephone units and on-hold message players. SMI offers no "services" other than sales-related services in connection with assisting customers select products.
a. RESPONSE: SMI objects to this Request for the reason that it is vague, ambiguous, overly broad and unduly burdensome. As written, this Request would literally require production of every document in SMI's possession concerning its business in some way, without regard to whether such business involves allegedly infringing activity in this action. Without waiving and subject to the foregoing objections, see documents produced herewith bearing production nos. SM 0184—SM 0240 [relating to SMI's OHP5000 and OHP5500 on-hold message players].
J.A. at 268. Not satisfied with this response, on September 14, 2005, Info-Hold filed a motion to compel SMI to answer question 10 by producing all documents that relate to SMI's on-hold messaging products. The following day, the district court addressed this motion in a telephone conference with the parties' counsel, but reserved judgment on it so as "to give [the] parties time to work it out." J.A. at 133. Despite the district court's hope for a mutual resolution of the issue, Info-Hold and SMI did not have any further discussions, either before or after the close of the discovery period, regarding Info-Hold's request for documents concerning SMI's on-hold messaging products. Moreover, as Info-Hold never sought to renew its motion to compel during the pendency of the suit, the district court never issued a ruling on it.
In the meantime, as the patent-infringement action proceeded, an essential component for production of the OHP5000 became unavailable and SMI was forced to discontinue the product. In January of 2006, SMI replaced its OHP5000 product line with a new OHP7000 product line. As introduced to distributors, the OHP7000 came in two configurations, one which enabled the user to select only one message from among a plurality of messages on a disc to play (later labeled as the "OHP7000S"), and another which allowed the user to create a multi-track selection of messages for repeated playback in user-selected order (later labeled as the "OHP7000M").1 While the OHP7000 was available for purchase beginning in January of 2006, Info-Hold appears not to have learned of the existence of the product until March of 2006 when it saw the product on display at a trade show.
On May 16, 2006, Info-Hold and SMI took part in a settlement conference under the supervision of Magistrate Judge Timothy S. Black. After a full day of negotiation, the parties reached an agreement to settle and terminate the litigation. This agreement was subsequently memorialized in the written Settlement Agreement, signed by both parties on June 19, 2006. Among other things, the Settlement Agreement granted SMI a license to make, use, or sell on-hold message players incorporating the technology contained in Info-Hold's patents, and provided that SMI would pay royalties to Info-Hold with respect to certain defined categories of these message players. In particular, the Settlement Agreement classified SMI's on-hold message players as either "Type 1" or "Type 2" depending on their functionality.2 SMI was to pay Info-Hold a $1.00 royalty for each Type 1 player sold and a $5.00 royalty for each Type 2 player sold. In addition to this royalties arrangement, paragraph 17 of the Settlement Agreement prohibited SMI from providing any assistance, monetary or otherwise to other parties against whom Info-Hold might bring patent-infringement actions in the future.3
On June 20, 2006, after both parties had signed the Settlement Agreement, the district court dismissed Info-Hold's patent-infringement claims with prejudice, pursuant to Federal Rule of Civil Procedure 41(a), but retained jurisdiction over the case so as to enforce the terms of and resolve disputes concerning the Settlement Agreement.
On December 12, 2006, following a dispute with SMI regarding royalty payments sent under the Settlement Agreement, Info-Hold filed a motion with the district court seeking interpretation of the Settlement Agreement or, in the alternative, relief from the district court's dismissal order under Rule 60(b). Specifically, Info-Hold requested that the district court interpret the Settlement Agreement as classifying all of SMI's OHP7000 products, including the OHP7000S, as Type 2 players for purposes of royalties collection. Alternatively, Info-Hold argued that it was entitled to relief from the dismissal order under Rule 60(b) because SMI had fraudulently concealed information about its OHP7000 players during the settlement negotiations and because SMI's attorneys had breached the terms of paragraph 17 of the Settlement Agreement.
On July 23, 2007, the district court entered an order denying Info-Hold's motion. With respect to Info-Hold's interpretation argument, the district court found that there was no dispute that SMI's OHP7000S was not a Type 2 player and refused to modify the Settlement Agreement's language so as to bring the OHP7000S within the Type 2 definition. Turning to Info-Hold's Rule 60(b) argument, the district court held that Info-Hold had failed to produce clear and convincing evidence of fraud or misconduct on the part of SMI. Finally, the district court noted that there was insufficient evidence to demonstrate a breach of paragraph 17 of the Settlement Agreement. Accordingly, the district court concluded that Info-Hold was not entitled to relief under Rule 60(b) and denied the motion.
On September 20, 2007, Info-Hold filed this timely appeal. On appeal, Info-Hold has abandoned its argument regarding the interpretation of the Settlement Agreement and has focused solely on the issue of whether the district court erred in failing to grant relief under Rule 60(b).
We review a district court's denial of a Rule 60...
To continue reading
Request your trial
-
In re Pertuset
...(citation omitted). The movant must establish the necessary grounds by clear and convincing evidence. Info–Hold, Inc. v. Sound Merchandising, Inc., 538 F.3d 448, 454 (6th Cir.2008). “Rule 60(b) does not allow a defeated litigant a second chance to convince the court to rule in his or her fa......
-
In re Pertuset, 12-8014
...(citation omitted). The movant must establish the necessary grounds by clear and convincing evidence. Info-Hold, Inc. v. Sound Merchandising, Inc., 538 F.3d 448, 454 (6th Cir. 2008). "Rule 60(b) does not allow a defeated litigant a second chance to convince the court to rule in his or her f......
-
Miller v. Joaquin
...... bears the burden of establishing the grounds for such relief by clear and convincing evidence." Info-Hold, Inc. v. Sound Merchandising, Inc. , 538 F.3d 448, 454 (6th Cir. 2008). Joaquin did not demonstrate that Miller committed fraud or made a misrepresentation, as opposed to disobeying......
-
United States v. Castleman
...Congress intended to incorporate the common-law meaning of a term absent evidence to the contrary. See Info–Hold v. Sound Merchandising, Inc., 538 F.3d 448, 455–56 (6th Cir.2008). Nothing about our decision transgresses that practice. The government asks us to do more than give due respect ......