Counterclaim v. Mulch Etc.

• Decision Date: 07 September 2010
• Docket Number: Nos. 2009-1455, 2009-1479.,s. 2009-1455, 2009-1479.
• Citation: 620 F.3d 1287
• Parties: GREEN EDGE ENTERPRISES, LLC, Plaintiff/Counterclaim Defendant-Appellant, v. RUBBER MULCH ETC., LLC and Rubber Resources, Ltd., LLP, Defendants/Counterclaimants-Cross Appellants, and Groundscape Technologies, LLC, Defendant/Counterclaimant, v. International Mulch Company and Michael Miller, Counterclaim Defendants-Appellees, and Judy Smith and Lee Greenberg, Counterclaim Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

620 F.3d 1287

GREEN EDGE ENTERPRISES, LLC, Plaintiff/Counterclaim Defendant-Appellant,

v.RUBBER MULCH ETC., LLC and Rubber Resources, Ltd., LLP, Defendants/Counterclaimants-Cross Appellants,andGroundscape Technologies, LLC, Defendant/Counterclaimant,

v.International Mulch Company and Michael Miller, Counterclaim Defendants-Appellees,andJudy Smith and Lee Greenberg, Counterclaim Defendants.

Nos. 2009-1455, 2009-1479.

United States Court of Appeals,Federal Circuit.

Sept. 7, 2010.

COPYRIGHT MATERIAL OMITTED.

Joe D. Jacobson, Green Jacobson, P.C., of Clayton, MO, argued for plaintiff/counterclaim defendant-appellant. With him on the brief was Allen P. Press.

Ronald D. Foster, Ronald Foster, P.C., of South Bend, IN, argued for defendants/counterclaimants-cross appellants.

Jennifer E. Hoekel, Senniger Powers LLP, of St. Louis, MO, argued for counterclaim defendants-appellees. With her on the brief was B. Scott Eidson.

Before RADER, Chief Judge, and LOURIE and BRYSON, Circuit Judges.

LOURIE, Circuit Judge.

Green Edge Enterprises, LLC (“Green Edge”) appeals from the decision of the United States District Court for the Eastern District of Missouri granting summary judgment of invalidity of U.S. Patent 5,910,514 (the “'514 patent”) for violation of the best mode requirement. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, No. 4:02CV566, 2008 WL 821695, 2008 U.S. Dist. Lexis 23378 (E.D.Mo. Mar. 25, 2008) (“ Best Mode Op.”). Rubber Mulch and Rubber Resources cross-appeal from the court's dismissal of their claim of trademark invalidity for lack of a case or controversy. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, 509 F.Supp.2d 814 (E.D.Mo.2007) (“ Trademark Dismissal ”). Rubber Resources cross-appeals from the court's dismissal of its Lanham Act claim for failure to prove damages. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, No. 4:02CV566, 2009 WL 1797868, 2009 U.S. Dist. Lexis 53411 (E.D. Mo. June 24, 2009) (“ Lanham Act Dismissal ”). We reverse in whole or in part on all three issues and remand.

Background

A. '514 Patent Claims

Green Edge owns the '514 patent and sued Rubber Mulch and Rubber Resources, among others, for infringement. The '514 patent claims a synthetic mulch that is colored with a “water based acrylic colorant” to imitate natural mulch. For example, claim 1 reads as follows:

1. A synthetic mulch material sized, shaped, and colored to imitate a natural mulch, wherein said synthetic mulch is comprised of:

a) a plurality of rubber particles, with the rubber selected from the group consisting of natural polymers and synthetic high polymers, with said rubber particles having an outer surface designed

and dimensioned to look like natural mulch

selected from the group consisting of pea gravel, wood chips, and tree bark, and a length ranging between about 1/16 inch and about 8 inches and a width ranging between about 1/16 inches and about 2 inches; and,

b) an amount of water based acrylic colorant added in an amount equal to between about 3% and about 10% by weight of said rubber particles, with said colorant coating said rubber particles thereby forming said synthetic mulch.

'514 patent col.5 l.62-col.6 l.15 (emphases added). The specification states that the colorant “can be selected from a variety of different coloring systems, as long as the colorant is available in at least earth tone colors, readily adheres to rubber, and does not wash off the rubber when contacted by water.” Id. at col.4 l.64-col.5 l.3. However, according to the specification, “[t]he most preferred colorants are water based acrylic systems such as the colorant systems sold under the name ‘VISICHROME’, by Futura Coatings, Inc. of Hazlewood, Mo.” Id. at col.5 ll.4-7. Claim 3 of the ' 514 patent recites “[t]he synthetic mulch of claim 1 wherein said colorant is a water based acrylic called VISICHROME.” Id. at col.6 ll.19-20.

At the district court, the parties agreed that there did not exist a colorant system sold by Futura Coatings, Inc. (“Futura”) under the name “Visichrome.” Instead, Green Edge had used a product that Futura sold under the product code “24009.” Green Edge asserted, however, that it had believed the colorant system to be called “Visichrome” based on a letter that it had received from Jeffrey Jarboe, Futura's vice president, in July 1997. Best Mode Op., 2008 WL 821695, at *4, 2008 U.S. Dist. Lexis 23378, at *12. In that letter, Jarboe stated that “[t]he Futura ‘Visichrome’ colorant system is designed to be a user friendly system. The infinite colors available are packaged as a single component water based acrylic system.” J.A. 250. The letter then discussed how the “ ‘Visichrome’ colorants” would be used to coat the rubber particles used by Green Edge. Id. However, before the district court, Jarboe could not remember why he used the term “Visichrome” in reference to the colorant system. Best Mode Op., 2008 WL 821695, at *4, 2008 U.S. Dist. Lexis 23378, at *12.

In March 2008, the district court granted Rubber Mulch and Rubber Resources summary judgment of invalidity of the '514 patent for failure to disclose the best mode of the invention, pursuant to 35 U.S.C. § 112, paragraph 1. Best Mode Op., 2008 WL 821695, 2008 U.S. Dist. Lexis 23378. The court found that “Visichrome,” the only water-based acrylic colorant disclosed in the specification, did not exist, despite having been referenced in Jarboe's letter. Id. at *3-5, 2008 U.S. Dist. Lexis 23378, at *11-14. The court further held that Green Edge had concealed the best mode by disclosing “a misleading, non-existent name instead of the number,” when no similar product was available on the market. Id. at *5, 2008 U.S. Dist. Lexis 23378, at *14. The court therefore held the '514 patent invalid based on Green Edge's failure to disclose the best mode of coloring the rubber particles.

In its opinion, the district court declined to address Rubber Mulch and Rubber Resources' argument for anticipation based on U.S. Patent 5,543,172 (“Jakubisin”). Id. at *2-3, 2008 U.S. Dist. Lexis 23378, at *8-9. In fact, the court had previously denied summary judgment of anticipation, obviousness, indefiniteness, and nonenablement of the '514 patent in an opinion dated January 10, 2007. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, No. 4:02CV566, 2007 WL 118919, 2007 U.S. Dist. Lexis 1939 (E.D.Mo. Jan. 10, 2007) (“ Denial of SJ of Anticipation ”). In that opinion, the court noted that anticipation is a question of fact for the jury to determine, and that Rubber Mulch and Rubber Resources would have to prove by clear and convincing evidence that the “unconsolidated fall zone material” of Jakubisin would “imitate[ ] natural mulch,” as required by the claims of the '514 patent. Id. at *4, 2007 U.S. Dist. Lexis 1939, at *13. The court also stated that “a jury could find differences between the functions and the manufacturing of the products.” Id. at *4, 2007 U.S. Dist. Lexis 1939, at *13-14. The court additionally denied summary judgment that the claims of the ' 514 patent were anticipated by others' products, as the parties had produced conflicting evidence such that a jury could conclude that the products did not anticipate the water-based acrylic colorant system or did not imitate natural mulch. Id. at *4-5, 2007 U.S. Dist. Lexis 1939, at *14-15. The court denied summary judgment of obviousness because Rubber Mulch and Rubber Resources' claim chart was uncorroborated and there was a lack of evidence that the prior art resembled natural mulch or was colorfast. Id. at *5, 2007 U.S. Dist. Lexis 1939, at *16-17.

In its January 2007 decision, the court also denied summary judgment of indefiniteness, based on the existence of factual questions. Id. at *5, 2007 U.S. Dist. Lexis 1939, at *17. Finally, the court denied summary judgment with respect to enablement, reasoning that Rubber Mulch and Rubber Resources had “failed to submit clear and convincing evidence that a person cannot obtain a water based acrylic colorant from Futura in lieu of the years of experimentation that [they] assert would be required.” Id. at *6, 2007 U.S. Dist. Lexis 1939, at *20.

In July 2008, after the district court had disposed of all claims relating to the validity of the '514 patent, counterclaim defendants International Mulch Company and Michael Miller (collectively, “International Mulch”) terminated a license with Green Edge for the '514 patent, and Green Edge then demanded that International Mulch cease manufacture of its product. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, No. 4:02CV566, slip op. at 1 (E.D.Mo. Nov. 26, 2008) (“ Realignment Op.”). In August 2008, International Mulch moved to realign itself with Rubber Mulch and Rubber Resources in asserting that the '514 patent was invalid. Id. at 1-2. The court granted the motion, reasoning that International Mulch and Green Edge now had opposing interests in the validity of the '514 patent. Id. at 3.

B. Trademark Claims

Green Edge also owns the trademark “RUBBERIFIC MULCH” and alleged in its complaint that Rubber Mulch had infringed the mark, based on Rubber Mulch's use of the words “Rubber Mulch.” International Mulch, the assignee of the trademark, had previously sent Rubber Mulch a cease and desist letter accusing it of trademark infringement, stating that “RUBBER MULCH” was confusingly similar to “RUBBERIFIC MULCH” and that such use was likely to confuse the public. Trademark Dismissal, 509 F.Supp.2d at 819. Rubber Resources also printed the words “Rubber Mulch” on its products. In the present case, Rubber Mulch and Rubber Resources together counterclaimed for a declaratory judgment of noninfringement and invalidity of the “RUBBERIFIC MULCH” mark and included International Mulch, the assignee, in their counterclaims.

In March 2007, the district court granted International Mulch summary judgment, finding no case or controversy regarding Rubber Mulch and Rubber Resources' counterclaims of noninfringement and invalidity of...