Power Controls Corp. v. Hybrinetics, Inc.

• Decision Date: 13 November 1986
• Docket Number: No. 86-1041,86-1041
• Citation: 806 F.2d 234,231 USPQ 774
• Parties: POWER CONTROLS CORP., Appellee, v. HYBRINETICS, INC., Appellant. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 234

806 F.2d 234

231 U.S.P.Q. 774

POWER CONTROLS CORP., Appellee, v. HYBRINETICS, INC., Appellant.

Appeal No. 86-1041.

United States Court of Appeals, Federal Circuit.

Nov. 13, 1986.

Richard E. Backus, Flehr, Hohbach, Test, Albritton & Herbert, San Francisco, Cal., argued for appellant. With him on the brief were William J. Egan, III, Luann Cserr and Richard P. Doyle, Jr.

Ted D. Lee, Gunn, Lee & Jackson, P.C., San Antonio, Tex., argued for appellee. With him on the brief was Jack V. Musgrove. Also on the brief was John F. Barg, Landels, Ripley & Diamond, San Francisco, Cal., of counsel.

Before FRIEDMAN, SMITH and BISSELL, Circuit Judges.

FRIEDMAN, Circuit Judge.

This is an appeal from an order of the United States District Court for the Northern District of California granting a preliminary injunction in a suit charging infringement of a design patent, and unfair competition in violation of federal and state law. We vacate in part and affirm in part.

I

A. U.S. Patent No. Des. 281,580 ('580 patent), which appellee Power Controls Corp. (Power Controls) owns, covers a design for a plastic "clam shell" type of package used to encase an electrical rotary dimmer switch. Figure 4 of the patent best illustrates the package:

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

FIG 4

In December 1985, Power Controls filed suit in the district court against the appellant Hybrinetics, Inc. (Hybrinetics), charging that Hybrinetics had infringed the '580 patent, had engaged in unfair competition in violation of 15 U.S.C. Sec. 1125(a) (1982) and Secs. 17200-17208 of the California Business and Professions Code (California Code), and had violated Sec. 17300 of the California Code by duplicating Power Controls' packages through a direct molding process. Hybrinetics filed an answer and a counterclaim alleging that the patent was invalid and unenforceable, and denying infringement and unfair competition.

Following discovery, Power Controls moved for a preliminary injunction. After a hearing, the district court on March 12, 1986, granted a preliminary injunction pending trial. The injunction prohibited Hybrinetics from (1) "[i]nfringing" the '580 patent, (2) making, using or selling "clam shell packaging substantially similar to, or copied from, the [registered trademark] Dynapak packaging of Power Controls," (3) "[u]nfairly competing with Power Controls under [the federal and state statutes specified in the complaint] by displaying, offering for sale, or selling a clam shell package substantially similar to, or copied from [Power Controls' Dynapak packaging]," (4) using a particular mold "to make clam shell packaging," (5) "[d]isplaying, offering for sale, or selling Hybrinetics products by distributing or displaying any advertising material that shows [Power Controls' Dynapak packaging]," and (6) "[d]estroying or disposing of Hybrinetics clam shell packaging substantially similar to, or copied from [Power Controls' Dynapak packaging], pending a final disposition of this case."

The only finding the district court made with respect to the basis for the injunction was as follows: "[T]he Court finds that the Hybrinetics clam shell packages placed before this Court as exhibits are substantially similar to, or copied from, the [registered trademark] DynaPak packaging of Power Controls."

On March 17, 1986, Hybrinetics filed in the district court a notice of appeal from the preliminary injunction and a motion for a stay. On April 8, 1986, the district court denied a stay. The parties then agreed to postpone the effectiveness of the injunction for 45 days to enable Hybrinetics to change its practices to conform to the injunction. On Hybrinetics' motion, we stayed the injunction and expedited the hearing on the appeal.

B. On June 5, 1986, the day before oral argument, Power Controls sought leave to file a supplemental brief to bring before In the modified injunction, the district court found "a substantial likelihood of success" on Power Controls' claims that (1) "the packaging depicted in [the '580 patent] is new, nonobvious, and primarily ornamental," (2) "the trade dress of the [packages] have acquired a secondary meaning associated with Power Controls," and (3) "the clam shell packages used by Hybrinetics are, in the eye of an ordinary observer, substantially the same as the respective packages used and created by Power Controls, and thus creates a likelihood of confusion as to the source of the packages." The court further found

                the court an order for a "modified injunction" that the district court had entered on June 3, 1986.  The district court had acted in response to Power Controls' motion to modify the injunction, filed May 12, 1986.  The district court described the motion as having been filed "in order to clarify the grounds on which the injunction was originally granted."    After a hearing, the district court granted the motion and entered a modified preliminary injunction
                

a substantial likelihood that plaintiff will be able to establish the following facts: In 1984, [the president] of ... Hybrinetics obtained samples of Power Controls' packages and instructed a mold maker to construct molds which would duplicate the packages. While these molds were being prepared, [the president] instructed his advertising department to use Power Controls' packages, and the advertising department did so use the packages, for advertising materials ostensibly depicting [Hybrinetics'] electrical switches. Pursuant to [the president's] instruction, molds were prepared from Power Controls' packages, and Hybrinetics has used and is still using said molds for creating clam shell packages for its product.

Finally, the court stated that Power Controls "has demonstrated a likelihood of success on the merits of its unfair competition claims and patent infringement claims, and [Power Controls] has shown the presumptive validity of [the '580 patent]."

Although the district court made some changes in the language of the preliminary injunction, the scope and content of the preliminary injunction remained essentially the same as in the original injunction.

Hybrinetics has not appealed from the modified preliminary injunction of June 3, 1986. The time for such appeal has expired. Fed.R.App.P. 4(a)(1), (5).

II

A. Power Controls filed its motion to modify the preliminary injunction on May 12, 1986, almost two months after Hybrinetics had filed its notice of appeal from that injunction on March 17, 1986. The Ninth Circuit, whose law we here follow on this procedural point, has held that a district court has no jurisdiction to amend its findings of fact and conclusions of law after a notice of appeal has been filed. Barber v. United States, 711 F.2d 128, 130 (9th Cir.1983); Matter of Combined Metals Reduction Co., 557 F.2d 179, 200-01 (9th Cir.1977); cf. Flynt Distributing Co. v. Harvey, 734 F.2d 1389, 1395 n. 3 (9th Cir.1984) (the district court's entry, after an appellant has filed his brief on appeal, of modified findings of fact and conclusions of law which to some extent rely on findings the appellee proposed "detract[s] from the appearance of justice" because it suggests that the appellee "carefully tailor[ed] his proposed findings to cure any deficiencies disclosed by the [appellant's] brief").

In Barber, the district court entered an injunction supported by findings of fact and conclusions of law on June 29, 1981. A notice of appeal was filed on July 1, 1981, and on July 9, 1981, the district court entered new findings of fact and conclusions of law to correct its misunderstanding about the applicable law. The Ninth Circuit held that the district court did not have jurisdiction to amend its findings after the appeal had been filed.

The Ninth Circuit stated, however, that "the district court would have reconsidered its findings of fact and conclusions of law had it been proper to have done so. We therefore remanded to the district court to When the district court in this case entered its modified preliminary injunction on June 3, 1986, which was two-and-a-half months after the notice of appeal had been filed and only three days before we were to hear oral argument of the appeal, the court long since had lost jurisdiction to act in the case. Indeed, Power Controls' action in this case closely parallels the situation the Ninth Circuit described in Harvey, supra. Power Controls filed its motion to modify on May 12, 1986, almost a month after Hybrinetics had filed its opening brief on April 15, 1986, which criticized the failure of the district court to make findings allegedly necessary for a preliminary injunction. Power Controls' filing in these circumstances suggests that it "carefully tailor[ed]" its proposed modifications "to cure any deficiencies disclosed by [Hybrinetics'] brief." Id. at 1395 n. 3.

                hold hearings and to consider amendments to the findings and conclusions.  We retained jurisdiction over the appeal and gave the parties an opportunity to file new briefs."    On remand, the district court entered new findings identical to those it had entered on July 9, 1981
                

The proper procedure for Power Controls to have followed if it wished to seek modification by the district court of the preliminary injunction, would have been for it to have filed in this court a motion to remand the case to enable the district court to consider the proposed modifications.

B. Although the Ninth Circuit in Barber remanded the case for the district court to reconsider the modifications it had made in its injunction while the appeal was pending, we do not follow that course here. Unlike the apparent situation in Barber, here the district court held a hearing, at which both parties were heard, before it entered the modified preliminary injunction. At oral argument before us, the parties expressed a willingness to argue the merits of the modified preliminary injunction and urged us to decide the appeal on that basis.

As...