Computer Access Technology v. Catalyst Enterprises
| Decision Date | 13 February 2003 |
| Docket Number | No. C-00-4852-DLJ.,C-00-4852-DLJ. |
| Citation | 273 F.Supp.2d 1063 |
| Parties | COMPUTER ACCESS TECHNOLOGY CORPORATION, Plaintiff, v. CATALYST ENTERPRISES, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
Sue J. Nam, Clark T. Thiel, Brobeck Phleger & Harrison LLP, Carla B. Oakley, Morgan Lewis & Bockius, LLP, Scott Bonagofsky, Morgan Lewis & Bockius LLP, San Francisco, CA, for Computer Access Technology Corporation, Plaintiff.
John C. Baum, William T. Gallagher, Townsend & Townsend & Crew LLP, San Francisco, CA, for Catalyst Enterprises, Defendant.
On January 10, 2003, the Court heard argument on defendant Catalyst Enterprises's motion for a new trial or, in the alternative, renewed motion for judgement as a matter of law. Carla B. Oakley and Scott Bonagofsky appeared on behalf of Computer Access Technology Corporation; William Gallagher, Paul Kirsch, Marc Gorelnik and K.T. Cherian appeared for Catalyst Enterprises. Having considered the arguments of counsel, the papers submitted, the applicable law, and the record in this case, the Court hereby GRANTS Catalyst Enterprises motion for a new trial for the trademark, willfulness and unfair competition under federal and state law. The Court also grants a new trial for the trade dress and copyright claim.
Plaintiff Computer Access Technology Corporation ("CATC") and Defendant Catalyst Enterprises, Inc. ("Catalyst") both sell products that enable developers of devices and communication channels to test and analyze the compatibility of the computer and of their respective products with a specific communication channel. Such products are known as protocol analyzers. The instant case arises from CATC's allegation that the graphical user interface ("GUI") of Catalyst's Serial Bus Analyzer Exerciser 20 ("SBAE-20") infringes on CATC's trademark, trade dress, and copyright rights in the GUI of its analyzers. CATC calls the GUI of its analyzers the CATC Trace data display design ("CATC design"). For a detailed description of the factual background, the parties are referred to this Court's June 13, 2001 Order in Computer Access Technology v. Catalyst Enterprises, C 00-4852-DLJ.
On December 29, 2000, CATC filed this action alleging that Catalyst copied the CATC design. The case was assigned to this Court on January 11, 2001.
On March 26, 2001, CATC filed its First Amended Complaint accusing Catalyst of trademark and trade dress infringement, copyright infringement, and unfair competition under federal and state law.
On March 28, CATC moved for a preliminary injunction to enjoin Catalyst from infringement of CATC's trademark, trade dress, and copyright in the graphical interface of CATC's USB analyzer. The Court denied CATC's motion for a preliminary injunction on June 13, 2001.
On December 11, 2002, Catalyst filed a motion for summary judgment. On January 25, 2002, CATC filed a motion for judgment on the pleadings and motion to strike.
On March 29, 2002, the Court issued an Order denying Catalyst's motion for partial summary judgment and granting CATC's motion for judgment on the pleadings with respect to all three of Catalyst's counterclaims for unfair competition under federal and state law and bad faith prosecution under state law.
On October 28, 2002, a jury trial began. On November 15, 2002, the jury reached a unanimous verdict. The jury found in favor of CATC on the trademark infringement, willfulness and unfair competition under state and federal law claims. The jury found in favor of Catalyst on the trade dress and copyright infringement claims. The jury awarded actual damages in the amount of $612,000. It also awarded lost profits in the amount of $1,200,000. The lost profit amount was based upon findings of the jury that Catalyst earned $1,700,000 in gross revenue, and that the gross revenue amount should be reduced by $250,000 for Catalyst's expenses incurred in making those sales and of $250,000 for the amount of sales caused by other factors.
Under the Federal Rules, the court may grant a new trial for any reason which suggests that the jury's verdict was clearly wrong or was a miscarriage of justice. See Fed.R.Civ.P. 59(a). The primary basis for granting a new trial is that the jury's verdict was against the clear weight of the evidence. See Landes Constr. Co., Inc. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987). In order to find that a verdict was against the clear weight of the evidence, the court must more than simply disagree with the jury's decision, although it need not find that there is no evidence in support of the verdict. See id. The court may weigh the evidence, assess the credibility of witnesses, and need not view the evidence in the light most favorable to the prevailing party. See id. A new trial should be ordered if the court has a firm conviction that the jury made an error which led to a miscarriage of justice. See id. at 1371-72 (quoting 11 Charles Wright & Arthur Miller, Federal Practice and Procedure, Civil 2806, at 48-49 (West 1973)).
Federal Rule of Civil Procedure 50(a) provides the basis for an attack on the sufficiency of the evidence to support a jury's finding. It states:
(1) If during a trial by jury a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may determine the issue against that party and may grant a motion for judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue.
Rule 50(b), which provides for renewing a judgment as a matter of law, states:
If, for any reason, the court does not grant a motion for judgment as a matter of law made at the close of all the evidence, the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion .... 59. In ruling on a renewed motion, the court may: (1) if a verdict was returned: (A) allow the judgment to stand, (B) order a new trial, or (C) direct entry of judgment as a matter of law.
Motions for judgment as a matter of law in jury trials are governed under the same standard as summary judgment motions, albeit at a later stage of the proceeding. Lies v. Farrell Lines, Inc., 641 F.2d 765, 772 (9th Cir.1981). Judgment as a matter of law is proper if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict. See Image Tech. Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1203 (9th Cir.1997), cert. denied, 523 U.S. 1094, 118 S.Ct. 1560, 140 L.Ed.2d 792 (1998); Fed.R.Civ.P. 50(b). The Court must determine whether there is relevant evidence sufficient to permit reasonable minds to reach the jury's verdict. See Landes Constr., 833 F.2d at 1371 (citing St. Elizabeth Community Hospital v. Heckler, 745 F.2d 587, 592 (9th Cir.1984)). In making this determination, the court may not weigh evidence, evaluate the credibility of witnesses, or substitute its judgment for that of the jury on any specific factual issue merely because it believes its judgment to be more reasonable. Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 631 (Fed.Cir.), cert. denied, 484 U.S. 827, 108 S.Ct. 95, 98 L.Ed.2d 56 (1987); Wetmore v. Gardner, 735 F.Supp. 974, 977-78 (E.D.Wash.1990); Modine Mfg. Co. v. Allen Group, Inc., 1989 WL 205782, 14 U.S.P.Q.2d 1210, 1212 (N.D.Cal. 1989), affirmed, 917 F.2d 538 (C.A.Fed. 1990), cert. denied, 500 U.S. 918, 111 S.Ct. 2017, 114 L.Ed.2d 103 (1991); 9 Charles Wright & Arthur Miller, Federal Practice and Procedure, § 2524, at 543-44 (West 1971 & Supp.1991).
If the court has granted a post-trial motion for judgment as a matter of law, Federal Rule of Civil Procedure 50(c)(1) requires the court to conditionally rule on a motion for a new trial.
Catalyst argues that the Court should grant its motion for a new trial, or in the alternative, its renewed motion for judgment as a matter of law ("JMOL"). More specifically, Catalyst argues the Court should grant its motion for a new trial because the jury's verdict of trademark infringement is clearly contrary to the jury's findings that the CATC design is functional and that Catalyst's design did not infringe any CATC copyright. Moreover, Catalyst argues the jury's verdict of infringement is clearly contrary to the evidence. Catalyst argues the Court should grant its motion for a renewed JMOL for the trademark claim because CATC failed to produce substantial evidence of the fact or amount of damages resulting from its alleged trademark infringement, or substantial evidence of secondary meaning or a likelihood of confusion. Catalyst also argues that the Court should grant its motion for a renewed JMOL for the willfulness and unfair competition claims under both federal and state law. Each of these issues are addressed in turn.
Catalyst argues that the Court should grant its motion for a new trial because the jury's verdict of trademark infringement is inconsistent with the jury's findings that the CATC design is functional and contrary to law in this Circuit. Moreover, Catalyst argues that CATC failed to produce any substantial evidence at trial to support the fact or amount of damages for trademark infringement.
The Court finds that the jury verdicts cannot be reconciled with the law in this Circuit and thus a new trial is appropriate. The only reasonable interpretation of the jury verdicts is that the jury decided that the CATC design is functional. It is a miscarriage of justice to...
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