ENDURACOAT TECHNOLOGIES INC. v. WATSON BOWMAN ACME Corp.

• Decision Date: 08 July 2010
• Docket Number: No. 2009 CA 2346.,2009 CA 2346.
• Citation: 42 So.3d 1107
• Parties: ENDURACOAT TECHNOLOGIES, INC. v. WATSON BOWMAN ACME CORP., as Successor-in-Interest to Master Builders, Inc., Krebs, LaSalle, Lemieux Consultants, Inc.; and Greater New Orleans Expressway Commission.
• Court: Court of Appeal of Louisiana — District of US

42 So.3d 1107

ENDURACOAT TECHNOLOGIES, INC. v. WATSON BOWMAN ACME CORP., as Successor-in-Interest to Master Builders, Inc., Krebs, LaSalle, Lemieux Consultants, Inc.; and Greater New Orleans Expressway Commission.

No. 2009 CA 2346.

Court of Appeal of Louisiana, First Circuit.

July 8, 2010.

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Stephen K. Conroy, Tom D. Snyder, Jr., Rebecca E. Fenton, Metairie, Louisiana, for Plaintiff-Appellant, Enduracoat Technologies, Inc.

Scott C. Barney, Matt N. Terrell, Baton Rouge, Louisiana, for Defendant-Appellee, Watson Bowman Acme Corporation.

Before PARRO, KUHN, and McDONALD, JJ.

KUHN, J.

Plaintiff-appellant, Enduracoat Technologies, Inc. (Enduracoat), appeals the trial court's judgment, granting summary judgment in favor of defendant-appellee, Watson Bowman Acme Corporation (WABO), and dismissing Enduracoat's claims for damages related to statements a representative of WABO made in a letter to a bidding contractor, TOPCOR Services, Inc. (TOPCOR), in conjunction with services TOPCOR proposed to perform on a project undertaken by the Greater New Orleans Expressway Commission (GNOEC). We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

According to the undisputed facts, in 1995, the GNOEC undertook a project to repair and renovate pilings of the Lake Ponchartrain Causeway bridges, identified as Project 1107 of the Lake Ponchartrain Causeway Capital Improvement Plan. The project generally contemplated encasing the pilings supporting the Causeway bridges in fiberglass-reinforced polymer jackets and pumping epoxy and grout into the annulus between the jackets and the pilings. In May 2003, the GNOEC, through its consulting engineers, Krebs, LaSalle, Lemieux Consultants, Inc. (Krebs, LaSalle), put out a request for proposals for Part D of Project 1107. According to the specifications of Project 1107D, WABO's Advanced Pile Encapsulation (APE) process was the acceptable method for the performance of the piling rehabilitation work;¹ however, any bidder seeking to use an alternative process could submit its proposal to Krebs, LaSalle for approval as an equal to the APE process. At the time GNOEC let out bidding for Project 1107D, WABO held the licensee rights to the patents issued for the APE process.²

By an addendum to the contract documents of the original bidding documents, on August 14, 2003, Krebs, LaSalle accepted the Enduragrip Pile Encapsulation System (EPE process) belonging to Enduracoat as an approved equal to the APE process.³

TOPCOR was the lowest bidder for Project 1107D. In order to successfully perform the renovation work, TOPCOR had to use an encapsulation process. Prior to completion of the bidding process, on August 25, 2003, WABO's president sent to TOPCOR a letter stating that it was aware that in its submission bid to the GNOEC, TOPCOR had indicated "it will utilize repair material from [Enduracoat]." After reminding TOPCOR that WABO had recently trained TOPCOR personnel in the APE process for encasing structural members, WABO's president stated, "we have reason to believe that the process to be used by [TOPCOR] in completion of this job is the same process which was learned from [WABO]. Accordingly, the use of the repair materials of third parties, according to the [APE] trained process, is addressed by [our patents], and would not be authorized by license." The August 25, 2003 letter further requested that if TOPCOR believed the EPE process was not addressed by the APE process patent rights, WABO be provided with an appropriate explanation along with technical information to support its position. The letter concluded, "We are confident that a mutually beneficial business resolution can be swiftly achieved," and asked TOPCOR's president to contact WABO's president.

TOPCOR eventually decided to utilize the APE process and submitted a bid in accordance with that decision. Enduracoat filed this lawsuit averring that as a result of the letter, WABO was liable to it based on theories arising under the Lanham Act, 15 U.S.C. § 1125(a);⁴ Louisiana Unfair Trade Practices and Consumer Protection Law, La. R.S. 51:1401-1426;⁵ and state tort law for loss of a business opportunity, damage to reputation, fraud, and misrepresentation.⁶

WABO filed a motion for summary judgment urging no disputed issue of material fact precluded its dismissal from Enduracoat's lawsuit. After a hearing, the trial court granted WABO's motion and dismissed all of Enduracoat's claims.⁷ This appeal followed.

JURISDICTION

Federal district courts shall have original jurisdiction of any civil action arising under any act of Congress relating to patents. 28 U.S.C. § 1338(a). Such jurisdiction shall be exclusive of the state courts in patent cases. See 28 U.S.C. § 1338(a). Jurisdiction under this statute extends to any case in which the well-pleaded complaint establishes that plaintiffs right to relief necessarily depends on resolution of a substantial question of federal patent law. Immunocept, LLC v. Fulbright, LLP, 504 F.3d 1281, 1284 (Fed. Cir.2007). The involvement of a patent question in a suit does not alone confer jurisdiction in the federal courts. Deats v. Joseph Swantak, Inc., 619 F.Supp. 973, 981 (N.D.N.Y.1985). Whether a claim "arises under" federal patent law must be determined from what necessarily appears in the plaintiffs statement of his own claim, unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809, 108 S.Ct. 2166, 2174, 100 L.Ed.2d 811 (1988). Thus, a case raising a federal patent-law defense does not, for that reason alone, "arise under" patent law, even if the defense is anticipated in the plaintiffs complaint, and even if both parties admit that the defense is the only question truly at issue in the case. Id.

The proper focus is on whether the plaintiff actually pleaded the elements required by the patent laws for a patent infringement claim, i.e., ownership of patent still in force, infringement by defendants, and relief such as treble damages and injunction. See Kunkel v. Topmaster Int'l, Inc., 906 F.2d 693, 695 (Fed.Cir. 1990).

Based on the allegations of Enduracoat's petition, we conclude that plaintiff has not alleged ownership of a patent still in force, an infringement, or relief arising under 35 U.S.C. §§ 283-285.⁸ Accordingly, we conclude our state courts have jurisdiction to address Enduracoat's claims.

SUMMARY JUDGMENT

A motion for summary judgment is a procedural device used when there is no genuine issue of material fact. Duncan v. U.S.A.A. Ins. Co., 06-0363, p. 3 (La.11/29/06), 950 So.2d 544, 546-47. Appellate courts review summary judgment de novo, using the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. Costello v. Hardy, 03-1146, p. 8 (La.1/21/04), 864 So.2d 129, 137. A motion for summary judgment should only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that the movant is entitled to summary judgment as a matter of law. See La. C.C.P. art. 966 B.

The initial burden of proof is with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact. La. C.C.P. art. 966 C(2). Once the motion for summary judgment has been properly supported by the moving party, the failure of the non-moving party to produce evidence of a genuine material issue of fact mandates the granting of the motion. See Babin v. Winn-Dixie Louisiana, Inc., 00-0078, p. 4 (La.6/30/00), 764 So.2d 37, 40; see La. C.C.P. art. 967 B.

An appellate court asks the same questions as does the trial court in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law. Guardia v. Lakeview Regional Medical Ctr., 08-1369, p. 3 (La.App. 1st Cir.5/8/09), 13 So.3d 625, 627. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is "material" for summary judgment purposes can be seen only in light of the substantive law applicable to the case. Id., 08-1369 at p. 4, 13 So.3d at 628.

Alleged infringers have previously challenged a notice of infringement letter sent by a competitor to the alleged infringer's potential customers alleging patent infringement and threatening retaliation. See GP Indus., Inc. v. Eran Indus., Inc., 500 F.3d 1369, 1371 (Fed.Cir.2007) (alleged infringer sought a preliminary injunction to prevent competitor from issuing further communications to the alleged infringer's potential customers alleging product infringement and threatening legal action); Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367, 1368-70 (Fed.Cir.2004) (alleged infringer pursued various business tort claims, including tortious interference with prospective economic advantage and unfair competition, against competitor that had sent communications alleging patent infringement to a potential buyer of the alleged infringer); Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 893-94 (Fed.Cir.1998) (alleged infringer sought a preliminary injunction to prevent competitor...