Magnetar Techs. Corp. v. Intamin, Ltd., s. 13–56119
| Decision Date | 14 September 2015 |
| Docket Number | Nos. 13–56119,13–56333.,s. 13–56119 |
| Citation | 801 F.3d 1150,116 U.S.P.Q.2d 1507 |
| Parties | MAGNETAR TECHNOLOGIES CORP., a Nevada corporation, Plaintiff–Appellant/Cross–Appellee, v. INTAMIN, LTD., a Maryland corporation, Defendant–Appellee/Cross–Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Maxwell M. Blecher (argued), Harold R. Collins, Blecher, Collins, Pepperman, and Joye, P.C., Los Angeles, CA, for Plaintiff–Appellant/Cross–Appellee.
Gerald E. Hawxhurst (argued), Daryl M. Crone, David S. Harris, Crone, Hawxhurst LLP, Los Angeles, CA, for Defendant–Appellee/Cross–Appellant.
Appeal from the United States District Court for the Central District of California, Gary A. Feess, District Judge, Presiding. D.C. No. 8:07–cv–01052–GAF–JCG.
Before: MILAN D. SMITH, JR. and N. RANDY SMITH, Circuit Judges and ROYCE C. LAMBERTH,* Senior District Judge.
Plaintiff–Appellant/Cross–Appellee Magnetar Technologies Corporation (Magnetar) alleges that Defendant–Appellee/Cross–Appellant Intamin Limited (Intamin) maliciously prosecuted a patent infringement action against it, asserting U.S. Patent No. 6,062,350 ('350 Patent). Magnetar claims that Intamin prosecuted the action even though the '350 Patent was invalid pursuant to the on-sale bar of 35 U.S.C. § 102 (on-sale bar). Magnetar also contends that Intamin, along with its European affiliate corporations, used the invalid '350 Patent to monopolize the market for magnetic braking systems, in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 –7 (Sherman Act).
The district court granted summary judgment to Intamin, holding that a reasonable attorney could have concluded that the on-sale bar did not apply to the '350 Patent, and that Intamin thus could not have maliciously prosecuted Magnetar for patent infringement. The district court also ruled that Magnetar had offered insufficient evidence to prove an antitrust injury in its antitrust claims against Intamin.
In its cross-appeal, Intamin contends that the district court erred by not imposing Rule 37 sanctions against Magnetar for bringing a frivolous antitrust action against Intamin. The district court denied Intamin's motion for sanctions, concluding that Magnetar brought its antitrust claims in good faith.
We affirm the decision of the district court.
Magnetar is a corporation organized and existing under the laws of Nevada, with its principal place of business in California. Magnetar manufactures and distributes magnetic brakes and braking systems for use on roller coaster rides.
Intamin is a corporation organized and existing under the laws of Maryland, with its principal place of business in Maryland. Intamin is affiliated with Intamin AG, located in Switzerland, and Ride Trade Corp., located in Liechtenstein. The three corporations design and build roller coaster rides for use in amusement parks.
On September 14, 1994, Intamin entered into a written “Ride Manufacture/User Agreement” with Kentucky Kingdom, an amusement park located in Kentucky, concerning a ride named the “Hellevator.” The agreement described the braking system to be installed on the ride as “fin brakes,” a type of mechanical braking system.
On October 11, 1994, Intamin entered into a written “Letter Agreement” with Kentucky Kingdom that augmented the September 1994 sales contract. The October 11 agreement required that Intamin deliver the Hellevator to Kentucky Kingdom during the 1995 amusement park season. The agreement also prohibited Intamin from selling the ride to regional competitors of Kentucky Kingdom until 1997.
On October 19, 1994, Intamin sent a fax to Kentucky Kingdom providing details about the braking system to be installed on the Hellevator: “INTAMIN is planning to have the braking executed by a newly developed magnetic brake unit which does not physically enter in contact with the vehicles.” Kentucky Kingdom subsequently issued a press release stating that the Hellevator would use “an innovating braking system ... and does not include the traditional ‘run-out’ found in existing free-fall rides.” Unlike mechanical braking systems, Intamin, Ltd. v. Magnetar Techs., Corp., 483 F.3d 1328, 1330 (Fed.Cir.2007) (Intamin II ).1
After the execution of the October 11, 1994 contract, Intamin began work on the Hellevator. Intamin also continued researching and testing the magnetic braking system mentioned in its October 19 fax. In his affidavit, Sandor Kernacs, President of Intamin, stated that Intamin did not deliver the Hellevator to Kentucky Kingdom on time
In March of 1995, Intamin published a report suggesting that it was still in the early stages of testing the magnetic braking system, and that the system was not yet ready for use on the Hellevator. At several points, the report noted that experiments were ongoing, and that the final parameters were not yet known.
One witness testified that the magnetic braking system was ready as early as October of 1994. In his affidavit, Ronald H. Berni, General Manager of Operations at Kentucky Kingdom, stated that On the other hand, Kentucky Kingdom's former CEO, Ed Hart, testified that it was possible for the braking mechanism on the Hellevator to have been either magnetic brakes or mechanical brakes. In October of 1995, Intamin completed construction on the Hellevator, using the magnetic braking system.
On April 12, 1996, Intamin filed an application with the U.S. Patent and Trademark Office (PTO) for a patent on the magnetic braking system used in the Hellevator. Intamin's application was submitted on behalf of the inventors of the magnetic braking system, including Patrick Spieldiener, a director of Intamin. See '350 Patent. Intamin contends that it informed its patent counsel that it had initially proposed the magnetic braking technology in the Fall of 1994, when it contracted to provide the Hellevator to Kentucky Kingdom.
The PTO issued the '350 Patent on May 16, 2000. The inventors listed on the '350 Patent were: Alfons Saiko, Peter Rosner, Reinhold Spieldiener, Robert Spieldiener, and Patrick Spieldiener. See '350 Patent. Intamin acquired exclusive property rights in the '350 Patent on March 18, 2004, when four of the original five inventors assigned their rights to Intamin. See Intamin, Ltd. v. Magnetar Techs. Corp., 623 F.Supp.2d 1055, 1073 (C.D.Cal.2009) (Intamin III).
In 2004, Intamin filed suit against Magnetar, contending that Magnetar had infringed the '350 Patent by selling “Soft Stop” brakes, a type of magnetic braking system. See Intamin II, 483 F.3d at 1331. The district court granted summary judgment to Magnetar, holding that the “Soft Stop” brakes did not infringe the '350 Patent because the components of the “Soft Stop” brake differed from those in the magnetic braking system Intamin had patented. Id. at 1332. The Federal Circuit reversed the grant of summary judgment and remanded the case to the Central District of California, concluding that the district court had erred by relying on a narrow construction of the '350 Patent. Id. at 1337.
After remand, the district court again granted summary judgment to Magnetar, finding in part that Intamin had “unclean hands” concerning post-issuance assignment of the '350 Patent : “[D]espite not having been assigned any rights in the patent, Intamin began writing letters in 2001 to several companies claiming those companies had infringed Intamin's patent and threatening litigation if the companies did not compensate Intamin by purchasing a license.” Intamin III, 623 F.Supp.2d at 1072. The Federal Circuit affirmed the district court's second grant of summary judgment, per curiam. See Intamin, Ltd. v. Magnetar Techs. Corp., 404 Fed.Appx. 496 (Fed.Cir.2010) (Intamin IV ).
On September 11, 2007, Magnetar filed its complaint in this action, alleging that Intamin had violated the Sherman Act by using a fraudulently-obtained patent to establish a monopoly in the market for magnetic braking systems. On January 21, 2011, Magnetar filed a Second Amended Complaint, to add a malicious prosecution claim, based on Intamin filing suit against Magnetar for patent infringement. The malicious prosecution claim is based on California law.
On May 28, 2013, the district court granted summary judgment to Intamin on both the malicious prosecution and Sherman Act claims. On the former claim, the court held that a reasonable attorney could have concluded that the on-sale bar did not apply to the '350 Patent. Because there was a legitimate dispute as to the applicability of the on-sale bar, Intamin had probable cause to bring its patent infringement action. On the latter claim, the district court concluded that Magnetar's theory of antitrust injury was unreliable and speculative, and that Magnetar had not provided an adequate causal link between Intamin's purported anticompetitive conduct and Magnetar's damages. The district court also denied Intamin's Rule 37 motion for sanctions against Magnetar.
This timely appeal followed.
The district court had subject matter jurisdiction over...
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