Mathis v. Spears
| Decision Date | 06 September 1988 |
| Docket Number | 86-1611 and 86-1643,86-1575,Nos. 86-1574,86-1608,86-1591,s. 86-1574 |
| Citation | 8 USPQ2d 1551,857 F.2d 749 |
| Parties | , 8 U.S.P.Q.2d 1551 Cleo D. MATHIS and Vico Products Manufacturing Co., Inc., Plaintiffs-Appellants, v. Bill SPEARS d/b/a Waterway Plastics and Waterway Plastics, Inc., Philip E. Chalberg, Robert Weygand, Hydrabaths, Hydro Air Industries, Inc., and Gerald Moreland, Defendants/Cross-Appellants. |
| Court | U.S. Court of Appeals — Federal Circuit |
William Bullinger, of Cushman, Darby and Cushman, Washington, D.C., argued, for plaintiffs-appellants.
William H. Nieman, on brief, and James B. Bear, of Knobbe, Martens, Olson & Bear, Newport Beach, Cal., argued, for Hydro Air Industries and Gerald Moreland.
Richard S. Koppel, of Koppel & Harris, Westlake Village, Cal., argued, for Bill Spears and Waterway Plastics.
Leonard Tachner, Newport Beach, Cal., for Philip E. Chalberg, Robert Weygand and Hydrabaths, Inc.
Before MARKEY, Chief Judge, RICH and NEWMAN, Circuit Judges.
Appeals and cross-appeals from a judgment of the United States District Court for the Central District of California (Pfaelzer, J.), setting the quantum of previously granted awards of attorney fees and expenses. Cleo D. Mathis and Vico Products Manufacturing Co., Inc. (Mathis) challenge the amount and bases of the awards. Bill Spears d/b/a Waterway Plastics, Waterway Plastics, Inc., Philip E. Chalberg, Robert Weygand, Hydrabaths, Hydro Air Industries, Inc., and Gerald Moreland (collectively Hydro) challenge the denial of prejudgment interest on the award. We remand that portion of the judgment denying Hydro's request for prejudgment interest to enable the district court to exercise its discretion on Hydro's request. We affirm the judgment in all other respects and impose a sanction.
Mathis dragged the seven appellees into court in three suits, each filed against a different grouping of the appellees and each charging infringement of three United States utility patents, Nos. 3,890,655 ('655), 3,890,656 ('656), and 3,946,449 ('449), all entitled "Whirlpool Jet For Bathtubs," and Design Patent No. 244,462, entitled "Whirlpool Jet Nozzle For Bathtubs and the Like." The district court consolidated the actions.
During discovery, Hydro sought all Mathis documents showing sales of the claimed jets before November 24, 1975, the filing date of the design patent application. Mathis produced only nine invoices, none showing any invalidating activity. Obtaining, over Mathis' objection, a court order for access to Mathis' files, Hydro discovered 295 undisclosed invoices for jet sales predating November 24, 1975; two showing sales of the jet claimed in the design patent more than one year before its filing date; three showing sales of jets more than one year before the filing date of the '449 application.
With truth thus discovered, Mathis dedicated the design patent (but not the '449 patent) to the public and moved to withdraw it. The district court granted the motion but allowed Hydro to use evidence relating to the design patent to show unenforceability of the utility patents and to establish the case as exceptional under 35 U.S.C. Sec. 285.
Following an eight-day bench trial on patent validity and enforceability, the district court issued an opinion on February 20, 1986, Mathis v. Hydro Air Industries, Inc., 1 USPQ2d 1513 (1986), holding that all claims of the three utility patents were invalid under at least one of 35 U.S.C. Secs. 102, 103, and 112, and unenforceable for inequitable conduct.
The district court found, inter alia, that: 1) during prosecution of the '655 patent, Mathis knowingly failed to disclose prior art more pertinent than that before the patent examiner, and affirmatively, untruthfully asserted that Mathis' structure was nowhere found in the prior art, 1 USPQ2d at 1515-16; 2) during prosecution of the '656 patent, Mathis knowingly failed to disclose material prior art, including industry practice and a Mathis product sold more than one year before the filing date of the '656 application, 1 USPQ2d at 1517-18; 3) during prosecution of the '449 patent, Mathis failed to disclose common industry practice and that the subject matter of claim 1 of that patent had been in public use more than one year before the filing date of the '449 application, 1 USPQ2d at 1520.
Citing Mathis' inequitable conduct before the Patent and Trademark Office (PTO), its discovery abuses, its continuation of the suits on the utility patents when aware of prior art that "clearly rendered them invalid," and its misleading "simulation" at trial of a prior art device, 1 USPQ2d at 1520-23, 1529-30, the district court said Mathis' "course of conduct demonstrates a recklessness with regard to the truth, which justifies an award of attorneys' fees under the 'exceptional case' provision of 35 U.S.C. Sec. 285." 1 USPQ2d at 1523.
On March 21, 1986, the district court entered judgment. In the face of the irrefutable evidence of invalidity and unenforceability This court affirmed in an unpublished opinion, perceiving no error in the determination of unenforceability, the finding of exceptional case, or the award of attorney fees, and deeming it unnecessary to reach the holdings of invalidity. Mathis v. Hydro Air Indus., Inc., 818 F.2d 874 (Fed.Cir.1987). Continuing to exhibit a vincible ignorance of reality and a persistent penchant for wasting judicial resources, Mathis filed a Petition for Rehearing in this court (denied March 11, 1987) and a Petition for Certiorari in the Supreme Court (denied, --- U.S. ----, 108 S.Ct. 92, 98 L.Ed.2d 53 (1987)).
described above, and with not even a seeming semblance of a sense of shame, Mathis appealed.
While Mathis' appeal from the March 21, 1986 judgment was pending in this court, the district court conducted proceedings to establish the quantum of attorney fees and expenses, and, on June 27, 1986, issued detailed findings and conclusions "Regarding the Reasonableness of Attorneys Fees Awarded ... Under 35 U.S.C. Section 285." 1 USPQ2d at 1530-1539. The court awarded attorney fees totalling $580,183.50 and expenses totalling $83,421.91, with post-judgment interest calculated from March 21, 1986, the date of the judgment by which Hydro became entitled to the fees. 1 USPQ2d at 1532, 1535, 1538. Judge Pfaelzer denied Hydro's request for pre-judgment interest, saying she lacked authority to grant that request. Id.
Mathis appealed the award, challenging each basis as improper and each amount as unreasonable. Hydro cross-appeals the denial of its request for prejudgment interest on the award.
Twelve days before oral argument in this appeal, Mathis' attorney withdrew. New counsel filed an appearance and argued the cause. 1
1. Whether any basis exists for reexamining the March 21, 1986 judgment and its affirmance by this court.
2. Whether the district court abused its discretion in setting the amount of the award.
3. Whether the district court erred in denying pre-judgment interest on the award.
4. Whether this consolidated appeal is frivolous.
OPINIONThis case illustrates the truism that abuses of the patent system and the judicial process are not limited to infringers. Blatantly misleading the PTO, Mathis obtained four patents it had to know were invalid. Mathis then wasted the resources of the trial and appellate courts and those of seven defendants in a charade in which Mathis attempted to employ the courts as handmaidens to its iniquity. 2
Mathis' conduct can be outlined as follows:
Before This Appeal
(1) Concealed from the PTO: pertinent prior art; a material industry practice; invalidating sales; an invalidating public use; and that discardable concrete pipes were known.
(2) Misleadingly told the PTO the claimed structure was nowhere in the prior art.
(3) Concealed 295 invoices, some evidencing invalidity.
(4) Disingenuously "explained" its discovery noncompliance.
(5) Submitted misleading evidence of tests.
(6) Prosecuted its suit, appeal, and petitions with full knowledge of all the foregoing.
(7) Attempted a frivolous second shot at the original judgment.
(8) Without basis, disputed relevancy of withheld art.
(9) Blamed nondisclosure of withheld art on a deceased attorney.
(10) Complained that an "army" of searchers invaded its premises.
(11) Labeled the court's reasons "a complete mystery."
(12) Without basis, questioned the court's impartiality.
(13) Untruthfully asserted that Kerr guidelines were ignored.
(14) Without basis, objected to fees for untried defenses.
(15) Insinuated without basis that Hydro's attorneys raised rates because of a trial court remark.
(16) Objected to fees relating to the design patent, on the frivolous ground it had been dedicated.
(17) Accused Hydro of "inequitable conduct" solely because Hydro thoroughly researched "every conceivable issue."
Repeating the arguments made in its briefs and petition for rehearing in his 1986 appeal, and citing no basis whatever for doing so, Mathis devotes forty percent of its present brief to attacks on the original judgment awarding attorney fees and this court's affirmance of that judgment. Citing no facts or law requiring their reconsideration, Mathis merely says those judgments are "palpably wrong" and "clearly erroneous."
Mathis' unsupported and unsupportable cries of judicial bias and incompetence fail to show any error whatever in the earlier decisions, much less any "exceptional circumstances" that might permit reopening them. See United States v. Turtle Mountain Band of Chippewa Indians, 612 F.2d 517, 522, 222 Ct.Cl. 1 (1979). Mathis has had his day in court, a day undeserved, on the issues previously decided. Our earlier affirmance remains the law of the case. See, e.g., Gindes v. United States, 740 F.2d 947, 949-50 (Fed.Cir.), cert. denied, 469 U.S. 1074, 105 S.Ct. 569, 83 L.Ed.2d 509 (1984); Turtle...
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