Puritan Med. Prods. Co. v. Copan Italia S.P.A.

• Decision Date: 03 July 2018
• Docket Number: Docket: BCD–17–180
• Citation: 188 A.3d 853
• Parties: PURITAN MEDICAL PRODUCTS COMPANY LLC v. COPAN ITALIA S.P.A.
• Court: Maine Supreme Court

188 A.3d 853

PURITAN MEDICAL PRODUCTS COMPANY LLC

v.COPAN ITALIA S.P.A.

Docket: BCD–17–180

Supreme Judicial Court of Maine.

Argued: November 14, 2017

Decided: July 3, 2018

Thomas E. Getchell, Esq. (orally), Troubh Heisler, Portland, for appellant Puritan Medical Products Company LLC

David P. Silk, Esq., Benjamin M. Leoni, Esq., and Rebecca G. Klotzle, Esq. (orally), Curtis Thaxter LLC, Portland, for appellee Copan Italia S.p.A.

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

Majority: SAUFLEY, C.J., and MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

Concurrence:ALEXANDER, J.

HUMPHREY, J.

[¶ 1] Puritan Medical Products Company LLC appeals from a summary judgment entered in the Business and Consumer Docket (Mulhern, J. ) in favor of Copan Italia S.p.A. on Puritan's claim that Copan violated Maine's Actions for Bad Faith Assertion of Patent Infringement statute, 14 M.R.S. §§ 8701 – 8702 (2017). Although the court granted Copan's motion for summary judgment after finding no genuine issues of material fact and determining that Copan was entitled to judgment as a matter of law, Copan filed a cross-appeal to preserve its separate argument that Puritan's claim was preempted by federal patent law. Because we conclude that Puritan's claim is preempted, we affirm the grant of summary judgment in favor of Copan on other grounds.

I. BACKGROUND

[¶ 2] Puritan and Copan both produce flocked swabs¹ that are sold throughout the world. Copan has developed, produced, and marketed flocked swabs since 2003 and currently holds patents in both Europe and the United States. Headquartered in Italy, Copan also maintains facilities in China and the United States and employs 450 people. In 2015, Copan produced over 50 million flocked swabs.

[¶ 3] Puritan also manufactures flocked swabs. Based in Guilford, Maine, Puritan employs 250 people. In 2010, Puritan applied for patents relating to flocked swabs and began producing, marketing, and selling its flocked swabs in countries where Copan holds patents.

[¶ 4] In 2011, Copan became concerned that some of Puritan's flocked swabs infringed its European and United States patents. Copan alleged that it commissioned external and performed internal examinations of Puritan's flocked swabs to compare them to Copan's patents.² Based on the results of that testing, Copan sent a letter to Puritan's distributor on June 8, 2011, communicating its belief that Puritan's swabs infringed Copan's patents.

[¶ 5] In 2012, Copan filed a claim against Puritan in Germany, alleging infringement of its German utility models,³ which evolve from its European patents. Through those proceedings, Copan received additional information about the composition of Puritan's flocked swabs from tests performed by two court-appointed experts. Copan interpreted the results of the tests to confirm that Puritan's flocked swabs fall within the scope of protection afforded by some of Copan's patents. Puritan denies that the experts' findings confirmed infringement. Although aspects of the German proceedings are still pending, Copan won a utility model infringement case against Puritan in 2014 and, in 2015, one of its European patents and a utility model were confirmed to be valid.

[¶ 6] In the spring of 2015, Copan learned that Puritan's flocked swabs may have been offered as part of a bid by a distributer, GE Healthcare Life Sciences, to supply the French Gendarmerie with forensic products. Copan sent letters to GE Healthcare⁴ and the French Gendarmerie, explaining that Puritan's flocked swabs may infringe upon Copan's patents. The French Gendarmerie did not accept GE Healthcare's offer.

[¶ 7] In September 2015, Puritan filed a complaint in the Superior Court in Piscataquis County against Copan pursuant to Maine's Actions for Bad Faith Assertion of Patent Infringement statute. See 14 M.R.S. §§ 8701 – 8702. Shortly thereafter, the case was transferred to the Business and Consumer Docket. Copan answered the complaint and asserted affirmative defenses, including that Puritan's claim was preempted by United States federal patent law.⁵ After more than one year of discovery, Copan moved for summary judgment, arguing that federal patent law preempted Puritan's claim and, in the alternative, that the record showed no genuine issue of material fact on the merits and that it was entitled to summary judgment as a matter of law.

[¶ 8] The court granted Copan's motion for summary judgment. It concluded (1) that it had jurisdiction to consider Puritan's claim because it was not preempted by federal patent law, and (2) that there were no genuine issues of material fact and Copan was entitled to summary judgment.⁶

[¶ 9] Puritan filed an appeal from the summary judgment, and Copan filed a cross-appeal, challenging the court's conclusion that Puritan's claim was not preempted by federal law. M.R. App. P. 2 (Tower 2016).⁷

II. DISCUSSION

[¶ 10] We review the entry of an order for summary judgment de novo for errors of law, viewing the evidence in the light most favorable to the party against whom summary judgment was entered. See Diviney v. Univ. of Me. Sys. , 2017 ME 56, ¶ 14, 158 A.3d 5.

[¶ 11] Before we can reach Puritan's challenge to the trial court's grant of summary judgment, we must first decide whether federal patent law preempts Puritan's state law claim. See James v. Inhabitants of the Town of West Bath , 437 A.2d 863, 865 n.3 (Me. 1981) (explaining that a court will decide whether a law or ordinance is preempted before addressing the substantive argument). "Federal preemption, which involves issues of statutory and constitutional interpretation, is a question of law reviewed de novo." In re Guardianship of Smith , 2011 ME 51, ¶ 10, 17 A.3d 136. If we conclude that Puritan's state law claim is preempted, we will not address the parties' substantive arguments on the merits of Puritan's claim. See Doe v. Portland Hous. Auth. , 656 A.2d 1200, 1202 (Me. 1995) ; James , 437 A.2d at 865 n.3.

[¶ 12] We begin by clarifying the legal standard for federal patent law preemption and apply it to the facts presented in the parties' statements of material facts and the supporting evidentiary materials, with disputes resolved in Puritan's favor. See Scott v. Androscoggin Cty. Jail , 2004 ME 143, ¶¶ 2, 15, 866 A.2d 88.

A. Preemption and Federal Patent Law

[¶ 13] The Supremacy Clause of the United States Constitution states that the "Constitution, and the Laws of the United States ... shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. Federal preemption of state law takes three forms: express preemption, field preemption, and conflict preemption. See, e.g. , English v. Gen. Elec. Co. , 496 U.S. 72, 78–79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). Express preemption occurs when Congress defines "explicitly the extent to which its enactments pre-empt state law." Id. at 78, 110 S.Ct. 2270. Field preemption occurs when a state law attempts to "regulate[ ] conduct in a field that Congress intended the Federal Government to occupy exclusively." Id. at 79, 110 S.Ct. 2270. Finally, conflict preemption occurs "where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."⁸ Id. (quotation marks omitted).

[¶ 14] The United States Court of Appeals for the Federal Circuit, the federal court with jurisdiction over patent law appeals, has determined that federal patent law neither fully occupies the field nor expressly preempts state patent law. See Ultra–Precision Mfg., Ltd. v. Ford Motor Co. , 411 F.3d 1369, 1377 (Fed. Cir. 2005). Therefore, federal patent law preempts state law only when the state law directly conflicts with federal law. See id.

[¶ 15] At the heart of it, federal patent law protects a patent holder's good-faith assertion of patent infringement. See Globetrotter Software, Inc. v. Elan Comput. Grp., Inc. , 362 F.3d 1367, 1374 (Fed. Cir. 2004) ; see also Virtue v. Creamery Package Mfg. Co. , 227 U.S. 8, 37–38, 33 S.Ct. 202, 57 L.Ed. 393 (1913) ("Patents would be of little value if infringers of them could not be notified of the consequences of infringement or proceeded against in the courts."); Aronson v. Orlov , 228 Mass. 1, 116 N.E. 951, 955 (1917) ("The owner of a patent already issued may notify infringers and warn of his intent to protect his rights, if he acts in good faith."). A patent holder, "acting in good faith on its belief as to the nature and scope of its rights, is fully permitted to press those rights even though [it] may misconceive what those rights are." Mikohn Gaming Corp. v. Acres Gaming, Inc. , 165 F.3d 891, 897 (Fed. Cir. 1998) (quotation marks omitted).

[¶ 16] Relevant to the conflict preemption analysis, it is fundamental to the federal patent law's protection accorded to patent holders that state law claims "against a patent holder ... based on enforcing a patent in the marketplace[ ] are ‘preempted’ by federal patent laws, unless the claimant can show that the patent holder acted in ‘bad faith’ in the publication or enforcement of its patent." See 800 Adept, Inc. v. Murex Sec., Ltd. , 539 F.3d 1354, 1369 (Fed. Cir. 2008) ; see also Globetrotter , 362 F.3d at 1374 ("We have held that federal patent law preempts state-law tort liability for a patentholder's good faith conduct in communications asserting infringement of its patent and warning about potential litigation."); Mikohn Gaming , 165 F.3d at 894 (stating that "a notice of patent rights that is protected under federal law can not be held violative of state law on a different legal standard").⁹ In order for a state law claim "to avoid preemption, bad faith must be alleged and ultimately proven, even if bad faith is not otherwise an element of the [state law] claim." Globetrotter , 362 F.3d at 1374 (quotation marks omitted). In other words, "federal patent laws ... bar state-law liability for communications concerning alleged infringement so long as those communications are not made in ...