Travel Sentry, Inc. v. Tropp

• Decision Date: 19 December 2017
• Docket Number: 2016-2386, 2016-2387, 2016-2714, 2017-1025
• Citation: 877 F.3d 1370
• Parties: TRAVEL SENTRY, INC., Plaintiff-Cross-Appellant v. David A. TROPP, Defendant-Appellant David A. Tropp, Plaintiff-Appellant v. Conair Corporation, Briggs & Riley Travelware LLC, Ebags, Inc., Eagle Creek, a Division of VF Outdoor, Inc., HP Marketing Corp., Ltd., L.C. Industries, LLC, Magellan's International Travel Corporation, Master Lock Company LLC, Outpac Designs Inc., Samsonite Corporation, Travelpro International Inc., TRG Accessories, LLC, Tumi, Inc., Wordlock, Inc., Defendants-Cross Appellants Victorinox Swiss Army, Inc., Defendant-Appellee Titan Luggage USA, Delsey Luggage Inc., Defendants
• Court: U.S. Court of Appeals — Federal Circuit

877 F.3d 1370

TRAVEL SENTRY, INC., Plaintiff-Cross-Appellant

v.David A. TROPP, Defendant-Appellant

David A. Tropp, Plaintiff-Appellant

v.Conair Corporation, Briggs & Riley Travelware LLC, Ebags, Inc., Eagle Creek, a Division of VF Outdoor, Inc., HP Marketing Corp., Ltd., L.C. Industries, LLC, Magellan's International Travel Corporation, Master Lock Company LLC, Outpac Designs Inc., Samsonite Corporation, Travelpro International Inc., TRG Accessories, LLC, Tumi, Inc., Wordlock, Inc., Defendants-Cross Appellants

Victorinox Swiss Army, Inc., Defendant-Appellee

Titan Luggage USA, Delsey Luggage Inc., Defendants

2016-2386, 2016-2387, 2016-2714, 2017-1025

United States Court of Appeals, Federal Circuit.

Decided: December 19, 2017

William L. Prickett, Seyfarth Shaw LLP, Boston, MA, argued for cross-appellants Briggs & Riley Travelware LLC, Conair Corporation, Eagle Creek, A Division of VF Outdoor, Inc., HP Marketing Corp., Ltd., L.C. Industries, LLC, Magellan's International Travel Corporation, Master Lock Company LLC, Outpac Designs Inc., Samsonite Corporation, TRG Accessories, LLC, Travel Sentry, Inc., Travelpro International Inc., Tumi, Inc., Wordlock, Inc., eBags, Inc. and appellee Victorinox Swiss Army, Inc. Cross-appellants Travel Sentry, Inc., Conair Corporation, Eagle Creek, A Division of VF Outdoor, Inc., HP Marketing Corp., Ltd., L.C. Industries, LLC, Master Lock Company LLC, Outpac Designs Inc., Samsonite Corporation, Travelpro International Inc., TRG Accessories, LLC, Wordlock, Inc. and appellee Victorinox Swiss Army, Inc. also represented by Brian Michaelis.

Paul Whitfield Hughes, Mayer Brown LLP, Washington, DC, argued for appellant. Also represented by Alan M. Grimaldi, Gary Hnath, Andrew John Pincus, Jonathan Weinberg.

Peter Ian Bernstein, Scully, Scott, Murphy & Presser, Garden City, NY, for cross-appellant Briggs & Riley Travelware LLC.

Carolyn V. Juarez, Neugeboren O'Dowd PC, Boulder, CO, for cross-appellant eBags, Inc.

Robert J. Kenney, Birch Stewart Kolasch & Birch, LLP, Falls Church, VA, for cross-appellant Magellan's International Travel Corporation.

Neil P. Sirota, Baker Botts, LLP, New York, NY, for cross-appellant Tumi, Inc. Also represented by Jennifer Cozeolino Tempesta.

Before Lourie, O'Malley, and Taranto, Circuit Judges.

O'Malley, Circuit Judge.

This is the third time we have had occasion to preside over this longstanding dispute regarding whether Travel Sentry, Inc. ("Travel Sentry") and its licensees infringe one or more claims of two patents issued to appellant David A. Tropp ("Tropp"): U.S. Patent Nos. 7,021,537 ("the '537 patent") and 7,036,728 ("the '728 patent"). See Travel Sentry, Inc. v. Tropp (Travel Sentry II ), 497 Fed.Appx. 958 (Fed. Cir. 2012) ; Tropp v. Conair Corp. , 484 Fed.Appx. 568 (Fed. Cir. 2012). In this most recent iteration, Tropp appeals from the district court's entry of summary judgment that Travel Sentry and its licensees do not directly infringe any of the method claims recited in the '537 and '728 patents under 35 U.S.C. § 271(a). See Travel Sentry, Inc. v. Tropp (Travel Sentry III ), 192 F.Supp.3d 332 (E.D.N.Y. 2016). Travel Sentry and several of its licensees cross-appeal from the district court's denial of their motions for attorney fees brought under 35 U.S.C. § 285.

We conclude that there are genuine disputes of material fact regarding whether Travel Sentry directs or controls the performance of certain steps of the claimed methods. Accordingly, we vacate the district court's entry of summary judgment of noninfringement in favor of Travel Sentry and its licensees and remand for further proceedings. Because Travel Sentry and its licensees are no longer "prevailing parties" to whom an award of attorney fees could be made under 35 U.S.C. § 285, we dismiss their cross-appeal as moot.

I. BACKGROUND

A. Factual Background

The claims of the '537 and '728 patents are directed to methods of improving airline luggage inspection through the use of dual-access locks. Claim 1 of the '537 patent is representative, and recites:

A method of improving airline luggage inspection by a luggage screening entity, comprising:

[a] making available to consumers a special lock having a combination lock portion and a master key lock portion, the master key lock portion for receiving a master key that can open the master key lock portion of this special lock, the special lock designed to be applied to an individual piece of airline luggage, the special lock also having an identification structure associated therewith that matches an identification structure previously provided to the luggage screening entity, which special lock the luggage screening entity has agreed to process in accordance with a special procedure,

[b] marketing the special lock to the consumers in a manner that conveys to the consumers that the special lock will be subjected by the luggage screening entity to the special procedure,

[c] the identification structure signaling to a luggage screener of the luggage screening entity who is screening luggage that the luggage screening entity has agreed to subject the special lock associated with the identification structureto the special procedure and that the luggage screening entity has a master key that opens the special lock, and

[d] the luggage screening entity acting pursuant to a prior agreement to look for the identification structure while screening luggage and, upon finding said identification structure on an individual piece of luggage, to use the master key previously provided to the luggage screening entity to, if necessary, open the individual piece of luggage.

'537 patent col. 6, ll. 6–37.

A comprehensive overview of the facts of these cases is provided in Travel Sentry II, 497 Fed.Appx. at 959–63. Only background relevant to this appeal is provided here.

Tropp, through his company Safe Skies, LLC, administers a lock system that permits the Transportation Security Administration ("TSA") to unlock, inspect, and relock checked baggage. Id. at 960. Travel Sentry also administers a system that enables a traveler to lock a checked bag while allowing TSA to open the lock, search the bag as needed, and then relock it. Id. at 961. The identifying mark on Travel Sentry's locks is a red diamond logo, for which Travel Sentry holds a registered trademark. Id. Travel Sentry has entered into license and distribution agreements with several lock manufacturers, lock distributors, and luggage manufacturers, under which Travel Sentry receives payments in exchange for granting these entities the right to use and market its locks and master keys. Id. Travel Sentry, however, "retains the right to monitor the quality of the locks bearing its mark and to control the distribution of master keys, which have a distinctive shape and color." Id.

In October 2003, Travel Sentry entered into a three-page Memorandum of Understanding ("MOU") with TSA. Id. The MOU, which is the only written agreement between TSA and Travel Sentry concerning Travel Sentry certified locks, states that Travel Sentry will supply TSA with master keys (termed "passkeys") to open checked baggage secured with certified locks. Id. According to the MOU, the purpose of the agreement:

is to set forth terms by which Travel Sentry will provide TSA, at no cost, with 1,500 complete sets of passkeys for the TSA to distribute to field locations. These passkeys are designed to permit TSA screeners to open checked baggage secured with Travel Sentry certified locks without breaking such locks.

TSA will test these passkeys to ensure their operational suitability. If TSA determines that Travel Sentry certified locks or the passkeys required for their operation do not perform their intended function, TSA will inform Travel Sentry and this agreement will be considered null and void. TSA takes no responsibility for any damage to locks or baggage secured with Travel Sentry locks, although TSA will make good faith efforts to distribute the passkeys and information provided by Travel Sentry on the use of the passkeys, and to use the passkeys to open checked baggage secured with Travel Sentry certified locks whenever practicable. TSA screeners will make good faith efforts to relock Travel Sentry locks after bags are inspected.

Id. at 961.

The MOU also sets forth the responsibilities of both parties to the agreement. With respect to TSA, the MOU provides that:

(a) TSA will accept passkey sets, as well as back-up replacement sets, from Travel Sentry and distribute the sets to all areas where baggage is being screened;

(b) the passkeys will be stamped "Property of TSA" and "Unlawful to Duplicate," may include the DHS logo if desired and authorized, and will be marked with a tracking number in a TSA-agreed format so that they can be easily integrated into the TSA property management system;

(c) Travel Sentry will coordinate the content of public announcement with the TSA in advance of the program launch, tentatively scheduled for November 12, 2003, including promotional materials, press releases and similar media; and

(d) TSA may offer the same terms and conditions in this agreement to any other entity that seeks to provide similar services.

See id. at 961–62. With regard to Travel Sentry's responsibilities, the MOU states that:

(a) Travel Sentry acknowledges that the TSA cannot make or infer any exclusive endorsement of Travel Sentry certified locks, nor can Travel Sentry claim that any such endorsement exists. Travel Sentry may not use the DHS/TSA logo on any of its locks or distributed print or other media materials unless specifically authorized to do so in writing;

(b) Travel Sentry understands that the TSA intends to develop a functional standard, open to the public, for 'Independent Dual Custody Operation Locking Systems.' By moving ahead with its program in advance of the publication and adoption of this standard, Travel Sentry or any other entity takes some degree of risk in that their locking system may not meet the final version of the functional

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