Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_02-cv-04483/USCOURTS-cand-3_02-cv-04483-10/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

For the Northern District of California

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 A motion for reconsideration will be granted where the moving party shows “[a] manifest failure by

the Court to consider material facts or dispositive legalarguments whichwere presented to the Court.” Local

Rule 7-9(b)(3). Because PostX cited Globetrotter in its moving papers, this legal authority was before the

Court at the time of its summary adjudication decision. See Docket # 596, Pl.’s Mot. at 1, n. 2 (“Upon a

determination that PostX’s patent claims were not were not a sham, Sigaba’s false advertising claim must also

fail. Cf. Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367, 1374-75 (Fed. Cir.

2004).”). 

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

POSTX CORPORATION,

Plaintiff,

 v.

SECURE DATA IN MOTION, d/b/a SIGABA,

Defendant,

AND RELATED COUNTERCLAIMS.

 /

No. C 02-04483 SI

ORDER GRANTING PLAINTIFF’S

MOTION FOR RECONSIDERATION,

AND AMENDING AUGUST 17, 2005

ORDER

On August 19, 2005, PostX filed a motion for leave to file a motion for reconsideration pursuant to

Local Rule 7-9(a). PostX seeks reconsideration of the statement in the Court’s August 17, 2005 Order re:

Summary Adjudication Motions that “a Lanham Act claim based on a false claim of infringement does not

require a showing of objective baselessness.” August 17, 2005 Order at 16:22-23. The Court has granted

the motion for leave and hereby GRANTS plaintiff’s motion for reconsideration.1

The Court relied on Zenith Electronics Corp. v. Exzec, Inc., 182 F.3d 1340, 1354 (Fed. Cir. 1999),

where the Federal Circuit held that claims under § 43(a) of the Lanham Act require a showing of bad faith.

As PostX correctly points out, however, the Court ofAppeals stated in Zenith that “[e]xactly what constitutes

bad faith remains to be determined on a case by case basis,” and did not clearly enunciate whether the bad faith

Case 3:02-cv-04483-SI Document 853 Filed 08/31/05 Page 1 of 6
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test included both objective and subjective requirements. More recently, in Globetrotter Software, Inc. v. Elan

Computer Group, Inc., 362 F.3d 1367 (Fed. Cir. 2004), the Federal Circuit addressed the question of

“whether the bad faith standard of Zenith can be satisfied in the absence of a showing that the claims asserted

were objectively baseless,” and held that “it cannot.” 362 F.3d at 1375. Under Globetrotter, which addressed

state law claims based on communications allegingpatentinfringement,“[a] plaintiff claiming that a patent holder

has engaged in wrongful conduct by asserting claims of patent infringement must establish that the claims of

infringement were objectively baseless.” Id. at 1377. Since Globetrotter, at least one court in this district has

applied the objective baselessness requirement to Lanham Act claims. See Dominant Semiconductors Sdn.

Bhd. v. OSRAM GmbH, 2005 WL 1514100, at *3-4 (N.D. Cal. Jun. 21, 2005) (finding that, in determining

whether a patentee has acted in bad faith under the Lanham Act, the court must first determine whether the

statements alleging infringement were objectively baseless). 

As PostX acknowledges, the rule of Globetrotter does not entitle it to summary adjudication on

Sigaba’s LanhamAct counterclaim. However, the Court considers it necessary to amend its August 17, 2005

Order to state the correct legal standard and clarify the effect of Globetrotter on the factual basis for the

LanhamAct claim. The sentence in the August 17, 2005 Order at 16:22-24 (“However, a Lanham Act claim

based on a false claim of infringement does not require a showing of objective baselessness, and thus the

Court’s finding that PostX’s suit was not objectively baseless under PREI does not control the viability of

Sigaba’s Lanham Act counterclaim”) is hereby deleted and replaced with the following:

A Lanham Act claim based on a false claim of infringement requires a showing of

objective baselessness. See Globetrotter Software, Inc. v. ElanComputer Group, Inc., 362

F.3d 1367 (Fed. Cir. 2004); Dominant Semiconductors Sdn. Bhd. v. OSRAM GmbH, 2005

WL 1514100, at *3-4 (N.D. Cal. Jun. 21, 2005) (applying Globetrotter, and holding that, in

determining whether a patentee has acted in bad faith for purposes of a LanhamAct claim, the

court must first determine whether the statements alleging infringement were “objectively

baseless” “such that no reasonable litigant could realistically expect success on the merits.”).

However, the Court’s finding that PostX’s suit was not objectively baseless under

PREI does not controlthe viability of Sigaba’s Lanham Act counterclaim. Sigaba allegesthat

PostX widely publicized its suit against Sigaba to potential customers, and that it went so far

as to leave on its website a press release regarding the alleged infringement for months after

the Federal Circuit had affirmed this Court’s findings of non-infringement. While statements

byPostX regarding infringement made before and during the patent litigationare not actionable

under Globetrotter, statements afterresolution ofthe infringement claims, and the act ofleaving

the press release up on PostX’s website after the Federal Circuit’s ruling, do give rise to a

Lanham Act claim that is not precluded by Noerr-Pennington doctrine.

The Court’s August 17, 2005 Order is hereby AMENDED accordingly.

Case 3:02-cv-04483-SI Document 853 Filed 08/31/05 Page 2 of 6
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IT IS SO ORDERED.

Dated: 8/31/05

 

SUSAN ILLSTON

United States District Judge

Case 3:02-cv-04483-SI Document 853 Filed 08/31/05 Page 3 of 6
United States District Court

For the Northern District of California

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 A motion for reconsideration will be granted where the moving party shows “[a] manifest failure by

the Court to consider material facts or dispositive legalarguments whichwere presented to the Court.” Local

Rule 7-9(b)(3). Because PostX cited Globetrotter in its moving papers, this legal authority was before the

Court at the time of its summary adjudication decision. See Docket # 596, Pl.’s Mot. at 1, n. 2 (“Upon a

determination that PostX’s patent claims were not were not a sham, Sigaba’s false advertising claim must also

fail. Cf. Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367, 1374-75 (Fed. Cir.

2004).”). 

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

POSTX CORPORATION,

Plaintiff,

 v.

SECURE DATA IN MOTION, d/b/a SIGABA,

Defendant,

AND RELATED COUNTERCLAIMS.

 /

No. C 02-04483 SI

ORDER GRANTING PLAINTIFF’S

MOTION FOR RECONSIDERATION,

AND AMENDING AUGUST 17, 2005

ORDER

On August 19, 2005, PostX filed a motion for leave to file a motion for reconsideration pursuant to

Local Rule 7-9(a). PostX seeks reconsideration of the statement in the Court’s August 17, 2005 Order re:

Summary Adjudication Motions that “a Lanham Act claim based on a false claim of infringement does not

require a showing of objective baselessness.” August 17, 2005 Order at 16:22-23. The Court has granted

the motion for leave and hereby GRANTS plaintiff’s motion for reconsideration.1

The Court relied on Zenith Electronics Corp. v. Exzec, Inc., 182 F.3d 1340, 1354 (Fed. Cir. 1999),

where the Federal Circuit held that claims under § 43(a) of the Lanham Act require a showing of bad faith.

As PostX correctly points out, however, the Court ofAppeals stated in Zenith that “[e]xactly what constitutes

bad faith remains to be determined on a case by case basis,” and did not clearly enunciate whether the bad faith

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For the Northern District of California

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test included both objective and subjective requirements. More recently, in Globetrotter Software, Inc. v. Elan

Computer Group, Inc., 362 F.3d 1367 (Fed. Cir. 2004), the Federal Circuit addressed the question of

“whether the bad faith standard of Zenith can be satisfied in the absence of a showing that the claims asserted

were objectively baseless,” and held that “it cannot.” 362 F.3d at 1375. Under Globetrotter, which addressed

state law claims based on communications allegingpatentinfringement,“[a] plaintiff claiming that a patent holder

has engaged in wrongful conduct by asserting claims of patent infringement must establish that the claims of

infringement were objectively baseless.” Id. at 1377. Since Globetrotter, at least one court in this district has

applied the objective baselessness requirement to Lanham Act claims. See Dominant Semiconductors Sdn.

Bhd. v. OSRAM GmbH, 2005 WL 1514100, at *3-4 (N.D. Cal. Jun. 21, 2005) (finding that, in determining

whether a patentee has acted in bad faith under the Lanham Act, the court must first determine whether the

statements alleging infringement were objectively baseless). 

As PostX acknowledges, the rule of Globetrotter does not entitle it to summary adjudication on

Sigaba’s LanhamAct counterclaim. However, the Court considers it necessary to amend its August 17, 2005

Order to state the correct legal standard and clarify the effect of Globetrotter on the factual basis for the

LanhamAct claim. The sentence in the August 17, 2005 Order at 16:22-24 (“However, a Lanham Act claim

based on a false claim of infringement does not require a showing of objective baselessness, and thus the

Court’s finding that PostX’s suit was not objectively baseless under PREI does not control the viability of

Sigaba’s Lanham Act counterclaim”) is hereby deleted and replaced with the following:

A Lanham Act claim based on a false claim of infringement requires a showing of

objective baselessness. See Globetrotter Software, Inc. v. ElanComputer Group, Inc., 362

F.3d 1367 (Fed. Cir. 2004); Dominant Semiconductors Sdn. Bhd. v. OSRAM GmbH, 2005

WL 1514100, at *3-4 (N.D. Cal. Jun. 21, 2005) (applying Globetrotter, and holding that, in

determining whether a patentee has acted in bad faith for purposes of a LanhamAct claim, the

court must first determine whether the statements alleging infringement were “objectively

baseless” “such that no reasonable litigant could realistically expect success on the merits.”).

However, the Court’s finding that PostX’s suit was not objectively baseless under

PREI does not controlthe viability of Sigaba’s Lanham Act counterclaim. Sigaba allegesthat

PostX widely publicized its suit against Sigaba to potential customers, and that it went so far

as to leave on its website a press release regarding the alleged infringement for months after

the Federal Circuit had affirmed this Court’s findings of non-infringement. While statements

byPostX regarding infringement made before and during the patent litigationare not actionable

under Globetrotter, statements afterresolution ofthe infringement claims, and the act ofleaving

the press release up on PostX’s website after the Federal Circuit’s ruling, do give rise to a

Lanham Act claim that is not precluded by Noerr-Pennington doctrine.

The Court’s August 17, 2005 Order is hereby AMENDED accordingly.

Case 3:02-cv-04483-SI Document 853 Filed 08/31/05 Page 5 of 6
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For the Northern District of California

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IT IS SO ORDERED.

Dated: 8/31/05

 

SUSAN ILLSTON

United States District Judge

Case 3:02-cv-04483-SI Document 853 Filed 08/31/05 Page 6 of 6