Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00842/USCOURTS-caed-1_06-cv-00842-8/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

The California Table Grape

Commission,

Plaintiff,

v.

RB Sandrini, Inc., RB Sandrini

Farms, L.P. d/b/a/ RB Sandrini

Farms, and Richard B.

Sandrini,

Defendants.

1:06-cv-00842-OWW-TAG

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

MOTION FOR SUMMARY JUDGMENT

AND DENYING DEFENDANTS’

MOTION FOR SUMMARY JUDGMENT

I. Introduction

Before the court are cross-motions for summary judgment. 

Plaintiff, The California Table Grape Commission (“Commission”),

moves for partial summary judgment on its first and second causes

of action for patent infringement under 35 U.S.C. § 271 and for

violation of California Business and Professions Code § 17200,

respectively. The Commission also moves for partial summary

judgment on the defendants’ affirmative defense and counterclaim

that the patent in question is not invalid under the public use

bar of 35 U.S.C. § 102(b). 

Defendants, RB Sandrini, Inc. (“Sandrini Inc.”), RB Sandrini

Farms, L.P. d/b/a/ RB Sandrini Farms (“Sandrini Farms”), and

Richard B. Sandrini (“Mr. Sandrini”) (all defendants

collectively, “Sandrini”), move for summary judgment on four 

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grounds: (1) the patent in question is invalid under the public

use bar of 35 U.S.C. § 102(b); (2) the Commission lacks statutory

authority under the Ketchum Act to engage in its patent licensing

program and therefore lacks standing; (3) the Commission granted

Sandrini a license to practice the patent in question; and (4)

federal law preempts the Commission’s state law causes of action.

II. Background

The Commission and Sandrini each submitted a statement of

undisputed facts and a response to each other’s statement of

undisputed facts. It is relatively clear from the responses that

the parties do not agree on what facts are undisputed.

A. Facts in Support of the Commission’s Motion

Sandrini Inc. is a California corporation with its principal

place of business in Delano, California. (PSUF 1). Sandrini

Inc. is in the business of selling and shipping table grapes. 

(PSUF 2). Mr. Sandrini is the sole shareholder of Sandrini Inc. 

(PSUF 3). Sandrini Farms is a California limited partnership

with its principal place of business in Delano, California. 

(PSUF 4). Sandrini Farms is in the business of growing table

grapes. (PSUF 5). Mr. Sandrini is the sole owner of Sandrini

Farms either directly, or through Sandrini Inc. (PSUF 6). The

identity of the general and limited partners is not specified by

the moving papers.

In 1981, the Commission began funding the table grape

breeding program run by the United States Department of

Agriculture (“USDA”). (PSUF 7). The Commission currently funds

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approximately one-third of the USDA’s program. (PSUF 7). 

Between 1990 and 2006, California table grape growers contributed

more than $1.1 million to the USDA program through their

assessments paid to the Commission. (PSUF 7).

On August 6, 2001, the Commission and the USDA entered into

a memorandum of understanding establishing a framework for

cooperation between each other to develop and patent new table

grape varieties. (PSUF 8). The USDA and Commission agreed that

obtaining intellectual property protection for the USDA’s new

table grape varieties would often be in the best interest of

table grape producers. (PSUF 8). The USDA and Commission also

agreed that as the USDA developed and decided to patent new table

grape varieties, the Commission would apply to become the

licensee. (PSUF 8). If the Commission became the licensee, it

would administer the rights to the new varieties and make them

available to the growers. (PSUF 8).

USDA employees David W. Ramming (“Ramming”) and Ronald E.

Tarailo (“Tarailo”) invented Autumn King, the table grape at

issue in this case. (PSUF 9). Ramming and Tarailo filed Patent

Application No. 10/953,387 on September 28, 2004. (PSUF 9). In

connection with the patent application, the inventors of Autumn

King did not collect the measurements of the mature vines until

December 19, 2003; these measurements were the final piece of

data needed for the patent application. (PSUF 10). Sandrini,

however, asserts that the measurements of the mature vines were

taken in the summer of 2003 in less than thirty minutes and could

have been taken in earlier growing seasons. (RPSUF 10).

The official public release of the Autumn King variety

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occurred on July 13, 2005. (PSUF 19). Prior to the official

release, Ramming took numerous precautions to maintain control

over the Autumn King vines grown on USDA controlled property

(PSUF 19), although Sandrini states Ramming took no such

precautions. (RPSUF 19). No person at the USDA with authority

to do so authorized the release of the Autumn King variety to any

grower before the official release date. (PSUF 19). Sandrini,

however, disputes this and states that a USDA employee most

likely provided the Autumn King plant material to Jim Ludy prior

to the official release date. (RPSUF 19). 

On February 21, 2006, patent number US PP16,284 (“‘284

Patent”), entitled Grape Vine Denominated Autumn King, was issued

to Ramming and Tarailo. (PSUF 11). The ‘284 Patent describes

and claims a variety of grapevine denominated Autumn King

(“Autumn King”). (PSUF 12). The United States, as represented

by the Secretary of Agriculture, is the owner of the ‘284 Patent

by assignment from Ramming and Tarailo. (PSUF 13).

The Commission and the United States entered into a license

agreement on June 27, 2005, which granted the Commission an

exclusive license to the ‘284 Patent. (PSUF 14). As the

exclusive licensee, the Commission makes the Autumn King variety

available to domestic growers through sublicensed nurseries. 

(PSUF 15). Currently, this is the only way growers are

authorized to obtain the Autumn King variety. (PSUF 15).

1. Sandrini’s Infringement of the ‘284 Patent 

Without authorization from the USDA or the Commission,

Sandrini grafted approximately 10,000 Autumn King buds onto vines

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in early spring 2004 and grafted 16,000 vines in April 2005;

these vines remain on Sandrini’s property. (PSUF 17d). 

In November 2004, Sandrini, on behalf of Larry Ludy, sold at

least 465 boxes of a variety of grape Mr. Sandrini and Larry Ludy

called “Late White” or “Big White.” (PSUF 17e). In October and

November 2005, Sandrini sold at least 6,332 boxes of Autumn King

from the vines he grafted in 2004. (PSUF 17e).

On November 22, 2005, Mr. Sandrini signed an affidavit

stating his company had 18,629 unauthorized and unreleased Autumn

King vines. (PSUF 17b). DNA testing conclusively established

Sandrini possesses the asexually propagated progeny of the first

Autumn King plant. (PSUF 17c). 

Sandrini tended to the Autumn King vines and caused grapes

to be harvested and sold from such vines after the ‘284 Patent

issued. (PSUF 17f). Specifically, Sandrini caused 7,309 boxes

of its Autumn King grapes to be harvested between October 3 and

October 9, 2006, and sold at a later date. (PSUF 17g). 

Sandrini’s position is it has not harvested or sold Autumn King

grapes after the issuance of the ‘284 Patent, and any harvesting

and sale of its Autumn King grapes was through a third party and

by order of this Court. (RPSUF 17g). Neither the Commission nor

the USDA has ever authorized Sandrini to sell or use the Autumn

King variety. (PSUF 17h).

Sandrini, with knowledge the ‘284 Patent had issued, used

and sold Autumn King material within the claim of the ‘284

Patent. (PSUF 18). Sandrini’s position is it has not harvested

or sold Autumn King grapes after the issuance of the ‘284 Patent,

and any harvesting and sale of its Autumn King grapes was through

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a third party and by order of this Court. (RPSUF 18). This is

somewhat disingenuous as it was Sandrini who sought and obtained

authority to market his 2006 disputed crop under a court imposed

protective order. The Commission notified growers and shippers,

including Sandrini, that new varieties released by the USDA were

going to be patented. (PSUF 18a). Sandrini saw and read memos

from the Commission that a patent was pending for Autumn King;

Sandrini saved this memo. (PSUF 18b and c).

One week after the ‘284 Patent issued, the Commission’s

counsel sent Sandrini a letter, which attached a copy of the ‘284

Patent and also demanded Sandrini to remove the infringing Autumn

King material in his possession. (PSUF 18d). Sandrini looked at

the ‘284 Patent. (PSUF 18e). After being notified that he was

growing a patented plant variety, Sandrini continued to use and

tend his Autumn King vines. (PSUF 18f). Sandrini, on the other

hand, asserts that he has never grown Autumn King within the

scope of the USDA’s exclusive rights. (RPSUF 18f). Rather, the

Autumn King in Sandrini’s possession was asexually reproduced

prior to the issuance of the ‘284 Patent, and Sandrini has not

“used” Autumn King vines within the meaning of the Patent Act. 

(RPSUF 18f).

The Autumn King grapevines Sandrini is currently growing

were propagated from vines that were obtained without

authorization from the USDA. (PSUF 20). Mr. Sandrini personally

took cuttings from Larry Ludy’s vines in the winter of 2003-2004

and grafted approximately 10,000 buds in the early spring of

2004. (PSUF 20). Sandrini, however, contends that a USDA

employee provided Autumn King plant material to Jim Ludy prior to

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the official release date, and Sandrini obtained Autumn King

plant material prior to the issuance of the ‘284 Patent. (RPSUF

20). 

Before Sandrini grafted the Autumn King variety, Mr.

Sandrini knew it was an unreleased USDA variety, that it was

going to be patented by the USDA, and that it was going to be

available only through licensed nurseries. (PSUF 21). Mr.

Sandrini asserts he could not have known that the Autumn King was

going to be patented because patent applications remain secret

until published or granted, and he could not have known the

United States Patent Office was going to issue a valid patent on

the Autumn King variety. (RPSUF 21).

Mr. Sandrini believed from the first time he saw the grape

variety at issue, which he called “Late White,” that it might be

C10/C67-120, a USDA developed variety. (PSUF 21a). Mr. Sandrini

also believed the plant material in Larry Ludy’s possession came

from the USDA testing grounds. (PSUF 21a). Mr. Sandrini only

thought the “Late White” might have come from the USDA testing

grounds, not that he had any belief as to where it actually came

from. (RPSUF 21a).

Before Mr. Sandrini acquired any plant material from Larry

Ludy, Jim Ludy specifically told Mr. Sandrini the variety which

he referred to as “Big White” was an unreleased USDA variety. 

(PSUF 21b). Jim Ludy also told Mr. Sandrini the “wood was going

to be released to nurseries, and you would have to go through a

nursery in order to get it,” and he said he “was afraid it was

going to create a problem by not going through a nursery to get

that wood.” (PSUF 21b). Mr. Sandrini asserts that Jim Ludy told

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him that “Big White” was likely a USDA variety, but nothing else. 

(RPSUF 21b; Decl. Mr. Sandrini, Doc. 122, ¶ 3). 

Larry and Jim Ludy knew the “Big White” variety they

obtained was an unreleased USDA variety, they were not authorized

to have it, it might be patented, and they needed to keep their

possession of the variety secret. (PSUF 22). Sandrini asserts

the Ludys did not keep their possession of the variety secret. 

(RPSUF 22). 

Larry Ludy obtained the Autumn King material from his cousin

Jim Ludy, who obtained it from an unidentified contact whom Jim

Ludy believed had access to the USDA test plot. (PSUF 22a). The

unidentified contact, according to the Commission, warned Jim

Ludy the material had to be kept secret and could not be shared

with others. (PSUF 22b). Jim Ludy knew the USDA had not

released the Autumn King variety, and he did not believe the USDA

authorized his unidentified contact to give him the Autumn King

material. (PSUF 22b). Jim Ludy’s explicit understanding,

according to the Commission, was he should “keep it quiet” and

“it was just to experiment with.” (PSUF 22b). Sandrini asserts,

however, the unidentified contact who supplied Jim Ludy with

Autumn King sticks said nothing specific, and it was Jim Ludy’s

general impression he should not advertise the use of the new

varieties. (RPSUF 22b).

When Jim Ludy shared a small amount of the Autumn King plant

material with his cousin Larry, he repeated the warning the

material was unreleased, had to be kept secret, and “was just to

experiment with.” (PSUF 22c). Jim Ludy also told Larry Ludy,

both before and after giving Larry plant material, not to share

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the material with anyone else or tell anyone else he had the

material. (PSUF 22c). Sandrini asserts Jim Ludy imposed no

express confidentiality restrictions on Larry Ludy’s use of the

Autumn King plant materials. (RPSUF 22c). 

The only use of the Autumn King variety prior to September

28, 2003, was by the USDA or its agents for their own

experimental purposes, apart from the Ludys’ secret use of such

material. (PSUF 23). Sandrini disputes that the Ludys’ use of

the Autumn King material was secret. (RPSUF 23). Despite such

alleged use, no Autumn King grapes were sold prior to September

28, 2003. (PSUF 24).

2. Sandrini’s Unfair Business Practices

The Commission alleges Sandrini used unlawful means to

conceal its sale of Autumn King grapes. To support this

allegation, the Commission asserts the following facts which

Sandrini disputes. Sandrini falsified invoices and bills of

lading by identifying Autumn King grapes as Thompson Seedless

grapes, despite knowing they were not Thompson Seedless. (PSUF

25a). Sandrini falsely labeled the containers in which the

grapes were shipped by identifying Autumn King grapes as Thompson

Seedless grapes, despite knowing they were not Thompson Seedless. 

(PSUF 25b). Sandrini also falsely identified the Autumn King

variety as Thompson Seedless in reports filed with the

Commission. (PSUF 23c). Sandrini disputes falsifying invoices,

falsifying bills of lading, falsely labeling grape containers,

and falsely identifying Autumn King variety grapes as Thompson

Seedless with the Commission. (RPSUF 25a, b, and c). Sandrini

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states he identified the Autumn King grapes as Thompson Seedless

not to conceal the true identity of the grapes, but rather

because he did not know the name of the variety. (RPSUF 25a, b,

and c).

Sandrini’s sale of Autumn King grapes has deprived the

Commission of royalties it would have collected from nurseries to

support its work on behalf of the Commission, and has deprived

the nurseries authorized to dispense Autumn King of revenue to

which they are entitled. (PSUF 26). Sandrini asserts the

Commission only collects royalties on the reproduction of Autumn

King, not on the sale of fruit. (RPSUF 26). Further, Sandrini

only reproduced Autumn King grapevines and sold Autumn King

grapes before the ‘284 Patent issued. (RPSUF 26).

Sandrini has also benefitted from obtaining the Autumn King

variety before other growers. (PSUF 28). Sandrini’s early use

of the Autumn King variety allowed him to experiment and acquire

know-how with the Autumn King variety, which was not available to

other growers. (PSUF 28a). Considerable trial and error is

required to learn how to cultivate, harvest, and store a

particular variety of grape. (PSUF 28b). Sandrini’s use of

Autumn King has given it at least a two year head start over

other growers. (PSUF 28c). This head start has also given

Sandrini an opportunity to build relationships with wholesalers

at the expense of other growers and shippers. (PSUF 28d). 

Sandrini counters that any benefit it may have received does not

take into account the Commission’s denial of the sale of Autumn

King to Sandrini while allowing sales to its competitors. (RPSUF

28a, b, c, and d).

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B. Facts in Support of Sandrini’s Cross Motion

1. Invalidity of the ‘284 Patent

The application for the ‘284 Patent was filed on September

28, 2004. (DSUF I.1). The ‘284 Patent claims a new variety of

grapevine named the Autumn King. (DSUF I.2). Development of the

Autumn King began in 1993. (DSUF I.3). Around November 2000,

the Autumn King vines in the USDA breeding block began bearing

fruit. (DSUF I.4 and RDSUF I.4). In September 2001, Ramming

began collecting data for a patent on the Autumn King Variety. 

(DSUF I.5). In January 2002, Ramming stated in a report to the

Commission Autumn King will likely be released, and virus testing

would be completed by December 2002. (DSUF I.6). The

Commission, however, asserts the report only stated C67-120

“remains high on the list for future releases,” not that Autumn

King will likely be released. (RDSUF I.6). The report did

indicate virus testing would be completed by December 2002, but

it was not completed by this date. (RDSUF I.6).

In March 2002, the Commission’s research committee decided

Ramming should continue collecting data needed to seek patent

protection, but the decision on releasing and patenting Autumn

King should be deferred another year. (DSUF I.7). According to

the Commission, however, its role was advisory to Ramming. 

(RDSUF I.7). Less than a year later, in January 2003, Ramming

recommended that the Autumn King be released that month; the

Commission, however, decided that any decision to release and

patent Autumn King should be deferred for another year. (DSUF

I.8). The Commission asserts the report recommended C67-120 be

released at an indeterminate time in the future and did not

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recommend release in January 2003 because additional testing

needed to be done. (RDSUF I.8).

Sandrini asserts all data needed for the Autumn King patent

application was available in February 2003 (DSUF I.9). Sandrini

further asserts in the summer of 2003 all data needed for the

‘284 Patent application was completed. (DSUF I.10). The

Commission’s position is the collection of data needed for the

Autumn King patent application was not completed until December

19, 2003 (RDSUF I.10).

In early 2002, Jim Ludy obtained sticks of Autumn King plant

material and grafted approximately forty-six vines. (DSUF I.11

and 12). Jim Ludy was given the Autumn King without any

restrictions on its disclosure. (DSUF I.15). In March 2002, Jim

Ludy gave Larry Ludy Autumn King plant material, and Larry Ludy

grafted twenty-five vines of Autumn King on his land. (DSUF I.13

and 14). When Jim Ludy gave Larry Ludy Autumn King plant

material, Jim Ludy knew Larry Ludy would be using the plant

material to graft the Autumn King to grow Autumn King vines and

grapes. (DSUF I.16). Jim Ludy imposed no restrictions on Larry

Ludy’s use or ability to publicly display the Autumn King vines. 

(DSUF I.16). Public access to Larry Ludy’s Autumn King vines was

not limited in any way. (DSUF I.17). The Commission denies all

of these factual allegations. (RDSUF I.11–17).

The Autumn King vines on Larry Ludy’s land bore fruit by

August 2002 (DSUF I.18), although the Commission contends the

vines began producing fruit in 2003 (RDSUF I.18). In the fall of

2002, Jim Ludy successfully grafted and grew Autumn King vines

and produced Autumn King grapes. (DSUF 21). The Autumn King

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vines growing on Jim Ludy’s Land were seen by several people

without any confidentiality agreement (DSUF 19); he did not take

any precautions to prevent the public from viewing the Autumn

King vines (DSUF 20), although it was his understanding to keep

it quiet. (RDSUF 20).

Around November 2002, Mr. Sandrini observed Autumn King

vines with fruit growing on Jim Ludy’s and Larry Ludy’s

respective farms. (DSUF 22). The Commission disputes Mr.

Sandrini observed fruit on the Autumn King vines in November 2002

because such vines began producing fruit in 2003. (RDSUF 22). 

Larry Ludy’s Autumn King vines produced fruit for a second year

in a row in July 2003, which was publicly viewed. (DSUF 23). 

The Commission denies Larry Ludy’s Autumn King vines were

producing fruit for a second year in a row. (RDSUF 23). The

Autumn King growing on Larry Ludy’s farm is genetically identical

to the plant variety claimed in the ‘284 Patent. (DSUF 24). 

Larry Ludy gave Mr. Sandrini Autumn King plant material. (DSUF

25). The Commission denies Larry Ludy gave Mr. Sandrini Autumn

King plant material, although it admits Mr. Sandrini has Autumn

King material that infringes the ‘284 Patent. (RDSUF 25). 

2. The Commission’s Lack of Statutory Authority Under

the Ketchum Act

Since the early 1980s, funding for research and development

of new plant varieties, including Autumn King, has been through

an assessment ultimately imposed on California’s grape growers. 

(DSUF II.3). The shippers of grapes pay the Commission the

assessment, and the shippers are authorized under California law

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to collect the assessment from the producer. (RDSUF II.3). The

Commission collects the assessment on a per pound basis. (RDSUF

II.1).

In the late 1990s, the Commission contacted the USDA to

initiate a patent licensing program to encourage the USDA to

patent grape varieties developed with Commission funding. (DSUF

II.4 and RDSUF II.4). The Commission charges nurseries that

distribute USDA patented varieties a $5,000 annual license fee

and a royalty of $1 per vine sold. (DSUF II.5 and RDSUF II.5). 

The nurseries pass such charges on to growers that purchase the

patented plant material. (DSUF II.6). The Commission does not

prohibit the nurseries from passing on the cost of royalty

payments to growers that purchase patented plant material; the

nurseries may pass this cost on, but the Commission does not have

direct knowledge of this practice. (RDSUF II.6). 

3. Sandrini’s License to Use Autumn King

In 2005, the Commission’s president, Kathleen Nave (“Nave”),

spoke with Mr. Sandrini regarding his possession of Autumn King

plant material. (DSUF III.1 and RDSUF III.1) On November 18,

2005, Ross Jones (“Jones”), the Commission’s vice president of

research, sent Mr. Sandrini a letter on the Commission’s behalf

asking Mr. Sandrini to sign an affidavit confirming his

possession of Autumn King. (DSUF III.2).

The Commission informed Mr. Sandrini once he signed an

affidavit affirming his possession of Autumn King, he would be

sent an Autumn King Domestic Grower License Agreement for his

execution. (DSUF III.3). The Commission’s letter dated November

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 The Agreement contained, among others, the following 1

terms:

1.2 “Licensed Patents” shall mean (a) U.S. Patent

Application No. 10/953,367 “Grapevine Denominated as

Autumn King,” filed September 28, 2004, (b) all patents

issuing therefrom including any reissue,

reexaminations, extensions, divisions, renewals,

substitutions, confirmations, registrations,

revalidations, revisions, and additions of or to any of

the foregoing . . .

1.3 “Licensed Variety” shall mean the variety

denominated as Autumn King in U.S. Patent Application

15

18, 2005, informed Mr. Sandrini he would be “required to register

under a commission Domestic Grower License Agreement and pay

associated vine and box shipment fees and/or take other

mitigation measures as required[,]” including, “grafting or

destroying vines, or injunctions against shipping.” (RDSUF

III.3). The letter further stated the Domestic Grower License

Agreement would be accompanied by “a letter summarizing relevant

fees and/or actions required.” (RDSUF III.3). The Commission

sent Mr. Sandrini a Domestic Grower License Agreement pertaining

to Autumn King material already in his possession, which Mr.

Sandrini signed and returned to the Commission. (DSUF III.4). 

The Commission states it merely faxed Mr. Sandrini a blank copy

of its standard Domestic Grower License Agreement for Autumn

King; the Commission was not offering Mr. Sandrini a license for

his unauthorized Autumn King material that he could accept by

merely signing and returning the agreement. (RDSUF III.4). Mr.

Sandrini faxed the Commission a signed copy of the Domestic

Grower License Agreement, but the Commission did not sign it. 1

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No. 10/953,387 . . .

2.1 License Grant. Subject to the terms and conditions

of this Agreement, the Commission hereby grants to

Grower a limited, nonexclusive, nontransferable right

and license under the Licensed Patents during the term

of this Agreement solely (a) to grow the Wood in the

United States and (b) to sell or market the Fruit in

the Territory in accordance with Article 4.

16

(RDSUF III.4).

4. Preemption of the Commission’s State Law Causes of

Action

The Commission included several state law causes of action

in its complaint for patent infringement. Count two of the

Commission’s complaint is for violation of California Business

and Professions Code section 17200 (“§ 17200”). The Commission’s

§ 17200 cause of action is predicated on Sandrini’s possession of

unlicensed Autumn King plant material. (DSUF IV.1). Count three

of the Commission’s complaint is for intentional interference

with prospective economic relationships and is predicated on

Sandrini’s possession of unlicensed Autumn King plant material. 

(DSUF IV.2). Count four of the Commission’s complaint is for

unjust enrichment and is predicated on Sandrini’s possession of

unlicensed Autumn King plant material. (DSUF IV.3). The

Commission asserts its state law causes of action are partly

based on Sandrini’s unauthorized possession of Autumn King plant

material, but are not predicated solely on Sandrini’s possession

of unlicensed Autumn King plant material or on the infringement

of the ‘284 Patent. (RDSUF IV.1, 2, and 3).

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III. Legal Standard

Summary judgment is warranted only “if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact.” Fed. R. Civ. P. 56(c);

California v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998). 

Therefore, to defeat a motion for summary judgment, the nonmoving party must show (1) that a genuine factual issue exists

and (2) that this factual issue is material. Id. A genuine

issue of fact exists when the non-moving party produces evidence

on which a reasonable trier of fact could find in its favor

viewing the record as a whole in light of the evidentiary burden

the law places on that party. See Triton Energy Corp. v. Square

D Co., 68 F.3d 1216, 1221 (9th Cir. 1995); see also Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986). Facts are

“material” if they “might affect the outcome of the suit under

the governing law.” Campbell, 138 F.3d at 782 (quoting Anderson,

477 U.S. at 248). 

The nonmoving party cannot simply rest on its allegations

without any significant probative evidence tending to support the

complaint. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.

2001).

[T]he plain language of Rule 56(c) mandates the

entry of summary judgment, after adequate time

for discovery and upon motion, against a party

who fails to make a showing sufficient to

establish the existence of an element essential

to the party's case, and on which that party

will bear the burden of proof at trial. In such

a situation, there can be “no genuine issue as

to any material fact,” since a complete failure

of proof concerning an essential element of the

nonmoving party’s case necessarily renders all

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other facts immaterial.

Celotex Corp. v. Catrell, 477 U.S. 317, 322-23 (1986). The more

implausible the claim or defense asserted by the nonmoving party,

the more persuasive its evidence must be to avoid summary

judgment. See United States ex rel. Anderson v. N. Telecom,

Inc., 52 F.3d 810, 815 (9th Cir. 1996). Nevertheless, the

evidence must be viewed in a light most favorable to the

nonmoving party. Anderson, 477 U.S. at 255. A court’s role on

summary judgment is not to weigh evidence or resolve issues;

rather, it is to determine whether there is a genuine issue for

trial. See Abdul-Jabbar v. G.M. Corp., 85 F.3d 407, 410 (9th

Cir. 1996).

IV. Discussion

A. The Commission’s Statutory Authority Under the Ketchum

Act

Sandrini contends the Commission lacks statutory authority

under the Ketchum Act to implement its patenting and licensing

program. The Commission moves for summary judgment on the

grounds it does have statutory authority under the Ketchum Act to

operate its patent licensing program. The Commission argues the

Ketchum Act is to be liberally construed and provides ample

authority for its patent licensing program.

Sandrini also moves for summary judgment on the grounds the

Commission does not have the statutory authority to engage in its

patent licensing program. Sandrini argues California law does

not permit commissions to exercise powers beyond those expressly

enumerated in the statute authorizing the particular commission. 

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Under the Ketchum Act, Sandrini maintains the commission cannot

promulgate a patent licensing program or bring suit against

parties for patent infringement, nor can it generate revenues

through the collection of patent royalties. 

The Ketchum Act of 1967 states that “[g]rapes produced in

California for fresh human consumption comprise one of the major

agricultural crops of California, and the production and

marketing of such grapes affects the economy, welfare, standard

of living and health of a large number of citizens residing in

this State.” Cal. Food & Agric. Code § 65500. The Act

effectuates a state policy “to aid producers of California fresh

grapes in preventing economic waste in the marketing of their

commodity, to develop more efficient and equitable methods in

such marketing, and to aid such producers in restoring and

maintaining their purchasing power at a more adequate, equitable

and reasonable level.” Id. § 65500(g). Although the statute

states the duties of the Commission, it does not enumerate every

duty or to define the exact extent of the Commission’s authority. 

Instead, the statute provides that the Ketchum Act shall be

“liberally construed” when defining the parameters of the

Commission's authority. Id. § 65674.

In United Farm Workers v. Agricultural Labor Relations

Board, 41 Cal. App. 4th 303 (Cal. Ct. App. 1995), the California

Court of Appeals faced the issue whether the Ketchum Act granted

the United Farm Workers standing to raise a claim. The United

Farm Workers claimed that pesticides used on table grapes were

carcinogenic and led to various health problems in newborns. Id.

at 308. As a result, the United Farm Workers ran a campaign to

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halt the use of pesticides on table grapes. Id. The Commission

suffered economically as a result of the boycott of the table

grapes and brought a claim against the United Farm Workers under

California Labor Code § 1154(d) and (h) for unfair labor

practices. The court held that “nothing either in the language

of the Ketchum Act or in its legislative history supports the

claim the Legislature authorized the Commission to file unfair

labor practice charges.” Id. at 318. In its reasoning the court

stated, “the express enumeration in the Ketchum Act of the types

of actions the Commission is authorized to bring impliedly

excludes the Commission from involving itself in other types of

proceedings.” Id. at 319. Accordingly, the court held that the

Ketchum Act did not grant the Commission the authority to raise

charges of “unfair labor practice[s].” Id. at 318.

Similarly, in B.C. Cotton, Inc. v. Voss, 33 Cal. App. 4th

929 (Cal. Ct. App. 1995), the California Court of Appeals held

the California Department of Food and Agriculture (“CDFA”) abused

its authority to impose certain cotton regulations. The CDFA

along with its Director, stated that breeders of cotton are

required to make their cotton available to all cotton growers and

not just themselves. Id. at 948. The court held that this is

such a specific requirement that the legislature would have

stated it as an administrative statute and is not something that

would have been implied. Id. at 950.

These two cases are factually inapposite. The Commission

asserts, “In B.C. Cotton, the CDFA regulations required growers

to license their own proprietary varieties to other growers,

penalizing conduct that the statutory scheme expressly

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encouraged.” Here, by contrast, the Commission is exercising its

statutory authority to contract to improve marketing by

introducing new propriety, patented table grape varieties. 

United Farm Workers is also inapplicable because the decision was

followed by the enactment of § 63903 of the Food and Agricultural

Code titled, “Administrative Civil Actions,” which states “[i]n

addition to the authority granted to any commission by Part 2

(commencing with Section 64001), those commissions may commence

or participate in administrative and civil actions relative to

the activities of the commission.” This, in turn, nullified the

decision of the court in United Farm Workers and grants the

Commission authority to institute civil actions that concern the

marketing or development of table grapes.

The Commission does not dispute Sandrini’s argument that an

administrative agency within California “derives its powers from

the statute under which it is created.” Crawford v. Imperial

Irrigation Dist., 200 Cal. 318, 326 (1927). However, the

Commission recognizes that California law grants administrative

agencies “additional powers as are necessary for the due and

efficient administration of powers expressly granted by statute,

or as are necessary for the due and efficient administration of

powers expressly granted by statute, or as may fairly be implied

from the statue granting the power.” Dickey v. Raisin Proration

Zone No. 1, 24 Cal. 2d 796, 810 (1944). Through this, the

Commission presents a strong argument supporting its statutory

authority to engage in the patent licensing program and in turn

to bring suit to enforce plant patents licensed by the

Commission. 

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The Commission also refers to specific sections in the

Ketchum Act, which grant the Commission discretion to define the

parameters of its own authority. “It is hereby declared to be

the policy of this state to aid producers of California fresh

grapes in preventing economic waste in the marketing of their

commodity, to develop more efficient and equitable methods in

such marketing, and to aid such producers in restoring and

maintaining their purchasing power at a more adequate, equitable

and reasonable level.” Cal. Food & Agric. Code § 65500(g). 

Section 65572 states, “The powers and duties of the Commission

shall include the following, (c) To administer and enforce this

chapter, and to do and perform all acts and exercise all powers

incidental to or in connection with or deemed reasonably

necessary, proper or advisable to effectuate the purposes of this

chapter.” Id. § 65572(c). This comports with the “liberally

construed” requirement of the Ketchum Act. Id. § 65674

Further, the Ketchum Act specifically states that the

Commission has the power to “enter into any and all contracts and

agreements . . . to conduct, and contract with others to conduct,

scientific research, . . . to develop and discover the dietetic

value of fresh grapes and to develop and expand markets, and to

improve cultural practices and product handling so that the

various varieties may be placed in the hands of the ultimate

consumer in the best possible condition . . . and to undertake

any other similar activities which the [C]ommission may determine

appropriate for the maintenance and expansion of present markets

and the creation of new and larger markets for fresh grapes.” 

Id. § 65572(e),(i),(k). The Commission’s licensing program of

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new patented grape varieties broadens product offerings by the

industry, which has the potential to develop and expand present

markets and to create new and larger markets for fresh grapes. 

The Commission derives its authority for its patent licensing

program from the omnibus “other similar activities” provision and

the “develop and expand markets” objective. Id. § 65572(i). 

Sandrini’s argument against the Commission’s ability to

bring suit is also foreclosed by the specific language of the

Ketchum Act because the current suit is the means of enforcement

of the patent licensing program which the Commission was

authorized by statute to adopt. Section 65572 specifically

states that it is the Commission’s duty “[t]o administer and

enforce this chapter, and . . . [t]o investigate and prosecute

civilly violations of this chapter.” Id. 65572(c),(g). 

The Ketchum Act grants the Commission authority to engage in

its patent licensing program, and the enactment of Cal. Food &

Agric. Code § 63903 provides sufficient authority for the

Commission to maintain its cause of action for patent

infringement. Accordingly, the Commission’s motion for summary

judgment that it has statutory authority to engage in its patent

licensing program is GRANTED. Sandrini’s motion for summary

judgment on the grounds the Commission does not have the

statutory authority under to the Ketchum Act to engage in its

patent licensing program is DENIED. 

B. Validity of the ‘284 Patent

Sandrini, by way of an affirmative defense and counterclaim, 

asserts the ‘284 Patent is invalid because the Autumn King

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variety was in public use more than one year prior to the patent

application date. 

The Commission moves for summary judgment on Sandrini’s

public use affirmative defense and counterclaim on the grounds

the ‘284 Patent is valid because the Autumn King variety was

neither ready for patenting nor in public use more than one year

prior to the patent application date.

Sandrini opposes the Commission’s motion for summary

judgment and also moves for summary judgment on the grounds the

‘284 Patent is invalid because the Autumn King variety was in

public use more than one year prior to the patent application

date. Sandrini inferentially suggests that the Autumn King

variety was ready for patenting more than one year before the

application. 

The application date for the Autumn King variety patent was

September 28, 2004. Exactly one year prior to the application

date is the “critical date,” which is September 28, 2003. The

Commission argues the Autumn King variety was neither ready for

patenting nor in public use before September 28, 2003. The

Commission contends the Autumn King variety was not ready for

patenting before the critical date because the last piece of data

necessary for the patent application was not collected until

December 19, 2003, nearly three months after September 28, 2003.

The Commission further maintains the secret use of improperly

obtained plant material by a grower who knew it was an unreleased

USDA variety is not an invalidating “public use” within the

meaning of 35 U.S.C. § 102(b). 

Sandrini rejoins that the ready for patenting prong of the

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public use bar has nothing to do with the time an inventor

completes the collection of all data needed to file a patent

application. Sandrini suggests an invention can be ready for

patenting in one of two ways: First, by proof of reduction to

practice before the critical date, or Second, by proof that prior

to the critical date the inventor had prepared drawings or other

descriptions of the invention that were sufficiently specific to

enable a person skilled in the art to practice the invention. 

Sandrini argues the Autumn King variety was necessarily ready for

patenting at the time Jim Ludy and Lawrence Ludy reproduced the

Autumn King variety in 2002-2003, otherwise the Ludys could not

have obtained sticks of the Autumn King plant to reproduce the

vines on their own properties.

Sandrini rejects the Commission’s argument, as obsolete law,

that the public use bar cannot apply because Jim Ludy and

Lawrence Ludy improperly obtained the Autumn King plant material. 

The Commission relies on pre-1870 cases to argue the public use

bar does not apply to a surreptitious or secret use. 

Specifically, prior to 1870, the public use and on sale bars

applied only to uses and sales occurring “with the consent and

allowance of the inventor,” but the 1870 amendments to the Patent

Act removed the requirement that public use or sale prior to the

critical date occur with the inventor’s consent.

1. Presumption of Patent Validity.

“A patent shall be presumed valid.” 35 U.S.C. § 282. “The

burden of establishing invalidity of a patent or any claim

thereof shall rest on the party asserting such invalidity.” Id.

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The party challenging a patent’s validity must prove its case by

clear and convincing evidence. Baxter Int’l, Inc. v. COBE

Laboratories, Inc., 88 F.3d 1054, 1057 (Fed. Cir. 1996). One of

the enumerated defenses to a patent infringement claim is

“[i]nvalidity of the patent or any claim in suit on any ground

specified in part II of this title as a condition for

patentability[.]” 35 U.S.C. § 282. 

2. Public Use Bar.

Among the defenses specified in part II, is the public use

bar, which provides

[a] person shall be entitled to a patent unless–(b) the

invention was patented or described in a printed

publication in this or a foreign country or in public use

or on sale in this country, more than one year prior to

the date of the application for patent in the United

States . . . .

35 U.S.C. § 102(b). The date that is exactly one year prior to

the patent application date is known as the “critical date.” See

Motionless Keyboard Co. v. Microsoft Corp., 2007 WL 1531401, at

*5 (Fed. Cir. May 29, 2007). Thus, the inquiry is whether the

patented invention was in public use prior to the critical date.

“Public use includes any [public] use of [the claimed]

invention by a person other than the inventor who is under no

limitation, restriction, or obligation of secrecy to the

inventor.” Motionless Keyboard Co., 2007 WL 1531401, at *5

(citing In re Smith, 714 F.2d 1127, 1134 (Fed. Cir. 1983) (citing

Egbert v. Lippmann, 104 U.S. 333, 336 (1881))) (alteration in

original). 

Recent decisions of the Federal Circuit clearly provide

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“[w]hether a patent is invalid due to a § 102(b) public use is a

question of law based on underlying questions of fact.” 

Minnesota Mining and Mfg. Co. v. Chemque, Inc., 303 F.3d 1294,

1301 (Fed. Cir. 2002); Netscape Commc’n Corp. v. Konrad, 295 F.3d

1315, 1320 (Fed. Cir. 2002); Juicy Whip, Inc. v. Orange Bang,

Inc., 292 F.3d 728, 736-37 (Fed. Cir. 2002); Dana Corp. v.

American Axle & Mfg., Inc., 279 F.3d 1372, 1375 (Fed. Cir. 2002)

(citing Intel Corp. v. International Trade Comm’n, 946 F.2d 821,

829 (Fed. Cir. 1991)).

While it can be fairly said there is a significant amount of

case law interpreting the public use bar, the cases are very fact

specific, and it is difficult to delineate bright line rules to

unequivocally determine what constitutes public use. The parties

have not cited and the court has not found a case on all fours

with the present case, i.e., whether the public use bar

invalidates a patent due to third party misappropriation and

surreptitious or secret use of an invention prior to the critical

date. 

Two cases, however, provide useful guidance whether a secret

use exception to the public use bar exists. In both Lorenz v.

Colgate-Palmolive-Peet Co. 167 F.2d 423 (3rd Cir. 1948) and Evans

Cooling Sys., Inc. v. General Motors Corp., 125 F.3d 1448 (Fed.

Cir. 1997), the Third Circuit and Federal Circuit declined to

create a secret use exception to the public use bar.

Nearly sixty years ago, the Third Circuit, in Lorenz,

invalidated a patent by reason of prior public use. Lorenz, 167

F.2d at 430. In Lorenz, the patent in suit covered the

manufacture of soap and the recovery of glycerine. Lorenz filed

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an application for his process in the Patent Office on January

24, 1920. Shortly thereafter, Lorenz communicated the substance

of the disclosures of his application to Ittner, who was

Colgate’s chief chemist, so Colgate could exploit the process if

it so desired. Ittner claimed to be uninterested in the process. 

Thereafter, the Patent Office rejected Lorenz’s application, and

he abandoned its prosecution. On July 18, 1933, patent number

1,918,603 was issued to Ittner on an application he filed on

February 19, 1931. After learning about Ittner’s ‘603 patent,

Lorenz filed a petition in the Patent Office to revive his

original application, which was later rejected. On November 8,

1934, Lorenz filed a new application in which he adopted his own

nineteen claims of Ittner’s ‘603 patent, asserting that he

disclosed the subject matter of the ‘603 patent to Ittner in

1920. The Patent Office declared an interference, which was

decided in Lorenz’s favor. The trial court in Lorenz found that

the process of Lorenz’s patent was in public use for more than

two years prior to the application date of November 8, 1934, and

declared Lorenz’s patent invalid.

Lorenz contended no public use existed because Congress did

not intend to bar the grant of a valid monopoly to an inventor

whose disclosures have been pirated by the person to whom he

confided them. Colgate, on the other hand, contended its use was

neither fraudulent nor piratical, and the disclosures made by

Lorenz to Ittner in 1920 carried no pledge, express or implied,

that Ittner or Colgate should not make use of Ittner’s invention. 

The Lorenz court painstakingly analyzed several Supreme

Court cases describing and explaining the history of the public

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use bar beginning with the seminal case of Pennock v. Dialogue,

27 U.S. 1 (1829). After reviewing these authorities, the Lorenz

court held “if an inventor does not protect his discovery by an

application for a patent within the period prescribed by the Act,

and an intervening public use arises from any source whatsoever,

the inventor must be barred from a patent or from the fruits of

his monopoly, if a patent has issued to him.” Lorenz, 167 F.2d

at 429 (emphasis added). The court specifically noted “[t]here

is not a single word in the statute which would tend to put an

inventor, whose disclosures have been pirated, in any different

position from one who has permitted the use of his process.” Id.

In the words of the Third Circuit,

[t]he Supreme Court in its opinion in Andrews v. Hovey,

124 U.S. 694 (1888) . . . put the matter succinctly when,

in referring to the second clause of Section 7 of the

1839 Patent Act, it said that it was the Congressional

intent that the patent should be held invalid without

regard to the consent or allowance of the inventor, if

there had been a prior public use within the terms of the

statute.

Lorenz, 167 F.2d at 429. 

More recently in 1997, the Federal Circuit, in Evans

Cooling, 125 F.3d 1448, invalidated a patent when the patented

invention, an aqueous reverse flow cooling system for internal

combustion engines, was offered for sale more than one year prior

to the critical date.

John Evans conceived the patented invention in 1984 and

reduced it to practice in 1986. On July 1, 1992, Evans filed a

patent application. On October 26, 1993, patent number 5,255,636

was issued to Evans for an aqueous reverse flow cooling system

for internal combustion engines. In early 1994, Evans filed a

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 GM also argued the ‘636 patent was invalid because GM 2

placed the reverse flow cooling system in its engines on sale

when it sent the order guide and supplemental information

brochure to its dealers across the country in late April or early

May 1991. With respect to GM’s argument, the court specifically

stated “we do not reach or decide that issue here.” Evans

Cooling, 125 F.3d at 1452. Although GM’s argument is addressed

to the on sale clause of § 102(b), had the Evans Cooling court

decided the issue, additional guidance might have been available

30

lawsuit against General Motors (“GM”) alleging GM infringed the

‘636 patent by the manufacture and sale of cars having GM’s LT1

and LT99 engines. GM asserted the ‘636 patent was invalid

because GM and its independent dealers had placed the patented

invention on sale prior to the critical date with the

introduction of the 1992 Corvette. GM sent an order guide to its

dealers in late April or early May of 1991. Several of the

dealers offered the 1992 Corvette for sale to customers.

Evans asserted GM should not be permitted to invalidate the

‘636 patent because GM stole the invention from him. 

Specifically, GM allegedly requested that Evans demonstrate its

aqueous reverse flow cooling system at GM’s test facility in the

spring of 1989. Evans alleged that GM stole the invention during

this demonstration. The district court granted summary judgment

in favor of GM because the record established GM and its dealers

placed the 1992 Corvette with the LT1 engine on sale prior to the

critical date.

In affirming the district court, the Federal Circuit held

the ‘636 patent invalid because the patented invention was on

sale one month prior to the critical date when a customer ordered

a 1992 Corvette from a Chevrolet dealership. 

2

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28 to analyze the public use issue presently before this court. 

31

Evans also urged the Federal Circuit to create a new

exception to the on sale bar. Specifically, Evans sought an

exception that an otherwise invalidating offer for sale does not

invalidate a patent “where a third party surreptitiously steals

an invention while it is a trade secret and then, unbeknownst to

the inventor, allegedly puts the invention on sale [more than one

year] before the inventor files a patent application covering the

stolen invention.” Evans Cooling, 125 F.3d 1452 (brackets in

original). 

In support of its argument, Evans cited an relied on three

Supreme Court cases from the 1800s–Pennock v. Dialogue, 27 U.S. 1

(1829), Shaw v. Cooper, 32 U.S. 292 (1833), and Kendall v.

Winsor, 62 U.S. 322 (1859). The Federal Circuit, however, found

none of these cases dispositive of the issue raised by Evans

noting Pennock was a public use case where the use at issue was

undertaken with the patentee’s knowledge, the statements Evans

relied on in Shaw were dicta, and Kendall addressed the issue of

whether the defendant had the right to continue to use an

invention after a patent had issued. The court did, however,

rely on Lorenz v. Colgate-Palmolive-Peet Co., 167 F.2d 423 (3rd

Cir. 1948), noting the Third Circuit rejected arguments similar

to Evans’s arguments. The Evans Cooling court specifically cited

the following analysis in Lorenz by which the Third Circuit

declined to create an exception to the statutory bar:

The prior-public-use proviso . . . contains no

qualification or exception which limits the nature of the

public use. We think that Congress intended that if an

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 In dicta, the court went on to state “[e]ven if we were to 3

create an exception to the on sale bar such that third parties

accused of misappropriating an invention could not invalidate a

patent based upon sales by the guilty third party, GM correctly

asserts that [In re Martin, 74 F.2d 951 (C.C.P.A. 1935)] squarely

holds that activities of third parties uninvolved in the alleged

misappropriation raise the statutory bar, even if those

activities are instigated by the one who allegedly

misappropriated the invention.” Evans Cooling, 125 F.3d 1453. 

32

inventor does not protect his discovery by an application

for a patent within the period prescribed by the Act, and

an intervening public use arises from any source

whatsoever, the inventor must be barred from a patent or

from the fruits of his monopoly, if a patent has issued

to him. There is not a single word in the statute which

would tend to put an inventor, whose disclosures have

been pirated, in any different position from one who has

permitted the use of his process . . . . [I]solated

instances of injustice may result if the law be strictly

applied, but the inventor's remedy is sure. He is master

of the situation and by prompt action [in filing a patent

application] can protect himself fully and render the

defense of prior public use impossible.

Evans Cooling, 125 F.3d 1453 (alterations in original). While 3

the Evans Cooling court did empathize with the harshness of the

result to Evans, it noted he would not be without recourse if GM

in fact misappropriated his invention–“Evans would have an

appropriate remedy in state court for misappropriation of a trade

secret.” Evans Cooling, 125 F.3d 1454. 

Here, the ‘284 Patent is presumed valid under 35 U.S.C. §

282. Ramming and Tarailo filed the patent application for the

Autumn King variety on September 28, 2004, making the critical

date September 28, 2003. The ‘284 patent can be invalidated if

the Autumn King variety was in public use prior to September 28,

2003.

Public use before the critical date is determined by whether

the Autumn King variety was publicly used by the Ludys or

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Sandrini under no limitation, restriction, or obligation of

secrecy to Ramming, Tarailo, and the USDA. See Motionless

Keyboard, 2007 W.L. 1531401, at *5.

There is a factual dispute whether the Ludys publicly used

the Autumn King variety by allegedly misappropriating and then

using the Autumn King variety in a hidden or secret manner, and

whether the Ludys attempted to misdesignate the true origin or

identity of their grapes. Based on which version of the facts

the trier of facts finds true, the legal decision will be made

whether such actions rise to the level of public use. 

The Commission asserts Larry Ludy and Jim Ludy knew the “Big

White” variety was an unreleased USDA variety, they were not

authorized to have it, it might be patented, and they needed to

keep their possession of the grape variety secret. Sandrini, on

the other hand, asserts the Ludys did not keep their possession

of the variety secret.

The Commission offers to prove that Larry Ludy obtained

Autumn King plant material from his cousin Jim Ludy, who in turn

obtained it from an “unidentified contact,” ostensibly associated

with the USDA, whom Jim Ludy believed had access to the USDA test

plot. The Commission claims that Jim Ludy’s intent in possessing

the Autumn King plant material was to “keep it quiet” and “it was

just to experiment with.” Sandrini asserts the unidentified

contact who supplied Jim Ludy with Autumn King sticks said

nothing specific, and it was Jim Ludy’s “general impression” he

should not advertise the use of the new variety.

The Commission asserts that when Jim Ludy shared a small

amount of the Autumn King plant material with his cousin Larry,

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Jim repeated the warning to Larry that the material was

unreleased, had to be kept secret, and “was just to experiment

with.” Jim Ludy also told Larry Ludy, both before and after

giving Larry plant material, not to share the material with

anyone else or tell anyone else he had the material. Sandrini,

on the other hand, asserts Jim Ludy imposed no express

confidentiality restrictions on Larry Ludy’s use of the Autumn

King plant materials.

Sandrini rejoins that Jim Ludy did not impose any

restrictions on Larry Ludy’s use or ability to display the Autumn

King vines. Sandrini further asserts public access to Larry

Ludy’s Autumn King vines was not limited in any way. The

Commission denies these factual allegations. Sandrini also

testified that the Autumn King vines growing on Jim Ludy’s land

were seen by several people without any confidentiality

agreement, and Jim Ludy did not prevent the public from viewing

Jim’s Autumn King vines. Mr. Sandrini saw Autumn King vines

bearing fruit, growing on Jim Ludy’s and Larry Ludy’s farms.

The parties vigorously dispute whether Jim Ludy and Larry

Ludy secretly used or tried to hide the use of the Autumn King

variety or did so openly and notoriously. The Commission

contends the Ludys’ use was surreptitious and secret, while

Sandrini contends the Ludys’ use was open and available for all

the public to see. Further dispute exists whether Jim Ludy was

under any obligation to Ramming, Tarailo, and the USDA to keep

his possession of the Autumn King plant material secret and

hidden from others. These factual disputes cannot be resolved on

summary judgment.

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Sandrini has not demonstrated by undisputed, clear and

convincing evidence, as a matter of law, that the ‘284 Patent was

in public use prior to the critical date and is therefore not

entitled to summary judgment. Nor has the Commission

demonstrated as a matter of law that the validity of the ‘284

Patent cannot withstand a § 102(b) public use challenge.

The Commission’s motion for summary judgment on the validity

of the ‘284 Patent is DENIED. Sandrini’s motion for summary

judgment on the invalidity of the ‘284 Patent is DENIED. The

‘284 Patent is presumed valid under 35 U.S.C. § 282; it remains

for Sandrini to overcome this presumption at trial by

demonstrating by clear and convincing evidence that the ‘284

Patent was in public use prior to the critical date. 

C. Infringement of the ‘284 Patent

1. Infringement

Assuming, arguendo, its validity, the Commission contends

Sandrini intentionally infringed the ‘284 Patent. Sandrini

denies it has infringed the ‘284 Patent because it asexually

reproduced the Autumn King plant material prior to the issuance

of the ‘284 Patent, and it never sold or offered for sale Autumn

King plant material after the ‘284 Patent issued. Sandrini

contends it cannot be liable for infringement because any of its

alleged use of the Autumn King plant material occurred before the

USDA held any exclusive rights to it; i.e., before the issuance

of the ‘284 Patent.

Whoever, without authority to do so, “makes, uses, offers to

sell, or sells any patented invention, within the United States

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or imports into the United States any patented invention during

the term of the patent therefor, infringes the patent.” 35

U.S.C. § 271. “Until the patent is issued, there is no property

right in it; that is, no such right as the inventor can enforce.” 

Marsh v. Nichols, Shepherd & Co., 128 U.S. 605, 612 (1888). 

Patent infringement requires a determination whether someone “(1)

without authority (2) makes, uses, offers to sell, sells, or

imports (3) the patented invention (4) within the United States,

its territories, or its possessions (5) during the term of the

patent.” Van Well Nursery, Inc. v. Mony Life Ins. Co., 421 F.

Supp. 2d 1321, 1334 (E.D. Wash. 2006). For purposes of proving

the third element in a plant patent infringement action, the

patentee must prove under 35 U.S.C. § 163 that the infringing

plant is an asexual reproduction of the patented plant. Id.

Inventions of new and distinct varieties of plants are

entitled to patent protection like any other invention. See 35

U.S.C. § 161 (stating “[t]he provisions of this title relating to

patents for inventions shall apply to patents for plants, except

as otherwise provided.”). Patent law specifically provides

“[w]hoever invents or discovers and asexually reproduces any

distinct and new variety of plant, including cultivated sports,

mutants, hybrids, and newly found seedlings, other than a tuber

propagated plant or a plant found in an uncultivated state, may

obtain a patent therefor, subject to the conditions and

requirements of this title.” Id. Thus, § 161 “engrafts the

Plant Patent Act onto the basic patent law, which requires [the

application of] all the rules, regulations, and provisions of the

basic patent law[.]” Imazio Nursery, Inc. v. Dania Greenhouses,

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69 F.3d 1560, 1564 (Fed. Cir. 1995). 

“In the case of a plant patent, the grant shall include the

right to exclude others from asexually reproducing the plant, and

from using, offering for sale, or selling the plant so

reproduced, or any of its parts, throughout the United States, or

from importing the plant so reproduced, or any parts thereof,

into the United States.” 35 U.S.C. § 163.

Determining patent infringement is a two-step process. “The

first step is to determine the meaning and scope of the patent

claim asserted to be infringed.” Imazio, 69 F.3d at 1569 citing

Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed.

Cir. 1995). “The second step is to compare the properly

construed claim to that which is asserted to infringe.” Imazio,

69 F.3d at 1569 citing Markman v. Westview Instruments, Inc., 52

F.3d 967, 976 (Fed. Cir. 1995). The first step applicable to

delineate the scope of a plant patent claim is the asexual

progeny of the plant shown and described in the particular

patent. Imazio, 69 F.3d at 1568-69. As to the second step, “the

patentee must prove that the alleged infringing plant is an

asexual reproduction, that is, the progeny of the patented

plant.” Id. at 1569.

The Patent Act grants the patentee the right to exclude

others from using the claimed invention. 35 U.S.C. § 271(a). 

Congress, however, has not defined the word “use” under § 271(a),

and few cases discuss the question of whether a particular use is

an infringing use under § 271(a). See 5 Donald S. Chisum, Chisum

on Patents § 16.02[4][b] (2004) [hereinafter Chisum] (noting

“[t]he question of what constitutes ‘use’ of the invention has

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rarely arisen.”).; see also, Black & Decker (U.S.), Inc. v. Home

Prod. Mktg., Inc., 929 F. Supp. 1114, 1121 (N.D. Ill. 1996).

“[A]s a matter of law mere possession of a product or

machine covered by a patent does not constitute infringement,

absent a threatened or contemplated use or sale.” L.A. Gear,

Inc. v. E.S. Originals, Inc., 859 F. Supp. 1294, 1298 (C.D. Cal.

1994); see also Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d

1342, 1366 (Fed. Cir. 1998); Chisum § 16.02[4][b].

To prove infringement, it must be determined whether

Sandrini (1) without authority (2) made, used, offered to sell,

sold, or imported, (3) an asexual reproduction of Autumn King

plant material (4) within the United States (5) during the term

of the patent.

There is an active dispute whether the Ludys publicly used

the Autumn King variety before the critical date, making

premature determination whether Sandrini infringed the ‘284

Patent.

Sandrini argues that because its initial reproduction of

Autumn King took place prior to the issuance of the ‘284 Patent,

any subsequent use or sale of that reproduced plant material

falls beyond the reach of the USDA’s exclusive patent rights. 

This argument is foreclosed by Columbia & N.R.R. Co. v. Chandler,

241 F. 261, 263 (9th Cir. 1917), where the Ninth Circuit held

that while there can be no invasion of a patentee’s rights before

a patent issues, “it does not follow, from the fact that there

can be no claim of damages for manufacturing [the patented

product] before the issuance of the patent, that [such

manufactured products] were set free from the monopoly of the

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patent, and could thereafter be used, without liability to the

inventor,” and Coakwell v. United States, 372 F.2d 508, 511 (Ct.

Cl. 1967), which cited Columbia & N.R.R. Co. v. Chandler, for the

proposition: “[t]he fact that certain articles embodying an

invention were manufactured before and obtained by the defendant

before the patent was issued does not authorize their use

thereafter.” The Federal Circuit has held that “[m]ere

possession of a product which becomes covered by a subsequently

issued patent does not constitute an infringement of that patent

until the product is used, sold, or offered for sale in the

United States during the term of the patent.” Johns Hopkins

Univ. v. CellPro, Inc., 152 F.3d 1342 (Fed. Cir. 1998) (citing

Cohen v. United States, 487 F.2d 525, 527 (Ct. Cl. 1973) and

Columbia & N.R.R. Co. v. Chandler, 241 F. 261 (9th Cir. 1917)). 

The Commission’s motion for summary judgment on infringement

of the ‘284 Patent is DENIED. 

Amenable to summary adjudication, if the infringement issue

is reached, is the issue of asexual reproduction. DNA testing

conclusively establishes–and Sandrini does not dispute the

results that show the Autumn King vines on Sandrini’s property

are the asexually propagated progeny of the first Autumn King

plant. There is no dispute Sandrini’s conduct occurred in

California. It is also undisputed that the term of the ‘284

Patent commenced upon its issuance, on February 21, 2006, and has

not expired.

The issuance of license is analyzed below. 

On the issue of “use,” the Commission refers to Mr.

Sandrini’s deposition testimony. (Sandrini Dep. Tr. p. 156, lns.

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 Mr. Sandrini refers to his Autumn King vines and grapes as 4

“late white” rather than Autumn King; the vines and grapes are

one and the same.

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10-12). Mr. Sandrini testified:

Q: “[w]hat are the production processes you go through as a

grower?” (Sandrini Dep. Tr. p. 156, lns. 12-13). 

A: “[P]runing, suckering, various sprays, hand tipping.” 

(Sandrini Dep. Tr. p. 156, lns. 14-15). 

Mr. Sandrini further responded: “[l]eaf pulling, and eventually

harvesting.” (Sandrini Dep. Tr. p. 156, ln. 17).

Sandrini last pruned its Autumn King grapes in January 4

2006. (Sandrini Dep. Tr. p. 157, ln. 19). As the pruning last

occurred prior to the issuance of the ‘284 Patent, Sandrini

cannot have “used” its Autumn King vines through pruning during

the term of the ‘284 Patent.

Sandrini did, however, undisputedly “use” its Autumn King

vines after the ‘284 Patent issued on February 21, 2006, by

implementing cultural practices to bring the grapes to harvest. 

Mr. Sandrini testified suckering, which includes shoot

trimming, last occurred in April 2006. (Sandrini Dep. Tr. p.

157, ln. 21). 

Mr. Sandrini testified that chemical sprays were applied to

the vines and grapes for mildew control every fourteen days

during 2006 up to the point the vines or grapes start to mature. 

(Sandrini Dep. Tr. p. 157, ln. 22-25 through p. 158, lns. 1-5). 

Mr. Sandrini further testified the last time he sprayed his late

whites for mildew control was three to four weeks before his

deposition date of September 13, 2006. (Sandrini Dep. Tr. p.

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158, lns. 6-8). The purpose of spraying for mildew control is

twofold; first, mildew is not eye-appealing, and second, it can

lead to bacteria formation and funguses and destruction of the

grape. (Sandrini Dep. Tr. p. 158, lns. 12-16). Mr. Sandrini

further testified he had to spray for “leaf hoppers,” a small

fly-like insect that hops from leaf to leaf. (Sandrini Dep. Tr.

p. 159, lns. 12-16). The leaf hoppers “suck[] nutrients from the

leaves and excretes on the grape berries.” (Sandrini Dep. Tr. p.

159, lns. 17-19). Leaf hoppers do not cause long-term damage to

the vines, but do cause damage to the grape production for a

given year. (Sandrini Dep. Tr. p. 159, lns. 20-24). Sandrini

testified he applied Giberal in May of 2006, (Sandrini Dep. Tr.

p. 160, lns. 2-10) and spot treated the “late white” grapes with

an herbicide in June or July 2006. (Sandrini Dep. Tr. p. 160,

lns. 15-18). 

The last time he hand tipped the late whites was in early

June. (Sandrini Dep. Tr. p. 162, lns. 1-3). Hand tipping is the

process of cutting a few berries out of a bunch when the berries

in a bunch are too tight. (Sandrini Dep. Tr. p. 161, lns. 18-

21). If the bunch is too long, it is tipped “to make it the

right formation.” (Sandrini Dep. Tr. p. 161, lns. 21-22). Hand

tipping is done to produce the best bunch of berries. (Sandrini

Dep. Tr. p. 161, lns. 23-25).

Mr. Sandrini testified the last time he engaged in leaf

pulling for the late whites was sometime in June. (Sandrini Dep.

Tr. p. 162, lns. 8-14). “Leaf pulling is pulling the bunches

that are touching the grapes so that they can get the proper air

circulation through there.” (Sandrini Dep. Tr. p. 162, lns. 5-

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7). Sandrini’s grapes were in a position to be harvested and

sold in 2006. (Sandrini Dep. Tr. p. 163, lns. 11-13). 

It is argued that these substantial acts, of tending to the

Autumn King vines, to bring the grapes to maturity, constitute

“use” of Autumn King vines protected by the ‘284 Patent. The

result of all Sandrini’s efforts in 2006 was to produce “late

white” grapes for harvest and market. Sandrini offers no

explanation why he would undertake the processes of suckering,

spraying, hand tipping, and leaf pulling his vines other than to

produce the grapes for sale. These facts, if proved by

admission, constitute a “use” within the meaning of the Patent

Act. 

2. Wilful Infringement

The Commission contends Sandrini’s infringement was wilful. 

Sandrini argues he did not wilfully infringe the ‘284 Patent if,

arguendo, the court were to find he did infringe the ‘284 Patent. 

Sandrini argues wilful infringement does not exist because he

reproduced the Autumn King grapevines and sold Autumn King grapes

before the ‘284 Patent issued. 

Whether the infringement of a patent was wilful is a

question of fact. Vulcan Eng’g Co., Inc. v. FATA Aluminum, Inc.,

278 F.3d 1366, 1378 (Fed. Cir. 2002). “The rules of patent

infringement are rules of business ethics, and require prudent

commercial actions in accordance with the law.” Id. “The tort

of wilful infringement arises upon deliberate disregard for the

property rights of the patentee.” Id. The focus is generally on

whether the infringer exercised due care to avoid infringement,

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usually by seeking the advice of competent counsel. Id. Willful

infringement must be proved by clear and convincing evidence in

view of the totality of the circumstances that the alleged patent

infringer acted in disregard of the patent and lacked a

reasonable basis for believing it had a right to do what it did. 

WMS Gaming, Inc. v. International Game Tech., 184 F.3d 1339, 1354

(Fed. Cir. 1999).

Wilful infringement necessarily requires an underlying

finding of infringement, and focuses on intent which is a pure

question of fact. Since infringement cannot be determined until

the factual disputes surrounding the public use issue are

resolved, necessarily, its character as wilful, cannot now be

decided as a matter of law.

The Commission’s motion for summary judgment on the grounds

of wilful infringement is DENIED. 

D. Sandrini’s License to Practice the ‘284 Patent

Mr. Sandrini contends he has an express license from the

Commission to practice the ‘284 Patent. Sandrini argues the

Commission offered him a license to practice the ‘284 Patent,

which he accepted. The Commission rejoins that Sandrini cannot

raise a license defense at this late juncture and, even if it

could, no license exists because the Commission never offered

Sandrini a license he could accept by merely signing and

returning a license agreement.

1. Express or Implied License

“A patent license agreement is in essence nothing more than

a promise by the licensor not to sue the licensee.” 

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Spindelfabrik Suessen-Schurr, Stahlecker & Grill GmbH v. Salzer

Maschinen-fabrik Aktiengesellschaft, 829 F.2d 1075, 1081 (Fed.

Cir. 1987). “Whether express or implied, a license is a contract

governed by ordinary principles of state contract law.” State

Contracting & Eng’g Corp. v. State of Florida, 258 F.3d 1329,

1339 (Fed. Cir. 2001).

Here, California law applies to determine whether a valid

license agreement exists between the Commission and Sandrini. 

See Cal. Civ. Code § 1646 (stating “[a] contract is to be

interpreted according to the law and usage of the place where it

is to be performed; or if it does not indicate a place of

performance, according to the law and usage of the place where it

is made.”). The parties do not contest that any law other than

California law should apply. Additionally, the Domestic Grower

License Agreement (“DGLA”) under which Sandrini claims an express

license, provides a choice of law provision at Article 10.4: 

“the provisions of this Agreement, including the provisions of

the exhibits hereof, will be interpreted in accordance with the

provisions of California law . . . .”

“The language of a contract is to govern its interpretation,

if the language is clear and explicit, and does not involve an

absurdity.” Cal. Civ. Code § 1638. “When a contract is reduced

to writing, the intention of the parties is to be ascertained

from the writing alone, if possible; subject, however, to other

provisions of this title.” Cal. Civ. Code § 1639.

State law principles determine the nature of the agreement 

between the Commission and Sandrini. Banner Entm’t, Inc. v.

Superior Court of Los Angeles County, 62 Cal. App. 4th 348, 357

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 If, however, the parties “orally agreed upon all of the 5

terms and conditions of a proposed written agreement with the

mutual intention that the oral agreement should thereupon become

binding, the mere fact that a formal written agreement to the

same effect has not yet been signed does not alter the binding

validity of the oral agreement.” Banner, 62 Cal. App. 4th at

358. Here, there is no evidence an oral license agreement

between the Commission and Sandrini exists. 

45

(Cal. Ct. App. 1998). It is well settled under California law

“that there is no contract until there has been a meeting of the

minds on all material points.” Id. at 357-58 (emphasis in

original).

When it is clear, both from a provision that

the proposed written contract would become

operative only when signed by the parties as

well as from any other evidence presented by

the parties that both parties contemplated

that acceptance of the contract’s terms would

be signified by signing it, the failure to

sign the agreement means no binding contract

was created.

Id. at 358 citing Beck v. American Health Group Int’l, Inc., 211

Cal. App. 3d 1555, 1562 (Cal. Ct. App. 1989). This rule holds

true even though the party sought to be bound by the agreement

indicated a willingness to sign the agreement. Banner, 62 Cal.

App. 4th at 358.5

“Mutual intent is determinative of contract formation

because there is no contract unless the parties thereto assent,

and they must assent to the same thing, in the same sense.” Id.

at 358-59. “It is essential to the existence of every contract

that there should be a reciprocal assent to a definite

proposition, and when the parties to a proposed contract have

themselves fixed the manner in which their assent is to be

manifested, an assent thereto, in any other or different mode,

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will not be presumed.” Id. at 359 (emphasis in original).

In 2005, Ms. Nave spoke with Mr. Sandrini regarding his

possession of Autumn King plant material. On November 18, 2005, 

Mr. Jones sent Mr. Sandrini a letter asking him to sign an

affidavit acknowledging Sandrini’s possession of Autumn King

plant material. The Commission informed Mr. Sandrini once he

signed an affidavit he would be sent an Autumn King Domestic

Grower License Agreement to execute. After Mr. Sandrini signed

an affidavit attesting to his possession of Autumn King plant

material, the Commission sent him a blank DGLA, which he signed

and faxed to the Commission. The Commission, however, did not

sign the faxed DGLA that Mr. Sandrini signed.

The DGLA that Mr. Sandrini signed provided:

DOMESTIC GROWER LICENSE AGREEMENT – AUTUMN KING

This Domestic Grower License Agreement (together with the

exhibits which are attached hereto and hereby incorporated by

reference, the “Agreement”) entered as of the Effective Date

designated below by and between the California Table Grape

Commission, with a principal place of business at 392 W.

Fallbrook, Suite 101, Fresno, CA 93711-6150 (hereinafter referred

to as the “Commission”) and the Grower designated below

(hereinafter referred to as “Grower”). This Agreement consists

of this Signature Page and the attached Basic Terms and

Conditions, which is hereby incorporated by reference.

The Commission reserves the right at its own discretion to

enter into or refuse to enter into this Agreement and no Wood

will be provided to the Grower unless and until both the

Commission and the Grower execute this Agreement. By signing

this Agreement, the Grower agrees to be bound by the terms and

conditions set forth on the attached Basic Terms and Conditions

form, including, without limitation, the restrictions prohibiting

Grower from asexually reproducing the Wood provided in Connection

with this Agreement and from selling, transferring or otherwise

providing the Wood to any third party. (Emphasis added).

GROWER: Richard B. Sandrini 

Address of Principal Place of Business: 10889 Casey Ave. 

Delano, Ca 93215 

 

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Effective Date: this 3rd day of January , 2006

Licensed Variety: Autumn King

Planting Details: Assessor’s Parcel Number(s) 521-110-08-00-4 

Planting Density 7X12 Total Acreage 49 

Total Vines 18,629 

IN WITNESS WHEREOF, the parties hereto have executed this

Agreement effective on the date specified below.

California Table Grape

Commission

[GROWER]

By:______________________ By: /s/ Richard B. Sandrini 

Name:____________________ Name: R.B. Sandrini Farms 

Title:___________________ Title: Owner 

Date:____________________

The information in the license agreement was hand written and

only signed by Mr. Sandrini.

The DGLA Mr. Sandrini signed and returned to the Commission

is not ambiguous, and the parties do not contend that it is. 

Therefore, the express language of the license agreement governs

its interpretation, Cal. Civ. Code § 1638, and the parties’

intentions will be ascertained by looking no further than the

four corners of the license agreement. Mr. Sandrini does not

claim any oral representations were made to him whether the

Commission would sign the agreement or whether a license would be

granted to him. 

The DGLA explicitly requires signatures from both the

Commission and Sandrini to become effective. The first paragraph

of the DGLA specifies it is “entered as of the Effective Date

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designated below by and between the . . . Commission and the

Grower designated below . . . .” This provision contemplates

that for the DGLA to become effective, both the Commission and

Sandrini need to “enter” into the DGLA. The Commission did not

enter into the DGLA with Sandrini because it never signed the

agreement. The second paragraph of the DGLA specifies “[t]he

Commission reserves the right at its own discretion to enter into

or refuse to enter into this Agreement and no Wood will be

provided to the Grower unless and until both the Commission and

the Grower execute this Agreement.” This provision expressly

states that the Commission reserves its right to enter into or

refuse to enter into the license agreement. The absence of a

signature on behalf of the Commission evidences that it refused

to enter into the DGLA with Sandrini, and Sandrini does not point

to any facts indicating otherwise. Finally, the last sentence

before the space for the parties’ signatures provides “IN WITNESS

WHEREOF, the parties hereto have executed this Agreement

effective on the date specified below.” The absence of a

signature on behalf of the Commission, accompanied by the

provision in paragraph two reserving the Commission’s right to

enter into the DGLA, establishes the Commission never executed

the DGLA that Mr. Sandrini signed.

Sandrini’s argument that the Commission’s reserved right to

enter into the DGLA is merely a condition precedent to the

receipt of new plant material and not plant material already in

Mr. Sandrini’s possession is without merit. The proper

interpretation, an issue of law, when read in conjunction with

other provisions in the DGLA, is the Commission, in its

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 At the hearing on the cross motions for summary judgment 6

on June 20, 2007, Sandrini acknowledged he was not pursuing an

implied or oral license defense.

49

discretion, may either enter into a license agreement with a

grower, or choose not to. Here, the condition precedent to

receiving Wood is the signature of the Commission and the grower. 

The condition precedent to receiving Wood is separate and

independent from the Commission’s discretion to enter into or to

not enter into a license agreement with a grower.

Giving full effect to all provisions in the DGLA, the

agreement specifically requires signatures from both the

Commission and Sandrini as conditions precedent to the existence

of a valid and operative license agreement. As the Commission

never signed the DGLA, a valid and operative, express written

license agreement between the Commission and Sandrini does not

exist. Banner, 62 Cal. App. 4th at 358. 

Sandrini provides no facts to suggest the Commission granted

it an implied or an oral license to practice the ‘284 Patent. 

Indeed, the only evidence Sandrini submitted regarding a license

is that the Commission sent Mr. Sandrini a blank DGLA that he

signed and returned to the Commission. The written license

agreement Mr. Sandrini signed reflects the basis for an express

license, not an implied license. With no other facts to support 

an implied license, Sandrini cannot prove a valid implied license

to practice the ‘284 Patent.6

2. Sandrini’s Untimely Raising of a License Defense 

The Commission argues Sandrini failed to raise the existence

of a license as an affirmative defense as required by Federal

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Rule of Civil Procedure 8(c) (“FRCP”) and is now barred from

doing so. Sandrini, on the other hand, argues its Fifth and

Tenth Affirmative Defenses of estoppel and misuse, respectively,

are predicated on the fact the Commission granted Sandrini a

license in the ‘284 Patent. 

“The doctrines of legal estoppel and equitable estoppel have

been applied by courts to imply a license.” Spindelfabrik, 829

F.2d at 1080. Legal estoppel “is merely a shorthand for saying

the grantor of a property right or interest cannot derogate from

the right granted by his own subsequent acts.” Id. The rationale

“is to estop the grantor from taking back that for which he

received consideration.” Id.

Sandrini’s Fifth Affirmative Defense provides “[t]he

Commission’s claim for infringement of the ‘284 patent is limited

and/or barred by the equitable doctrines of laches, estoppel, and

unclean hands. While Sandrini could have pleaded its license

defense in a clearer manner, its Fifth Affirmative Defense of

estoppel encompasses a license defense and is sufficient to

satisfy the pleading standard of FRCP 8(c). Spindelfabrik, 829

F.2d at 1080. The Commission could have, but did not raise a

Rule 12 motion to Sandrini’s defenses and has had ample time to

propound discovery to ascertain the facts supporting the estoppel

defense. 

Sandrini’s motion for summary judgment on a theory of an

express or implied license is DENIED.

E. The Commission’s § 17200 Cause of Action

The Commission contends Sandrini is liable for “unfair

competition” under California Business and Professions Code §

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17200. Specifically, the Commission contends Sandrini unlawfully

infringed the ‘284 Patent, Sandrini unlawfully and unfairly used

misappropriated USDA property for his own gain at the expense of

other growers, and Sandrini unlawfully and unfairly concealed his

actions. Sandrini, on the other hand, contends he is not liable

under § 17200 for several reasons. First, Sandrini did not

infringe any proprietary rights held by the USDA before or after

the ‘284 Patent issued. Second, the Commission is not a “person”

with standing to sue under § 17200. Third, the Commission lacks

standing to assert a § 17200 cause of action because it is not an

“aggrieved person” as defined by statute. Fourth, the

Commission does not assert any facts indicating Sandrini stole

Autumn King plant materials.

Business and Professions Code sections 17200-17210 is known

as California’s unfair competition law, which provides remedies

for a wide range of unfair business practices. Under § 17200,

unfair competition “mean[s] and includes any unlawful, unfair or

fraudulent business act or practice . . . .” Cal. Bus. & Prof.

Code § 17200. 

“An unfair business practice occurs when the practice

offends an established public policy or when the practice is

immoral, unethical, oppressive, unscrupulous or substantially

injurious to consumers.” People v. Duz-Mor Diagnostic Lab.,

Inc., 68 Cal. App. 4th 654, 662 (Cal. Ct. App. 1998). The test

of whether a business practice is unfair under § 17200 involves

an examination of [that practice’s] impact on its alleged victim,

balanced against the reasons, justifications and motives of the

alleged wrongdoer[,] . . . [and] the court must weigh the utility

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of the defendant’s conduct against the gravity of the harm to the

alleged victim.” Id.

An unlawful business practice under § 17200 occurs when a

person violates a law. Cel-Tech Communications, Inc. v. Los

Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (Cal. 1999). 

Section 17200 borrows violations of other laws and treats them as

unlawful actions that are independently actionable under § 17200. 

Id.

Here, the Commission contends Sandrini used misappropriated

Autumn King plant material to infringe the ‘284 Patent. The

Commission also contends Sandrini took possession of

misappropriated USDA property without authorization from the

USDA, and with knowledge it was an unreleased variety. Sandrini

contends there is no evidence indicating Sandrini was the one who

stole the Autumn King plant materials.

The Commission also contends Sandrini attempted to conceal

his wrongful actions by violating regulatory and criminal laws. 

Specifically, Sandrini falsified invoices and bills of lading by

identifying Autumn King grapes as Thompson Seedless grapes, when

Sandrini knew they were not Thompson Seedless grapes. Sandrini

shipped Autumn King grapes in containers bearing false labels in

direct contravention of California shipping regulations. 

Sandrini committed a misdemeanor by falsifying shipping reports

with the Commission. Sandrini, on the other hand, contends he

was not trying to conceal the identity of the Autumn King grapes. 

Sandrini labeled the Autumn King grapes as Thompson Seedless

grapes because he did not know the name of the Autumn King

variety.

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Sandrini argues the Commission lacks standing to bring a §

17200 cause of action because it is not an “aggrieved person” as

defined by statute as the Commission has not suffered an injury

or lost money as a result of unfair competition. The Commission

contends it has been injured because it did not receive any vine

royalties that would have been collected by an authorized nursery

had Sandrini purchased its Autumn King vines through the proper

channels. The Commission’s lost royalties are a legally

cognizable injury that give the Commission standing to assert a §

17200 cause of action.

Sandrini contends the Commission is not a “person” with

standing to sue under § 17200. The Commission, on the other

hand, agrees that it is a governmental entity, but that fact is

not determinative of whether it may bring suit under § 17200. In

support of its argument, the Commission contends § 17204

authorizes corporations to bring suit under § 17200, and the

Ketchum Act, in turn, provides the Commission shall “have and

possess all of the powers of a corporation.” 

The Ketchum Act specifically provides “[t]he California

Table Grape Commission shall be and is hereby declared a

corporate body.” Cal. Food & Agric. Code § 65551 (emphasis

added). The Ketchum Act further provides the Commission “shall

have the power to sue and be sued, to contract and be contracted

with, and to have and possess all of the powers of a

corporation.” Id. (emphasis added).

The Ketchum Act specifically declares the Commission a

“corporate body,” which “possesses all of the powers of a

corporation.” As § 17204 specifically provides a “person” may

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sue under § 17200, and § 17201 defines “person” as including

corporations, the Commission has standing to sue under § 17200 as

a corporation.

As genuine issues of material fact exist regarding the

Commission’s § 17200 cause of action, the Commission’s motion for

summary judgment is DENIED. 

 

E. Preemption of the Commission’s State Law Causes of

Action

Sandrini contends the Commission’s state law causes of

action for unfair competition under § 17200, intentional

interference with prospective economic advantage, and unjust

enrichment are all predicated on Sandrini’s alleged possession of

Autumn King plant material without a license from the Commission. 

Because the Commission seeks damages for its state law claims,

which are predicated on Sandrini’s infringement of the ‘284

Patent, they are preempted. The Commission, on the other hand,

contends its state law causes of action are not preempted by

federal patent law because the state law claims are not entirely

predicated on the facts giving rise to its patent law claim. 

Federal patent law may preempt state law if it “stands as an

obstacle to the accomplishment and execution of the full purposes

and objectives of Congress.” Kewanee Oil Co. v. Bicron Corp.,

416 U.S. 470, 479 (1974). “When state law touches upon the area

of federal statutes enacted pursuant to constitutional authority,

it is familiar doctrine that the federal policy may not be set at

naught, or its benefits denied by the state law.” Id. at 479-80.

Patent law will not preempt state law claims if such claims

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“include additional elements not found in the federal patent law

cause of action and if they are not an impermissible attempt to

offer patent-like protection to subject matter addressed by

federal law.” Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294,

1306 (Fed. Cir. 1999). 

Tortious interference with prospective economic relations

“requires proof that the defendant intentionally engaged in acts

wrongful by some measure other that the fact of the interference

itself which are designed to disrupt an economic relationship

between the plaintiff and another.” Id. (citing Della Penna v.

Toyota Motor Sales U.S.A., Inc., 11 Cal. 4th 376 (Cal. 1995).) 

“Tortious interference protects business relationships.” Rodime,

174 F.3d at 1306.

Unfair competition requires a plaintiff to prove the

defendant “engaged in an unfair business practice, that is, a

business practice that is immoral, unethical, oppressive,

unscrupulous, or substantially injurious.” Id. (citing People v.

Casa Blanca Convalescent Homes, Inc., 159 Cal. App. 3d 509, 206

(Cal. Ct. App. 1984)). “Unfair competition prevents unethical

and oppressive business practices.” Rodime, 174 F.3d at 1306.

In Rodime, the Federal Circuit addressed whether, under

California law, tortious interference with prospective economic

relations and unfair competition were preempted by federal patent

law. The court held that “these state law causes of action do

not constitute an impermissible attempt to offer patent-like

protection to subject matter addressed by federal law.” Id. The

court held “because these state law causes of action protect

interests different from federal patent law, federal law does not

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preempt [the plaintiff’s] state law claims.” Id.

The Commission’s state law claims are not foreclosed as a

matter of law because they have different elements and do not

constitute an impermissible attempt to offer patent-like

protection. Sandrini’s motion for summary judgment as to the

Commission’s state law claims is DENIED.

V. Conclusion

The Commission’s motion for summary judgment on the grounds

it has statutory authority to engage in its patent licensing

program is GRANTED, and Sandrini’s motion for summary judgment on

the grounds the Commission lacks statutory authority to engage in

its patent licensing program is DENIED.

The Commission’s motion for summary judgment seeking to

establish that the ‘284 Patent is not invalid under the public

use bar of 35 U.S.C. § 102(b) is DENIED. Sandrini’s motion for

summary judgment seeking to establish that the ‘284 Patent is

invalid under the public use bar of 35 U.S.C. § 102(b) is DENIED.

The Commission’s motion for summary judgment on the grounds

Sandrini infringed the ‘284 Patent is DENIED. The Commission’s

motion for summary judgment on the grounds Sandrini’s

infringement of the ‘284 Patent was willful is DENIED. 

Sandrini’s motion for summary judgment on the grounds the

Commission granted it an express license to practice the ‘284

Patent is DENIED.

The Commission’s motion for summary judgment on the grounds

Sandrini’s conduct was unlawful, unfair, or fraudulent under

California Business and Professions Code § 17200 is DENIED.

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Sandrini’s motion for summary judgment on the grounds the

Commission’s state law causes of action are preempted by the

Patent Act is DENIED.

DATED: 6/27/2007 /s/ Oliver W. Wanger

United States District Judge

Oliver W. Wanger

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