1The Honorable Mary Ann Whipple was substituted on the panel for William T.

Bodoh, who retired from the bench as of January 2, 2004. 

ELECTRONIC CITATION: 2004 FED App. 0001P (6th Cir.)

File Name: 04b0001p.06

BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: WILLIAM FARRIS TRANTHAM, )

)

Debtor. )

_____________________________________ )

)

MONSANTO COMPANY, )

)

Plaintiff-Appellant, )

)

 v. ) No. 03-8010

)

WILLIAM FARRIS TRANTHAM, )

)

Defendant-Appellee. )

_____________________________________ )

Appeal from the United States Bankruptcy Court

for the Western District of Tennessee at Memphis.

No. 02-27859-K; Adv. No. 02-0596.

Argued: November 10, 2003

Decided and Filed: January 30, 2004

Before: AUG, COOK, and WHIPPLE, Bankruptcy Appellate Panel Judges.1

____________________

COUNSEL

ARGUED: Joseph N. Mole, FRILOT, PARTRIDGE, KOHNKE & CLEMENTS, New

Orleans, Louisiana, for Appellant. P. Preston Wilson, GOTTEN, WILSON, SAVORY &

BEARD, Memphis, Tennessee, for Appellee. ON BRIEF: Joseph N. Mole, Michael H.

Pinkerton, Miles P. Clements, FRILOT, PARTRIDGE, KOHNKE & CLEMENTS, New

Orleans, Louisiana, for Appellant. P. Preston Wilson, GOTTEN, WILSON, SAVORY &

BEARD, Memphis, Tennessee, for Appellee.
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____________________

OPINION

____________________

J. VINCENT AUG, JR., Bankruptcy Appellate Panel Judge. Monsanto Company

(Monsanto) appeals the bankruptcy court’s memorandum and order denying its motion for

summary judgment on its complaint for nondischargeability of Monsanto’s claim against

the Debtor, William Farris Trantham (Trantham). The bankruptcy court determined that

the pre-petition patent infringement judgment obtained by Monsanto against Trantham in

the amount of $592,677.89 is dischargeable.

I. ISSUES ON APPEAL

1. Whether the bankruptcy court applied the wrong standard for a finding of

“willful and malicious injury” under 11 U.S.C. § 523(a)(6).

2. Whether the debt for willful patent infringement is dischargeable.

II. JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this

appeal. The United States District Court for the Western District of Tennessee has

authorized appeals to the BAP. A "final order" of a bankruptcy court may be appealed by

right under 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it "ends the

litigation on the merits and leaves nothing for the court to do but execute the judgment."

Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989)

(citations omitted). The bankruptcy court's order denying Monsanto’s motion for summary

judgment and finding, based on the collateral estoppel effect of the district court’s

decisions, that Trantham’s debt to Monsanto was dischargeable is a final order. 

Orders denying motions for summary judgment are reviewed for abuse of discretion.

Romstadt v. Allstate Ins. Co., 59 F.3d 608 (6th Cir. 1995). “‘An abuse of discretion occurs

only when the [bankruptcy] court relies upon clearly erroneous findings of fact or when it

improperly applies the law or uses an erroneous legal standard.’” Sicherman v. Diamoncut,

Inc. (In re Sol Bergman Estate Jewelers, Inc.), 225 B.R. 896, 899 (B.A.P. 6th Cir. 1998)
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(alteration in original) (quoting Mapother & Mapother, P.S.C. v. Cooper (In re Downs), 103

F.3d 472, 480-81 (6th Cir. 1996)). 

The application of collateral estoppel is reviewed de novo. See Markowitz v.

Campbell (In re Markowitz), 190 F.3d 455, 461 (6th Cir.1999). “De novo review requires

the Panel to review questions of law independent of the bankruptcy court’s determination.”

First Union Mortgage Corp. v. Eubanks (In re Eubanks), 219 B.R. 468, 469 (B.A.P. 6th Cir.

1998) (citation omitted). “When reviewing a summary judgment decision, an appellate

court must confine its review to the evidence as submitted to the district court.” Markowitz,

190 F.3d at 463.

III. FACTS

Before delving into Monsanto’s issues on appeal, it is necessary to review the facts

giving rise to the patent infringement judgment which Monsanto asserts is

nondischargeable. In its decision finding that Trantham had infringed Monsanto’s patents,

the U. S. District Court for the Western District of Tennessee gives a succinct version of

these background facts. The court states: 

This case stems from [Monsanto’s] patents on technology that allows

a seed producer of cottonseed and soybean seeds to insert genes into the

seed to make the resulting plants resistant to glysophate herbicides, such as

Roundup herbicide, a product manufactured by [Monsanto]. Seeds with the

patented technology are called Roundup Ready®. A grower using the

Roundup Ready® seed can spray his crops with the Roundup herbicide, or

another glysophate herbicide, thereby killing the weeds in his field without

damaging his crops. The technology can also be injected into cottonseed to

make the resulting cotton plants insect repellant. Cottonseed using the

technology is called Bollgard® Cotton. Cottonseed containing both versions

of the technology is called Bollgard® with Roundup Ready® Cotton.

[Monsanto’s] Roundup Ready® and Bollgard® gene technology is protected

by three patents, which were issued prior to the events giving rise to this

controversy. [Monsanto] sells the gene technology to seed producers under

a license to use the technology in the production of cottonseed and

soybeans. The seed producers then sell the seed treated with the

technology to retailers or to growers, both of whom must obtain licenses from

[Monsanto] before selling or using the seeds with the Roundup Ready® or

Bollgard® technology. . . . 

In order for an individual farmer to use seed produced with the

patented gene technology, the farmer must be licensed to use the product.

Under the licensing arrangement, a grower is only allowed to use the
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technology in one growing season and is prohibited from saving for later

planting any of the seed produced from plants grown using the purchased

seed. The grower is also prohibited from selling saved seed or transferring

the seed to anyone else for planting. 

. . . 

[Trantham] is a farmer in Tipton County, Tennessee. [Trantham] has

never obtained a license from [Monsanto] to use its technology in

cottonseed. In 1999, [Trantham] purchased, along with James Wood,

approximately 900 bushels of cottonseed from the Burlison Gin, located near

Covington, Tennessee. [Trantham] then used that seed to plant over 100

acres of land with cotton seed. [Trantham] applied Roundup herbicide over

the cotton, some of which was killed. In 2000, [Trantham] used seed

purchased from the Burlison Gin to plant his cotton crops and again applied

Roundup herbicide to the crop.

[Trantham] also purchased soybeans in 1999 from a retailer named

Terra Seed and Chemical Company. [Trantham] planted and harvested the

soybeans in 1999, and then planted his 2000 crop with soybeans saved from

the previous year's harvest.

[Monsanto] was granted leave by this Court to enter [Trantham’s] land

to collect samples of the cotton and soybean crops to be tested for the

presence of the Roundup Ready® and Bollgard® gene technology.

[Monsanto] used three separate testing procedures on the cotton and

soybean crops, and detected [Monstanto’s] patented gene technology in

93% of the cotton samples and 100% of the soybean samples.

Monsanto Co. v. Trantham, 156 F. Supp. 2d 855, 858-59 (W.D. Tenn. 2001). Subsequent

to the district court’s summary judgment that Trantham had in fact infringed Monsanto’s

patent, a separate jury trial was held to determine Monsanto’s damages. The jury found

by clear and convincing evidence that Trantham had willfully infringed Monsanto’s patents

and awarded damages of $34,392. Trantham filed a brief in opposition to the jury’s finding

of willfulness and Monsanto filed a Motion for Judgment as a Matter of Law, asserting that

the amount of the jury’s award as to a reasonable cottonseed royalty was inadequate and

not supported by the evidence. 

The district court declined to set aside the jury’s finding of willfulness. The court

stated that “[t]here is more than ample evidence to support the jury determination that

Trantham acted willfully in infringing Monsanto’s patents. In fact, Trantham admitted at trial

that he simply could not or did not want to pay the price that Monsanto charged.”
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On the other hand, the district court agreed with Monsanto that the amount of the

verdict was not supported by the evidence and, with the encouragement of the district

court, the parties agreed that the compensatory damages with respect to the cottonseed

technology were $87,022.50. 

Monstanto also filed a post-trial memorandum in the district court requesting

additional relief in the form of treble damages, attorney fees and expert witness fees. In

analyzing whether Monsanto was entitled to treble damages, the district court considered:

(1) whether the infringer deliberately copied the idea or design of another; (2) whether the

infringer had a good faith belief that the patent was invalid; (3) the infringer’s behavior as

a party to the litigation; (4) the infringer’s size and financial condition; (5) the closeness of

the case; (6) the duration of the infringer’s misconduct; (7) any remedial action taken by

the infringer; (8) the infringer’s motivation for harm; and (9) whether the infringer attempted

to conceal his misconduct. 

In reviewing these factors and deciding that enhancement of damages was

appropriate, the district court noted that (i) “Trantham admitted that he infringed simply to

avoid paying the license fee;” (ii) the infringement issue was decided on summary

judgment; and therefore, the issue of Trantham’s willfulness was not a close one in the

case; (iii) Trantham took no remedial action; (iv) the deception was carried out over a

period of two years; and (v) there was evidence that Trantham sought to conceal his

infringement by sending cottonseed to be delinted under a false name.

The court concluded that it was appropriate to award treble damages, even though

it found with respect to item (8) above (motivation), that “[t]here is no evidence that

Trantham was motivated by an intent to harm Monsanto.” 

In deciding that it was also appropriate to award 50% of Monsanto’s attorney fees

in the case, the district court stated: 

In this case, the Court concludes that an award of attorneys’ fees is

appropriate. Trantham deliberately used Monsanto’s patented technology

without obtaining a license and without paying for it. In addition, he

undertook to conceal his infringement. Trantham admitted at trial that his

sole motivation was to avoid paying for a license and abiding by its terms.

The policy behind [35 U.S.C.] § 285 of discouraging infringement is wellserved by awarding attorneys’ fees under these circumstances.

Finally, the district court determined that Monsanto was not entitled to its expert witness

fees in excess of the statutory limit set forth in 28 U.S.C. § 1821(b). In making this
2The judgment was composed of compensatory damages of $106,132.50 trebled

to $318,397.50; prejudgment interest of $9,005.27 and Monsanto’s attorney fees of

$265,275.12.

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decision, the district court noted that before such an award could be made, the court must

make a finding of “fraud, abuse of the judicial process or something tantamount to the very

temple of justice (being) denied.” The district court found that “there has been neither

fraud, abuse of judicial process, or any other gross injustice perpetrated by Trantham. This

case does not qualify as the kind of ‘very exceptional’ case which would warrant the award

of additional expert fees.”

The final judgment was entered by the district court on May 14, 2002, against

Trantham in the amount of $592,677.89.2 Trantham did not appeal that judgment.

On May 10, 2002, Trantham filed his chapter 7 petition. Monsanto filed a timely

complaint objecting to the discharge of its patent infringement judgment pursuant to 11

U.S.C. § 523(a)(6). Monsanto also filed a motion for summary judgment asserting that,

based on the collateral estoppel effect of the district court’s prior decisions, it was entitled

to have its judgment determined nondischargeable. Monsanto argued that (i) the district

court jury had already decided that Trantham intentionally infringed Monsanto’s patent;

(ii) Trantham knew that his intentional acts would harm Monsanto because Trantham

utilized Monsanto’s technology without paying the required fees; and (iii) Trantham

admitted that he could not or did not want to pay the price Monsanto charged. Monsanto

also pointed out that the district court jury and judicial findings of willfulness coupled with

an award of treble damages and attorney fees, showed that an intentional tort had

occurred and justified a finding that Monsanto’s prepetition patent infringement judgment

was nondischargeable under § 523(a)(6).

In response to Monsanto’s motion for summary judgment, Trantham argued that the

district court did not make a finding that Trantham acted with malice and that the doctrine

of collateral estoppel is, therefore, not applicable. He requested a separate hearing on the

sole issue of malice. Alternatively, he argued that the bankruptcy court should give

collateral estoppel effect to the district court’s findings that there was no evidence that
3

In this appeal both of the parties are in agreement that the doctrine of collateral

estoppel applies in this case with respect to the district court decisions and each party

argues that those district court decisions support the party’s respective position in this

case. 

-7-

Trantham was motivated by an intent to harm Monsanto and no evidence of fraud or any

other gross injustice on Trantham’s part.3

The bankruptcy court found that the issue of willfulness was determined by the

district court proceeding and that Trantham basically conceded that issue. The bankruptcy

court also stated that, in its opinion, “the meaning of the two words (i.e., ‘willful’ and

‘malicious’) were intended by the Congress to be treated differently and possess entirely

separate and distinct legal significance under section 523(a)(6).” Applying Markowitz v.

Campbell (In re Markowitz), 190 F.3d 455, 464 (6th Cir. 1999), the bankruptcy court found

that it was required “to determine whether the debtor subjectively desired to intend the

harm or had knowledge that harm is substantially certain to occur or result from the

debtor’s actions.”

In determining that the prepetition patent infringement judgment was dischargeable,

the bankruptcy court noted that Trantham asserts that his subjective intent was not to harm

Monsanto but rather to produce an efficient and profitable crop to save his farm. It also

stated that the district court’s findings i.e., that Trantham was not motivated by an intent

to harm Monsanto and that there was no evidence that Trantham committed fraud, abuse

of the judicial process or other gross injustice, played a significant role in its determination

that Monsanto had not met its burden of showing a willful and malicious injury under

§ 523(a)(6). Monsanto filed this timely appeal.

IV. DISCUSSION

Summary Judgment Standard

Bankruptcy Rule 7056 governs summary judgment in adversary proceedings. The

bankruptcy court denied Monsanto’s motion for summary judgment. Trantham had not

filed a cross motion for summary judgment. However, the bankruptcy court went on to find

that Trantham’s debt owed to Monsanto was dischargeable, in effect making a summary

judgment ruling in favor of Trantham. See In re Hunt, 65 B.R. 627 (Bankr. M.D. Fla. 1986)

(holding it appropriate for the court to enter summary judgment in favor of the nonmoving
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party if the court determines that there are no genuine issues of material fact and

nonmoving party is entitled to judgment as a matter of law); see also Fed. R. Civ. P. 56;

Fed. R. Bankr. P. 7056. According to the Sixth Circuit, 

A court must grant summary judgment "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

and that the moving party is entitled to judgment as a matter of law." Under

this test, the moving party may discharge its burden by "pointing out to the

[bankruptcy] court ... that there is an absence of evidence to support the

nonmoving party's case." The nonmoving party cannot rest on its pleadings,

but must identify specific facts supported by affidavits, or by depositions,

answers to interrogatories, and admissions on file that show there is a

genuine issue for trial. Although we must draw all inferences in favor of the

nonmoving party, it must present significant and probative evidence in

support of its complaint. "The mere existence of a scintilla of evidence in

support of the [nonmoving party's] position will be insufficient; there must be

evidence on which the jury could reasonably find for the [nonmoving party]."

Gibson v. Gibson (In re Gibson), 219 B.R. 195, 198 (B.A.P. 6th Cir. 1998) (alterations in

original) (quoting Hall v. Tollett, 128 F.3d 418, 421-22 (6th Cir.1997) (internal citations

omitted)). As noted below, collateral estoppel required the bankruptcy court to apply the

district court’s findings of fact. 

Collateral Estoppel

The Supreme Court has held that the doctrine of collateral estoppel is applicable in

dischargeability proceedings. Grogan v. Garner, 498 U.S. 279, 284 n.11, 111 S. Ct. 654,

658 (1991). Federal common law governs the claim-preclusive effect of all federal court

judgments. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507-8, 121 S. Ct.

1021, 1027-28 (2001). While the federal rule applied to federal judgments in diversity

cases generally requires the application of the issue preclusion rules of the state in which

the federal diversity court sits, federal issue preclusion law applies to federal judgments in

federal question cases. See id. The issue of willful infringement of Monsanto’s patent

presented a federal question in the district court. Thus, this court must apply federal issue

preclusion law as follows: 

The Sixth Circuit has addressed a federal rule of issue preclusion,

requiring “that the precise issue in the latter proceedings have been raised

in the prior proceeding, that the issue was actually litigated, and that the

determination was necessary to the outcome." Spilman v. Harley, 656 F. 2d
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224, 228 (6th Cir. 1981), overruled on other grounds, Bay Area Factors v.

Calvert (In re Calvert), 105 F. 3d 315, 319 (6th Cir. 1997). That court

observed that mutuality of parties "is no longer necessary in some

circumstances." Id.

Gonzalez v. Moffitt (In re Moffitt), 252 B.R. 916, 921 (B.A.P. 6th Cir. 2000).

We agree with the bankruptcy court’s determination that the issue of “willfulness was

actually raised, litigated, and determined because adjudication of the willfulness issue was

necessary to the outcome of the patent infringement action.” And for the reasons that

follow, we conclude that it was appropriate for the bankruptcy court to give the district

court’s decisions collateral estoppel effect on the issue of whether Trantham’s debt to

Monsanto was the result of a willful injury as defined under 11 U.S.C. § 523(a)(6) by the

Sixth Circuit. We further conclude that the findings made by the district court or by the jury

in that case also support a finding of a “malicious” injury under 11 U.S.C. § 523(a)(6).

Section 523(a)(6) Analysis:

The discharge exceptions are to be narrowly construed in favor of the debtor.

Meyers v. I.R.S. (In re Meyers), 196 F.3d 622 (6th Cir. 1999). The party seeking the

exception to discharge bears the burden of proof by a preponderance of the evidence.

Grogan, 498 U.S. at 286.

The Bankruptcy Code provides that an individual debtor is not discharged from any

debt “for willful and malicious injury by the debtor to another entity or to the property of

another entity.” 11 U.S.C. § 523(a)(6). “From the plain language of the statute, the

judgment must be for an injury that is both willful and malicious. The absence of one

creates a dischargeable debt.” Markowitz, 190 F.3d at 463.

In Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S. Ct. 974, 977 (1998), the Supreme

Court held that finding nondischargeability of a debt under § 523(a)(6) “takes a deliberate

or intentional injury, not merely a deliberate or intentional act that leads to injury. Geiger,

523 U.S. at 61. The Supreme Court further stated that

the (a)(6) formulation triggers in the lawyer’s mind the category “intentional

torts,” as distinguished from negligent or reckless torts. Intentional torts

generally require that the actor intend “the consequences of an act,” not

simply, “the act itself.”

Geiger, 523 U.S. at 61-62 (alteration in original) (citing Restatement (Second) of Torts § 8A

cmt. a (1964)). The Supreme Court also stated that its prior decision in McIntyre v.
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Kavanaugh, 242 U.S. 138, 37 S. Ct. 38 (1916) was in accord with its construction of

§ 523(a)(6) as set forth in Geiger. In McIntyre, the Court found that a broker had

“deprive[d] another of his property forever by deliberately disposing of it without semblance

of authority.” Id. at 141. “The Court held that this act constituted an intentional injury to

property of another, bringing it within the discharge exception.” Geiger, 523 U.S. at 63.

In analyzing § 523(a)(6) after Geiger, the Sixth Circuit states:

[T]he [Supreme] Court’s citationto the Restatement’s definition of “intentional

torts” underscores the close relationship between the Restatement’s

definition of those torts and the definition of “willful and malicious injury.” The

Restatement defines intentional torts as those motivated by a desire to inflict

injury or those substantially certain to result in injury. Although the Supreme

Court identified a logical association between intentional torts and the

requirements of § 523(a)(6), it neither expressly adopted nor quoted that

portion of the Restatement discussing “substantially certain” consequences.

Nonetheless, from the Court’s language and analysis in Geiger, we now hold

that unless “the actor desires to cause the consequences of his act, . . . or

believes that the consequences are substantially certain to result from it,” he

has not committed a “willful and malicious injury” as defined under

§ 523(a)(6).

Markowitz, 190 F.3d at 464 (citations omitted) (emphasis added). We are bound by the

Sixth Circuit’s interpretation and exposition of Geiger, and so the bankruptcy courts in this

circuit, in order to find a “willful” injury under § 523(a)(6), must determine either that (i) the

actor desired to cause the consequences of the act or (ii) the actor believed that the given

consequences of his act were substantially certain to result from the act. Markowitz, 190

F.3d at 464.

The bankruptcy court correctly stated the test to determine “willful” injury for

purposes of nondischargeability under § 523(a)(6) in the Sixth Circuit based on Markowitz.

However, it halted its analysis after its determination that Trantham did not desire to cause

the consequences of his act and thus failed to consider the second prong of the Markowitz

test: Whether Trantham believed that the consequences of his act were substantially

certain to result. Those consequences were the financial harm caused to Monsanto.

Where Trantham’s stated purpose in willfully infringing Monsanto’s patents was not to pay

Monsanto for its technology, what else could Trantham believe would be the consequences

of his act but that Monsanto would be deprived of money to which it was entitled? 

The findings of the district court were applied in bankruptcy court via collateral

estoppel. The district court found, inter alia, (1) that Trantham had admitted that his
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infringement was solely for the purpose of avoiding the payment of the license fee to

Monsanto (i.e., enriching himself), and (2) that there was some evidence that Trantham

tried to conceal his infringement by using a false name. Thus Trantham must have known,

and therefore believed, that economic damage to Monsanto was substantially certain to

result from his failure to pay the license fee because he was in a zero-sum situation. He

could only gain if Monsanto lost. Trantham’s efforts at concealment show that he believed

Monsanto was damaged and had good cause to pursue him if the damage came to light.

It is true that the district court also found that there was no evidence to suggest

Trantham was specifically motivated by an intent to injure Monsanto. However, that finding

is not particularly relevant when reviewing the second part of the test because the same

can be said of almost any intentional tortfeasor, for example, a bank robber. His chief

motive is to enrich himself, not financially injure the bank. The injury, however, is bound

to occur, and in civil terms it constitutes an intentional tort against the bank. 

As the Supreme Court pointed out in Geiger, the “willful and malicious” standard in

§ 523(a)(6) brings to the legal mind the idea of an intentional tort. That is how patent

infringement has historically been viewed. “Infringement, whether direct or contributory,

is essentially a tort, and implies invasion of some right of the patentee.” Carbice Corp. v.

Am. Patents Dev. Corp., 283 U.S. 27, 33, 51 S. Ct. 334, 336 (1931). The patent

infringement statute that authorized the recovery of damages stated that they “may be

recovered by action on the case,” 9 Charles Alan Wright & Arthur R. Miller, Federal

Practice and Procedure § 2312 (2d ed. 1994), and the proper action for infringement under

the patent laws was trespass on the case. Moore v. Marsh, 74 U.S. 515, 520 (1868);

Agawam Co. v. Jordan, 74 U.S. 583, 593 (1868); Myers v. Cunningham, 44 F. 346, 349

(Ohio C.C. 1890) (“[A]ctions of trespass on the case were first prescribed by congress for

patent suits in 1790, and . . . the law has never since been changed in that particular.”);

Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1141 (7th Cir. 1975) (“Infringement

of a patent is a tort.”); Graham Eng’g Corp. v. Kemp Prods. Ltd., 418 F. Supp. 915, 919

(N.D. Ohio 1976). Because the district court in this case found Trantham’s actions were

willful, those actions constitute an intentional tort which, according to Geiger, could lead

to nondischargeability under § 523(a)(6). 

In a substantially similar case, also involving a Monsanto prepetition patent

infringement judgment, the U.S. Bankruptcy Court for the Western District of Louisiana
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found that the judgment owed by the farmer/debtor to Monsanto was nondischargeable

under § 523(a)(6). Monsanto Co. v. Thomason (In re Thomason), Ch. 11 Case No. 00-

31755, Adv. No. 01-3012, slip op. (Bankr. W.D. La. Apr. 4, 2003). In Thomason, the

district court also found that there was no evidence that the debtor intended any harm

toward Monsanto. However, in finding the debt nondischargeable, the bankruptcy court

stated:

The district court also observed that the defendants “deliberately and

with forethought hatched and carried out a plan to appropriate plaintiffs’

patented and certificated technology for their own use.” Debtor’s reliance on

the trial court’s comment that no harm was intended toward Monsanto . . .

“other than deprivation of the companies’ rightful royalties and profits” is

misplaced, since when read in context, the comment merely identifies the

only possible injury that could have been intended, i.e., pecuniary injury.

That the willfulness determination was a part of the judgment in the prior

action is beyond peradventure.

Thomason, slip op. at 8.

Although it is unreported, we find the decision of the bankruptcy court in Thomason

to be persuasive. In the case at bar, as in Thomason, the Debtor carried out his plan to

appropriate Monsanto’s technology without any intention of paying Monsanto for it. In

addition, Trantham attempted to conceal his efforts. In effect, Trantham was planning to

permanently deprive Monsanto of its property (its license fees) without the semblance of

authority (the license agreement) to use the patent technology. See McIntyre, 242 U.S.

at 141.

While the bankruptcy court correctly applied collateral estoppel to the issue of a

“willful” injury, we conclude that the findings of the district court also require a determination

that Trantham’s debt was the result of a “malicious” injury. Under § 523(a)(6), “‘[m]alicious’

means in conscious disregard of one’s duties or without just cause or excuse; it does not

require ill-will or specific intent.” Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir. 1986).

The district court’s findings that Trantham “deliberately” infringed Monsanto’s patent for the

sole purpose of avoiding payment of the license fee and then undertook to conceal his

actions is also tantamount to a finding that Trantham acted in conscious disregard of his

known duty to Monsanto with respect to the patent.
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V. CONCLUSION

Trantham must have believed that the consequences of his refusal to pay the

license fee would be financial injury to Monsanto because, in the zero-sum situation

inherent wherever something is reserved to the use of a particular entity, Trantham could

only profit if Monsanto lost its reservation without proper compensation, i.e., the gain he

sought could come only at Monsanto’s expense. Thus, the Markowitz standard of “willful”

injury is met. In addition, because Trantham acted in conscious disregard of his duty to

Monsanto, the requirement of a “malicious” injury is also met. See Markowitz, 190 F.3d

at 463 (holding the absence of either the willful or malicious requirement from § 523(a)(6)

creates a dischargeable debt). 

Moreover, patent infringement, being the invasion of a protected interest, is a tort.

Here, according to the district court’s finding of willfulness, it was an intentional tort. Since

the Supreme Court observed that § 523(a)(6) was probably focused on intentional torts,

Trantham’s infringement in this case would pass muster under Geiger and McIntyre as well

as Markowitz. 

The decision of the bankruptcy court is REVERSED. Monsanto’s entire judgment

for willful patent infringement in the amount of $592,677.89 is nondischargeable. See

Cohen v. De La Cruz, 523 U.S. 213, 118 S. Ct. 1212 (1998) (finding that bankruptcy law

prevented the discharge of all liability arising from fraud, including actual and treble

damages); Spring Works, Inc. v. Sarff (In re Sarff), 242 B.R. 620, 627 (B.A.P. 6th Cir.

2000) (recognizing no distinction between compensatory and punitive damages).