*

The Honorable Louis F. Oberdorfer, United States District Judge for the District of Columbia, sitting by

designation.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 05a0484p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

GNESYS, INC.,

Plaintiff-Appellee,

v.

BOYD B. GREENE, Individually, and d/b/a GREENE &

ASSOCIATES, and GREENE & ASSOCIATES, LLC,

Defendants-Appellants.

X

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No. 04-6048

Appeal from the United States District Court

for the Western District of Tennessee at Memphis.

No. 99-02659—Jon Phipps McCalla, District Judge.

Argued: October 26, 2005

Decided and Filed: December 22, 2005 

Before: KEITH and BATCHELDER, Circuit Judges; OBERDORFER, District Judge.*

_________________

COUNSEL

ARGUED: John J. Mulrooney, CRONE & MASON, Memphis, Tennessee, for Appellants. Grady

M. Garrison, BUTLER, SNOW, O’MARA, STEVENS & CANNADA, Memphis, Tennessee, for

Appellee. ON BRIEF: John J. Mulrooney, CRONE & MASON, Memphis, Tennessee, for

Appellants. Grady M. Garrison, Charles C. Harrell, Elizabeth Einstman Chance, BUTLER, SNOW,

O’MARA, STEVENS & CANNADA, Memphis, Tennessee, for Appellee.

_________________

OPINION _________________

OBERDORFER, District Judge. This is an appeal from the district court’s decision finding

Defendant-Appellant Boyd B. Greene in contempt for violating its order enjoining him from using

the intellectual property of his former employer, Gnesys, Inc. It found that Greene had illegally used

confidential and proprietary information regarding Gnesys’s products in marketing his own product

overseas. The central issue on appeal is whether Greene timely appealed the district court’s orders

finding him in contempt and directing him to pay compensatory damages. We conclude that he did

not, and accordingly we dismiss the appeal of the district court’s ruling on these two substantive

1
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 2

issues. However, we affirm the district court’s finding that Greene willfully violated the Injunction

and its consequent award of attorney’s fees to Gnesys.

I. Background and Procedural History. 

Gnesys manufactures and sells the HYDRASEP Oil Water Separator, a device that separates

oil from water. Until he left the company because of a salary dispute, Greene had served Gnesys

in several positions over the years: shareholder of Gnesys from mid-1993 to August 22, 2000;

employee and officer until his resignation on May 4, 1998; and a member of the Board of Directors

until he resigned that position on April 28, 1999.

On August 2, 1999, Gnesys sued Greene in federal court. Gnesys alleged that Greene’s

unauthorized use of Gnesys’s intellectual property constituted unfair competition and violated state

tort law. According to Gnesys, after Greene left the company, it discovered that Greene sought to

obtain patent rights in India for Greene’s own StakPak product, and distributed to potential investors

in the United States and China StakPak business plans which contained information he knew to be

the confidential and proprietary information of Gnesys. He also allegedly used photographs of the

HYDRASEP device in promotional materials for the StakPak (albeit with the Gnesys logo digitally

removed), and used product specifications for the StakPak that were almost verbatim the same as

Gnesys’s specifications for the HYDRASEP device. 

On October 26, 1999, pursuant to a settlement agreement, the district court entered a Consent

Preliminary Injunction, which ordered Greene to stop using Gnesys’s intellectual property and

infringing its patents related to its HYDRASEP device. On August 22, 2000, the court entered a

Consent Permanent Injunction and Final Judgment (“Injunction”) to the same effect.

In April 2001, Gnesys moved the court to cite Greene for contempt. The motion alleged six

separate violations of the Injunction, primarily related to Greene’s continued unauthorized use of

Gnesys’s confidential and proprietary information to market his StakPak device. Gnesys also sought

compensatory damages, expenses, and attorney’s fees. 

The district court found that Greene willfully violated four provisions of the Injunction and

consequently was in contempt. The court accordingly directed Gnesys to submit evidence that

would support an award of damages, “either compensatory or punitive.” See Contempt Order (Nov.

26, 2002) (J.A. 63), at 20. After receiving briefing from the parties, the court awarded Gnesys

$100,000 in damages, and ordered Greene to post a $25,000 bond pending rescission of the patent

application in India. See Damages Order (Aug. 26, 2003) (J.A. 101), at 6. After additional briefing,

the court also directed Greene to reimburse Gnesys $158,041.50 for attorney’s fees and $8,774.40

in costs that he had caused Gnesys to incur. See Attorney Fees Order (July 21, 2004) (J.A. 199), at

1-2. On August 20, 2004, Greene appealed all three orders.

II. Timeliness of Appeal.

Before reaching the merits of the district court’s decision, we consider whether Greene

timely appealed the orders finding him in contempt and awarding Gnesys compensatory damages.

A party must file a notice of appeal with the district court “within 30 days after the judgment

or order appealed from is entered.” Fed. R. App. P. 4(a)(1)(A). The judgment must be a “final

decision” of the lower court. 28 U.S.C. § 1291. “‘A ‘final decision’ generally is one which ends

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

Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199 (1988) (citation omitted).
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 3

In this case, the district court issued its Contempt Order on November 26, 2002; its Damages

Order on August 26, 2003; and its Attorney Fees Order on July 21, 2004. Greene filed a Notice of

Appeal on August 20, 2004, within 30 days of the filing of the Attorney Fees Order, but almost a

year after the entry of the Damages Order. Gnesys contends that the Damages Order was a “final

decision” on the discrete issues of contempt and compensatory damages. Therefore, it urges that

the August 20, 2004 Notice of Appeal was not timely, because it was filed more than 30 days after

issuance of the lower court’s “final decision” of August 26, 2003. 

Greene responds that the attorney’s fees award was part of the merits decision and was

intertwined with the damages assessment. As a result, he contends, the August 2003 Damages Order

was not a final judgment, because an essential element of the damages award remained unresolved,

so that the contempt judgment is appealable. 

In Budinich, the Supreme Court held that the district court’s decision denying petitioner’s

new trial motion was final and appealable even when the court had not yet awarded attorney’s fees.

There petitioner sued pursuant to a Colorado statute to collect employment compensation that

respondent owed him. A jury awarded petitioner only $5,000, and petitioner timely moved for a

new trial and attorney’s fees. On May 14, 1984, the Budinich court denied the new trial motions,

found that petitioner was entitled to attorney’s fees, and ordered further briefing on the proper

amount. On August 1, 1984, the trial court issued its “final order” concerning attorney’s fees. On

August 29, 1984, petitioner filed its Notice of Appeal, which purported to cover all of the post-trial

orders. See 486 U.S. at 197-98. Respondent moved to dismiss the appeal as untimely, arguing that

the May 14 ruling was a final judgment. The Tenth Circuit agreed and granted the motion to dismiss

as to all issues except the attorney’s fees, which it affirmed on the merits. 

The question thus presented to the Supreme Court on appeal was “whether a decision on the

merits is a ‘final decision’ . . . when the recoverability or amount of attorney’s fees for the litigation

remains to be determined.” Id. at 199. The Court unanimously held that the district court’s May

1984 order was a final decision. It reasoned that “[a] question remaining to be decided after an order

ending litigation on the merits does not prevent finality if its resolution will not alter the order or

moot or revise decisions embodied in the order.” Id. (citations omitted). As the Court previously

held in another case involving a 42 U.S.C. § 1988 claim, a request for attorney’s fees is not a motion

to alter or amend the judgment under Fed. R. Civ. P. 59(e) because it does not seek “‘reconsideration

of matters properly encompassed in a decision on the merits. . . . [A] request for attorney’s fees

under § 1988 raises legal issues collateral to’ and ‘separate from’ the decision on the merits.” Id.

at 200 (quoting White v. N.H. Dep’t of Empl. Sec., 455 U.S. 445, 451-52 (1982)).

Finally, the Court held that “[a]s a general matter . . . we think it indisputable that a claim

for attorney’s fees is not part of the merits of the action to which the fees pertain. Such an award

does not remedy the injury giving rise to the action, and indeed is often available to the party

defending against the action.” Id.

The Colorado statute at issue in Budinich provided that, in a suit to collect compensation due

from employment, “the judgment shall include a reasonable attorney fee in favor of the winning

party, to be taxed as part of the costs of the action.” Colo. Rev. Stat. 8-4-114 (1986). The Budinich

petitioner argued that there must be an exception to the general rule when the statute itself appears

to make attorney’s fees part of the merits question. The Court rejected this argument. It held that

a determination as to whether a decision is “final” “should not turn upon the characterization of

those fees by the statute or decisional law that authorizes them.” Budinich, 486 U.S. at 201. 

In reaching this conclusion, the Court cited to the need for the judicial system to function

smoothly and the need for a uniform rule, even when an attorney’s fee provision appears to be more

of a “merits” issue. As the Court stated, 
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 4

1

We note that the perfection of an appeal does not deprive the lower court of jurisdiction to award attorney’s

fees. See Jankovich v. Bowen, 868 F.2d 867, 871 (6th Cir. 1989) (“federal courts repeatedly have held that the filing

of a notice of appeal in the underlying action does not affect the district court’s jurisdiction to consider a post-judgment

motion for attorneys fees.”) (citation omitted). 

what is of importance here is not preservation of conceptual consistency in the

statute of a particular fee authorization as “merits” or “nonmerits,” but rather

preservation of operational consistency and predictability in the overall application

of § 1291. This requires, we think, a uniform rule that an unresolved issue of

attorney’s fees for the litigation in question does not prevent judgment on the merits

from being final.

Id. at 202 (emphasis added); see also Morgan v. Union Metal Mfg., 757 F.2d 792, 794 (6th Cir.

1985) (“We ally ourselves with those circuits which have held that a judgment is final for purposes

of appeal although the amount of attorney fees have not been determined.”) (citation omitted).

Lastly, the Court also held that “[t]he time of appealability, having jurisdictional consequences,

should above all be clear. . . . Courts and litigants are best served by the bright-line rule[.]”

Budinich, 486 U.S. at 202.

On appeal, Greene offers two arguments in an attempt to distinguish Budinich. First,

pointing to the fact that the Injunction was a product of a settlement agreement as distinguished from

an adjudication, he argues that Gnesys is not entitled to attorney’s fees because the court’s finding

of contempt was not a “merits” decision that disposed of the complaint. This argument is

unpersuasive. There is no meaningful distinction for these purposes between a complaint that is

resolved on the merits, and a complaint that leads to a consent injunction which is subsequently

violated. To find otherwise would mean that a decision finding a party in contempt of an injunction

as part of a settlement would not be appealable at all. Greene’s argument is also contrary to

prevailing caselaw, which routinely allows direct appeal from a contempt citation. See, e.g., Peabody Coal Co. v. Local Union Nos. 1734, 1508, and 1548, 484 F.2d 78 (6th Cir. 1973) (rejecting

appellee’s argument that lower court’s order holding appellant in contempt for violating injunction

was not a “final judgment”); see Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716 (6th Cir. 1996)

(defendant appealed lower court’s finding of contempt for violating a consent permanent injunction).

Second, Greene argues that the award of attorney’s fees was part of the damages assessment,

so that the initial decision fixing the compensatory damages was not a final decision. The clear

message of Budinich is to the contrary: even when a statute provides that attorney’s fees are part

of the damages claim, an award of compensatory damages effectively renders the decision final.

 Budinich compels the conclusion that Greene’s appeal was not timely with respect to the

district court’s finding of contempt and its award of compensatory damages. Indeed, an untimely

appeal deprives a court of jurisdiction to consider the matter; “[c]ompliance with [the notice of

appeal] rule is a jurisdictional prerequisite which this court can neither waive nor extend.” United

States v. Christunas, 126 F.3d 765, 768 (6th Cir. 1997) (citations omitted).1

As Budinich held, and we reaffirm today, a decision awarding attorney’s fees is not part of

the merits for purposes of determining if the lower court issued a “final decision.” This is so even

if the attorney’s fees are authorized by statute, and even if the attorney’s fees are construed to be part

of the damages or sanction awarded by the court. The primary interest in these matters is to draw

a clear line. The alternative would be unnecessary confusion for parties and the courts alike, with

the outcome turning on whether attorney’s fees in a particular case were deemed part of the “merits.”

We accordingly dismiss the appeal from the lower court’s decision finding Greene in contempt and

awarding Gnesys $100,000 in damages.
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 5

III. Attorney’s Fees.

We review a district court’s award of attorneys’ fees and expenses under 15 U.S.C. § 1117(a)

for abuse of discretion. See Eagles, Ltd. v. Am. Eagle Found. 356 F.3d 724, 728 (6th Cir. 2004)

(“The district court’s denial of attorney’s fees under 15 U.S.C. § 1117(a) . . . is reviewed for abuse

of discretion.”) (citation omitted); see also Johnson v. Jones, 149 F.3d 494, 503 (6th Cir. 1998)

(“This court has held that, pursuant to § 35 of the Lanham Act, 15 U.S.C. § 1117, attorney’s fees

may be awarded in ‘exceptional cases.’ Thus, we review a district court’s decision to award

attorney’s fees under the Lanham Act in the same way as its decision to award attorney’s fees under

any discretionary provision; i.e., for an abuse of discretion.”) (citations omitted). “An abuse of

discretion occurs when the district court relies on clearly erroneous findings of fact, . . . improperly

applies the law, . . . [or] employs an erroneous legal standard.” Barner v. Pilkington, 399 F.3d 745,

748 (6th Cir. 2005) (internal quotations and citation omitted). This Circuit “has defined an abuse of

discretion as a definite and firm conviction that the trial court committed a clear error of judgment.”

Eagles, 356 F.3d at 726 (internal quotations omitted). 

A. Waiver

Before reaching the merits, Greene faces a procedural obstacle. He did not object in the

district court to the appropriateness of the attorney’s fees award; he only objected to the amount of

fees and the market rate for attorney’s fees in Memphis, Tennessee. On appeal, however, he argues

for the first time that no fees were justified. 

The Sixth Circuit “generally . . . will not hear issues raised for the first time on appeal. We

will deviate from this rule only in exceptional circumstances, such as when following the rule would

cause a miscarriage of justice, and particularly where the question is entirely legal and has been fully

briefed by both parties.” Golden v. Kelsey-Hayes Co., 73 F.3d 648, 657-58 (6th Cir. 1996) (citation

omitted).

As explained below, an award of attorney’s fees in this case would not be a miscarriage of

justice. Nor is the award of attorney’s fees here a purely legal decision – the issue of whether

Greene’s violation was willful is a fact-based question. In short, Greene waived his right to argue

on appeal the appropriateness of any attorney’s fees.

Even if Greene had not waived his right to appeal this issue, however, we conclude the

district court’s decision to award attorney’s fees was not an abuse of discretion. 

B. Award of Attorney’s Fees

On appeal, Greene contends that the attorney’s fees award statute relied on by the district

court, 15 U.S.C. § 1117(a), applies only to trademarks and is inapplicable here. This argument is

incorrect. Section 1117(a) provides that, in “exceptional circumstances,” a court may award

attorney’s fees for a violation of, inter alia, 15 U.S.C. § 1125(a) (also known as the Lanham Act).

That provision, in turn, concerns false representation by those engaged in commerce. By the
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 6

2

Section 1125(a) establishes liability for:

Any person who, on or in connection with any goods or services, or any container for goods, uses in

commerce any word, term, name, symbol, or device, or any combination thereof, or any false

designation of origin, false or misleading description of fact, or false or misleading representation of

fact, which--

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,

connection, or association of such person with another person, or as to the origin,

sponsorship, or approval of his or her goods, services, or commercial activities by another

person, or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics,

qualities, or geographic origin of his or her or another person's goods, services, or

commercial activities.

statute’s clear language,2 it is not limited to trademark issues. As the Supreme Court held in Dastar

Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003): 

While much of the Lanham Act addresses the registration, use, and infringement of

trademarks and related marks, . . . 15 U.S.C. § 1125(a) is one of the few provisions

that goes beyond trademark protection. As originally enacted, [§ 1125(a)] created

a federal remedy against a person who used in commerce either “a false designation

of origin, or any false description or representation” in connection with “any goods

or services.” 

Id. at 28-29 (quoting 60 Stat. 441).

The district court demonstrated how Greene violated the Injunction in four respects, and how

he did so deliberately. We agree. Rather than detailing once again the minutiae, we attach as an

appendix the district court’s Contempt Order. 

Most important for these purposes, the district court found that Greene violated Paragraph

4(e)(i) of the Injunction, which prohibited Greene from “using or causing to be used . . . any of

[Gnesys’] names and marks . . . on signs, decals, or other manner of display or in any promotional

materials . . . or from otherwise suggesting in any way that Defendants’ products or services have

been approved, endorsed, authorized or sponsored by or are in any way associated or connected with

[Gnesys.].” See Contempt Order at 4 (emphasis added). The district court found that Greene

violated this provision by using a picture of Gnesys’s HYDRASEP device in marketing his StakPak

product (with the Gnesys logo digitally removed) and by including a virtually verbatim description

of the HYDRASEP device in Greene’s description of his own product. See id. at 17-18. These

district court findings fully support its conclusion that Greene used a “false description or

representation” in marketing his product. Dastar, 539 U.S. at 29 (citation omitted). 

The foregoing considered, we are persuaded that Greene willfully disregarded the Injunction,

and that the district court’s decision to award attorney’s fees was not an abuse of discretion.

IV. Conclusion.

The appeal of the district court’s decision finding Greene in contempt and awarding

compensatory damages is DISMISSED. The district court’s July 21, 2004 Order awarding Gnesys

attorney’s fees and costs is AFFIRMED.
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 7

1

Gnesys’ name is Greene Nassif Environmental Systems, Inc. 

APPENDIX

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION _________________________________________________________________

GNESYS, INC., )

)

)

Plaintiff, )

)

v. ) No. 99-2659 Ml/Bre

)

BOYD B. GREENE, individually )

and d/b/a GREENE & ASSOCIATES )

and GREENE & ASSOCIATES, L.L.C., )

)

)

)

)

 Defendants. )

_________________________________________________________________

ORDER FINDING DEFENDANTS IN CONTEMPT OF COURT _________________________________________________________________

Before the Court is Plaintiff’s Motion for Issuance of Order to Show Cause and for Judgment

of Contempt filed on April 12, 2001. The Court held hearings on this motion on July 11-12, 2001.

The Court held a status conference on the matter on September 25, 2002. 

Finding that Defendant disclosed confidential and proprietary information belonging to

Plaintiff, pursued commercial exploitation of Plaintiff’s intellectual property, and induced, aided and

abetted other persons to commit the acts enjoined, the Court finds Defendant in contempt. 

Facts and Procedural History

Defendant Boyd B. Greene was a shareholder of Gnesys, Inc. from prior to July 1, 1993

through August 22, 2000. He was employed with Plaintiff until June 30, 1998. He resigned as an

officer of Plaintiff on May 4, 1998 and resigned from the Gnesys Board of Directors on April 28,

1999. 

Green & Associates and Green & Associates, LLP are the other defendants in the case. At

the request of Gnesys, Defendant Green established Green & Associates, a non-profit business, to

provide a forum to do work to comply with the requirements of the Tennessee Valley Authority

(“TVA”) for having manufacturing standardized plans to manufacture the equipment, the

HYDRASEP, and other equipment. Greene & Associates, LLC was a prior company that existed

that was Defendant Greene’s personal company for his engineering services formed in July of 1998.1

(Transcript, pg. 9, lines 7-11).
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 8

Plaintiff Gnesys, Inc. owns U.S. Patent No. 5,266,191 for “Immiscible Liquids Separator

Apparatus and Method” issued on November 30, 1993; U.S. Patent No. 5,433,845 issued on July

18, 1995 for “Flow Control Bypass Basin Apparatus;” and U.S. Patent No. 6,019,825 issued on

February 1, 2000 for “Hydrocyclone Gas Separator.” Plaintiff also owns trademarks HYDRASEP

and HYDRAPASS for mechanisms that separate oil from water. 

This case was originally filed on August 2, 1999 as a Complaint for Federal Unfair

Competition and Pendent State Claims. On October 26, 1999, the Court entered a Consent

Preliminary Injunction. The Court approved and entered the Consent Permanent Injunction and Final

Judgment on August 22, 2000 (“Injunction”).

Paragraph 4 of the Injunction states as follows:

Defendants, their officers, members, agents, servants and employees and those persons in

active concert or participation with them who receive actual notice of this order be, and they hereby

are, permanently enjoined from:

A. Directly or indirectly making, using, offering to sell or selling any products, process or

services which infringe upon any of the patents identified herein above in Paragraph 2.

B. Directly or indirectly using, in any manner, or disclosing to any third party, the existence

of contents of Plaintiff’s pending patent applications identified herein above in

Paragraph 2, or Plaintiff’s trade secrets or proprietary information, namely, Plaintiff’s

confidential information and know-how related to its products and processes, including

those for separating two immiscible liquids of different densities, such as oil and water,

and for removing sediment therefrom. 

C. Directly or indirectly claiming ownership of, or any right, privilege, or permission to use,

any of the Gnesys Intellectual Property.

D. Directly or indirectly pursuing commercial exploitation of, or United States or foreign

patent or equivalent protection for, any of the Gnesys Intellectual Property.

E. (i) Directly or indirectly using or causing to be used, except as permitted

hereinbelow, any of Plaintiff’s names and marks, including without limitation,

GNESYS, HYDRASEP, and HYDRAPASS, or any combination thereof, or any

colorable imitations thereof, on signs, decals, or other manner of display or in any

promotional materials or telephone directories, or from otherwise suggesting in any

way that Defendants’ products or services have been approved, endorsed,

authorized or sponsored by or are in any way associated or connected with

Plaintiff; and

(ii) Committing any other acts calculated to cause the public to believe that

Defendants’ products or services originate with, are approved, endorsed,

authorized or sponsored by, or are in some way associated or connected with

Plaintiff and from otherwise competing unfairly with Plaintiff. 

F. Directly or indirectly representing that they are authorized representatives of Plaintiff,

or that they have authority to transact business for or on behalf of Plaintiff. 

G. Directly or indirectly inducing, aiding or abetting any other person or company to

commit the acts enjoined in paragraphs 1 through 5 herein.
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 9

THE INDIA PATENT

On June 23, 1999, Defendant Greene and Manickam Athapa (“Athapa”) agreed for Athapa

to file patent applications in India in Defendant’s name on the patents comprising the Gnesys

Intellectual Property. (Def. Post-Hearing Brief, pg. 3). By letter dated July 6, 1999, Athapa informed

Greene that he had completed the formalities for filing the patent application in India on the

Immiscible Liquid Separator and Method that is the subject of U.S. Patent Number 5,266,191, (Stip.

Fact 8), owned in the United States by Plaintiff. On July 13, 1999, Grady M. Garrison, acting as

attorney for Plaintiff, sent Athapa a facsimile letter in which he informed Athapa that Defendant had

assigned to Plaintiff all of the United States and foreign rights in and to the Immiscible Liquid

Separator and Method. (Stip. Fact 9). Greene testified that he telephoned Athapa to “stop the patent”

on July 13, 1999 (Transcript, pg. 270, lines 2-4), but at no time did Defendant ask Athapa to

withdraw the patent application. (Athapa Dep., pg. 13, lines 16-23; Transcript, page 222, lines 14-

16). 

On July 22, 1999, Defendant authorized Athapa to be Defendant’s patent agent in the matter

of the patent application in India. (Stip. Fact 10). Athapa filed the patent application on August 27,

1999.

Defendant received $5,000.00 from Athapa on November 10, 1999 and later applied that

payment to the patent application project. (Transcript, pg. 204, lines 7 - pg. 205, line 5). 

THE NU-CORP BUSINESS PLAN

Defendant Greene prepared the Nu-Corp Business Plan dated January 1, 1998, while he was

an officer, director and employee of Plaintiff for the purpose of purchasing Plaintiff’s assets. This

plan contained information regarding the markets that Plaintiff was planning to enter and identified

by product name and description Plaintiff’s several products and trademarks comprising the Gnesys

Intellectual property that Defendant sought to purchase. (Def. Post-Hearing Brief, pg. 3). 

Defendant gave a copy of the Nu-Corp Plan to Gary Green of Morgan Keegan in March,

1999. (Transcript pg. 278, lines 13-28). In October 2000, Defendant also gave a copy of the NuCorp Business Plan to Jerry Miller, Riuxing Liu and Lei Zhai. (Transcript, pg. 141, lines 9-21).

Defendant directed these latter individuals to use the information contained in the plan, coupled with

proprietary and confidential information belonging to Plaintiff that he had stored on the hard drive

of his personal computer, to prepare the Entech Plan for the purpose of marketing Defendant’s

StakPak Oil Recovery System (“StakPak”) in China. (Transcript, pg. 133, line 9 - pg. 142, line 25).

The Entech Plan stated that the StakPak introduced the “bubble spin” principle for the

separation of immiscible liquids. However, previously existing HYDRASEP literature demonstrates

that HYDRASEP introduced such a bubble spin principle. (Transcript, pg. 111, lines 12-20).

Furthermore, Defendant admits that similar descriptions exist for both StakPak literature and

HYDRASEP literature. (Id.)

The Entech Plan was presented to Peter Tsoi of Golden Bridge Enterprises in China in

December, 2000 by Jerry Miller and Defendant, who were joint venturers at that time. (Stip. Fact

19) A letter of intent was executed on December 5, 2000, in which Tsoi, Miller, and Defendant

intended to market oil separators in China. (Transcript, pg. 23, lines 1-15). 
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 10

2

The 2001 Nu-Corp Technologies Business Plan is a different entity than the Nu-Corp Business Plan of 1998.

While Defendant claims that he has no interest in Nu-Corp Technologies, Defendant’s daughter is a part owner.

THE 2001 NU-CORP TECHNOLOGIES BUSINESS PROPOSAL 

In January 2001, Defendant presented the 2001 Nu-Corp Technologies Business Proposal2

to Gary Green of Morgan Keegan in an attempt to raise money to manufacture and sell Defendant’s

StakPak design in China. (Transcript, pg. 175, lines 11-17). Although Defendant admits preparing

the Nu-Corp Technologies Business Proposal in his deposition, he stated at the hearing that Judy

Jones prepared the proposal with his assistance. (Transcript, pg. 172, line 22 - pg. 174, line 10). The

2001 Nu-Corp Proposal is substantially similar to the Entech Plan. (Def. Post-Hearing Brief, pg. 6).

Defendant testified that Green of Morgan Keegan made a verbal agreement to furnish sixteen million

dollars if Defendants raised four million on his own intiative. However, Green testified that such an

agreement did not exist. Green further testified that the 2001 Nu-Corp Technologies Business

Proposal represented that a patent for StakPak had been applied for and approved and that it was

introducing the bubble spin principle. (Gary Green Dep., pg. 14, lines 1-22)

Defendant also used a photograph in the Entech Plan that depicted the StakPak device

operating at a FedEx fueling facility. The photograph of the StakPak contains a device that is the

HYDRASEP separator, but that had the label and the Gnesys logo digitally removed. (Transcript,

pg. 117, lines 12- pg. 120, line 14). 

In March, 2001, Miller informed Preston Grace, Chairman of the Board of Gnesys, of

Defendant’s deal with Tsoi to market StakPak in China and Defendant’s deal with Morgan Keenan

to finance the marketing plan. (Def. Post-Hearing Brief, pg. 6). After meeting with Grace, Miller

withdrew from the joint venture with Defendant and accepted employment with a business owned

by Grace in March, 2001, at a salary of $55,000.00 per year. (Transcript, pg. 58-59).

Standard

Plaintiff moves the Court to find Defendants in civil contempt of the Injunction. A party may

be found in contempt if the petitioner shows that the respondent “violate[d] a definite and specific

order of the court requiring him to perform or refrain from performing a particular act or acts with

knowledge of the court’s order.” Id. (quoting NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 591

(6th Cir. 1987). In a contempt proceeding, “the basic proposition [is] that all orders and judgments

of courts must be complied with promptly.” NLRB, 829 F.2d at 590 (quoting Jim Walter Res., Inc.

v. Int’l Union, United Mine Workers, 609 F.2d 165, 168 (5th Cir. 1980)). As the Sixth Circuit has

held, “civil contempt may be either intended to coerce future compliance with a court's order, or to

compensate for the injuries resulting from the noncompliance.” Glover v. Johnson, 199 F.3d 310,

313 (6th Cir. 1999)(internal citations omitted). Good faith is not a defense in civil contempt

proceedings. Glover, 934 F.2d at 708. Likewise, wilfulness is not an element of civil contempt, but

the state of mind of the contemnor is relevant only in the consideration of sanctions. Rogers v.

Webster, 776 F.2d 607, 612 (6th Cir. 1985). 

In a civil contempt proceeding, the burden is on the petitioner to “prove by clear and

convincing evidence that the respondent violated the court’s prior order.” Glover, 934 F.2d at 707.

The standard is whether “the defendants took all reasonable steps within their power to comply with

the court’s order,” which includes whether the defendants have “marshal[ed] their own resources,

assert[ed] their high authority, and demand[ed] the results needed from subordinate persons and

agencies in order to effectuate the course of action required by the [court’s order].” Id. at 708.
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 11

Discussion

Plaintiff moves the Court to find Defendants in contempt of court on six primary issues:

(1) Defendants have violated Paragraph 4(b) of the Injunction by directly or indirectly using in any

manner, or disclosing to third parties, Plaintiff’s trade secrets and proprietary information, namely

Plaintiff’s confidential information and know-how related to its products and processes, including

those for separating two immiscible liquids of different densities, such as oil and water, and from

removing sediment therefrom; (2) Defendants have violated Paragraph 4(c) of the Injunction by

directly or indirectly claiming ownership of, or any right, privilege, or permission to use, Gnesys

Intellectual Property; (3) Defendants have violated Paragraph 4(d) of the Injunction by directly or

indirectly pursuing commercial exploitation of, or United States or foreign patent or equivalent

protection for, the Gnesys Intellectual Property; (4) Defendants have violated Paragraph 4(e)(i) of

the Injunction by suggesting that Defendants’ products or services have been approved, endorsed,

authorized or sponsored by or are in any way associated or connected with Plaintiff; (5) Defendants

have violated Paragraph 4(f) of the Injunction by directly or indirectly representing that they are

authorized representatives of Plaintiff, or that they have authority to transact business for or on

behalf of Plaintiff; (6) Defendants have violated Paragraph 4(g) of the Injunction by directly or

indirectly inducing, aiding or abetting others to commit the acts enjoined.

The Court will discuss each of these issues in turn.

1. Whether Defendants violated Paragraph 4(b) of the Injunction 

Plaintiff argues that Defendants violated Paragraph 4(b) by disclosing Plaintiff’s confidential

and proprietary information in the distribution of the 1998 Nu-Corp Business Plan. Plaintiff asserts

that confidential information included Plaintiff’s anticipated markets of entry, confidential and

proprietary business plans and drawings of the HYDRASEP separators customized for TVA, as well

as parameters of how the HYDRASEP device operates. Defendant shared this plan with Ruixing

Liu, Lei Zhai and Jerry Miller. This information was, in turn, used by Miller and Liu in the

preparation of the Entech Plan. 

Defendant admits that such information was contained in the 1998 Plan and that this

information was indeed shared with others, but argues that it is not protected information under the

Injunction. Indeed, Defendant admitted that he had in his possession a standardized drawing of

HYDRASEP separators prepared for TVA. (Transcript, pg. 133, line 3 - pg. 134, line 5). Defendant

further admitted that he had used a pro forma statement of income and expense associated with the

HYDRASEP separator in the preparation of the plan. Defendant also admitted that he had taken

confidential information of the Plaintiff with him following the termination of his employment and

had used drawings of HYDRASEP and HYDRAPASS in the plan. (Transcript, pg. 9, line 133 - pg.

138, line 14).

Defendant argues that the incorporation of this information into the Nu-Corp Business Plan

was not in violation of the Injunction since such information was not specifically listed in the

Injunction as prohibited from use. (Def. Post-Hearing Brief, pg. 11) Defendant argues that the

Injunction’s failure to identify those specific bits of information that are protected falls short of the

specificity requirements outlined in Rule 65 of the Federal Rules of Civil Procedure. 

Instead, Defendant argues that the only information protected by the Injunction was “the

secret know-how related to Plaintiff’s products and processes ... the secret formulas and Excel

spread sheet technical information that describes the internal parameters and set up for the

HYDRASEP that is not disclosed in the patents or published marketing literature.” (Def. PostHearing Brief, pg. 10). Defendant asserts that the information he considered confidential to the
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 12

HYDRASEP system was not disclosed in the Indian patent application, nor in the 1998 Plan.(Def.

Post-Hearing Brief, pg. 10).

The Court disagrees with Defendant and finds that this information was protected. The

drawings of the HYDRASEP and HYDRAPASS products that Defendant admitted he used in his

1998 Plan contained legends stating that such drawings were proprietary and confidential.

(Transcript, pg. 142). Additionally, the business plans of Plaintiff contain a legend stating that the

plans are confidential and proprietary. (Trial Exh. 19). Grace further testified that the licensing fee

agreed upon with TVA to fabricate oil/water separators was confidential and proprietary information

of Plaintiff, was not communicated to others by Plaintiff, and would be used by competition to bid

at a lower price. (Transcript, pg. 207, lines 20-21; pg. 215, lines 22- page 216, line 12). The Court

fails to see how Defendant, who worked for Plaintiff, could not have realized that this was sensitive

information belonging to Plaintiff and protected by the Injunction. Defendant testified at the hearing

that confidential and proprietary information of Plaintiff included certain formulas, even though they

were not specifically listed in the Injunction. (Transcript, pg. 263, lines 5-17). Accordingly, the

Court finds that Defendant violated Paragraph 4(b) of the Injunction. 

2. Whether Defendants violated Paragraph 4(e) of the Injunction

Plaintiff alleges that Defendant violated Paragraph 4(e) of the Injunction in claiming

ownership of, or any right, privilege or permission to use the Intellectual Property. Miller testified

that Greene told him that he (Greene) had international marketing rights to the HYDRASEP and

would be marketing the HYDRASEP oil/water separator in China.

However, Miller is the only witness that testified to this effect. Since Miller’S credibility was

impeached at the hearing, this evidence does not rise to the level of clear and convincing evidence

necessary to find in favor of the Plaintiff. Therefore, the Court finds that Defendant did not violate

Paragraph 4(e) of the Injunction. 

3. Whether Defendants violated Paragraph 4(d) of the Injunction 

Plaintiff alleges that Defendants violated Paragraph 4(d) by directly or indirectly pursuing

commercial exploitation of, or United States or foreign patent or equivalent protection for, Plaintiff’s

intellectual property. The Court finds that Defendant’s pursuit of a patent in India and his

incorporation of the HYDRASEP specifications into the StakPak design are violations of this portion

of the Injunction. 

Defendant authorized Athapa to act as his agent in procuring a patent in India for the

HYDRASEP system. This authorization was given prior to the Injunction. However, Defendant did

not ask Athapa to withdraw the application at any time after the Injunction, nor did he alert Plaintiff

after the Injunction that the application had been filed. Although Defendant asked Athapa to “stop

the patent” on July, 1999, he authorized Athapa to be his agent on July 29, 1999 and continued to

support the Indian patent application after the injunction was entered on October 26, 1999. 

Moreover, Defendant violated paragraph 4(d) in seeking to commercially exploit the

intellectual property by developing and promoting the Entech Plan. Several similarities exist

between the Entech Plan and the HYDRASEP specifications. The specifications and product

descriptions contained in the Entech Plan are exactly those contained in the Plaintiff’s specifications

and product descriptions for its HYDRASEP device except for the substitution of the word

“pressure” for the word “gravity”. (Trial Ex. 6 at D178-D188 and Trial Ex. 54, pg. 444-481).

Furthermore, Defendant admitted that the HYDRASEP separator was available in a pressure vessel

design and could be equipped to function as a crude oil recovery system. (Transcript, pg. 302, line

24 - pg. 304, line 25). 
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 13

Defendant admitted that the photograph of the alleged StakPak included a device that was

a HYDRASEP separator. (Transcript, pg. 117, lines 12 - pg. 120, line 14). Defendant argues,

however, that since the photograph does not contain any indicia that the equipment belongs to

Plaintiff, he is in compliance with the Injunction as nothing suggests an association between himself

and Plaintiff. This argument is unconvincing to the Court. The Court finds that merely removing any

insignia that identifies equipment with a particular owner does not absolve Defendant of all

responsibility for pursuing commercial exploitation of Plaintiff’s intellectual property. 

Defendant further argues that to violate Paragraph 4(d), there must have been a sale or profit

of equipment belonging to Plaintiff. Since there was not such a sale or profit, Defendant asserts that

he could not have engaged in commercial exploitation. The Court disagrees with Defendant’s

interpretation of “commercial exploitation” as it is used in the Injunction. Plaintiff does not contend

that Defendant has used the HYDRASEP separator by buying or selling it, but states that Defendant

violated the Injunction by pursuing commercial exploitation. The Court agrees that Paragraph 4(d)

is aimed at preventing the pursuit of commercial exploitation, and the Defendant’s use of the

HYDRASEP in its StakPak promotion materials does just that. Also, the incorporation of Paragraph

4(a), explicitly prohibiting Defendant’s sale or profit from the HYDRASEP indicates that this matter

was considered in the Injunction. Paragraph 4(a) of the Injunction states that Defendant is prohibited

from “directly or indirectly making, using, offering to sell, or selling any products, process or

services which infringe upon any of the patents identified herein above in Paragraph 2.” 

4. Whether Defendants violated Paragraph 4(e)(i) of the Injunction 

Plaintiff alleges that Defendants violated Paragraph 4(e)(i) of the Injunction by suggesting

that Defendant’s products or services have been approved, endorsed, authorized or sponsored by

Plaintiff. 

Even though Plaintiff removed the Gnesys logo from the HYDRASEP device in the picture

showcasing the StakPak, its inclusion could lead a viewer of that picture to the conclusion that

Defendant’s StakPak was associated with Plaintiff, or that Plaintiff’s HYDRASEP system was

associated with Defendant. Also, the incorporation of verbatim descriptive language of the

HYDRASEP device into the 2001 Nu-Corp Technologies Business Proposal given to Gary Green

of Morgan Keegan denotes an association between Plaintiff and Defendant. Accordingly, the Court

finds that Defendant violated Paragraph 4(e)(i) of the Injunction. 

5. Whether Defendants violated Paragraph 4(f) of the Injunction

Plaintiff argues that Defendant has violated Paragraph 4(f) of the Injunction by directly or

indirectly representing that he is an authorized representative of Plaintiff, or that they he has the

authority to transact business for or on behalf of Plaintiff. Once again, Plaintiff relies solely on the

testimony of Miller to establish the fact that Defendant represented to Miller that he had marketing

rights to the HYDRASEP separator outside the U.S. and Canada and that he would be marketing the

HYDRASEP in China. The Court finds that since Miller’s credibility has been impeached, his

testimony does not rise to the level of clear and convincing evidence necessary to hold the

Defendant in violation of this provision. 

6. Whether Defendants violated Paragraph 4(g) of the Injunction

Plaintiff argues that Defendant has violated Paragraph 4(g) of the Injunction by directly or

indirectly inducing, aiding, or abetting others to commit the acts enjoined as set forth above.

Namely, Plaintiff points to the fact that Defendant induced Jerry Miller, Riuxing Liu, and Lei Zhai

to participate in the preparation of the Entech Plan. Plaintiff also asserts that Defendant induced Judy

Jones to participate in the preparation of the 2001 Nu-Corp Technologies Business Proposal. 
No. 04-6048 Gnesys, Inc. v. Greene, et al. Page 14

Defendant does not dispute that he directed Miller, Liu, and Zhai to form a business plan to

market the StakPak in China using the 1998 Nu-Corp Business Plan as a template. Defendant

admitted that he had used confidential and proprietary information belonging to the Plaintiff in the

preparation of the 1998 Nu-Corp Plan. Additionally, Defendant gave these individuals permission

to use the information that was on his computer consisting of protected information belonging to

Plaintiff. Much of the information that was included in the resulting Entech Plan was the same

information that was in the 1998 Nu-Corp Plan. The 2001 Nu-Corp Technologies Business Proposal

prepared by Judy Jones was substantially similar to the Entech Plan. Accordingly, the Court finds

that Defendant’s actions in enlisting the assistance of these individuals for the commercial

exploitation of Plaintiff’s proprietary and confidential information violates Paragraph 4(g) of the

Injunction. 

Conclusion

For the reasons listed above, the Court finds, by clear and convincing evidence, that

Defendant violated Paragraphs 4(b), 4(d), 4(e)(i), and 4(g) of the Injunction. The evidence supports

a finding that the Defendants’ actions were wilful and intentional in that Boyd Greene acted in

disregard of the intellectual property rights of the Plaintiff and without sound reason to believe that

the rights were not infringed. Plaintiff shall submit within twenty (20) days any documents and

materials necessary to support an award of damages, either compensatory or punitive. 

ENTERED this 26th day of November, 2002.

/s/

______________________________

JON P. McCALLA

UNITED STATES DISTRICT JUDGE