Opinion ID: 209019
Heading Depth: 2
Heading Rank: 2

Heading: Euclid's Bona Fide Purchaser Claim

Text: The district court found that Euclid had abandoned Count VII of its complaint, which alleged that Euclid was a bona fide purchaser for value of the '742 patent. Euclid, slip op. at 8. In making this finding, the district court noted that Euclid did not move for summary judgment on its bona fide purchaser claim, and that the only arguments that it had presented to support that claim were made in an educational footnote in its brief in opposition to Vector's motion for summary judgment on the issue of ownership based on the Assignment. Id. In its briefing on appeal, Vector argues that the district court's finding was proper, because Vector had moved for summary judgment on the issue of ownership under the Assignment, and Euclid failed to meet its burden under Federal Rule of Civil Procedure 56(e)(2) to set out specific facts showing a genuine issue for trial. In essence, Vector treats the district court's finding of abandonment as a grant of summary judgment in Vector's favor. Euclid responds that Vector never moved for summary judgment on Euclid's bona fide purchaser claim, and that Euclid was therefore under no obligation to come forward with evidence until trial. Euclid therefore characterizes the district court's action not as a grant of summary judgment, but rather as a dismissal of its claim for failure to prosecute. We agree with Euclid that the district court's finding that it had abandoned its bona fide purchaser claim was effectively a dismissal for failure to prosecute, rather than a grant of summary judgment. Euclid's complaint presented two separate counts related to the '742 patent: Count VI sought a declaratory judgment that the Assignment did not transfer any rights in the '742 patent to Vector, while Count VII sought a declaratory judgment that Euclid was a bona fide purchaser for value of the '742 patent. Vector moved for partial summary judgment on its claim of title pursuant to the Assignment, but it has identified no part of its motion for partial summary judgment that makes any mention of Euclid's bona fide purchaser for value claim. A party's obligation to set out specific facts showing a genuine issue for trial is triggered only when a motion for summary judgment is properly made and supported. Fed.R.Civ.P. 56(e)(2). Here, Vector did not move for summary judgment on Euclid's bona fide purchaser claim, and the district court therefore could not properly have entered summary judgment against Euclid under Rule 56(e)(2). We therefore construe the district court's judgment that Euclid abandoned its bona fide purchaser claim as a dismissal for failure to prosecute. Pursuant to Federal Rule of Civil Procedure 41(b), [i]f the plaintiff fails to prosecute ... a defendant may move to dismiss the action or any claim against it. Regional circuit law governs our standard of review of dismissals for failure to prosecute, Mitutoyo Corp. v. Cent. Purchasing, LLC, 499 F.3d 1284, 1290 (Fed.Cir.2007), and the Sixth Circuit reviews such dismissals for abuse of discretion, Wu v. T.W. Wang, Inc., 420 F.3d 641, 643 (6th Cir.2005). In this case, the district court relied on two facts to conclude that Euclid had abandoned its bona fide purchaser claim: (1) Euclid did not move for summary judgment on this claim; and (2) Euclid's arguments on [its] status as a [bona fide purchaser] were limited to a footnote in its Brief in Opposition to Defendants' Motion for Partial Summary Judgment and in its list of extrinsic evidence it asked the Court to consider when determining ownership of the 742 patent. Euclid, slip op. at 8. Neither of these facts support the district court's conclusion that Euclid abandoned its bona fide purchaser claim. As to Euclid's failure to move for summary judgment, it is clear that the failure to move for summary judgment on a claim does not indicate an intent to abandon that claim. See, e.g., Mitutoyo, 499 F.3d at 1290-91 hholding that district court abused its discretion by dismissing [a] claim for failure to prosecute under Rule 41(b) when the court relied heavily on the fact that [the plaintiff] did not move for summary judgment, because failure to so move likely indicates [the plaintiff's] sense that issues of material fact exist, not an intent to abandon its ... claim.). Likewise, Euclid's failure to address its bona fide purchaser argument in detail in its opposition to Vector's motion for summary judgment cannot support dismissal for failure to prosecute. As discussed above, Euclid was not obligated to come forward with any argument concerning its bona fide purchaser claim when Vector did not move for summary judgment on that claim. Moreover, Euclid asserted its bona fide purchaser argumentalbeit in what the district court characterized as an educational footnotein response to Vector's separate summary judgment motion on the issue of ownership under the Assignment. Euclid, slip op. at 8. In these circumstances, we conclude that the district court abused its discretion by dismissing Euclid's bona fide purchaser claim.