Opinion ID: 855334
Heading Depth: 2
Heading Rank: 3

Heading: The 299 Racket Models

Text: Mr. Frolow argues that the court erred in granting Wilson’s second motion for summary judgment on the 299 racket models. Before the district court, Wilson moved for summary judgment that the 299 racket models were not Licensed Articles. It argued that Mr. Frolow added the FROLOW v. WILSON SPORTING 12 models too late in the case and failed to submit any evidence that the 299 models were Licensed Articles. For 82 of the 299 models, Wilson produced an expert report that concluded that those models had a moment of inertia of eighty-ounce inches squared or less and were not Licensed Articles. Wilson did not provide any data for the remaining 217 racket models. In response, Mr. Frolow submitted a declaration disputing Wilson’s test data and stating that Wilson had been paying royalties on the 299 racket models. 3 Wilson admitted that it paid royalties for the racket models but asserted that these payments were mistaken. A. Whether Wilson’s Past Royalty Payments Raises a Genuine Issue of Material Fact We agree with Mr. Frolow that the district court erred in granting summary judgment. Because the License Agreement obligates Wilson to pay royalties based upon its sales of Licensed Articles, Wilson’s history of paying royalties on the 299 racket models is circumstantial evidence that those models are Licensed Articles. For 217 of the racket models, Wilson failed to introduce any evidence that those racket models fall outside the ’372 patent claims. Wilson admitted that it had been paying royalties on the 217 rackets. Under these circumstances, it was improper to grant summary judgment. 3 Mr. Frolow also argues that Wilson should be es- topped from denying that the 299 rackets models are Licensed Articles because Wilson had been paying royalties on those models. Licensing payments, like marking, is circumstantial evidence in the form of an extrajudicial admission. We decline, however, to create a new equitable doctrine which would prevent a licensee from ever arguing that its Licensed Article fell within the patent claims. 13 FROLOW v. WILSON SPORTING For 82 of the racket models, Wilson provided test data that it argued established that the racket models were not License Articles. Mr. Frolow disputed the accuracy of Wilson’s data. He also provided evidence that Wilson had been paying royalties on the 82 racket models. This evidence, like Mr. Frolow’s marking evidence, constitutes admissible circumstantial evidence that the rackets fell within the terms of the patent claims. In light of this competing evidence, we conclude that Mr. Frolow raised a genuine issue of material fact and reverse the district court’s grant of summary judgment. This is not to say that evidence of past royalty payments will raise a genuine issue of material fact in every case. For example, had Mr. Frolow admitted that Wilson’s test data for the 82 racket models was accurate, this would be a different case and summary judgment would be appropriate for 82 of the 299 racket models. There may be other sets of facts which would warrant summary judgment despite a history of licensing payments. But evidence of past royalty payments is circumstantial evidence that may preclude summary judgment in appropriate cases. And we concluded that the evidence is this case raises a genuine issue of material fact. B. The District Court’s Discretionary Power to Dismiss 299 Racket Models The district court also based its summary judgment on the fact that Mr. Frolow identified the racket models too late in the proceedings. Second Summary Judgment Order, 2010 WL 5150161, at –6. That was in error. Excluding the racket models on the basis that Mr. Frolow failed to timely identify them is certainly within a court’s discretionary power. Such a decision would result in dismissal of the claims, not a judgment on the merits that the 299 racket models are not Licensed Articles. It is true FROLOW v. WILSON SPORTING 14 that Mr. Frolow failed to identify the racket models in the pretrial order, during discovery, in his expert reports, or in connection with the first summary judgment motion. And we leave it to the sound discretion of the district court to determine whether the 299 racket models should be included in this proceeding on remand. See Phx. Can. Oil Co. v. Texaco, Inc., 842 F.2d 1466, 1475–75 (3d Cir. 1988). But we do conclude that Mr. Frolow has submitted sufficient evidence to preclude a judgment on the merits in this case as to those models.