Court Opinion

ID: 868047
Source: CourtListenerOpinion
Date Created: 2013-05-16 20:12:22.206924+00
Date Added: 2024-06-11T09:06:52.417677
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             MAY 16 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

WYATT TECHNOLOGY                                 No. 10-55343
CORPORATION, a California
corporation,                                     D.C. No. 2:07-cv-08298-ABC-RZ

              Plaintiff - Appellant,
                                                 MEMORANDUM *
  v.

MALVERN INSTRUMENTS
INCORPORATED, a Massachusetts
corporation; DAVID DOLAK, an
individual,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                    Audrey B. Collins, District Judge, Presiding

                        Argued and Submitted April 9, 2013
                               Pasadena, California

Before: REINHARDT and MURGUIA, Circuit Judges, and MOLLOY, District
Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
              The Honorable Donald W. Molloy, United States District Judge for
the District of Montana, sitting by designation.
      Wyatt Technology Corporation manufactures the DynaPro—a laboratory

instrument—and holds the copyright to certain versions of Dynamics, the software

used to operate the DynaPro. Malvern Instruments Incorporated manufactures the

competing Zetasizer Nano; David Dolak is a Malvern employee. Wyatt sued

Malvern and Dolak for infringing its copyrights in Dynamics, purloining various

trade secrets, and making false representations in advertising the Zetasizer Nano

(in violation of the Lanham Act, 15 U.S.C. § 1125(a)). The district court granted

Malvern summary judgment on many of Wyatt’s claims, leaving only its Lanham

Act claim and a portion of its misappropriation of trade secrets claim. After the

district court made several rulings adverse to Wyatt on the parties’ motions in

limine, Wyatt apparently determined its remaining claims would fail at trial, and

stipulated to the entry of a judgment it could appeal—the one we now review. We

review the district court’s entry of summary judgment de novo, Ctr. for Biological

Diversity v. Salazar, 706 F.3d 1085, 1090 (9th Cir. 2013), and as discussed below,

we affirm. We lack jurisdiction to review the district court’s rulings on the

motions in limine, because Wyatt declined to go to trial—therefore passing on the

chance to have the district court revisit those rulings, which remain preliminary

(and thus unreviewable). Adkins v. Mireles, 526 F.3d 531, 542–43 (9th Cir. 2008).

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Consequently, we dismiss Wyatt’s appeal as to the district court’s rulings on the

motions in limine.

      The heft of Wyatt’s claims against Malvern—specifically, Wyatt’s copyright

infringement claims—required Wyatt to proffer some evidence that Malvern’s

software was substantially similar to Dynamics. L.A. Printex Indus., Inc. v.

Aeropostale, Inc., 676 F.3d 841, 846 (9th Cir. 2012). Wyatt, however, never

obtained in discovery the source code for Malvern’s allegedly infringing software,

because Malvern asserted the source code was outside its possession, custody, or

control, and in the hands of its British parent company. Wyatt never made any

effort to challenge that assertion, nor did it attempt to obtain the source code from

Malvern’s British parent by other means. Consequently, the record lacked

evidence that Malvern’s software was substantially similar to Dynamics, and as a

result, Malvern was entitled to summary judgment. Cavalier v. Random House,

Inc., 297 F.3d 815, 822 (9th Cir. 2002); Narell v. Freeman, 872 F.2d 907, 909–10

(9th Cir. 1989).

      To compensate for its failure to obtain the crucial piece of evidence, Wyatt

seeks a holding that Malvern spoliated the residuum of the source code that was in

its possession, thereby entitling Wyatt to an inference that the source code, if

produced, would favor its position. The district court did not abuse its discretion in

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denying such an inference when the allegedly spoliated evidence was lost or

destroyed years before Wyatt even held the Dynamics copyrights.1 See United

States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002) (noting that

spoliation requires the spoliator to have notice that the evidence being destroyed is

potentially relevant to litigation). Wyatt now argues, additionally, that Malvern

actually had possession, custody, or control of the source code, and therefore

withheld it wrongfully during discovery. Wyatt did not advance this argument in

the district court, and we will not entertain it now. Biller v. Toyota Motor Corp.,

668 F.3d 655, 663 (9th Cir. 2012); Dream Palace v. Cnty. of Maricopa, 384 F.3d
990, 1005 (9th Cir. 2003).

      Likewise, we will not take up the other of Wyatt’s arguments about what the

facts do or do not show, because Wyatt neglected to make those arguments before

the district court in the first place. See Dream Palace, 384 F.3d at 1005 (noting the

reasons for not considering new arguments on appeal, i.e., that doing so deprives

      1
         As to the contention that Dolak deleted evidence from his laptop after the
onset of litigation, we note that Wyatt, at the time it moved for an adverse
inference, did not present any evidence suggesting that Dolak had deleted any
information from his laptop, or even contend that Dolak had actually destroyed
such information (the evidence to which Wyatt points us now was placed in the
record by Malvern, long after Wyatt sought an adverse inference). We cannot say
that the district court abused its discretion in failing to take into account facts not
presented to it at the time it considered Wyatt’s request.

                                            4
the court of appeals “of a fully developed factual record” and “the benefit of the

district court’s prior analysis”). For instance, Wyatt now contends that the district

court granted partial summary judgment improperly as to some portions of its

misappropriation of trade secrets claim, but failed to make any argument in defense

of that claim at all in front of the district court, which noted that Wyatt did not

“submit any legal analysis or argument on this subject.”

      Indeed, what it characterized accurately as Wyatt’s “pattern of filing briefs

that make little sense and do not respond in any meaningful way to the pertinent

issues” played a role in the district court’s shifting to Wyatt nearly $2 million of

Malvern’s attorneys’ fees and costs under the Copyright Act, 17 U.S.C. § 505,

California Civil Code § 3426.4, and, after finding the case “exceptional,” the

Lanham Act, 15 U.S.C. § 1117(a). Wyatt also appeals the district court’s

imposition of that fee award. We review de novo the district court’s finding that

the case was exceptional under the Lanham Act. Love v. Associated Newspapers,

Ltd., 611 F.3d 601, 615 (9th Cir. 2010). After determining the case exceptional,

the district court’s decision to award fees under the Lanham Act was discretionary,

Lahoti v. Vericheck, Inc., 636 F.3d 501, 505 (9th Cir. 2011), as was its decision to

grant fees under the Copyright Act, Petrella v. Metro-Goldwyn-Mayer, Inc., 695
F.3d 946, 951 (9th Cir. 2012), and California law, CRST Van Expedited, Inc. v.

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Werner Enters., Inc., 479 F.3d 1099, 1104 (9th Cir. 2007).

       Reviewing de novo, we conclude that the district court did not err in

determining this case was exceptional under the Lanham Act. Given Wyatt’s

repeated failure to meaningfully litigate the issues it put before the district court by

bringing this lawsuit, it may be said fairly that “plaintiff’s case is groundless,

unreasonable, vexatious, or pursued in bad faith.” 2 Secalt S.A. v. Wuxi Shenxi

Constr. Mach. Co., 668 F.3d 677, 687 (9th Cir. 2012) (internal quotation marks

and citation omitted). Nor can we conclude that the district court, having properly

annunciated the standards for fee-shifting under the Copyright Act, the Lanham

Act, and California law, thereafter abused its discretion in awarding fees under the

facts before it.3

       AFFIRMED IN PART; DISMISSED IN PART.

       2
        We note that Wyatt’s arguments against a finding that the case is
exceptional were never made before the district court in opposition to Malvern’s
motion for fees.
       3
        Those facts include that Wyatt filed frivolous responses to Malvern’s
motions (including for summary judgment); Wyatt made copyright claims as to
software features outside the scope of copyright protection; Wyatt affirmatively
disclaimed some of the copyrights that it accused Malvern of infringing; and that
Wyatt made a claim for damages that was legally unsupportable. Further, Wyatt’s
response to Malvern’s motion for fees provided almost nothing by way of coherent
argument to explain why such fees should not be granted.

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