Court Opinion

ID: 211355
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:26:30+00
Date Added: 2024-06-11T17:28:06.070056
License: Public Domain

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
                   is not citable as precedent. It is a public record.

 United States Court of Appeals for the Federal Circuit

                                        05-1378

                           ATHLETIC ALTERNATIVES, INC.,

                                                 Plaintiff-Appellant,

                                            v.

                          BENETTON TRADING USA, INC.,
                 (formerly known as Benetton Sportsystem USA, Inc.,
                and Successor in Interest to Prince Manufacturing, Inc.)

                                                 Defendant-Appellee.

                           ___________________________

                             DECIDED: March 31, 2006
                           ___________________________

Before MICHEL, Chief Judge, MAYER, and BRYSON, Circuit Judges.

PER CURIAM.

                                            I

      Athletic Alternatives, Inc., (“AAI”) owns U.S. Patent No. 5,197,731 (“the ’731

patent”), which is directed to a sports racquet having an interwoven string bed in which

the ends of the strings are anchored in frame holes that lie alternately above and below

the plane of the string bed. That configuration of string ends is referred to as “splay,”

and the distance between the holes above and below the plane is referred to as the

splay distance or degree of splay. We affirm in part and reverse in part.
      In 1990, AAI and Prince Manufacturing, Inc., to which Benetton Trading USA,

Inc., is a successor in interest, entered into a confidentiality agreement regarding AAI’s

“Redemption Stringing System.” Under that agreement, Prince and AAI shared ideas

on racquet designs, but they ultimately failed to reach a mutually satisfactory licensing

arrangement.    Prince subsequently released its Vortex tennis racquet.       The Vortex

racquet contained cross strings (lateral strings) having two different degrees of splay, 2

millimeters in some portions of the racquet and 4.5 millimeters in other portions.

      In 1992, AAI sued Prince for infringement of U.S. Patent No. 5,037,097 (the

parent of the ’731 patent) and trade secret misappropriation. Prince separately sued for

a declaratory judgment of non-infringement and invalidity with respect to the ’731

patent. Those two cases were eventually consolidated. The parties stipulated to a

dismissal of AAI’s trade secret misappropriation claim without prejudice, and to a stay of

the declaratory judgment action involving the ’731 patent.        The district court then

granted summary judgment of noninfringement of the ’097 patent. On appeal from that

judgment, this court affirmed. Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d

1573 (Fed. Cir. 1996).      In 1997, Prince sought and obtained a dismissal of its

declaratory judgment claim without prejudice.

      In 1996, AAI requested reexamination of the ’731 patent. Claims 1 and 2 were

initially rejected by the examiner as anticipated by prior art including French Patent No.

2,276,845 to Martel.      On appeal, however, the Board of Patent Appeals and

Interferences reversed the rejection, explaining that the Martel reference is silent as to

the direction in which the opposite ends of a string are splayed. In response to the

examiner’s observation that whether string ends splay in opposite directions depends on

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whether there is an odd or even number of longitudinal main strings, the Board held that

Martel does not inherently disclose a racquet with an even number of longitudinal

strings and thus does not disclose all the limitations of the ’731 patent.

       Shortly thereafter, AAI filed the instant action. With respect to claims 1-2 and 8-

9, the district court granted summary judgment for Prince, finding those claims obvious

in light of the Martel prior art reference. The district court also dismissed AAI’s claim for

breach of contract, finding it barred by the statute of limitations. Following a bench trial,

the court held that Prince’s racquets do not infringe claim 3 and that claims 3-5 are

invalid for indefiniteness.

                                             II

       1. Claim 3 of the ’731 patent requires that string ends anchored in “the sides of

said frame . . . are splayed to a greater degree in the regions where the length of said

ends is greater.” As a matter of claim construction, the district court ruled that the

quoted language “requires two or more splay distances along the sides of the racquet.”

AAI states that it does not challenge the district court’s construction of claim 3.        It

argues, however, that the Vortex racquets infringe claim 3 because the sides of the

Vortex racquets contain more than one splay distance. In particular, AAI asserts that at

least one lateral string on each of the accused racquets (the “disputed string”) is

anchored in the “side” and has a splay distance of 2 millimeters, as opposed to the 4.5

millimeter splay distances of all the other strings anchored along the racquet’s side.

       In its Markman order, the district court observed that the written description and

figures of the ’731 patent characterize the racquet frame as being divided into a “tip,” a

“heel,” two “sides,” and four “corners,” with the tip and heel separated from the sides by

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the corners. In its subsequent opinion, the court noted that Figure 8 indicates that the

term “corners” refers to those portions of the racquet frame that contain both

longitudinal and lateral strings, whereas the term “sides” refers to those portions that

contain only lateral strings. The court also explained that the specification uses the

term “corners” to mean “those regions . . . where it is ‘desirable’ to have ‘minimal [splay

distance]’ to ‘facilitate the stringing of the racquet.’” See ’731 patent, col. 8, ll. 39-44.

The court concluded that claim 3, “in reference to the ‘sides,’ calls for increased splay in

‘the regions where the length of said ends is greater.’”            With respect to AAI’s

infringement argument, the court found that the disputed strings in the accused racquets

are anchored in the corners, not the sides, and that the accused racquets therefore

“have only a single degree of splay along the sides and therefore do not infringe claim 3

of the ’731 patent.”

       In light of AAI’s acceptance of the district court’s claim construction, its appeal

targets only the district court’s factual finding that the Prince racquets do not infringe

because the disputed strings are anchored in the corners and thus all of the strings on

the sides have an equal degree of splay. We review that finding of fact for clear error,

and we reverse only if “on the entire evidence [we are] left with the definite and firm

conviction that a mistake has been committed.” Biovail Corp. Int'l v. Andrx Pharms.,

Inc., 239 F.3d 1297, 1300 (Fed. Cir. 2001).

       The district court noted that Prince’s Director of Research and Development

testified that the splay of the disputed string in each of the accused racquets was

reduced “in order to facilitate stringing.” Moreover, the court found that the degree of

splay in the regions of the sides where the string ends are longer is 4.5 millimeters, the

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same amount as in the regions of the sides where the string ends are shorter. In what

the court referred to as the “transition regions between tip and sides, and the heel and

the sides,” i.e., the corners, the court found that the splay distance in the Prince

racquets is only 2 millimeters. Because we find no clear error in the district court’s

factual determination that the disputed string in each of the accused racquets is

anchored in the “corner” and not the “side,” we uphold the district court’s decision that

Prince’s accused racquets do not infringe claim 3 of the ’731 patent.

       2. AAI argues that the district court erred in granting summary judgment that

claims 1-2 and 8-9 of the ’731 patent are obvious in light of the Martel patent. Noting

that the Board held Martel to be non-anticipating only because Martel was silent about

the required number of main strings, the district court observed that all commercial

tennis racquets on the market contained an even number of strings. The district court

therefore concluded that, to a person skilled in the art, using an even number of strings

would have been an obvious way of implementing Martel.

       Citing In re Portola Packaging, Inc., 110 F.3d 786, 789 (Fed. Cir. 1997), AAI

contends that “a district court should not invalidate claims where the exact prior art

references were before the patent examiner who upheld the patent.” Portola is not

instructive in the present context, because it involves reexamination proceedings before

the Patent and Trademark Office (“PTO”). Portola stands for the proposition that in

reexamination the PTO is not supposed to reevaluate prior art that was considered in

the original examination. It does not, however, limit a court’s authority to address patent

validity by restricting the court’s right to consider prior art that was before the examiner.

Moreover, the Board in this case addressed only the examiner’s rejection for

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anticipation; it did not address the question of obviousness. AAI’s argument based on

Portola is therefore without merit.

       AAI further asserts that Martel does not suggest the use of an even number of

strings and that it actually teaches away from the claimed invention because it calls for

a racquet design that limits twisting of the racquet frame, while “implementation of an

even number of strings . . . would result in . . . twisting of the sides of the racket frame.”

However, AAI does not explain why an even number of strings would produce twisting.

In any event, Martel does not explicitly suggest using a racquet with an odd number of

strings, and thus it makes sense to combine the stringing configuration of Martel with

the predominant type of racquet on the market—one with an even number of main

strings. We therefore uphold the district court’s grant of summary judgment invalidating

claims 1-2 and 8-9 as obvious.

       3. AAI next contends that the district court erred in invalidating claims 3-5 for

indefiniteness. The district court reasoned that the ’731 patent contains no definition of

either the term “side” or the term “region,” that those terms are not used in the tennis

industry, and that the ’731 patent fails to explain “where the ‘sides’ end and the ‘corners’

begin.”

       To avoid invalidity for indefiniteness, a claim, read in light of the specification,

must “reasonably apprise those skilled in the art both of the utilization and scope of the

invention.” Shatterproof Glass Corp. v. Libbey-Owens-Ford Co., 758 F.2d 613, 624

(Fed. Cir. 1985).     If the claim “is subject to construction, i.e., it is not insolubly

ambiguous, it is not invalid for indefiniteness.” Bancorp Servs., L.L.C. v. Hartford Life

Ins. Co., 359 F.3d 1367, 1371 (Fed. Cir. 2004). A claim will not be held invalid if the

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“meaning of the claim is discernible, ‘even though the task may be formidable and the

conclusion may be one over which reasonable persons will disagree.’” Id. (quoting

Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001)).

       In this case, the district court was able to distinguish portions of the racquet

frame by construing the term “sides” as referring to those portions of the racquet frame

located between the “corners.” Figure 8 is also instructive because it indicates that the

“sides” of the racquet can be differentiated from “corners” in that the “sides” contain only

lateral strings ends, whereas the “corners” contain both lateral and longitudinal string

ends. Moreover, the specification explains that the “corners” contain minimal splay

distance to “facilitate the stringing of the racquet.” Because the specification and the

figures provide a sufficient basis for differentiating “sides” from “corners,” we hold that

the term “sides” is amenable to construction.

       The specification further makes clear that the term “region” is not used in a

specialized sense, but merely refers to a portion of the edge of the racquet, so that the

claim language “in the regions where the length of said ends is greater” is equivalent to

saying simply “where the length of said ends is greater.” Accordingly, the term “regions”

does not introduce insoluble ambiguity into the claim. In sum, we hold that the claim

language is sufficiently precise to avoid invalidity on grounds of indefiniteness. We

therefore reverse the portion of the district court’s judgment invalidating claims 3-5 as

being fatally indefinite.

       4. AAI argues that the district court erred in dismissing its breach of contract

claim. The parties agreed that the statute of limitations for a breach of contract claim is

six years, and the district court found that AAI’s claim was filed more than six years after

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Prince allegedly breached the parties’ confidentiality agreement.          Accordingly, the

district court dismissed AAI’s breach of contract claim as barred by the statute of

limitations.

       AAI contends that Prince breached the agreement each time it used AAI’s

information and techniques in manufacturing, marketing, and selling the Vortex racquet.

Yet, as the district court explained, the continuing-breach theory advanced by AAI does

not apply to breach of a contract covering trade secrets.         See Intermedics, Inc. v.

Ventritex, Inc., 822 F. Supp. 634, 645 (N.D. Cal. 1993). Intermedics involved a breach

of contract claim that “consist[ed] entirely of the same acts of misappropriation . . . that

would be barred by the statute of limitations applicable to trade secret claims.” Id. at

644. The court there explained that allowing such a breach of contract claim to proceed

under a continuing-breach theory “would frustrate the legislature’s judgment about how

the statute of limitations should operate for trade secret cases.” Id.

       Because AAI’s breach of contract claim is similarly based on Prince’s alleged

breach of the confidentiality agreement, Intermedics is instructive here. Under Arizona

law, the statute of limitations for misappropriation of trade secrets is three years. A.R.S.

§ 44-406 (1990).     Furthermore, a “continuing misappropriation constitutes a single

claim.” Id. Thus, under the analysis of Intermedics, the district court correctly rejected

AAI’s continuing-breach argument. Although AAI contends that Intermedics does “not

purport to reflect Arizona law,” AAI fails to cite any contrary Arizona case that involves a

breach of contract involving trade secret misappropriation.

       AAI also asserts, for the first time on appeal, that the statute of limitations should

be deemed tolled during the pendency of the earlier lawsuit because the action involving

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the ’731 patent was stayed beginning in 1994.                  However, AAI’s trade secret

misappropriation claim was not stayed as part of the 1994 stay order; that claim had

already been voluntarily dismissed without prejudice in 1992. Nor has AAI pointed to

any legal authority for its assertion that the statute of limitations on its breach of contract

claim should be deemed tolled during the period that the original misappropriation claim

was pending. We therefore uphold the court’s dismissal order.

       5.   AAI next complains that Prince’s counsel acted inappropriately by being

unduly involved in the preparation of the expert report of Prince’s expert witness. For

that reason, AAI asserts, the trial court should not have credited the expert’s testimony.

The district court acknowledged that the expert’s credibility was “significantly clouded”

by counsel’s “extensive involvement” in the preparation of the report, yet nonetheless

credited the expert’s testimony due to his expertise and qualifications. Based on the

highly deferential standard of review that we apply to witness credibility determinations

by the trial court, Mass. Bay Transp. Auth. v. United States, 254 F.3d 1367, 1376 (Fed.

Cir. 2001), we reject AAI’s argument regarding the credibility of Prince’s expert.

       6. Finally, AAI argues that the district court should have granted its request for a

jury trial. The district court ruled that AAI forfeited its right to a jury trial when it failed to

serve its jury demand on Prince in a timely manner, as required by Federal Rule of Civil

Procedure 38(b). Noting that the Ninth Circuit has held that a district court may not

overlook a party’s failure to make a timely jury trial demand when the failure to make a

timely demand results from an oversight or inadvertence, Zivkovic v. S. Cal. Edison Co.,

302 F.3d 1080, 1086 (9th Cir. 2002), the district court found that AAI had “offered no

05-1378                                         9
explanation beyond inadvertence or oversight to excuse the omission” and therefore

denied the jury trial request.

       On appeal, AAI argues that the “right to a trial by jury is too important to be cast

aside for a procedural technicality” and that one’s constitutional right to a jury “should

not be cavalierly dismissed.” However, the district court correctly ruled that a party

“should not be relieved of the responsibility of complying with the applicable procedural

rules” where it has failed to “show some reason beyond oversight or inadvertence.” See

Boice v. United States, 87 F.R.D. 494, 496 (D. Ariz. 1980). We therefore affirm the

district court’s denial of AAI’s motion.

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