Court Opinion

ID: 8407890
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:36:31.143792+00
Date Added: 2024-06-11T16:46:39.440081
License: Public Domain

PREGERSON, Circuit Judge,
concurring in part and dissenting in part:
I concur in the majority’s decision to affirm the jury’s determination that Bourns was liable for interfering with Raychem’s employment contracts and misappropriating Raychem’s trade secrets. But I dissent from the majority’s decision to reverse the jury’s verdict in favor of Bourns on its anti-trust claims against Raychem concerning its unlawful monopolization of the Polymeric Positive Temperature Coefficient (“PPTC”) market in violation of Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 86 S.Ct. 347, 15 L.Ed.2d 247 *713(1965) (hereinafter Walker Process), and Section 2 of the Sherman Act. First, the majority errs by reweighing the evidence presented to the jury regarding Raychem’s anti-trust liability and by reversing the jury’s determination that Raychem by threatening to enforce its fraudulently obtained patents against Bourns unlawfully thwarted Bourns’ effort to enter into the PPTC market. By doing so, the majority contravenes our rule that “the weight of the evidence[is an] issue[ ] for the jury that [is] generally not subject to appellate review.” Murray v. Laborers Union Local No. 324, 55 F.3d 1445, (9th Cir.1995). In addition, the majority errs by reasoning that Bourns could not have suffered an anti-trust injury since it did not have a PPTC product to sell for twenty months after it achieved anti-trust standing to sue Raychem.
In Walker Process the Supreme Court held that an injured party may bring a suit for anti-trust damages under Section 2 of the Sherman Act against a company that attempts to monopolize a market by threatening to enforce a patent obtained by fraud. To sustain a Walker Process claim, a party must prove that “(1) the relevant patent is shown to have been procured by knowing and willful fraud practiced by the defendant on the Patent Office or, if the defendant was not the original patent applicant, he had been enforcing the patent with knowledge of the fraudulent manner in which it was obtained; and (2) all the elements otherwise necessary to establish a § 2 monopolization charge.” Walker Process, 382 U.S. at 179, 86 S.Ct. 347 (Harlan, J. concurring).
The majority does not question the jury’s special verdict that Bourns had proved by clear and convincing evidence that Raychem unlawfully procured four of its PPTC patents by intentional fraud on the United States Trademark and Patent Office, or that Bourns had anti-trust standing to bring suit against Raychem on December 1, 1994. The majority also does not dispute that Raychem made several threats to Bourns to enforce its fraudulently obtained patents against Bourns if Bourns entered the PPTC market. Instead, the majority reversed the jury’s verdict in favor of Bourns because (1) Bourns did not present adequate evidence that it suffered antitrust injury since it had no product to sell for twenty months after it acquired standing to bring a Walker Process claim, and (2) Raychem threatened to enforce its fraudulent patents against Bourns before the date that Bourns acquired its anti-trust standing.
The majority’s reliance on whether Bourns had a PPTC product in the market as an indicator that Bourns suffered antitrust injury misses the point of the Walker Process inquiry: a Walker Process claim is designed to prohibit a dominant party from willfully and fraudulently monopolizing a market by deterring another company’s attempt to enter that market. As the Supreme Court described in Walker Process:
A patent by its very nature is affected with a public interest. * * * (It) is an exception to the general rule against monopolies and to the right to access to a free and open market. The far-reaching social and economic consequences of a patent, therefore, give the public a paramount interest in seeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct and that such monopolies are kept within their legitimate scope.
Walker Process, 382 U.S. at 177, 86 S.Ct. 347 (citing Precision Instrument Mfg. Co. v. Automotive Maint. Mach. Co., 324 U.S. 806, 816, 65 S.Ct. 993, 89 L.Ed. 1381 (1945)). Because a party who wishes to enter a market often is deterred from *714doing so as a direct result of a monopolizing party's threats to enforce its fraudulent patents, Walker Process only requires that to have standing to sue, a company which wishes to enter the market demonstrate that it was a potential competitor, not an actual competitor. Thus, “our circuit, along with most circuits, has held that a potential competitor has standing if he can show a genuine intent to enter the market and a preparedness to do so.” Buhar v. Ampco Foods, Inc., 752 F.2d 445, 450 (9th Cir.1985), cert. denied, 472 U.S. 1018, 105 S.Ct. 3481, 87 L.Ed.2d 616 (1985). The majority errs by holding that Raychem’s threats to enforce its patents against Bourns could not have caused Bourns anti-trust injury because it took Bourns twenty months to enter the PPTC market after it acquired standing to bring a Walker Process claim.
Second, the majority errs by reweighing the evidence when it reconsidered the effect that Raychem’s repeated threats to Bourns had on its ability to enter the PPTC market. The applicable standard of review is whether the jury’s verdict is supported by substantial evidence. Gilbrook v. City of Westminster, 177 F.3d 839, 856 (9th Cir.1999), cert. denied, 528 U.S. 1061, 120 S.Ct. 614, 145 L.Ed.2d 509 (1999). “Substantial evidence is such relevant evidence as reasonable minds might accept as adequate to support a conclusion even if it is possible to draw two inconsistent conclusions from the evidence.” Id. (quoting Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987)). This court “review[s] for abuse of discretion the district court’s denial of a motion for a new trial grounded on the assertion that the jury’s verdict was against the clear weight of evidence.” Id. Furthermore, “the credibility of witnesses and the weight of the evidence are issues for the jury that are generally not subject to appellate review.” Murray, 55 F.3d at 1452.
During trial, Bourns introduced evidence that throughout its business relationship with Rayehem, it sought to dominate the PPTC market by making it clear to Bourns and other competitors that Bourns could not enter the market because of Raychem’s PPTC patents, which were obtained by fraud. On ten occasions from 1986 to 1993, Rayehem rejected Bourns’ request for a PPTC manufacturing licence. Rayehem informed Bourns that it could never enter the market without a patent license and that it had successfully enforced the patents in question against another competitor, Therm-O-Disc. In May 1994, Rayehem informed Bourns that it “should never think about” manufacturing PPTCs and reminded Bourns of its 1986 suit against Therm O Disc. In September 1994, when Bourns informed Rayehem that it was considering manufacturing PPTCs, Rayehem warned that it had “so many patents nobody ever succeeded to go around them that I wouldn’t even think about doing this.” Finally, Rayehem informed its customers that Bourns’ potential PPTC products would be in violation of its patents.
After an eight week trial, the jury found that Bourns proved by a preponderance of the evidence that Rayehem caused Bourns to suffer anti-trust injury by enforcing or threatening to enforce its fraudulently obtained patents against Bourns. The jury also found that Rayehem willfully acquired monopoly power in the PPTC market by its unlawful conduct. By reversing the jury’s sound judgment, I submit that the majority erroneously substituted its own determination of the evidence for the jury’s verdict in contravention of Murray, 55 F.3d at 1452. None of this court’s prior decisions require as a matter of law that a company unlawfully monopolizing the mar*715ket by threatening competitors with fraudulently obtained patents make such unlawful threats after the time when a potential competitor is prepared to enter the market. The jury weighed the evidence of Raychem’s unlawful threats to Bourns and concluded that Raychem unlawfully deterred Bourns from entering the PPTC market in violation of Walker Process.
Accordingly, I affirm in part and dissent in part.