Court Opinion

ID: 3052231
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:40:48.853834+00
Date Added: 2024-06-11T11:49:27.342803
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

FISHER TOOL COMPANY, INC.; YU          
FENG INDUSTRIAL COMPANY, LTD., a
Taiwanese corporation,
              Plaintiffs-Appellants,
                v.
GILLET OUTILLAGE, a French                   No. 06-55996
corporation,
                         Defendant,           D.C. No.
                                           CV-04-07550-ABC
               and
MAYHEW STEEL PRODUCTS, INC., a
Massachusetts corporation;
MATTHEWS COLLINS SHEPHERD AND
MCKAY, a New Jersey partnership,
             Defendants-Appellees.
                                       

                            7829
7830           FISHER TOOL CO. v. MAYHEW STEEL

FISHER TOOL COMPANY, INC.; YU          
FENG INDUSTRIAL COMPANY, LTD., a
Taiwanese corporation,
              Plaintiffs-Appellants,
                v.
GILLET OUTILLAGE, a French                   No. 06-56165
corporation,
              Defendant-Appellee,             D.C. No.
                                           CV-04-07550-ABC
               and                            OPINION
MAYHEW STEEL PRODUCTS, INC., a
Massachusetts corporation;
MATTHEWS COLLINS SHEPHERD AND
MCKAY, a New Jersey partnership,
                        Defendants.
                                       
         Appeal from the United States District Court
            for the Central District of California
         Audrey B. Collins, District Judge, Presiding

                   Argued and Submitted
           February 4, 2008—Pasadena, California

                     Filed June 30, 2008

             Before: Alex Kozinski, Chief Judge,
       Diarmuid F. O’Scannlain and William A. Fletcher,
                       Circuit Judges.

              Opinion by Chief Judge Kozinski
7832          FISHER TOOL CO. v. MAYHEW STEEL

                        COUNSEL

Louis S. Mastriani, Michael G. McManus, Rodney R. Sweet-
land, III and David F. Nickel, Adduci, Mastriani & Schaum-
berg, L.L.P., Washington, DC, for the plaintiffs-appellants.
               FISHER TOOL CO. v. MAYHEW STEEL             7833
Maryam Shokrai, Wayne W. Call and Melinda Evans, Call,
Jensen & Ferrell, Newport Beach, California, for defendant-
appellee Gillet Outillage.

Daniel F. Lula and Daniel L. Rasmussen, Payne & Fears LLP,
Irvine, California, for defendant-appellee Mathews, Collins,
Shepherd & McKay, P.A.

Michael J. Coyne and Benjamin M. Coyle, Bacon & Wilson,
P.C., Springfield, Massachusetts and Joseph F. Coyne, Jr.,
Sheppard, Mullin, Richter & Hampton LLP, Los Angeles,
California, for defendant-appellee Mayhew Steel Products,
Inc.

                          OPINION

KOZINSKI, Chief Judge:

   Defendant Gillet Outillage is a French company that makes
hose clamp pliers; it owns French and U.S. patents on the pli-
ers’ design. When Gillet discovered that plaintiffs were sell-
ing similar pliers in the United States, the company sued them
for patent infringement. But the lawsuit didn’t go as well as
Gillet hoped: The district court construed the patent’s claims
narrowly at a pre-trial Markman hearing; after that setback
Gillet dropped the suit, which was then dismissed. Plaintiffs
thereupon sued Gillet and its lawyers, claiming that Gillet’s
lawsuit was a malicious prosecution under California law and
a violation of the federal antitrust laws. Plaintiffs also claim
that the company’s public allegations of patent infringement
violated section 43(a) of the Lanham Act and various Califor-
nia tort laws. The district court granted summary judgment to
defendants, and plaintiffs appeal.

  1.   Malicious prosecution

  [1] a. The district court granted summary judgment to
Gillet on plaintiffs’ malicious prosecution claim because Gil-
7834           FISHER TOOL CO. v. MAYHEW STEEL
let relied on the advice of its lawyers, defendant Mathews,
Collins, Shepherd & McKay, P.A. See DeRosa v. Transamer-
ica Title Ins. Co., 213 Cal. App. 3d 1390, 1397 (1989) (no
malicious prosecution where defendants show “that they have
in good faith consulted a lawyer, have stated all the facts to
him, have been advised by the lawyer that they have a good
cause of action and have honestly acted upon the advice of the
lawyer”). Plaintiffs concede that Gillet consulted with
Mathews, and don’t dispute that Mathews advised the com-
pany that it had a good cause of action for patent infringe-
ment; the only question is whether Gillet acted in good faith
and provided Mathews with any facts in the company’s pos-
session that it “knew or should have known would defeat” the
lawsuit. Bertero v. Nat’l Gen. Corp., 529 P.2d 608, 616 (Cal.
1975); see also 5 Witkin, Summary of California Law § 482
(2005) (“The defendant must have disclosed all pertinent and
material facts within his . . . knowledge.”).

   David Loft, Gillet’s executive, declared that he “engaged
Mathews . . . to determine whether [plaintiffs’] Pliers
infringed the Gillet Patent, and if so, . . . to commence a
patent infringement action.” Loft Decl. ¶ 6. To conduct an
infringement analysis, Mathews needed two things: Gillet’s
patent and a pair of plaintiffs’ pliers. Loft says he provided
Mathews with accurate information as to both. See id. (“I pro-
vided to [Mathews] all facts relating to the Gillet Pliers that
I deemed material.”). Plaintiffs don’t offer any evidence to the
contrary.

  [2] Instead, plaintiffs argue that Gillet’s patent is invalid
and/or unenforceable. But even assuming that’s true—it was
never established in the infringement lawsuit or in any other
proceeding—plaintiffs don’t have any evidence that Gillet
was on notice of the problem.

   [3] Plaintiffs claim that Gillet knew of a “mistranslation” in
its patent. See 35 U.S.C. § 375(b) (courts won’t enforce
claims that are expanded by a mistranslation). But even
                  FISHER TOOL CO. v. MAYHEW STEEL                         7835
assuming that there is mistranslation,1 there’s no evidence that
Gillet or its lawyers knew or should have known about it. The
mistranslation certainly isn’t clear on its face, since French-
to-English dictionaries support it. E.g., 1 J.E. Mansion, Har-
rap’s New Standard French and English Dictionary (D.M.
Ledesert & R.P.L. Ledesert eds., rev. ed. 1974) (defining “cli-
quet” as “catch, pawl . . . ratchet”). And Gillet’s application
for a U.K. patent uses a similar translation,2 so the U.K. patent
application couldn’t have put Gillet on notice of the alleged
problem with its U.S. patent.

   [4] Plaintiffs allege that Gillet knew various other facts that
put it on notice that its patent was invalid or unenforceable,
but these facts are even less probative of invalidity and unen-
forceability than the alleged mistranslation; even if Gillet was
aware of these additional facts, the company could reasonably
have concluded that they were neither “pertinent” nor “mate-
rial” and therefore didn’t have to be disclosed to its lawyers.
See Witkin, supra.3
  1
     The purported mistranslation is this: The patent claims a device for fas-
tening together the pliers’ handles using what would, in English, be
termed a latch. One end of the latch is fixed to one handle by a hinge; at
the latch’s end is a hook that catches on a post on the other handle, thereby
locking the two handles together. In the French patent, the latch is called
a “mécanisme à cliquet;” in the U.S. patent, it is termed a “ratchet mecha-
nism.”
   2
     The U.K. patent application, which was also based on the French
patent, translates the term “mécanisme à cliquet” as “pawl mechanism.”
This is very similar to the U.S. translation of “ratchet mechanism.” A pawl
is a hinged catch that engages with a notched wheel in such a way that the
wheel can only move in one direction. See Webster’s New International
Dictionary (2d ed. 1939). There’s a pawl at work inside most ratchets, see
id., so someone comparing the U.K. patent application with the U.S.
patent could easily conclude that they claim precisely the same thing.
   3
     First, plaintiffs claim that Gillet knew it had “withheld” prior art from
the Patent and Trademark Office during the patent prosecution “in order
to deceive the PTO.” But plaintiffs don’t point to any relevant prior art.
Plaintiffs point out that a different pair of pliers in Gillet’s catalog appears
to use a similar latch, but plaintiffs offer no argument as to why this prior
7836              FISHER TOOL CO. v. MAYHEW STEEL
   [5] b. The district court granted summary judgment to
Gillet’s law firm, Mathews, on a different theory: Plaintiffs
haven’t shown that Mathews lacked probable cause to bring
the suit. See Sheldon Appel Co. v. Albert & Oliker, 765 P.2d
498, 501 (Cal. 1989). To prove a lack of probable cause,
plaintiffs must show that the lawsuit was “so completely lack-
ing in apparent merit that no reasonable attorney would have
thought the claim tenable.” Wilson v. Parker, Covert & Chid-
ester, 50 P.3d 733, 741 (Cal. 2002).

   [6] The district court was right: Mathews had abundant
probable cause to think that plaintiffs’ pliers infringed the Gil-
let patent. Two of the firm’s lawyers performed independent
infringement analyses; the firm obtained a third infringement
analysis from an outside patent lawyer; all three concluded
that plaintiffs’ pliers infringed Gillet’s patent. Plaintiffs
haven’t come forward with any evidence that these infringe-
ment analyses fell below professional standards or were done
in bad faith. Of course the district court ultimately construed
Gillet’s patent more narrowly than the lawyers predicted, but
that doesn’t prove that the lawyers’ analyses were “com-
pletely lacking in apparent merit.” Id. Quite the contrary, the
district judge who ruled against Gillet at the pre-trial Mark-
man hearing later said the company’s arguments of patent
infringement were “strong.”4 We agree with the district court

art was relevant to the subsequent patent application. Second, Gillet’s
executive, Loft, told the lawyers that “a guy wrote” to Gillet, claiming that
he “invented the same thing and here are my drawings.” But there’s no
evidence that these drawings in fact look anything like Gillet’s pliers, so
there’s no proof that Gillet was on notice that this “guy” anticipated the
company’s patent. Finally, plaintiffs quibble that the patent didn’t name
the true inventor. But such an error can be fixed by amending the patent,
35 U.S.C. § 256; see Pannu v. Iolab Corp., 155 F.3d 1344, 1350 (Fed. Cir.
1998), so even if there was a misstatement, it could not have defeated Gil-
let’s infringement lawsuit.
   4
     The district judge in the present case also presided over the underlying
infringement litigation.
                 FISHER TOOL CO. v. MAYHEW STEEL                   7837
that “more than ample probable cause supported Mathews’s
decision to file the underlying lawsuit.”

   [7] Plaintiffs contend that Mathews should have investi-
gated the patent’s validity and enforceability before filing
suit; if Mathews had done so, plaintiffs insist, the firm would
have discovered the mistranslation that, in plaintiffs’ view,
renders the patent invalid or unenforceable. See pp. 7834-35
supra. But even if Mathews had been negligent in failing to
investigate the patent’s validity and enforceability, that negli-
gence would be “[i]rrelevan[t]” to the question of whether the
lawyers had probable cause to sue. Sheldon Appel, 765 P.2d
at 509. Mathews could reasonably conclude, based on the
facts available to it, that Gillet’s infringement case was “tena-
ble.” Wilson, 50 P.3d at 741.

  2.   Lanham Act and California tort law

   At Gillet’s direction, Mathews prepared letters, addressed
“To Whom It May Concern,” expressing Mathews’s “strong
opinion” that plaintiffs’ pliers infringed Gillet’s patent and
threatening that Gillet would sue anyone who sold plaintiffs’
pliers. Defendant Mayhew Steel Products, Inc., Gillet’s U.S.
distributor, forwarded these letters to its customers.5 Plaintiffs
claim that the letters falsely stated that their pliers infringed
Gillet’s patent, and therefore violated section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a), and various California tort
laws.

   [8] But the Federal Circuit has held that where Lanham Act
claims and state tort claims are based on a defendant’s repre-
sentation that someone infringed his patent, plaintiff must
show that defendant’s representation was made in bad faith.
Zenith Elecs. Corp. v. Exzec, Inc., 182 F.3d 1340, 1353 (Fed.
  5
    Mayhews doesn’t dispute that forwarding the letter on Gillet’s behalf
was a statement for purposes of the Lanham Act, so we don’t consider the
issue.
7838             FISHER TOOL CO. v. MAYHEW STEEL
Cir. 1999) (Lanham Act claims); Hunter Douglas, Inc. v.
Harmonic Design, Inc., 153 F.3d 1318, 1335-37 (Fed. Cir.
1998), overruled on other grounds by Midwest Indus. Inc. v.
Karavan Trailers, Inc., 175 F.3d 1356, 1358-59 (Fed. Cir.
1999) (state tort claims). We adopt these holdings. See Zila,
Inc. v. Tinnell, 502 F.3d 1014, 1022 (9th Cir. 2007) (because
of the “particularly strong national uniformity concerns” in
patent law, we are especially “hesit[ant]” to open up conflicts
with other circuits in this area).

   [9] In Zenith and Hunter Douglas, the defendants owned
the patents at issue or were the exclusive licensee; here, by
contrast, plaintiffs are suing not only the patent-holder (Gillet)
but also that company’s U.S. distributor (Mayhew) and its law
firm (Mathews). Plaintiffs argue that Zenith and Hunter
Douglas apply only to patent-holders, so that plaintiffs don’t
have to show that Mayhew and Mathews acted in bad faith.
But plaintiffs offer no good reason why the bad-faith require-
ment should apply only to the patent-holder and not also to
those who act in concert with him to enforce his patent rights.
The purpose of the bad-faith requirement is to permit the
patent-holder to assert his rights (in good faith) without fear
that he might thereby violate the Lanham Act or state tort
laws. See Zenith, 182 F.3d at 1353. And, to assert his patent
rights, a patent-holder will often need help. Here, for instance,
Gillet relied on its lawyers to draft the letters; it relied on its
U.S. distributor to forward those letters to retailers. Because
Mayhew and Mathews acted in concert with Gillet, the patent-
holder, to recover against them plaintiffs must show that they
acted in bad faith.6

  [10] Plaintiffs haven’t presented any evidence that defen-
dants drafted or forwarded the letters in bad faith. Plaintiffs
  6
    We do not consider whether plaintiffs would have to show bad faith in
order to bring a Lanham Act or state tort claim against a third party who
stated that a product infringed another’s patent but who did not do so in
concert with the patent-holder.
               FISHER TOOL CO. v. MAYHEW STEEL             7839
argue that we should infer bad faith because defendants never
intended to carry out the letters’ promise to sue everyone who
sold plaintiffs’ pliers, but even if that were true, it wouldn’t
be “particularly probative of bad faith.” Golan v. Pingel
Enter. Inc., 310 F.3d 1360, 1372 n.5 (Fed. Cir. 2002).

  3.   Antitrust

   [11] Plaintiffs’ antitrust claims are barred by the Noerr-
Pennington doctrine because plaintiffs haven’t come forward
with evidence that defendants’ lawsuit was “objectively base-
less,” Prof’l Real Estate Investors, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49, 60 (1993), or that Gillet’s patent
was procured through knowing and willful fraud, Q-Pharma,
Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1304-05 (Fed.
Cir. 2004).

  AFFIRMED.