Hakan Lans v. Digital Equipment

Notice Requirement Must Be Met by Patentee

00-1144

June 04, 2001

Niemeyer, Elizabeth A.

Decision

Last Month at the Federal Circuit - July 2001

Judges: Rader (author), Plager, and Schall

In Lans v. Digital Equipment Corp., No. 00- 1144 (Fed. Cir. June 4, 2001), the Federal Circuit affirmed a district court’s dismissal of a suit for infringement brought by the inventor of U.S. Patent No. 4,303,986 (“the ‘986 patent”). The Federal Circuit also affirmed the district court’s holding that Håkan Lans, the inventor, did not meet the requirements of Fed. R. Civ. P. 60(b)(2) and affirmed dismissal of a separate action brought by Uniboard Aktiebolag (“Uniboard”) for infringement of the ‘986 patent because the patent had expired and 35 U.S.C. § 287(a) prevented recovery of any damages.

The subject matter of the patent is directed toward a data-display system for a color graphics display. Lans is the sole inventor of the ‘986 patent, which issued in 1981. In 1989, Lans assigned the ‘986 patent to Uniboard, which had Lans as the managing director and sole shareholder. In 1996, Lans sent letters to the Defendants accusing them of infringing the ‘986 patent and offering them licenses. In 1997, without naming Uniboard as a Plaintiff, Lans sued the Defendants.

The Defendants discovered the assignment of the patent from Lans to Uniboard and moved for SJ that Lans lacked standing. Lans responded to this motion by moving to amend the complaint and substitute Uniboard for himself. The district court granted the Defendants’ motion for SJ based on lack of standing and further denied Lans’s motion to amend the complaint because “without standing there was no motion to amend.” Lans, slip op. at 8.

Lans then brought a motion for relief from judgment based on a “Clarification-Contract,” which Lans had executed in 1989 and which was produced to Lans by Lans’s former accountant in January 2000. The Clarification-Contract purported to transfer the ‘986 patent rights to Uniboard, but stated that Lans would own the patent. The district court denied Lans’s motion, finding that Lans was in constructive possession of the Clarification-Contract. Therefore, it was not newly discovered evidence.

Finally, in November 1999, Uniboard filed suit against the Defendants. The Defendants moved to dismiss the complaint for failure to state a claim upon which relief may be granted, noting that the patent had expired in January 1999. The Defendants also argued § 287(a) precluded damages because Uniboard had not properly notified the Defendants of infringement before expiration of the ‘986 patent.

On appeal, the Federal Circuit affirmed each of the district court’s holdings. The Federal Circuit reviewed the district court’s dismissal of Uniboard’s complaint, examining § 287(a) and its own precedent, which held that determining notice under § 287 depends on the action of the patentee and not the knowledge of the infringer. Although the Defendants had received notice from Lans, the requirements of § 287(a) were not met until Uniboard gave actual notice of infringement and notice that it was the patentee, which occurred when Uniboard filed its complaint. Consequently, the Federal Circuit affirmed the district court’s dismissal of Uniboard’s complaint because § 287(a) precluded any award of damages and because no other remedy was available.

The Federal Circuit also held that Lans lacked prudential standing and, consequently, the district court had been correct in granting SJ, the district court had been well within its broad discretion in denying Lans’s motion to amend, and the district court had not abused its discretion in denying relief from judgment under Rule 60(b).