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NATIONAL PRESTO INDUS. v. BLACK & DECKER INC.

March 20, 1991

NATIONAL PRESTO INDUSTRIES, INC., Plaintiff,
v.
BLACK & DECKER (U.S.) INC., Defendant, and BETTER MOUSETRAPS, INC., Third-Party Defendant


Hubert L. Will, United States District Judge.


The opinion of the court was delivered by: WILL

HUBERT L. WILL, UNITED STATES DISTRICT JUDGE

 Pending are two pretrial motions: (1) Black & Decker and Better Mousetraps have moved to bar National Presto from seeking or recovering damages based upon a reasonable royalty; (2) National Presto has moved to strike two of Black & Decker's affirmative defenses from its second amended answer. The first motion will be entered and continued, as discussed in the opinion below; the second motion is granted.

 Before asking for a reasonable royalty, National Presto will have to make a record showing what a reasonable royalty would be. We will not allow either side in this case to go to the jury with a blank request: "We are asking you for damages in the form of a reasonable royalty. We are not going to tell you anything about how a reasonable royalty might be calculated or how much it might be. That is for you, as jurors, to figure out on your own from your own minds. You guess what royalties typically are in this industry, or on comparable patents, and how much a negotiated royalty between these parties would have been in this case."

 The patent statute provides for damages "in no event less than a reasonable royalty." 35 U.S.C. § 284. But that's assuming that damages have been proved up. Neither the patent statute nor the rules of evidence contemplate judgments or jury verdicts based on conjecture, and we will not permit that in this case. See Lindemann Maschinenfabrik v. American Hoist & Derrick Co., 895 F.2d 1403, 1406-1407 (Fed. Cir. 1990); Devex Corp. v. General Motors Corp., 667 F.2d 347 (3d Cir. 1981) (affirming an award of zero damages for lack of evidence and saying: "The statute requires the award of a reasonable royalty, but to argue that this requirement exists even in the absence of any evidence from which a court may derive a reasonable royalty goes beyond the possible meaning of the statute."), quoted in Lindemann, 895 F.2d at 1407. See also W.L. Gore & Associates, Inc. v. Carlisle Corp., 198 U.S.P.Q. (BNA) 353, 368 (D. Del. 1978) (a reasonable royalty should be calculated solely from the submitted evidence, not conjecture).

 Neither Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 827-28, 11 U.S.P.Q.2D (BNA) 1321 (Fed. Cir. 1989) nor Lindemann, supra, dictate a different result. Granted, in both those cases the Federal Circuit approved awards of a reasonable royalty, notwithstanding that the prevailing plaintiffs in those cases had never asserted specific royalty rates. But those were bench trials; this will be a jury trial. A judge's determination of a reasonable royalty may be guided by prior experience in the area; a jury's is not. There is, moreover, no hint in either Datascope or Lindemann that the accused infringers ever made the argument that Black & Decker and Better Mousetraps are making here -- that a patent owner who fails to put in evidence of what a figure for a reasonable royalty would be may not seek to recover one. Datascope and Lindemann do not decide the issue presented and argued by Black & Decker and Better Mousetraps.

 If National Presto intends to seek or recover a reasonable royalty, it has one week from entry of this opinion to supply discovery on what a reasonable figure would be -- and to identify an expert and make him or her available for a deposition, if expert testimony is going to be used. We will enter and continue the motion to bar Presto's recovery of a reasonable royalty for one week and either grant or deny this motion at the end of the week, consistent with National Presto's behavior in the interim.

 We proceed, next, to Presto's motion to strike Black & Decker's third and fourth affirmative defenses, starting with the fourth. A defense may be struck if it is "insufficient . . ., redundant, immaterial, impertinent . . . or scandalous . . . ." Fed. R. Civ. P. 12(f).

 Black and Decker's fourth affirmative defense rests on Presto's allegedly "unclean hands in suppressing and concealing its invention from the public and, then later, threatening retailers and competitors . . . with patent infringement lawsuits, when it had not obtained patent protection and had not even filed its utility patent application." That "affirmative defense" is insufficient as a matter of law.

 Black and Decker has cited no authority for the proposition that "suppressing and concealing" an invention from the public supports an equitable defense of unclean hands, as opposed to a priority defense under 102(g). We have found no such authority and reject the proposition. "[Mere] concealment of an invention at least until an application for patent . . . is filed is the normal behavior of the cautious inventor, and in itself . . . is not reprehensible." Dewey v. Lawton, 52 C.C.P.A. 1573, 347 F.2d 629, 632, 146 U.S.P.Q. (BNA) 187 (1965).

 As to "threatening retailers and competitors," Presto's letter terrorizing the trade has already been the subject of an order from this court. It is not grounds, however, for an affirmative defense of unclean hands in an action where the issues are infringement and priority of invention. The defense of unclean hands does not close the courthouse door to plaintiffs simply because they have behaved improperly, even unlawfully. For the maxim that equity helps only those with clean hands to apply a plaintiff's misconduct must be "unconscionable" and have some "immediate and necessary relation to the equity he seeks." Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245, 78 L. Ed. 293, 54 S. Ct. 146 (1933). In a patent case, the misconduct should "bear upon the validity of the patent or defendant's infringement of the patent for the unclean hands defense to be available." Southwire Co. v. Essex Group, Inc., 220 U.S.P.Q. (BNA) 1053 (N.D. Ill. 1983).

 Nothing in Presto's letter, or in the sending of it, has given Presto any advantage in prosecuting this lawsuit or bears, directly or indirectly, on the issues at the heart of this case -- priority and infringement. Advertising that your product is covered by a patent or pending application when in fact it is not, or not yet, may be tortious, and might be grounds for a counterclaim in a suit for infringement, but it is not a legally sufficient affirmative defense. See Republic Molding Corp. v. B.W. Photo Utilities, 319 F.2d 347 (9th Cir. 1963).

 Black & Decker's fourth affirmative defense is legally insufficient on its face. Neither Presto's menacing letter nor anything Presto may have done to conceal its invention from the public are grounds for an affirmative defense of unclean hands, ...


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